NEW YORK, Jan. 21, 2016
/PRNewswire/ --
GENERATED MORE THAN 300 BASIS POINTS OF POSITIVE OPERATING
LEVERAGE YEAR-OVER-YEAR ON AN ADJUSTED BASIS (a)
- Total revenue up 2% on an adjusted basis (a)
- Net interest revenue up 7%
- Total noninterest expense decreased 2% on an adjusted
basis (a)
FULL-YEAR 2015 EARNINGS OF $3.1
BILLION OR $2.71 PER COMMON
SHARE, OR $2.85 PER COMMON SHARE
EXCLUDING NON-OPERATING ITEMS (b)
- Generated more than 400 basis points of positive operating
leverage in 2015 on an adjusted basis (b)
- Earnings per common share up 19% in 2015 on an adjusted
basis (b)
EXECUTING ON CAPITAL PLAN AND RETURN OF VALUE TO COMMON
SHAREHOLDERS
- Repurchased 10.1 million common shares for $431 million in the fourth quarter and 55.6
million common shares for $2.4
billion in full-year 2015
- Adjusted return on tangible common equity of 19% in
the fourth quarter and 21% in full-year 2015 (b)
ACQUIRING SILICON VALLEY WEALTH MANAGER, ATHERTON LANE ADVISERS, WITH $2.7 BILLION OF AUM
The Bank of New York Mellon Corporation ("BNY Mellon") (NYSE:
BK) today reported fourth quarter net income applicable to common
shareholders of $637 million, or
$0.57 per diluted common share, or
$755 million, or $0.68 per diluted common share, adjusted for the
impairment charge related to a recent court decision, litigation
and restructuring charges. In the fourth quarter of 2014, net
income applicable to common shareholders was $209 million, or $0.18 per diluted common share, or $667 million, or $0.58 per diluted common share, adjusted for
litigation and restructuring charges, offset by the benefit
primarily related to a tax carryback claim. In the third
quarter of 2015, net income applicable to common shareholders was
$820 million, or $0.74 per diluted common share. (b)
"Our results in 2015 demonstrated that our strategic plan has
positioned us well to perform in all operating environments. Even
with geopolitical instability, emerging market weakness, higher
regulatory compliance requirements and low interest rates, we
executed on our strategic priorities and focused on what was within
our control. For full-year 2015, our earnings per share increased
by 19 percent on an adjusted basis as we generated more than 400
basis points of positive operating leverage and achieved a return
on tangible common equity of 21 percent. Importantly, we are on
track to achieve our three-year goals," Gerald L. Hassell, chairman and chief executive
officer, said. (b)
"In the fourth quarter, we also generated strong positive
operating leverage, mainly through our intense focus on our
business improvement process, which is creating operating
efficiencies for our clients and savings for our shareholders. As
we look ahead to 2016, enhancing the client experience continues to
be a priority, as we seek to strengthen service quality and
productivity by leveraging our investments in industry-leading
technologies," Mr. Hassell added.
"Our focus remains on relentlessly delivering value-added
solutions, investment excellence and actionable, data-driven
insights to our clients and strong returns to our shareholders. I
want to thank our clients for their partnership and confidence in
us as well as all our team members around the world for rising to
the occasion to meet the heightened expectations of ourselves, our
clients and our shareholders," Mr. Hassell concluded.
In 2015, net income applicable to common shareholders totaled
$3.1 billion, or $2.71 per diluted common share, or $3.2 billion, or $2.85 per diluted common share, adjusted for the
impairment charge related to a recent court decision, litigation
and restructuring charges. In 2014, net income applicable to
common shareholders totaled $2.5
billion, or $2.15 per diluted
common share, or $2.8 billion, or
$2.39 per diluted common share,
adjusted for litigation and restructuring charges, the charge
related to investment management funds, net of incentives, the
gains on the sales of our investment in Wing Hang Bank and the One
Wall Street building, and the benefit primarily related to a tax
carryback claim.
(a) See pages 3-4 for the Non-GAAP adjustments
and additional information.
(b) See
"Supplemental information – Explanation of GAAP and Non-GAAP
financial measures" beginning on page 24 for the reconciliation of
these Non-GAAP measures.
CONFERENCE CALL INFORMATION
Gerald L. Hassell, chairman and
chief executive officer, and Thomas P.
Gibbons, vice chairman and chief financial officer, along
with other members of executive management from BNY Mellon, will
host a conference call and simultaneous live audio webcast at
8:00 a.m. EST on Jan. 21, 2016. This conference call and
audio webcast will include forward-looking statements and may
include other material information.
Investors and analysts wishing to access the conference call and
audio webcast may do so by dialing (877) 397-0291 (U.S.) or
(719) 325-2175 (International), and using the passcode:
619690, or by logging on to www.bnymellon.com. Earnings
materials will be available at www.bnymellon.com beginning at
approximately 6:30 a.m. EST on
Jan. 21, 2016. Replays of the
conference call and audio webcast will be available beginning
Jan. 21, 2016 at approximately
2 p.m. EST through Feb. 21, 2016 by dialing (888) 203-1112
(U.S.) or (719) 457-0820 (International), and using the
passcode: 2620345. The archived version of the conference
call and audio webcast will also be available at www.bnymellon.com
for the same time period.
FOURTH QUARTER 2015 FINANCIAL HIGHLIGHTS
(a)
(comparisons are 4Q15 vs. 4Q14 unless otherwise
stated)
|
Earnings per
share
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
(in millions,
except per share amounts)
|
4Q15
|
|
4Q14
|
|
Inc
|
|
4Q15
|
|
4Q14
|
|
Inc
|
GAAP
results
|
$
|
0.57
|
|
|
$
|
0.18
|
|
|
|
|
$
|
637
|
|
|
$
|
209
|
|
|
|
Add: Litigation
and restructuring charges
|
0.01
|
|
|
0.53
|
|
|
|
|
12
|
|
|
608
|
|
|
|
Impairment charge
related to a recent court decision
|
0.10
|
|
|
N/A
|
|
|
|
|
106
|
|
|
N/A
|
|
|
|
Less: Benefit
primarily related to a tax carryback claim
|
N/A
|
|
|
0.13
|
|
|
|
|
N/A
|
|
|
150
|
|
|
|
Non-GAAP
results
|
$
|
0.68
|
|
|
$
|
0.58
|
|
|
17
|
%
|
|
$
|
755
|
|
|
$
|
667
|
|
|
13
|
%
|
N/A - Not
applicable.
|
- Total revenue was $3.7 billion,
an increase of 1%, or 2% (Non-GAAP).
- Investment services fees were flat reflecting growth in the
Global Collateral Services and Broker-Dealer Services and higher
securities lending revenue, offset by lost business in clearing
services due to industry consolidations and the unfavorable impact
of a stronger U.S. dollar.
- Investment management and performance fees decreased 2%, or an
increase of 1% on a constant currency basis (Non-GAAP), driven by
lower money market fee waivers and higher performance fees,
partially offset by net outflows and lower market values.
- Foreign exchange revenue was flat reflecting lower volumes in
standing instruction programs and lower volatility, offset by
higher volumes in other trading programs and the impact of hedging
activity for foreign currency placements.
- Financing-related fees increased $8
million driven by higher fees related to secured intraday
credit provided to dealers in connection with their tri-party repo
activity.
- Investment and other income increased $15 million driven by the higher other income
related to termination fees in our clearing business and seed
capital gains, partially offset by lower asset-related gains and
lease residual gains.
- Net interest revenue increased $48
million driven by higher yields, the shift out of cash into
securities and loans and lower interest expense on deposits.
- The provision for credit losses was $163
million reflecting the impairment charge related to a recent
court decision.
- Noninterest expense was $2.7
billion, a decrease of 24%, or 2% (Non-GAAP) excluding
litigation and restructuring charges and amortization of intangible
assets. Noninterest expense was lower in nearly all categories
reflecting the favorable impact of a stronger U.S. dollar, offset
by higher compensation and employee benefits expenses. The increase
in compensation expenses primarily related to severance in support
of our business improvement process. See page 10 for additional
information.
- Generated more than 300 basis points of positive operating
leverage year-over-year on an adjusted basis (Non-GAAP).
- Effective tax rate of 20.1%. The rate is approximately 3% lower
primarily due to the impact of the impairment charge and a 2%
benefit from a more favorable geographic mix of earnings and higher
tax-exempt income.
- Assets under custody and/or administration ("AUC/A") and
Assets under management ("AUM")
- AUC/A of $28.9 trillion,
increased 1% reflecting net new business, partially offset by the
unfavorable impact of a stronger U.S. dollar and lower market
values.
- Estimated new AUC/A wins in Asset Servicing of $49 billion in 4Q15.
- AUM of $1.63 trillion, decreased
4% reflecting the unfavorable impact of a stronger U.S. dollar, net
outflows and lower market values, partially offset by the
January 2015 acquisition of Cutwater
Asset Management.
- Net long-term outflows of $11
billion in 4Q15 driven by index and equity investments
offset by continued strength in liability-driven investments.
- Net short-term inflows totaled $2
billion in 4Q15.
- Capital
- Repurchased 10.1 million common shares for $431 million in 4Q15 and 55.6 million common
shares for $2.4 billion in full-year
2015.
- Adjusted return on tangible common equity of 19% in 4Q15 and
21% in full-year 2015 (a).
(a) See "Supplemental information – Explanation
of GAAP and Non-GAAP financial measures" beginning on page 24 for
the reconciliation of Non-GAAP measures. Non-GAAP excludes
net income (loss) attributable to noncontrolling interests of
consolidated investment management funds, amortization of
intangible assets, M&I, litigation and restructuring charges,
the impairment charge related to a recent court decision and the
benefit primarily related to a tax carryback claim, if
applicable.
Note: In the table above and throughout this document, sequential
growth rates are unannualized.
FINANCIAL SUMMARY
(dollars in
millions, except per share amounts; common shares in
thousands)
|
|
|
|
|
|
4Q15
vs.
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q15
|
4Q14
|
Revenue:
|
|
|
|
|
|
|
|
Fee and other
revenue
|
$
|
2,950
|
|
$
|
3,053
|
|
$
|
3,067
|
|
$
|
3,012
|
|
$
|
2,935
|
|
(3)%
|
|
1
|
%
|
Income (loss) from
consolidated investment management funds
|
16
|
|
(22)
|
|
40
|
|
52
|
|
42
|
|
|
|
Net interest
revenue
|
760
|
|
759
|
|
779
|
|
728
|
|
712
|
|
—
|
|
7
|
|
Total revenue –
GAAP
|
3,726
|
|
3,790
|
|
3,886
|
|
3,792
|
|
3,689
|
|
(2)
|
|
1
|
|
Less: Net
income (loss) attributable to noncontrolling interests related to
consolidated investment management funds
|
5
|
|
(5)
|
|
37
|
|
31
|
|
24
|
|
|
|
Total revenue –
Non-GAAP
|
3,721
|
|
3,795
|
|
3,849
|
|
3,761
|
|
3,665
|
|
(2)
|
|
2
|
|
Provision for
credit losses
|
163
|
|
1
|
|
(6)
|
|
2
|
|
1
|
|
|
|
Expense:
|
|
|
|
|
|
|
|
Noninterest expense –
GAAP
|
2,692
|
|
2,680
|
|
2,727
|
|
2,700
|
|
3,524
|
|
—
|
|
(24)
|
|
Less:
Amortization of intangible assets
|
64
|
|
66
|
|
65
|
|
66
|
|
73
|
|
|
|
M&I, litigation
and restructuring charges (recoveries)
|
18
|
|
11
|
|
59
|
|
(3)
|
|
800
|
|
|
|
Total noninterest
expense – Non-GAAP
|
2,610
|
|
2,603
|
|
2,603
|
|
2,637
|
|
2,651
|
|
—
|
|
(2)
|
|
Income:
|
|
|
|
|
|
|
|
Income before income
taxes
|
871
|
|
1,109
|
|
1,165
|
|
1,090
|
|
164
|
|
(21)%
|
|
N/M
|
|
Provision (benefit)
for income taxes
|
175
|
|
282
|
|
276
|
|
280
|
|
(93)
|
|
|
|
Net income
|
$
|
696
|
|
$
|
827
|
|
$
|
889
|
|
$
|
810
|
|
$
|
257
|
|
|
|
Net (income) loss
attributable to noncontrolling interests (a)
|
(3)
|
|
6
|
|
(36)
|
|
(31)
|
|
(24)
|
|
|
|
Net income applicable
to shareholders of The Bank of New York Mellon
Corporation
|
693
|
|
833
|
|
853
|
|
779
|
|
233
|
|
|
|
Preferred stock
dividends
|
(56)
|
|
(13)
|
|
(23)
|
|
(13)
|
|
(24)
|
|
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
637
|
|
$
|
820
|
|
$
|
830
|
|
$
|
766
|
|
$
|
209
|
|
|
|
|
|
|
|
|
|
|
|
Operating leverage –
Non-GAAP (b)
|
|
|
|
|
|
(222)
|
bps
|
308
|
bps
|
|
|
|
|
|
|
|
|
Key
Metrics:
|
|
|
|
|
|
|
|
Pre-tax operating
margin (c)
|
23
|
%
|
29
|
%
|
30
|
%
|
29
|
%
|
4
|
%
|
|
|
Non-GAAP
(c)
|
30
|
%
|
31
|
%
|
33
|
%
|
30
|
%
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
Return on common
equity (annualized) (c)
|
7.1
|
%
|
9.1
|
%
|
9.4
|
%
|
8.8
|
%
|
2.2
|
%
|
|
|
Non-GAAP
(c)
|
8.9
|
%
|
9.7
|
%
|
10.3
|
%
|
9.2
|
%
|
7.7
|
%
|
|
|
|
|
|
|
|
|
|
|
Return on tangible
common equity (annualized) – Non-GAAP (c)
|
16.2
|
%
|
20.8
|
%
|
21.5
|
%
|
20.3
|
%
|
5.9
|
%
|
|
|
Non-GAAP adjusted
(c)
|
19.0
|
%
|
21.0
|
%
|
22.5
|
%
|
20.2
|
%
|
16.3
|
%
|
|
|
|
|
|
|
|
|
|
|
Fee revenue as a
percentage of total revenue excluding net securities
gains
|
79
|
%
|
80
|
%
|
79
|
%
|
79
|
%
|
79
|
%
|
|
|
|
|
|
|
|
|
|
|
Percentage of
non-U.S. total revenue (d)
|
34
|
%
|
37
|
%
|
36
|
%
|
36
|
%
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
Average common shares
and equivalents outstanding:
|
|
|
|
|
|
|
|
Basic
|
1,088,880
|
|
1,098,003
|
|
1,113,790
|
|
1,118,602
|
|
1,120,672
|
|
|
|
Diluted
|
1,096,385
|
|
1,105,645
|
|
1,122,135
|
|
1,126,306
|
|
1,129,040
|
|
|
|
|
|
|
|
|
|
|
|
Period
end:
|
|
|
|
|
|
|
|
Full-time
employees
|
51,200
|
|
51,300
|
|
50,700
|
|
50,500
|
|
50,300
|
|
|
|
Book value per common
share – GAAP (c)
|
$
|
32.69
|
|
$
|
32.59
|
|
$
|
32.28
|
|
$
|
31.89
|
|
$
|
32.09
|
|
|
|
Tangible book value
per common share – Non-GAAP (c)
|
$
|
15.27
|
|
$
|
15.16
|
|
$
|
14.86
|
|
$
|
14.82
|
|
$
|
14.70
|
|
|
|
Cash dividends per
common share
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.17
|
|
|
|
Common dividend
payout ratio
|
|
30
|
%
|
|
23
|
%
|
|
23
|
%
|
|
25
|
%
|
|
94
|
%
|
|
|
Closing stock price
per common share
|
$
|
41.22
|
|
$
|
39.15
|
|
$
|
41.97
|
|
$
|
40.24
|
|
$
|
40.57
|
|
|
|
Market
capitalization
|
$
|
44,738
|
|
$
|
42,789
|
|
$
|
46,441
|
|
$
|
45,130
|
|
$
|
45,366
|
|
|
|
Common shares
outstanding
|
1,085,343
|
|
1,092,953
|
|
1,106,518
|
|
1,121,512
|
|
1,118,228
|
|
|
|
(a) Primarily attributable to noncontrolling
interests related to consolidated investment management
funds.
(b) Pre-tax operating leverage is the
rate of increase in total revenue less the rate of increase in
total noninterest expense. The year-over-year pre-tax
operating leverage (Non-GAAP) was based on growth in total revenue,
as adjusted (Non-GAAP), of 153 basis points, and a decrease in
total noninterest expense, as adjusted (Non-GAAP), of 155 basis
points. The sequential operating leverage (Non-GAAP) was
based on decline in total revenue, as adjusted (Non-GAAP), of 195
basis points, and an increase in total noninterest expense, as
adjusted (Non-GAAP), of 27 basis points.
(c) Non-GAAP excludes the net income (loss)
attributable to noncontrolling interests related to consolidated
investment management funds, amortization of intangible assets,
M&I, litigation and restructuring charges (recoveries), the
impairment charge related to a recent court decision and the
benefit primarily related to a tax carryback claim, if
applicable. See "Supplemental information – Explanation of
GAAP and Non-GAAP financial measures" beginning on page 24 for the
reconciliation of Non-GAAP measures.
(d)
Includes fee revenue, net interest revenue and (loss) income from
consolidated investment management funds, net of net loss (income)
attributable to noncontrolling interests.
N/M – Not
meaningful.
CONSOLIDATED BUSINESS METRICS
Consolidated
business metrics
|
|
|
|
|
|
|
4Q15
vs.
|
4Q15
|
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q15
|
4Q14
|
Changes in AUM
(in billions): (a)
|
|
|
|
|
|
|
|
|
Beginning balance of
AUM
|
$
|
1,625
|
|
|
$
|
1,700
|
|
$
|
1,717
|
|
$
|
1,686
|
|
$
|
1,620
|
|
|
|
Net inflows
(outflows):
|
|
|
|
|
|
|
|
|
Long-term:
|
|
|
|
|
|
|
|
|
Equity
|
(9)
|
|
|
(4)
|
|
(13)
|
|
(5)
|
|
(5)
|
|
|
|
Fixed
income
|
1
|
|
|
(3)
|
|
(2)
|
|
3
|
|
4
|
|
|
|
Index
|
(16)
|
|
|
(10)
|
|
(9)
|
|
8
|
|
1
|
|
|
|
Liability-driven
investments (b)
|
11
|
|
|
11
|
|
5
|
|
8
|
|
24
|
|
|
|
Alternative
investments
|
2
|
|
|
1
|
|
3
|
|
1
|
|
2
|
|
|
|
Total long-term
inflows (outflows)
|
(11)
|
|
|
(5)
|
|
(16)
|
|
15
|
|
26
|
|
|
|
Short
term:
|
|
|
|
|
|
|
|
|
Cash
|
2
|
|
|
(10)
|
|
(11)
|
|
1
|
|
6
|
|
|
|
Total net inflows
(outflows)
|
(9)
|
|
|
(15)
|
|
(27)
|
|
16
|
|
32
|
|
|
|
Net market/currency
impact/acquisition
|
9
|
|
|
(60)
|
|
10
|
|
15
|
|
34
|
|
|
|
Ending balance of
AUM
|
$
|
1,625
|
|
(c)
|
$
|
1,625
|
|
$
|
1,700
|
|
$
|
1,717
|
|
$
|
1,686
|
|
—
|
%
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
AUM at period end,
by product type: (a)
|
|
|
|
|
|
|
|
|
Equity
|
14
|
%
|
|
14
|
%
|
15
|
%
|
15
|
%
|
15
|
%
|
|
|
Fixed
income
|
13
|
|
|
13
|
|
13
|
|
12
|
|
12
|
|
|
|
Index
|
20
|
|
|
20
|
|
21
|
|
22
|
|
21
|
|
|
|
Liability-driven
investments (b)
|
32
|
|
|
32
|
|
30
|
|
30
|
|
30
|
|
|
|
Alternative
investments
|
4
|
|
|
4
|
|
4
|
|
4
|
|
4
|
|
|
|
Cash
|
17
|
|
|
17
|
|
17
|
|
17
|
|
18
|
|
|
|
Total AUM
|
100
|
%
|
(c)
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Management:
|
|
|
|
|
|
|
|
|
Average loans (in
millions)
|
$
|
13,447
|
|
|
$
|
12,779
|
|
$
|
12,298
|
|
$
|
11,634
|
|
$
|
11,124
|
|
5
|
%
|
21
|
%
|
Average deposits
(in millions)
|
$
|
15,497
|
|
|
$
|
15,282
|
|
$
|
14,638
|
|
$
|
15,217
|
|
$
|
14,602
|
|
1
|
%
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Investment
Services:
|
|
|
|
|
|
|
|
|
Average loans (in
millions)
|
$
|
36,960
|
|
|
$
|
38,025
|
|
$
|
38,264
|
|
$
|
37,699
|
|
$
|
35,448
|
|
(3)%
|
|
4
|
%
|
Average deposits
(in millions)
|
$
|
226,774
|
|
|
$
|
230,153
|
|
$
|
237,193
|
|
$
|
234,183
|
|
$
|
228,282
|
|
(1)%
|
|
(1)%
|
|
|
|
|
|
|
|
|
|
|
AUC/A at period end
(in trillions) (d)
|
$
|
28.9
|
|
(c)
|
$
|
28.5
|
|
$
|
28.6
|
|
$
|
28.5
|
|
$
|
28.5
|
|
1
|
%
|
1
|
%
|
|
|
|
|
|
|
|
|
|
Market value of
securities on loan at period end (in billions)
(e)
|
$
|
277
|
|
|
$
|
288
|
|
$
|
283
|
|
$
|
291
|
|
$
|
289
|
|
(4)%
|
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
Asset
servicing:
|
|
|
|
|
|
|
|
|
Estimated new
business wins (AUC/A) (in billions)
|
$
|
49
|
|
(c)
|
$
|
84
|
|
$
|
933
|
|
$
|
125
|
|
$
|
168
|
|
|
|
|
|
|
|
|
|
|
|
|
Depositary
Receipts:
|
|
|
|
|
|
|
|
|
Number of sponsored
programs
|
1,145
|
|
|
1,176
|
|
1,206
|
|
1,258
|
|
1,279
|
|
(3)%
|
|
(10)%
|
|
|
|
|
|
|
|
|
|
|
Clearing
services:
|
|
|
|
|
|
|
|
|
Global DARTS volume
(in thousands)
|
230
|
|
|
246
|
|
242
|
|
261
|
|
242
|
|
(7)%
|
|
(5)%
|
|
Average active
clearing accounts (U.S. platform) (in thousands)
|
5,959
|
|
|
6,107
|
|
6,046
|
|
5,979
|
|
5,900
|
|
(2)%
|
|
1
|
%
|
Average long-term
mutual fund assets (U.S. platform)
(in
millions)
|
$
|
437,260
|
|
|
$
|
447,287
|
|
$
|
466,195
|
|
$
|
456,954
|
|
$
|
450,305
|
|
(2)%
|
|
(3)%
|
|
Average investor
margin loans (U.S. platform) (in millions)
|
$
|
11,575
|
|
|
$
|
11,806
|
|
$
|
11,890
|
|
$
|
11,232
|
|
$
|
10,711
|
|
(2)%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
Broker-Dealer:
|
|
|
|
|
|
|
|
|
Average tri-party
repo balances (in billions)
|
$
|
2,153
|
|
|
$
|
2,142
|
|
$
|
2,174
|
|
$
|
2,153
|
|
$
|
2,101
|
|
1
|
%
|
2
|
%
|
(a) Excludes securities lending cash management
assets and assets managed in the Investment Services
business. In 3Q15, prior period AUM was restated to reflect
the reclassification of Meriten from the Investment Management
business to the Other segment.
(b)
Includes currency overlay assets under management.
(c) Preliminary.
(d)
Includes the AUC/A of CIBC Mellon Global Securities Services
Company ("CIBC Mellon"), a joint venture with the Canadian Imperial
Bank of Commerce, of $1.0 trillion at
Dec. 31, 2015 and Sept. 30, 2015 and $1.1 trillion at June 30, 2015, March 31, 2015 and Dec.
31, 2014.
(e) Represents the
total amount of securities on loan managed by the Investment
Services business. Excludes securities for which BNY Mellon
acts as agent on behalf of CIBC Mellon clients, which totaled
$55 billion at Dec. 31, 2015, $61
billion at Sept. 30, 2015,
$68 billion at June 30, 2015, $69
billion at March 31, 2015
and $65 billion at
Dec. 31, 2014.
The following table presents key market metrics at period end
and on an average basis.
Key market
metrics
|
|
|
|
|
|
4Q15
vs.
|
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q15
|
4Q14
|
S&P 500 Index
(a)
|
2044
|
|
1920
|
|
2063
|
|
2068
|
|
2059
|
|
6
|
%
|
(1)%
|
|
S&P 500 Index –
daily average
|
2052
|
|
2027
|
|
2102
|
|
2064
|
|
2009
|
|
1
|
|
2
|
|
FTSE 100 Index
(a)
|
6242
|
|
6062
|
|
6521
|
|
6773
|
|
6566
|
|
3
|
|
(5)
|
|
FTSE 100 Index –
daily average
|
6271
|
|
6399
|
|
6920
|
|
6793
|
|
6526
|
|
(2)
|
|
(4)
|
|
MSCI World Index
(a)
|
1663
|
|
1582
|
|
1736
|
|
1741
|
|
1710
|
|
5
|
|
(3)
|
|
MSCI World Index –
daily average
|
1677
|
|
1691
|
|
1780
|
|
1726
|
|
1695
|
|
(1)
|
|
(1)
|
|
Barclays Capital
Global Aggregate BondSM Index (a)(b)
|
342
|
|
346
|
|
342
|
|
348
|
|
357
|
|
(1)
|
|
(4)
|
|
NYSE and NASDAQ share
volume (in billions)
|
198
|
|
206
|
|
185
|
|
187
|
|
198
|
|
(4)
|
|
—
|
|
JPMorgan G7
Volatility Index – daily average (c)
|
9.49
|
|
9.93
|
|
10.06
|
|
10.40
|
|
8.54
|
|
(4)
|
|
11
|
|
Average Fed Funds
effective rate
|
0.16
|
%
|
0.13
|
%
|
0.13
|
%
|
0.11
|
%
|
0.10
|
%
|
3
|
bps
|
6
|
bps
|
Foreign exchange
rates vs. U.S. dollar:
|
|
|
|
|
|
|
|
British pound -
average rate
|
$
|
1.52
|
|
$
|
1.55
|
|
$
|
1.53
|
|
$
|
1.51
|
|
$
|
1.58
|
|
(2)%
|
|
(4)%
|
|
Euro - average
rate
|
1.10
|
|
1.11
|
|
1.11
|
|
1.13
|
|
1.25
|
|
(1)
|
|
(12)
|
|
(a) Period
end.
(b) Unhedged in U.S.
dollar terms.
(c) The
JPMorgan G7 Volatility Index is based on the implied volatility in
3-month currency options.
bps – basis
points.
FEE AND OTHER REVENUE
Fee and other
revenue
|
|
|
|
|
|
4Q15
vs.
|
(dollars in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q15
|
4Q14
|
Investment services
fees:
|
|
|
|
|
|
|
|
Asset servicing
(a)
|
$
|
1,032
|
|
$
|
1,057
|
|
$
|
1,060
|
|
$
|
1,038
|
|
$
|
1,019
|
|
(2)%
|
|
1%
|
|
Clearing
services
|
339
|
|
345
|
|
347
|
|
344
|
|
347
|
|
(2)
|
|
(2)
|
|
Issuer
services
|
199
|
|
313
|
|
234
|
|
232
|
|
193
|
|
(36)
|
|
3
|
|
Treasury
services
|
137
|
|
137
|
|
144
|
|
137
|
|
145
|
|
—
|
|
(6)
|
|
Total investment
services fees
|
1,707
|
|
1,852
|
|
1,785
|
|
1,751
|
|
1,704
|
|
(8)
|
|
—
|
|
Investment management
and performance fees
|
864
|
|
829
|
|
878
|
|
867
|
|
885
|
|
4
|
|
(2)
|
|
Foreign exchange and
other trading revenue
|
173
|
|
179
|
|
187
|
|
229
|
|
151
|
|
(3)
|
|
15
|
|
Financing-related
fees
|
51
|
|
71
|
|
58
|
|
40
|
|
43
|
|
(28)
|
|
19
|
|
Distribution and
servicing
|
41
|
|
41
|
|
39
|
|
41
|
|
43
|
|
—
|
|
(5)
|
|
Total fee revenue
excluding investment and other income
|
2,836
|
|
2,972
|
|
2,947
|
|
2,928
|
|
2,826
|
|
(5)
|
|
—
|
|
Investment and other
income
|
93
|
|
59
|
|
104
|
|
60
|
|
78
|
|
58
|
|
19
|
|
Total fee
revenue
|
2,929
|
|
3,031
|
|
3,051
|
|
2,988
|
|
2,904
|
|
(3)
|
|
1
|
|
Net securities
gains
|
21
|
|
22
|
|
16
|
|
24
|
|
31
|
|
N/M
|
N/M
|
Total fee and other
revenue
|
$
|
2,950
|
|
$
|
3,053
|
|
$
|
3,067
|
|
$
|
3,012
|
|
$
|
2,935
|
|
(3)%
|
|
1%
|
|
(a) Asset servicing fees include securities
lending revenue of $46 million in
4Q15, $38 million in 3Q15,
$49 million in 2Q15 and
$43 million in 1Q15 and $37 million in 4Q14.
N/M
–Not meaningful.
KEY POINTS
- Asset servicing fees were $1.0
billion, an increase of 1% year-over-year and a decrease of
2% sequentially. The year-over-year increase primarily reflects
growth in the Global Collateral Services and Broker-Dealer Services
and higher securities lending revenue, partially offset by the
unfavorable impact of a stronger U.S. dollar. The sequential
decrease primarily reflects lower client activity.
- Clearing services fees were $339
million, a decrease of 2% both year-over-year and
sequentially. Both decreases primarily reflect lost business due to
industry consolidations.
- Issuer services fees were $199
million, an increase of 3% year-over-year and a decrease of
36% sequentially. The year-over-year increase primarily reflects
net new business and lower money market fee waivers in Corporate
Trust, partially offset by the unfavorable impact of a stronger
U.S. dollar in Corporate Trust. The sequential decrease primarily
reflects seasonality in Depositary Receipts.
- Treasury services fees were $137
million, a decrease of 6% year-over-year and flat
sequentially. The year-over-year decrease primarily reflects higher
compensating balance credits provided to clients and lower
volumes.
- Investment management and performance fees were $864 million, a decrease of 2% year-over-year, or
an increase of 1% on a constant currency basis (Non-GAAP). On a
constant currency basis (Non-GAAP), investment management and
performance fees primarily reflect lower money market fee waivers
and higher performance fees, partially offset by net outflows and
lower market values. Sequentially, investment management and
performance fees increased 4% primarily reflecting higher
performance fees, lower money market fee waivers and higher equity
market values, partially offset by net outflows.
|
Foreign exchange
and other trading revenue
|
|
|
|
|
|
|
(in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
|
Foreign
exchange
|
$
|
165
|
|
$
|
180
|
|
$
|
181
|
|
$
|
217
|
|
$
|
165
|
|
|
Other trading revenue
(loss)
|
8
|
|
(1)
|
|
6
|
|
12
|
|
(14)
|
|
|
Total foreign
exchange and other trading revenue
|
$
|
173
|
|
$
|
179
|
|
$
|
187
|
|
$
|
229
|
|
$
|
151
|
|
Foreign exchange and other trading
revenue totaled $173 million in 4Q15
compared with $151 million in 4Q14
and $179 million in 3Q15. In
4Q15, foreign exchange revenue totaled $165
million, flat year-over-year and a decrease of 8%
sequentially. Year-over-year, lower volumes in standing
instruction programs and lower volatility were offset by higher
volumes in the other trading programs and the impact of hedging
activity for foreign currency placements. The sequential
decrease primarily reflects lower volumes and volatility and lower
Depositary Receipts-related activity, partially offset by the
impact of hedging activity for foreign currency placements.
Other trading revenue was
$8 million in 4Q15, compared with an
other trading loss of $14 million in
4Q14 and an other trading loss of $1
million in 3Q15. The year-over-year increase primarily
reflects the losses on hedging activities within one of the
Investment Management boutiques recorded in 4Q14.
- Financing-related fees were $51
million in 4Q15 compared with $43
million in 4Q14 and $71
million in 3Q15. The year-over-year increase primarily
reflects higher fees related to secured intraday credit provided to
dealers in connection with their tri-party repo activity. The
sequential decrease primarily reflects lower underwriting
fees.
|
Investment and
other income
|
|
|
|
|
|
|
(in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
|
Corporate/bank-owned
life insurance
|
$
|
43
|
|
$
|
32
|
|
$
|
31
|
|
$
|
33
|
|
$
|
37
|
|
|
Expense
reimbursements from joint venture
|
16
|
|
16
|
|
17
|
|
14
|
|
15
|
|
|
Seed capital gains
(a)
|
10
|
|
7
|
|
2
|
|
16
|
|
—
|
|
|
Asset-related gains
(losses)
|
5
|
|
(9)
|
|
1
|
|
3
|
|
20
|
|
|
Private equity gains
(losses)
|
—
|
|
1
|
|
3
|
|
(3)
|
|
1
|
|
|
Equity investment
(losses)
|
(2)
|
|
(6)
|
|
(7)
|
|
(4)
|
|
(5)
|
|
|
Lease residual gains
(losses)
|
(8)
|
|
—
|
|
54
|
|
(1)
|
|
5
|
|
|
Other
income
|
29
|
|
18
|
|
3
|
|
2
|
|
5
|
|
|
Total investment and
other income
|
$
|
93
|
|
$
|
59
|
|
$
|
104
|
|
$
|
60
|
|
$
|
78
|
|
(a) Excludes the gain (loss) on seed capital
investments in consolidated investment management funds which are
reflected in operations of consolidated investment management
funds, net of noncontrolling interests. The gain (loss) on
seed capital investments in consolidated investment management
funds was $11 million in 4Q15,
$(17) million in 3Q15, $3 million in 2Q15, $21
million in 1Q15 and $18
million in 4Q14.
Investment and other income was
$93 million in 4Q15 compared with
$78 million in 4Q14 and $59 million in 3Q15. The year-over-year
increase primarily reflects higher other income related to
termination fees in our clearing business and seed capital gains,
partially offset by lower asset-related gains and lease residual
losses. The sequential increase primarily reflects higher
asset-related gains, income from corporate/bank owned life
insurance and other income related to termination fees in our
clearing business, partially offset by lease residual losses.
NET INTEREST REVENUE
Net interest
revenue
|
|
|
|
|
|
4Q15
vs.
|
(dollars in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q15
|
4Q14
|
Net interest revenue
(non-FTE)
|
$
|
760
|
|
$
|
759
|
|
$
|
779
|
|
$
|
728
|
|
$
|
712
|
|
—
|
%
|
7%
|
|
Net interest revenue
(FTE) – Non-GAAP
|
774
|
|
773
|
|
794
|
|
743
|
|
726
|
|
—
|
|
7
|
|
Net interest margin
(FTE)
|
0.99
|
%
|
0.98
|
%
|
1.00
|
%
|
0.97
|
%
|
0.91
|
%
|
1
|
bps
|
8 bps
|
|
|
|
|
|
|
|
|
|
Selected average
balances:
|
|
|
|
|
|
|
|
Cash/interbank
investments
|
$
|
128,328
|
|
$
|
130,090
|
|
$
|
125,626
|
|
$
|
123,647
|
|
$
|
140,599
|
|
(1)%
|
|
(9)%
|
|
Trading account
securities
|
2,786
|
|
2,737
|
|
3,253
|
|
3,046
|
|
3,922
|
|
2
|
|
(29)
|
|
Securities
|
119,532
|
|
121,188
|
|
128,641
|
|
123,476
|
|
117,243
|
|
(1)
|
|
2
|
|
Loans
|
61,964
|
|
61,657
|
|
61,076
|
|
57,935
|
|
56,844
|
|
—
|
|
9
|
|
Interest-earning
assets
|
312,610
|
|
315,672
|
|
318,596
|
|
308,104
|
|
318,608
|
|
(1)
|
|
(2)
|
|
Interest-bearing
deposits
|
160,334
|
|
169,753
|
|
170,716
|
|
159,520
|
|
163,149
|
|
(6)
|
|
(2)
|
|
Noninterest-bearing
deposits
|
85,878
|
|
85,046
|
|
84,890
|
|
89,592
|
|
85,330
|
|
1
|
|
1
|
|
|
|
|
|
|
|
|
|
Selected average
yields/rates:
|
|
|
|
|
|
|
|
Cash/interbank
investments
|
0.32%
|
|
0.32%
|
|
0.34%
|
|
0.35%
|
|
0.31%
|
|
|
|
Trading account
securities
|
2.79
|
|
2.74
|
|
2.63
|
|
2.46
|
|
2.64
|
|
|
|
Securities
|
1.62
|
|
1.60
|
|
1.57
|
|
1.55
|
|
1.54
|
|
|
|
Loans
|
1.54
|
|
1.56
|
|
1.51
|
|
1.55
|
|
1.58
|
|
|
|
Interest-earning
assets
|
1.08
|
|
1.08
|
|
1.08
|
|
1.07
|
|
1.02
|
|
|
|
Interest-bearing
deposits
|
0.01
|
|
0.02
|
|
0.02
|
|
0.04
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
Average
cash/interbank investments as a percentage of average
interest-earning assets
|
41%
|
|
41%
|
|
39%
|
|
40%
|
|
44%
|
|
|
|
Average
noninterest-bearing deposits as a percentage of average
interest-earning assets
|
27%
|
|
27%
|
|
27%
|
|
29%
|
|
27%
|
|
|
|
FTE – fully taxable equivalent.
bps – basis
points.
KEY POINTS
- Net interest revenue totaled $760
million in 4Q15, an increase of $48
million year-over year and $1
million sequentially. The year-over-year increase primarily
reflects higher yields, the shift out of cash into securities and
loans and lower interest expense on deposits. The sequential
increase primarily reflects higher yields, offset by lower
accretion.
NONINTEREST EXPENSE
Noninterest
expense
|
|
|
|
|
|
4Q15
vs.
|
(dollars in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q15
|
4Q14
|
Staff:
|
|
|
|
|
|
|
|
Compensation
|
$
|
927
|
|
$
|
905
|
|
$
|
877
|
|
$
|
871
|
|
$
|
893
|
|
2%
|
|
4%
|
|
Incentives
|
315
|
|
326
|
|
349
|
|
425
|
|
319
|
|
(3)
|
|
(1)
|
|
Employee
benefits
|
239
|
|
206
|
|
208
|
|
189
|
|
206
|
|
16
|
|
16
|
|
Total
staff
|
1,481
|
|
1,437
|
|
1,434
|
|
1,485
|
|
1,418
|
|
3
|
|
4
|
|
Professional, legal
and other purchased services
|
328
|
|
301
|
|
299
|
|
302
|
|
390
|
|
9
|
|
(16)
|
|
Software and
equipment
|
225
|
|
226
|
|
228
|
|
228
|
|
235
|
|
—
|
|
(4)
|
|
Net
occupancy
|
148
|
|
152
|
|
149
|
|
151
|
|
150
|
|
(3)
|
|
(1)
|
|
Distribution and
servicing
|
92
|
|
95
|
|
96
|
|
98
|
|
102
|
|
(3)
|
|
(10)
|
|
Sub-custodian
|
60
|
|
65
|
|
75
|
|
70
|
|
70
|
|
(8)
|
|
(14)
|
|
Business
development
|
75
|
|
59
|
|
72
|
|
61
|
|
75
|
|
27
|
|
—
|
|
Other
|
201
|
|
268
|
|
250
|
|
242
|
|
211
|
|
(25)
|
|
(5)
|
|
Amortization of
intangible assets
|
64
|
|
66
|
|
65
|
|
66
|
|
73
|
|
(3)
|
|
(12)
|
|
M&I, litigation
and restructuring charges
|
18
|
|
11
|
|
59
|
|
(3)
|
|
800
|
|
N/M
|
N/M
|
Total noninterest
expense – GAAP
|
$
|
2,692
|
|
$
|
2,680
|
|
$
|
2,727
|
|
$
|
2,700
|
|
$
|
3,524
|
|
—%
|
|
(24)%
|
|
|
|
|
|
|
|
|
|
Total staff expense
as a percentage of total revenue
|
40
|
%
|
38
|
%
|
37
|
%
|
39
|
%
|
38
|
%
|
|
|
|
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
|
|
|
Total noninterest
expense excluding amortization of intangible assets and M&I,
litigation and restructuring charges – Non-GAAP
|
$
|
2,610
|
|
$
|
2,603
|
|
$
|
2,603
|
|
$
|
2,637
|
|
$
|
2,651
|
|
—%
|
|
(2)%
|
|
N/M –Not meaningful.
KEY POINTS
- Total noninterest expense excluding amortization of intangible
assets and M&I, litigation and restructuring charges (Non-GAAP)
decreased 2% year-over-year and was flat sequentially.
- The year-over-year decrease reflects lower expenses in all
categories, except compensation and employee benefits expenses. The
lower expenses primarily reflect the favorable impact of a stronger
U.S. dollar and lower professional, legal and other purchased
services and other expenses.
- Compensation expense increased year-over-year primarily
reflecting severance expense of approximately $55 million recorded in 4Q15 in ongoing support
of our business improvement process.
- Employee benefits expense increased as a result of an
adjustment of approximately $30
million related to updated information received from an
administrator of our health care benefits, partially offset by the
impact of curtailing the U.S. pension plan.
- Other expense decreased primarily reflecting approximately
$35 million of adjustments to bank
assessment charges, partially offset by higher asset-based
taxes.
- The sequential increase reflects higher staff expense primarily
reflecting the factors mentioned above, and higher professional,
legal and other purchased services and business development
expenses, partially offset by lower other expense, as described
above.
INVESTMENT SECURITIES PORTFOLIO
At Dec. 31, 2015, the fair value
of our investment securities portfolio totaled $118.8 billion. The net unrealized pre-tax
gain on our total securities portfolio was $357 million at Dec. 31,
2015 compared with $1.05
billion at Sept. 30,
2015. The decrease in the net unrealized pre-tax gain was
primarily driven by the increase in interest rates. At
Dec. 31, 2015, the fair value of the
held-to-maturity securities totaled $43.2
billion and represented 36% of the fair value of the total
investment securities portfolio.
The following table shows the distribution of our investment
securities portfolio.
Investment
securities portfolio
(dollars in millions)
|
Sept. 30,
2015
|
|
4Q15
change in
unrealized
gain
(loss)
|
Dec. 31,
2015
|
Fair value
as a % of
amortized
cost (a)
|
Unrealized
gain
(loss)
|
|
Ratings
|
|
|
|
|
BB+
and
lower
|
|
Fair
value
|
|
Amortized
cost
|
Fair
value
|
|
|
AAA/
AA-
|
A+/
A-
|
BBB+/
BBB-
|
Not
rated
|
Agency
RMBS
|
$
|
49,850
|
|
|
$
|
(408)
|
|
$
|
49,585
|
|
$
|
49,464
|
|
|
100
|
%
|
$
|
(121)
|
|
|
100
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
U.S.
Treasury
|
23,642
|
|
|
(193)
|
|
24,019
|
|
23,920
|
|
|
100
|
|
(99)
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Sovereign
debt/sovereign guaranteed
|
17,674
|
|
|
5
|
|
16,574
|
|
16,708
|
|
|
101
|
|
134
|
|
|
75
|
|
—
|
|
25
|
|
—
|
|
—
|
|
Non-agency RMBS
(b)
|
1,938
|
|
|
(36)
|
|
1,435
|
|
1,789
|
|
|
81
|
|
354
|
|
|
—
|
|
1
|
|
1
|
|
90
|
|
8
|
|
Non-agency
RMBS
|
973
|
|
|
(4)
|
|
900
|
|
914
|
|
|
94
|
|
14
|
|
|
7
|
|
5
|
|
18
|
|
69
|
|
1
|
|
European floating rate notes
|
1,634
|
|
|
2
|
|
1,369
|
|
1,345
|
|
|
98
|
|
(24)
|
|
|
68
|
|
27
|
|
5
|
|
—
|
|
—
|
|
Commercial
MBS
|
5,730
|
|
|
(57)
|
|
5,868
|
|
5,826
|
|
|
99
|
|
(42)
|
|
|
95
|
|
4
|
|
1
|
|
—
|
|
—
|
|
State and political
subdivisions
|
4,334
|
|
|
1
|
|
3,988
|
|
4,065
|
|
|
102
|
|
77
|
|
|
80
|
|
17
|
|
—
|
|
—
|
|
3
|
|
Foreign covered
bonds
|
2,379
|
|
|
(9)
|
|
2,201
|
|
2,242
|
|
|
102
|
|
41
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Corporate
bonds
|
1,822
|
|
|
(8)
|
|
1,740
|
|
1,752
|
|
|
101
|
|
12
|
|
|
21
|
|
66
|
|
13
|
|
—
|
|
—
|
|
CLO
|
2,291
|
|
|
(6)
|
|
2,363
|
|
2,351
|
|
|
99
|
|
(12)
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
U.S. Government
agencies
|
1,572
|
|
|
(10)
|
|
1,817
|
|
1,810
|
|
|
100
|
|
(7)
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Consumer
ABS
|
3,129
|
|
|
(7)
|
|
2,909
|
|
2,893
|
|
|
99
|
|
(16)
|
|
|
100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other
(c)
|
3,055
|
|
|
38
|
|
3,654
|
|
3,700
|
|
|
101
|
|
46
|
|
|
45
|
|
—
|
|
51
|
|
—
|
|
4
|
|
Total investment
securities
|
$
|
120,023
|
|
(d)
|
$
|
(692)
|
|
$
|
118,422
|
|
$
|
118,779
|
|
(d)
|
100
|
%
|
$
|
357
|
|
(d)(e)
|
90
|
%
|
2
|
%
|
6
|
%
|
2
|
%
|
—
|
%
|
(a) Amortized cost before
impairments.
(b) These RMBS were included in
the former Grantor Trust and were marked-to-market in 2009.
We believe these RMBS would receive higher credit ratings if these
ratings incorporated, as additional credit enhancements, the
difference between the written-down amortized cost and the current
face amount of each of these
securities.
(c) Includes commercial
paper with a fair value of $1.5
billion and $1.9 billion and
money market funds with a fair value of $770
million and $886 million at
Sept. 30, 2015 and Dec. 31, 2015,
respectively.
(d) Includes net unrealized
losses on derivatives hedging securities available-for-sale of
$417 million at Sept. 30, 2015 and $292
million at Dec. 31,
2015.
(e) Unrealized gains of
$465 million at Dec. 31, 2015 related to available-for-sale
securities.
NONPERFORMING ASSETS
Nonperforming
assets
(dollars in
millions)
|
Dec.31,
2015
|
Sept. 30,
2015
|
Dec. 31,
2014
|
Loans:
|
|
|
|
Financial
institutions
|
$
|
171
|
|
$
|
—
|
|
$
|
—
|
|
Other residential
mortgages
|
102
|
|
103
|
|
112
|
|
Wealth management
loans and mortgages
|
11
|
|
12
|
|
12
|
|
Commercial real
estate
|
2
|
|
1
|
|
1
|
|
Total nonperforming
loans
|
286
|
|
116
|
|
125
|
|
Other assets
owned
|
6
|
|
7
|
|
3
|
|
Total nonperforming
assets (a)
|
$
|
292
|
|
$
|
123
|
|
$
|
128
|
|
Nonperforming assets
ratio
|
0.46
|
%
|
0.20
|
%
|
0.22
|
%
|
Allowance for loan
losses/nonperforming loans
|
54.9
|
|
156.0
|
|
152.8
|
|
Total allowance for
credit losses/nonperforming loans
|
96.2
|
|
241.4
|
|
224.0
|
|
(a) Loans of consolidated investment management
funds are not part of BNY Mellon's loan portfolio. Included
in the loans of consolidated investment management funds are
nonperforming loans of $53 million at
Dec. 31, 2014. These loans are
recorded at fair value and therefore do not impact the provision
for credit losses and allowance for loan losses, and accordingly
are excluded from the nonperforming assets table above. In
2Q15, BNY Mellon adopted the new accounting guidance included in
ASU 2015-02, Consolidations. As a result, we deconsolidated
substantially all of the loans of consolidated investment
management funds retroactively to Jan. 1,
2015.
Nonperforming assets were $292
million at Dec. 31, 2015, an
increase of $169 million compared
with $123 million at Sept. 30, 2015. The increase in
nonperforming loans in the financial institutions portfolio is
related to a recent court decision.
ALLOWANCE FOR CREDIT LOSSES, PROVISION AND NET
CHARGE-OFFS
Allowance for
credit losses, provision and net charge-offs
(in
millions)
|
Dec. 31,
2015
|
Sept. 30,
2015
|
Dec. 31,
2014
|
Allowance for credit
losses - beginning of period
|
$
|
280
|
|
$
|
278
|
|
$
|
288
|
|
Provision for credit
losses
|
163
|
|
1
|
|
1
|
|
Net (charge-offs)
recoveries:
|
|
|
|
Financial
institutions
|
(170)
|
|
—
|
|
1
|
|
Other residential
mortgages
|
2
|
|
1
|
|
—
|
|
Commercial
|
—
|
|
—
|
|
(8)
|
|
Commercial real
estate
|
—
|
|
—
|
|
(2)
|
|
Net (charge-offs)
recoveries
|
(168)
|
|
1
|
|
(9)
|
|
Allowance for credit
losses - end of period
|
$
|
275
|
|
$
|
280
|
|
$
|
280
|
|
Allowance for loan
losses
|
$
|
157
|
|
$
|
181
|
|
$
|
191
|
|
Allowance for
lending-related commitments
|
118
|
|
99
|
|
89
|
|
The allowance for credit losses was $275
million at Dec. 31, 2015, a
decrease of $5 million compared with
$280 million at Sept. 30, 2015. Net charge-offs were
$168 million in 4Q15, primarily
reflecting the impairment charge related to a recent court decision
recorded in the financial institutions portfolio.
CAPITAL AND LIQUIDITY
The common equity Tier 1 ("CET1"), Tier 1 and Total risk-based
regulatory capital ratios in the first section of the table below
are based on Basel III components of capital, as phased-in, and
credit risk asset risk-weightings using the U.S. capital rules'
advanced approaches framework (the "Advanced Approach") as the
related risk-weighted assets ("RWA") were higher when calculated
under the Advanced Approach at Dec. 31,
2015, Sept. 30, 2015 and
Dec. 31, 2014. Our risk-based
capital adequacy is determined using the higher of RWA determined
using the Advanced Approach and the U.S. capital rules'
standardized approach (the "Standardized Approach"). The
leverage capital ratios are based on Basel III components of
capital, as phased-in and quarterly average total assets. Our
consolidated capital ratios are shown in the following
table.
Capital
ratios
|
Dec. 31,
2015
|
Sept. 30,
2015
|
Dec. 31,
2014
|
Consolidated
regulatory capital ratios: (a)(b)
|
|
|
|
CET1 ratio
|
10.8
|
%
|
10.5
|
%
|
11.2
|
%
|
Tier 1 capital
ratio
|
12.3
|
|
11.9
|
|
12.2
|
|
Total (Tier 1 plus
Tier 2) capital ratio
|
12.5
|
|
12.2
|
|
12.5
|
|
Leverage capital
ratio
|
5.9
|
|
5.9
|
|
5.6
|
|
BNY Mellon
shareholders' equity to total assets ratio – GAAP
(c)
|
9.7
|
|
10.1
|
|
9.7
|
|
BNY Mellon common
shareholders' equity to total assets ratio – GAAP
(c)
|
9.0
|
|
9.4
|
|
9.3
|
|
BNY Mellon tangible
common shareholders' equity to tangible assets of operations ratio
– Non-GAAP (c)
|
6.5
|
|
6.2
|
|
6.5
|
|
|
|
|
|
Selected
regulatory capital ratios – fully phased-in – Non-GAAP:
(a)
|
|
|
|
Estimated CET1
ratio:
|
|
|
|
Standardized
Approach
|
10.3
|
|
9.9
|
|
10.6
|
|
Advanced
Approach
|
9.5
|
|
9.3
|
|
9.8
|
|
Estimated
supplementary leverage ratio ("SLR") (d)
|
4.9
|
|
4.8
|
|
4.4
|
|
(a) Regulatory capital ratios for Dec. 31, 2015 are
preliminary.
(b) At Dec. 31, 2015 and Sept.
30, 2015, the CET1, Tier 1 and Total risk-based consolidated
regulatory capital ratios determined under the transitional Basel
III Standardized Approach were 11.6%, 13.2% and 13.6%, and 11.2%,
12.7%, and 13.1%, respectively. At Dec. 31, 2014, the CET1, Tier 1 and Total
risk-based consolidated regulatory capital ratios determined under
the transitional Standardized Approach were 15.0%, 16.3% and 16.9%,
and were calculated based on Basel III components of capital, as
phased-in, and asset risk-weightings using Basel I-based
requirements.
(c) See "Supplemental
information – Explanation of GAAP and Non-GAAP financial measures"
beginning on page 24 for a reconciliation of these
ratios.
(d) The estimated SLR on a fully
phased-in basis (Non-GAAP) for our largest bank subsidiary, The
Bank of New York Mellon, was 4.8% at Dec.
31, 2015 and 4.6% at Sept. 30,
2015.
Estimated Basel
III CET1 generation presented on a fully phased-in basis – Non-GAAP
– preliminary
|
|
(in
millions)
|
4Q15
|
Estimated fully
phased-in Basel III CET1 – Non-GAAP – Beginning of
period
|
$
|
16,077
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon Corporation –
GAAP
|
637
|
|
Goodwill and
intangible assets, net of related deferred tax
liabilities
|
139
|
|
Gross Basel III CET1
generated
|
776
|
|
Capital
deployed:
|
|
Dividends
|
(188)
|
|
Common stock
repurchased
|
(431)
|
|
Total capital
deployed
|
(619)
|
|
Other comprehensive
(loss)
|
(245)
|
|
Additional paid-in
capital (a)
|
94
|
|
Other
|
(1)
|
|
Total other
deductions
|
(152)
|
|
Net Basel III CET1
generated
|
5
|
|
Estimated fully
phased-in Basel III CET1 – Non-GAAP – End of period
|
$
|
16,082
|
|
(a) Primarily related to stock awards, the
exercise of stock options and stock issued for employee benefit
plans.
The table presented below compares the fully phased-in Basel III
capital components and ratios to those capital components and
ratios determined on a phased-in basis (referred to as the
"Transitional Approach").
Basel III capital
components and ratios at Dec. 31, 2015 –
preliminary
|
Fully
phased-
in
Basel III -
Non-GAAP
|
|
Transitional
Approach
(a)
|
(dollars in
millions)
|
|
CET1:
|
|
|
|
Common shareholders'
equity
|
$
|
35,485
|
|
|
$
|
36,067
|
|
Goodwill and
intangible assets
|
(18,911)
|
|
|
(17,295)
|
|
Net pension fund
assets
|
(116)
|
|
|
(46)
|
|
Equity method
investments
|
(347)
|
|
|
(296)
|
|
Deferred tax
assets
|
(20)
|
|
|
(8)
|
|
Other
|
(9)
|
|
|
(5)
|
|
Total CET1
|
16,082
|
|
|
18,417
|
|
Other Tier 1
capital:
|
|
|
|
Preferred
stock
|
2,552
|
|
|
2,552
|
|
Trust preferred
securities
|
—
|
|
|
74
|
|
Disallowed deferred
tax assets
|
—
|
|
|
(12)
|
|
Net pension fund
assets
|
—
|
|
|
(70)
|
|
Other
|
(22)
|
|
|
(25)
|
|
Total Tier 1
capital
|
18,612
|
|
|
20,936
|
|
|
|
|
|
Tier 2
capital:
|
|
|
|
Trust preferred
securities
|
—
|
|
|
222
|
|
Subordinated
debt
|
149
|
|
|
149
|
|
Allowance for credit
losses
|
275
|
|
|
275
|
|
Other
|
(12)
|
|
|
(12)
|
|
Total Tier 2 capital
- Standardized Approach
|
412
|
|
|
634
|
|
Excess of expected
credit losses
|
19
|
|
|
19
|
|
Less: Allowance for
credit losses
|
275
|
|
|
275
|
|
Total Tier 2 capital
- Advanced Approach
|
$
|
156
|
|
|
$
|
378
|
|
|
|
|
|
Total
capital:
|
|
|
|
Standardized
Approach
|
$
|
19,024
|
|
|
$
|
21,570
|
|
Advanced
Approach
|
$
|
18,768
|
|
|
$
|
21,314
|
|
|
|
|
|
Risk-weighted
assets:
|
|
|
|
Standardized
Approach
|
$
|
156,428
|
|
|
$
|
158,273
|
|
Advanced
Approach
|
$
|
168,703
|
|
|
$
|
170,578
|
|
|
|
|
|
Standardized
Approach:
|
|
|
|
Estimated Basel III
CET1 ratio
|
10.3
|
%
|
|
11.6
|
%
|
Tier 1 capital
ratio
|
11.9
|
|
|
13.2
|
|
Total (Tier 1 plus
Tier 2) capital ratio
|
12.2
|
|
|
13.6
|
|
|
|
|
|
Advanced
Approach:
|
|
|
|
Estimated Basel III
CET1 ratio
|
9.5
|
%
|
|
10.8
|
%
|
Tier 1 capital
ratio
|
11.0
|
|
|
12.3
|
|
Total (Tier 1 plus
Tier 2) capital ratio
|
11.1
|
|
|
12.5
|
|
(a) Reflects transitional adjustments to CET1,
Tier 1 capital and Tier 2 capital required in 2015 under the U.S.
capital rules.
BNY Mellon has presented its estimated fully phased-in Basel III
CET1 and other risk-based capital ratios and SLR based on its
interpretation of the U.S. capital rules, which are being gradually
phased-in over a multi-year period, and on the application of such
rules to BNY Mellon's businesses as currently conducted.
Management views the estimated fully phased-in Basel III CET1 and
other risk-based capital ratios and SLR as key measures in
monitoring BNY Mellon's capital position and progress against
future regulatory capital standards. Additionally, the
presentation of the estimated fully phased-in Basel III CET1 and
other risk-based capital ratios and SLR are intended to allow
investors to compare these ratios with estimates presented by other
companies. The estimated fully phased-in Basel III CET1 and
other risk-based capital ratios for certain periods assume certain
regulatory approvals. The U.S. capital rules require approval
by banking regulators of certain models used as part of RWA
calculations. If these models are not approved, the estimated
fully phased-in Basel III CET1 and other risk-based capital ratios
would likely be adversely impacted.
RWA at Dec. 31, 2014, for credit
risk under the estimated fully phased-in Advanced Approach,
reflects the use of a simple value-at-risk methodology for
repo-style transactions (including agented indemnified securities
lending transactions), eligible margin loans, and similar
transactions. The estimated fully phased-in Advanced Approach
RWA at Dec. 31, 2015 and Sept. 30, 2015 no longer assumes the use of this
methodology.
Our capital and liquidity ratios are necessarily subject to,
among other things, BNY Mellon's further review of applicable
rules, anticipated compliance with all necessary enhancements to
model calibration, approval by regulators of certain models used as
part of RWA calculations, other refinements, further implementation
guidance from regulators, market practices and standards and any
changes BNY Mellon may make to its businesses. Consequently,
our capital and liquidity ratios remain subject to ongoing review
and revision and may change based on these factors.
Supplementary Leverage Ratio ("SLR")
The following table presents the components of our estimated SLR
using fully phased-in Basel III components of capital.
Estimated fully
phased-in SLR – Non-GAAP (a)
(dollars in
millions)
|
Dec. 31,
2015
|
(b)
|
Sept. 30,
2015
|
|
Dec. 31,
2014
|
Total estimated fully
phased-in Basel III CET1 – Non-GAAP
|
$
|
16,082
|
|
|
$
|
16,077
|
|
|
$
|
15,931
|
|
Additional Tier 1
capital
|
2,530
|
|
|
2,528
|
|
|
1,550
|
|
Total Tier 1
capital
|
$
|
18,612
|
|
|
$
|
18,605
|
|
|
$
|
17,481
|
|
|
|
|
|
|
|
Total leverage
exposure:
|
|
|
|
|
|
Quarterly average
total assets
|
$
|
368,590
|
|
|
$
|
373,453
|
|
|
$
|
385,232
|
|
Less: Amounts
deducted from Tier 1 capital
|
19,403
|
|
|
19,532
|
|
|
19,947
|
|
Total on-balance
sheet assets, as adjusted
|
349,187
|
|
|
353,921
|
|
|
365,285
|
|
Off-balance sheet
exposures:
|
|
|
|
|
|
Potential future
exposure for derivatives contracts (plus certain other
items)
|
7,358
|
|
|
8,358
|
|
|
11,376
|
|
Repo-style
transaction exposures included in SLR
|
440
|
|
|
362
|
|
|
302
|
|
Credit-equivalent
amount of other off-balance sheet exposures (less SLR
exclusions)
|
26,224
|
|
|
27,482
|
|
|
21,850
|
|
Total off-balance
sheet exposures
|
34,022
|
|
|
36,202
|
|
|
33,528
|
|
Total leverage
exposure
|
$
|
383,209
|
|
|
$
|
390,123
|
|
|
$
|
398,813
|
|
|
|
|
|
|
|
Estimated fully
phased-in SLR – Non-GAAP
|
4.9
|
%
|
(c)
|
4.8
|
%
|
(c)
|
4.4
|
%
|
(a) The estimated fully phased-in SLR (Non-GAAP)
is based on our interpretation of the U.S. capital rules.
When the SLR is fully phased-in, we expect to maintain an SLR of
over 5%. The minimum required SLR is 3% and there is a 2%
buffer, in addition to the minimum, that is applicable to U.S.
G-SIBs.
(b) Dec. 31, 2015 information is preliminary.
(c) The estimated SLR on a fully phased-in
basis (Non-GAAP) for our largest bank subsidiary, The Bank of New
York Mellon, was 4.8% at Dec. 31,
2015 and 4.6% at Sept. 30,
2015. At Dec. 31, 2015 and
Sept. 30, 2015, total Tier 1 capital
was $15,142 million and $14,882 million, respectively, and total leverage
exposure was $316,268 million and
$322,531 million, respectively, for
The Bank of New York Mellon.
Liquidity Coverage Ratio ("LCR")
The U.S. LCR rules became effective Jan.
1, 2015 and require BNY Mellon to meet an LCR of 80%,
increasing annually by 10% increments until fully phased-in on
Jan. 1, 2017, at which time we will
be required to meet an LCR of 100%. Our estimated LCR on a
consolidated basis is compliant with the fully phased-in
requirements of the U.S. LCR as of Dec. 31,
2015 based on our current understanding of the U.S. LCR
rules.
INVESTMENT MANAGEMENT provides investment management
services to institutional and retail investors, as well as
investment management, wealth and estate planning and private
banking solutions to high net worth individuals and families, and
foundations and endowments.
(dollars in
millions, unless otherwise noted)
|
|
|
|
|
|
|
4Q15
vs.
|
4Q15
|
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q15
|
4Q14
|
Revenue:
|
|
|
|
|
|
|
|
|
Investment management
fees:
|
|
|
|
|
|
|
|
|
Mutual
funds
|
$
|
294
|
|
|
$
|
301
|
|
$
|
312
|
|
$
|
301
|
|
$
|
306
|
|
(2)%
|
|
(4)%
|
|
Institutional
clients
|
350
|
|
|
347
|
|
363
|
|
365
|
|
364
|
|
1
|
|
(4)
|
|
Wealth
management
|
155
|
|
|
156
|
|
160
|
|
159
|
|
157
|
|
(1)
|
|
(1)
|
|
Investment management
fees
|
799
|
|
|
804
|
|
835
|
|
825
|
|
827
|
|
(1)
|
|
(3)
|
|
Performance
fees
|
55
|
|
|
7
|
|
20
|
|
15
|
|
40
|
|
N/M
|
38
|
|
Investment management
and performance fees
|
854
|
|
|
811
|
|
855
|
|
840
|
|
867
|
|
5
|
|
(1)
|
|
Distribution and
servicing
|
39
|
|
|
37
|
|
38
|
|
38
|
|
39
|
|
5
|
|
—
|
|
Other
(a)
|
25
|
|
|
(2)
|
|
20
|
|
45
|
|
6
|
|
N/M
|
N/M
|
Total fee and other
revenue (a)
|
918
|
|
|
846
|
|
913
|
|
923
|
|
912
|
|
9
|
|
1
|
|
Net interest
revenue
|
84
|
|
|
83
|
|
78
|
|
74
|
|
69
|
|
1
|
|
22
|
|
Total
revenue
|
1,002
|
|
|
929
|
|
991
|
|
997
|
|
981
|
|
8
|
|
2
|
|
Noninterest expense
(ex. amortization of intangible assets)
|
691
|
|
|
668
|
|
703
|
|
710
|
|
716
|
|
3
|
|
(3)
|
|
Income before taxes
(ex. amortization of intangible assets)
|
311
|
|
|
261
|
|
288
|
|
287
|
|
265
|
|
19
|
|
17
|
|
Amortization of
intangible assets
|
24
|
|
|
24
|
|
25
|
|
24
|
|
29
|
|
—
|
|
(17)
|
|
Income before
taxes
|
$
|
287
|
|
|
$
|
237
|
|
$
|
263
|
|
$
|
263
|
|
$
|
236
|
|
21
|
%
|
22
|
%
|
|
|
|
|
|
|
|
|
|
Pre-tax operating
margin
|
29
|
%
|
|
26
|
%
|
27
|
%
|
26
|
%
|
24
|
%
|
|
|
Adjusted pre-tax
operating margin (b)
|
36
|
%
|
|
34
|
%
|
34
|
%
|
34
|
%
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Changes in AUM
(in billions): (c)
|
|
|
|
|
|
|
|
|
Beginning balance of
AUM
|
$
|
1,625
|
|
|
$
|
1,700
|
|
$
|
1,717
|
|
$
|
1,686
|
|
$
|
1,620
|
|
|
|
Net inflows
(outflows):
|
|
|
|
|
|
|
|
|
Long-term:
|
|
|
|
|
|
|
|
|
Equity
|
(9)
|
|
|
(4)
|
|
(13)
|
|
(5)
|
|
(5)
|
|
|
|
Fixed
income
|
1
|
|
|
(3)
|
|
(2)
|
|
3
|
|
4
|
|
|
|
Index
|
(16)
|
|
|
(10)
|
|
(9)
|
|
8
|
|
1
|
|
|
|
Liability-driven
investments (d)
|
11
|
|
|
11
|
|
5
|
|
8
|
|
24
|
|
|
|
Alternative
investments
|
2
|
|
|
1
|
|
3
|
|
1
|
|
2
|
|
|
|
Total long-term
inflows (outflows)
|
(11)
|
|
|
(5)
|
|
(16)
|
|
15
|
|
26
|
|
|
|
Short
term:
|
|
|
|
|
|
|
|
|
Cash
|
2
|
|
|
(10)
|
|
(11)
|
|
1
|
|
6
|
|
|
|
Total net inflows
(outflows)
|
(9)
|
|
|
(15)
|
|
(27)
|
|
16
|
|
32
|
|
|
|
Net market/currency
impact/acquisition
|
9
|
|
|
(60)
|
|
10
|
|
15
|
|
34
|
|
|
|
Ending balance of
AUM
|
$
|
1,625
|
|
(e)
|
$
|
1,625
|
|
$
|
1,700
|
|
$
|
1,717
|
|
$
|
1,686
|
|
—
|
%
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
AUM at period end,
by product type: (c)
|
|
|
|
|
|
|
|
|
Equity
|
14
|
%
|
|
14
|
%
|
15
|
%
|
15
|
%
|
15
|
%
|
|
|
Fixed
income
|
13
|
|
|
13
|
|
13
|
|
12
|
|
12
|
|
|
|
Index
|
20
|
|
|
20
|
|
21
|
|
22
|
|
21
|
|
|
|
Liability-driven
investments (d)
|
32
|
|
|
32
|
|
30
|
|
30
|
|
30
|
|
|
|
Alternative
investments
|
4
|
|
|
4
|
|
4
|
|
4
|
|
4
|
|
|
|
Cash
|
17
|
|
|
17
|
|
17
|
|
17
|
|
18
|
|
|
|
Total AUM
|
100
|
%
|
(e)
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Average
balances:
|
|
|
|
|
|
|
|
|
Average
loans
|
$
|
13,447
|
|
|
$
|
12,779
|
|
$
|
12,298
|
|
$
|
11,634
|
|
$
|
11,124
|
|
5
|
%
|
21
|
%
|
Average
deposits
|
$
|
15,497
|
|
|
$
|
15,282
|
|
$
|
14,638
|
|
$
|
15,217
|
|
$
|
14,602
|
|
1
|
%
|
6
|
%
|
(a) Total fee and other revenue includes the
impact of the consolidated investment management funds, net of
noncontrolling interests. See "Supplemental information –
Explanation of GAAP and Non-GAAP financial measures" beginning on
page 24 for the reconciliation of Non-GAAP measures.
Additionally, other revenue includes asset servicing, treasury
services, foreign exchange and other trading revenue and investment
and other income.
(b) Excludes the net
negative impact of money market fee waivers, amortization of
intangible assets and is net of distribution and servicing
expense. See "Supplemental information – Explanation of GAAP
and Non-GAAP financial measures" beginning on page 24 for the
reconciliation of this Non-GAAP
measure.
(c) Excludes securities
lending cash management assets and assets managed in the Investment
Services business. In 3Q15, prior period AUM was restated to
reflect the reclassification of Meriten from the Investment
Management business to the Other segment.
(d)
Includes currency overlay assets under
management.
(e)
Preliminary.
N/M – Not meaningful.
INVESTMENT MANAGEMENT KEY POINTS
- Assets under management were $1.63
trillion at Dec. 31, 2015, a
decrease of 4% year-over-year and flat sequentially. Both
comparisons reflect the unfavorable impact of a stronger U.S.
dollar. The year-over-year decrease also reflects net outflows and
lower market values, partially offset by the January 2015 acquisition of Cutwater Asset
Management. Sequentially, higher market values were partially
offset by net outflows.
- Net long-term outflows of $11
billion in 4Q15 driven by index and equity investments
offset by continued strength in liability-driven investments.
- Net short-term inflows were $2
billion in 4Q15.
- Income before taxes excluding amortization of intangible assets
totaled $311 million in 4Q15, an
increase of 17% year-over-year and 19% sequentially.
- Total revenue was $1.0 billion,
an increase of 2% year-over-year and 8% sequentially. Both
increases primarily reflect seasonally higher performance fees and
seed capital gains. The year-over-year increase also reflects
higher net interest revenue and higher other trading revenue
related to losses on hedging activities within a boutique recorded
in 4Q14, partially offset by the unfavorable impact of a stronger
U.S. dollar.
- 42% non-U.S. revenue in 4Q15 vs. 43% in 4Q14.
- Investment management fees were $799
million, a decrease of 3% year-over-year, or flat on a
constant currency basis (Non-GAAP). On a constant currency basis
(Non-GAAP), investment management fees primarily reflect net
outflows and lower market values, offset by lower money market fee
waivers and the impact of strategic initiatives. Sequentially,
investment management fees decreased 1% primarily reflecting net
outflows, partially offset by lower money market fee waivers and
higher equity market values.
- Performance fees were $55 million
in 4Q15 compared with $40 million in
4Q14 and $7 million in 3Q15. The
sequential increase was driven by seasonality.
- Other revenue was $25 million in
4Q15 compared with $6 million in 4Q14
and other losses of $2 million in
3Q15. Both increases primarily reflect higher seed capital gains.
The year-over-year comparison also reflects higher other trading
revenue related to losses on hedging activities within a boutique
recorded in 4Q14.
- Net interest revenue increased 22% year-over-year and 1%
sequentially. Both increases primarily reflect record high average
loans and deposits and higher internal crediting rates for
deposits.
- Average loans increased 21% year-over-year and 5% sequentially;
average deposits increased 6% year-over-year and 1%
sequentially.
- Total noninterest expense (excluding amortization of intangible
assets) decreased 3% year-over-year and increased 3% sequentially.
The year-over-year decrease primarily reflects the favorable impact
of a stronger U.S. dollar, lower incentives and distribution and
servicing expenses and the business improvement process, partially
offset by strategic initiatives. The sequential increase primarily
reflects higher incentive expense driven by seasonally higher
performance fees.
- BNY Mellon has signed a definitive agreement to acquire the
assets of Menlo Park, CA-based
Atherton Lane Advisers, LLC. With approximately $2.7 billion in assets under management,
Atherton is one of Silicon
Valley's premier independent investment managers serving
approximately 700 high net-worth clients.
INVESTMENT SERVICES provides global custody and related
services, broker-dealer services, global collateral services,
corporate trust, depositary receipt and clearing services as well
as global payment/working capital solutions to global financial
institutions.
(dollars in
millions, unless otherwise noted)
|
|
|
|
|
|
|
4Q15
vs.
|
4Q15
|
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
3Q15
|
4Q14
|
Revenue:
|
|
|
|
|
|
|
|
|
Investment services
fees:
|
|
|
|
|
|
|
|
|
Asset
servicing
|
$
|
1,005
|
|
|
$
|
1,031
|
|
$
|
1,035
|
|
$
|
1,013
|
|
$
|
992
|
|
(3)%
|
|
1
|
%
|
Clearing
services
|
337
|
|
|
345
|
|
346
|
|
342
|
|
346
|
|
(2)
|
|
(3)
|
|
Issuer
services
|
199
|
|
|
312
|
|
234
|
|
231
|
|
193
|
|
(36)
|
|
3
|
|
Treasury
services
|
135
|
|
|
135
|
|
141
|
|
135
|
|
142
|
|
—
|
|
(5)
|
|
Total investment
services fees
|
1,676
|
|
|
1,823
|
|
1,756
|
|
1,721
|
|
1,673
|
|
(8)
|
|
—
|
|
Foreign exchange and
other trading revenue
|
148
|
|
|
177
|
|
179
|
|
209
|
|
165
|
|
(16)
|
|
(10)
|
|
Other
(a)
|
102
|
|
|
87
|
|
85
|
|
63
|
|
70
|
|
17
|
|
46
|
|
Total fee and other
revenue
|
1,926
|
|
|
2,087
|
|
2,020
|
|
1,993
|
|
1,908
|
|
(8)
|
|
1
|
|
Net interest
revenue
|
632
|
|
|
628
|
|
636
|
|
599
|
|
573
|
|
1
|
|
10
|
|
Total
revenue
|
2,558
|
|
|
2,715
|
|
2,656
|
|
2,592
|
|
2,481
|
|
(6)
|
|
3
|
|
Noninterest expense
(ex. amortization of intangible assets)
|
1,765
|
|
|
1,822
|
|
1,840
|
|
1,794
|
|
2,509
|
|
(3)
|
|
(30)
|
|
Income (loss) before
taxes (ex. amortization of intangible assets)
|
793
|
|
|
893
|
|
816
|
|
798
|
|
(28)
|
|
(11)
|
|
N/M
|
Amortization of
intangible assets
|
40
|
|
|
41
|
|
40
|
|
41
|
|
43
|
|
(2)
|
|
(7)
|
|
Income (loss) before
taxes
|
$
|
753
|
|
|
$
|
852
|
|
$
|
776
|
|
$
|
757
|
|
$
|
(71)
|
|
(12)%
|
|
N/M
|
|
|
|
|
|
|
|
|
|
Pre-tax operating
margin
|
29
|
%
|
|
31
|
%
|
29
|
%
|
29
|
%
|
(3)%
|
|
|
|
Pre-tax operating
margin (ex. amortization of intangible assets)
|
31
|
%
|
|
33
|
%
|
31
|
%
|
31
|
%
|
(1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment services
fees as a percentage of noninterest expense (b)
|
96
|
%
|
|
101
|
%
|
98
|
%
|
96
|
%
|
93
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Securities lending
revenue
|
$
|
36
|
|
|
$
|
30
|
|
$
|
40
|
|
$
|
34
|
|
$
|
28
|
|
20
|
%
|
29
|
%
|
|
|
|
|
|
|
|
|
|
Metrics:
|
|
|
|
|
|
|
|
|
Average
loans
|
$
|
36,960
|
|
|
$
|
38,025
|
|
$
|
38,264
|
|
$
|
37,699
|
|
$
|
35,448
|
|
(3)%
|
|
4
|
%
|
Average
deposits
|
$
|
226,774
|
|
|
$
|
230,153
|
|
$
|
237,193
|
|
$
|
234,183
|
|
$
|
228,282
|
|
(1)%
|
|
(1)%
|
|
|
|
|
|
|
|
|
|
|
AUC/A at period end
(in trillions) (c)
|
$
|
28.9
|
|
(d)
|
$
|
28.5
|
|
$
|
28.6
|
|
$
|
28.5
|
|
$
|
28.5
|
|
1
|
%
|
1
|
%
|
Market value of
securities on loan at period end
(in billions)
(e)
|
$
|
277
|
|
|
$
|
288
|
|
$
|
283
|
|
$
|
291
|
|
$
|
289
|
|
(4)%
|
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
Asset
servicing:
|
|
|
|
|
|
|
|
|
Estimated new
business wins (AUC/A) (in billions)
|
$
|
49
|
|
(d)
|
$
|
84
|
|
$
|
933
|
|
$
|
125
|
|
$
|
168
|
|
|
|
|
|
|
|
|
|
|
|
|
Depositary
Receipts:
|
|
|
|
|
|
|
|
|
Number of sponsored
programs
|
1,145
|
|
|
1,176
|
|
1,206
|
|
1,258
|
|
1,279
|
|
(3)%
|
|
(10)%
|
|
|
|
|
|
|
|
|
|
|
Clearing
services:
|
|
|
|
|
|
|
|
|
Global DARTS volume
(in thousands)
|
230
|
|
|
246
|
|
242
|
|
261
|
|
242
|
|
(7)%
|
|
(5)%
|
|
Average active
clearing accounts (U.S. platform)
(in
thousands)
|
5,959
|
|
|
6,107
|
|
6,046
|
|
5,979
|
|
5,900
|
|
(2)%
|
|
1
|
%
|
Average long-term
mutual fund assets (U.S. platform)
|
$
|
437,260
|
|
|
$
|
447,287
|
|
$
|
466,195
|
|
$
|
456,954
|
|
$
|
450,305
|
|
(2)%
|
|
(3)%
|
|
Average investor
margin loans (U.S. platform)
|
$
|
11,575
|
|
|
$
|
11,806
|
|
$
|
11,890
|
|
$
|
11,232
|
|
$
|
10,711
|
|
(2)%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
Broker-Dealer:
|
|
|
|
|
|
|
|
|
Average tri-party
repo balances (in billions)
|
$
|
2,153
|
|
|
$
|
2,142
|
|
$
|
2,174
|
|
$
|
2,153
|
|
$
|
2,101
|
|
1
|
%
|
2
|
%
|
(a) Other revenue includes investment management
fees, financing-related fees, distribution and servicing revenue
and investment and other income.
(b)
Noninterest expense excludes amortization of intangible assets and
litigation expense.
(c) Includes the
AUC/A of CIBC Mellon of $1.0 trillion
at Dec. 31, 2015 and
Sept. 30, 2015 and
$1.1 trillion at June 30, 2015, March 31, 2015 and Dec.
31, 2014.
(d)
Preliminary.
(e) Represents the total
amount of securities on loan managed by the Investment Services
business. Excludes securities for which BNY Mellon acts as
agent on behalf of CIBC Mellon clients, which totaled $55 billion at Dec. 31,
2015, $61 billion at
Sept. 30, 2015, $68 billion at June
30, 2015, $69 billion
at March 31, 2015 and
$65 billion at Dec. 31, 2014.
N/M – Not
meaningful.
INVESTMENT SERVICES KEY POINTS
- Income before taxes excluding amortization of intangible assets
totaled $793 million in 4Q15.
- The pre-tax operating margin excluding amortization of
intangible assets was 31% in 4Q15 and the investment services fees
as a percentage of noninterest expense was 96% in 4Q15, reflecting
the continued focus on the business improvement process to drive
operating leverage.
- Investment services fees were $1.7
billion, flat year-over-year and a decrease of 8%
sequentially.
- Asset servicing fees (global custody, broker-dealer services
and global collateral services) were $1.01
billion in 4Q15 compared with $992
million in 4Q14 and $1.03
billion in 3Q15. The year-over-year increase primarily
reflects growth in the Global Collateral Services and Broker-Dealer
Services and higher securities lending revenue, partially offset by
the unfavorable impact of a stronger U.S. dollar. The sequential
decrease primarily reflects lower client activity.
- Estimated new business wins (AUC/A) in Asset Servicing of
$49 billion in 4Q15.
- Clearing services fees were $337
million in 4Q15 compared with $346
million in 4Q14 and $345
million in 3Q15. Both decreases primarily reflect lost
business due to industry consolidations.
- Issuer services fees (Corporate Trust and Depositary Receipts)
were $199 million in 4Q15 compared
with $193 million in 4Q14 and
$312 million in 3Q15. The
year-over-year increase primarily reflects net new business and
lower money market fee waivers in Corporate Trust, partially offset
by the unfavorable impact of a stronger U.S. dollar in Corporate
Trust. The sequential decrease primarily reflects seasonality in
Depositary Receipts.
- Treasury services fees were $135
million in 4Q15 compared with $142
million in 4Q14 and $135
million in 3Q15. The year-over-year decrease primarily
reflects higher compensating balance credits provided to clients
and lower volumes.
- Foreign exchange and other trading revenue was $148 million in 4Q15 compared with $165 million in 4Q14 and $177 million in 3Q15. The year-over-year decrease
primarily reflects lower volumes in standing instruction programs
and lower volatility, partially offset by higher volumes in other
trading programs. The sequential decrease primarily reflects lower
volumes and volatility and lower Depositary Receipts-related
activity.
- Other revenue was $102 million in
4Q15 compared with $70 million in
4Q14 and $87 million in 3Q15. Both
increases primarily relate to termination fees in our clearing
services business.
- Net interest revenue was $632
million in 4Q15 compared with $573
million in 4Q14 and $628
million in 3Q15. Both increases primarily reflect higher
internal crediting rates for deposits, partially offset by lower
average deposits.
- Noninterest expense (excluding amortization of intangible
assets) was $1.77 billion in 4Q15
compared with $2.51 billion in 4Q14
and $1.82 billion in 3Q15. The
year-over-year decrease primarily reflects lower litigation and
consulting expenses, an adjustment to bank assessment charges and
the favorable impact of a stronger U.S. dollar, partially offset by
higher staff expense. The sequential decrease primarily reflects an
adjustment to bank assessment charges, partially offset by higher
staff expense.
OTHER SEGMENT primarily includes credit-related
activities, leasing operations, corporate treasury activities,
global markets and institutional banking services, business exits,
M&I expenses and other corporate revenue and expense items.
|
|
|
|
|
|
(dollars in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
Revenue:
|
|
|
|
|
|
Fee and other
revenue
|
$
|
117
|
|
$
|
103
|
|
$
|
137
|
|
$
|
117
|
|
$
|
133
|
|
Net interest
revenue
|
44
|
|
48
|
|
65
|
|
55
|
|
70
|
|
Total
revenue
|
161
|
|
151
|
|
202
|
|
172
|
|
203
|
|
Provision for credit
losses
|
163
|
|
1
|
|
(6)
|
|
2
|
|
1
|
|
Noninterest expense
(ex. amortization of intangible assets, M&I and restructuring
charges (recoveries))
|
174
|
|
125
|
|
110
|
|
134
|
|
226
|
|
(Loss) income before
taxes (ex. amortization of intangible assets, M&I and
restructuring charges (recoveries))
|
(176)
|
|
25
|
|
98
|
|
36
|
|
(24)
|
|
Amortization of
intangible assets
|
—
|
|
1
|
|
—
|
|
1
|
|
1
|
|
M&I and
restructuring charges (recoveries)
|
(4)
|
|
(2)
|
|
8
|
|
(4)
|
|
—
|
|
(Loss) income before
taxes
|
$
|
(172)
|
|
$
|
26
|
|
$
|
90
|
|
$
|
39
|
|
$
|
(25)
|
|
|
|
|
|
|
|
Average loans and
leases
|
$
|
11,557
|
|
$
|
10,853
|
|
$
|
10,514
|
|
$
|
8,602
|
|
$
|
10,272
|
|
KEY POINTS
- Total fee and other revenue decreased $16 million compared with 4Q14 and increased
$14 million compared with 3Q15. The
year-over-year decrease primarily reflects lower asset-related
gains, lease residual gains, the impact of the July 2015 sale of Meriten Investment Management
GmbH and lower securities gains, partially offset by the impact of
hedging activity for foreign currency placements. The sequential
increase primarily reflects higher asset-related gains, income from
corporate/bank-owned life insurance and the impact of hedging
activity for foreign currency placements, partially offset by lower
underwriting fees.
- Net interest revenue decreased $26
million compared with 4Q14 and $4
million compared with 3Q15. Both decreases primarily reflect
higher internal crediting rates to the businesses for deposits,
partially offset by higher average loans and leases.
- The provision for credit losses was $163
million in 4Q15 reflecting the impairment charge related to
a recent court decision.
- Noninterest expense, excluding amortization of intangible
assets, M&I and restructuring charges (recoveries), decreased
$52 million compared with 4Q14 and
increased $49 million compared with
3Q15. Both comparisons were impacted by higher employee benefits
expense primarily reflecting updated information received from an
administrator of our health care benefits. The year-over-year
decrease primarily reflects lower litigation and the impact of
curtailing the U.S. pension plan. The sequential increase also
reflects higher professional, legal and other purchased
services.
THE BANK OF NEW
YORK MELLON CORPORATION
Condensed Consolidated
Income Statement
(in
millions)
|
Quarter
ended
|
|
Year-to-date
|
|
Dec.
31,
2015
|
Sept. 30,
2015
|
Dec. 31,
2014
|
|
Dec.
31,
2015
|
Dec. 31,
2014
|
|
|
|
Fee and other
revenue
|
|
|
|
|
|
|
|
Investment services
fees:
|
|
|
|
|
|
|
|
Asset
servicing
|
$
|
1,032
|
|
$
|
1,057
|
|
$
|
1,019
|
|
|
$
|
4,187
|
|
$
|
4,075
|
|
|
Clearing
services
|
339
|
|
345
|
|
347
|
|
|
1,375
|
|
1,335
|
|
|
Issuer
services
|
199
|
|
313
|
|
193
|
|
|
978
|
|
968
|
|
|
Treasury
services
|
137
|
|
137
|
|
145
|
|
|
555
|
|
564
|
|
|
Total investment
services fees
|
1,707
|
|
1,852
|
|
1,704
|
|
|
7,095
|
|
6,942
|
|
|
Investment management
and performance fees
|
864
|
|
829
|
|
885
|
|
|
3,438
|
|
3,492
|
|
|
Foreign exchange and
other trading revenue
|
173
|
|
179
|
|
151
|
|
|
768
|
|
570
|
|
|
Financing-related
fees
|
51
|
|
71
|
|
43
|
|
|
220
|
|
169
|
|
|
Distribution and
servicing
|
41
|
|
41
|
|
43
|
|
|
162
|
|
173
|
|
|
Investment and other
income
|
93
|
|
59
|
|
78
|
|
|
316
|
|
1,212
|
|
|
Total fee
revenue
|
2,929
|
|
3,031
|
|
2,904
|
|
|
11,999
|
|
12,558
|
|
|
Net securities
gains
|
21
|
|
22
|
|
31
|
|
|
83
|
|
91
|
|
|
Total fee and other
revenue
|
2,950
|
|
3,053
|
|
2,935
|
|
|
12,082
|
|
12,649
|
|
|
Operations of
consolidated investment management funds
|
|
|
|
|
|
|
|
Investment income
(loss)
|
19
|
|
(6)
|
|
101
|
|
|
115
|
|
503
|
|
|
Interest of
investment management fund note holders
|
3
|
|
16
|
|
59
|
|
|
29
|
|
340
|
|
|
Income (loss) from
consolidated investment management funds
|
16
|
|
(22)
|
|
42
|
|
|
86
|
|
163
|
|
|
Net interest
revenue
|
|
|
|
|
|
|
|
Interest
revenue
|
834
|
|
838
|
|
802
|
|
|
3,326
|
|
3,234
|
|
|
Interest
expense
|
74
|
|
79
|
|
90
|
|
|
300
|
|
354
|
|
|
Net interest
revenue
|
760
|
|
759
|
|
712
|
|
|
3,026
|
|
2,880
|
|
|
Provision for credit
losses
|
163
|
|
1
|
|
1
|
|
|
160
|
|
(48)
|
|
|
Net interest revenue
after provision for credit losses
|
597
|
|
758
|
|
711
|
|
|
2,866
|
|
2,928
|
|
|
Noninterest
expense
|
|
|
|
|
|
|
|
Staff
|
1,481
|
|
1,437
|
|
1,418
|
|
|
5,837
|
|
5,845
|
|
|
Professional, legal
and other purchased services
|
328
|
|
301
|
|
390
|
|
|
1,230
|
|
1,339
|
|
|
Software and
equipment
|
225
|
|
226
|
|
235
|
|
|
907
|
|
942
|
|
|
Net
occupancy
|
148
|
|
152
|
|
150
|
|
|
600
|
|
610
|
|
|
Distribution and
servicing
|
92
|
|
95
|
|
102
|
|
|
381
|
|
428
|
|
|
Sub-custodian
|
60
|
|
65
|
|
70
|
|
|
270
|
|
286
|
|
|
Business
development
|
75
|
|
59
|
|
75
|
|
|
267
|
|
268
|
|
|
Other
|
201
|
|
268
|
|
211
|
|
|
961
|
|
1,031
|
|
|
Amortization of
intangible assets
|
64
|
|
66
|
|
73
|
|
|
261
|
|
298
|
|
|
Merger and
integration, litigation and restructuring charges
|
18
|
|
11
|
|
800
|
|
|
85
|
|
1,130
|
|
|
Total noninterest
expense
|
2,692
|
|
2,680
|
|
3,524
|
|
|
10,799
|
|
12,177
|
|
|
Income
|
|
|
|
|
|
|
|
Income before income
taxes
|
871
|
|
1,109
|
|
164
|
|
|
4,235
|
|
3,563
|
|
|
Provision for income
taxes
|
175
|
|
282
|
|
(93)
|
|
|
1,013
|
|
912
|
|
|
Net income
|
696
|
|
827
|
|
257
|
|
|
3,222
|
|
2,651
|
|
|
Net (income) loss
attributable to noncontrolling interests (includes $(5), $5, $(24),
$(68) and $(84) related to consolidated investment management
funds, respectively)
|
(3)
|
|
6
|
|
(24)
|
|
|
(64)
|
|
(84)
|
|
|
Net income applicable
to shareholders of The Bank of New York Mellon
Corporation
|
693
|
|
833
|
|
233
|
|
|
3,158
|
|
2,567
|
|
|
Preferred stock
dividends
|
(56)
|
|
(13)
|
|
(24)
|
|
|
(105)
|
|
(73)
|
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
637
|
|
$
|
820
|
|
$
|
209
|
|
|
$
|
3,053
|
|
$
|
2,494
|
|
|
THE BANK OF NEW
YORK MELLON CORPORATION
Condensed Consolidated
Income Statement - continued
Net income
applicable to common shareholders of The Bank of
New York
Mellon Corporation used for the earnings per
share
calculation
(in
millions)
|
Quarter
ended
|
|
Year-to-date
|
|
|
|
Dec. 31,
2015
|
Sept. 30,
2015
|
Dec. 31,
2014
|
|
Dec. 31,
2015
|
Dec. 31,
2014
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation
|
$
|
637
|
|
$
|
820
|
|
$
|
209
|
|
|
$
|
3,053
|
|
$
|
2,494
|
|
|
Less: Earnings
allocated to participating securities
|
9
|
|
6
|
|
4
|
|
|
43
|
|
43
|
|
|
Net income applicable
to the common shareholders of The Bank of New York Mellon
Corporation after required adjustments for the calculation of basic
and diluted earnings per common share
|
$
|
628
|
|
$
|
814
|
|
$
|
205
|
|
|
$
|
3,010
|
|
$
|
2,451
|
|
|
Average common
shares and equivalents outstanding of The Bank
of New York
Mellon Corporation
(in
thousands)
|
Quarter
ended
|
|
Year-to-date
|
Dec. 31,
2015
|
Sept. 30,
2015
|
Dec. 31,
2014
|
|
Dec. 31,
2015
|
Dec. 31,
2014
|
Basic
|
1,088,880
|
|
1,098,003
|
|
1,120,672
|
|
|
1,104,719
|
|
1,129,897
|
|
Diluted
|
1,096,385
|
|
1,105,645
|
|
1,129,040
|
|
|
1,112,511
|
|
1,137,480
|
|
Earnings per share
applicable to the common shareholders of The
Bank of New
York Mellon Corporation
(in
dollars)
|
Quarter
ended
|
|
Year-to-date
|
Dec. 31,
2015
|
Sept. 30,
2015
|
Dec. 31,
2014
|
|
Dec. 31,
2015
|
Dec. 31,
2014
|
Basic
|
$
|
0.58
|
|
$
|
0.74
|
|
$
|
0.18
|
|
|
$
|
2.73
|
|
$
|
2.17
|
|
Diluted
|
$
|
0.57
|
|
$
|
0.74
|
|
$
|
0.18
|
|
|
$
|
2.71
|
|
$
|
2.15
|
|
THE BANK OF NEW
YORK MELLON CORPORATION
Consolidated Balance
Sheet
(dollars in
millions, except per share amounts)
|
Dec.
31,
2015
|
Sept. 30,
2015
|
Dec. 31,
2014
|
|
|
Assets
|
|
|
|
|
Cash and due
from:
|
|
|
|
|
Banks
|
$
|
6,537
|
|
$
|
8,234
|
|
$
|
6,970
|
|
|
Interest-bearing
deposits with the Federal Reserve and other central
banks
|
113,203
|
|
82,426
|
|
96,682
|
|
|
Interest-bearing
deposits with banks
|
15,146
|
|
20,002
|
|
19,495
|
|
|
Federal funds sold
and securities purchased under resale agreements
|
24,373
|
|
28,901
|
|
20,302
|
|
|
Securities:
|
|
|
|
|
Held-to-maturity (fair
value of $43,204, $43,758 and $21,127)
|
43,312
|
|
43,423
|
|
20,933
|
|
|
Available-for-sale
|
75,867
|
|
76,682
|
|
98,330
|
|
|
Total
securities
|
119,179
|
|
120,105
|
|
119,263
|
|
|
Trading
assets
|
7,368
|
|
6,645
|
|
9,881
|
|
|
Loans
|
63,703
|
|
63,309
|
|
59,132
|
|
|
Allowance for loan
losses
|
(157)
|
|
(181)
|
|
(191)
|
|
|
Net loans
|
63,546
|
|
63,128
|
|
58,941
|
|
|
Premises and
equipment
|
1,379
|
|
1,361
|
|
1,394
|
|
|
Accrued interest
receivable
|
562
|
|
530
|
|
607
|
|
|
Goodwill
|
17,618
|
|
17,679
|
|
17,869
|
|
|
Intangible
assets
|
3,842
|
|
3,914
|
|
4,127
|
|
|
Other
assets
|
19,626
|
|
22,149
|
|
20,490
|
|
|
Subtotal assets of
operations
|
392,379
|
|
375,074
|
|
376,021
|
|
|
Assets of
consolidated investment management funds, at fair value:
|
|
|
|
|
Trading
assets
|
1,228
|
|
2,087
|
|
8,678
|
|
|
Other
assets
|
173
|
|
210
|
|
604
|
|
|
Subtotal assets of
consolidated investment management funds, at fair value
|
1,401
|
|
2,297
|
|
9,282
|
|
|
Total
assets
|
$
|
393,780
|
|
$
|
377,371
|
|
$
|
385,303
|
|
|
Liabilities
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
(principally U.S. offices)
|
$
|
96,277
|
|
$
|
101,111
|
|
$
|
104,240
|
|
|
Interest-bearing
deposits in U.S. offices
|
51,704
|
|
54,073
|
|
53,236
|
|
|
Interest-bearing
deposits in Non-U.S. offices
|
131,629
|
|
111,584
|
|
108,393
|
|
|
Total
deposits
|
279,610
|
|
266,768
|
|
265,869
|
|
|
Federal funds
purchased and securities sold under repurchase
agreements
|
15,002
|
|
8,824
|
|
11,469
|
|
|
Trading
liabilities
|
4,501
|
|
4,756
|
|
7,434
|
|
|
Payables to customers
and broker-dealers
|
21,900
|
|
22,236
|
|
21,181
|
|
|
Other borrowed
funds
|
523
|
|
648
|
|
786
|
|
|
Accrued taxes and
other expenses
|
5,986
|
|
6,457
|
|
6,903
|
|
|
Other liabilities
(includes allowance for lending-related commitments of $118, $99
and $89)
|
5,490
|
|
5,890
|
|
5,025
|
|
|
Long-term
debt
|
21,547
|
|
21,430
|
|
20,264
|
|
|
Subtotal liabilities
of operations
|
354,559
|
|
337,009
|
|
338,931
|
|
|
Liabilities of
consolidated investment management funds, at fair value:
|
|
|
|
|
Trading
liabilities
|
229
|
|
1,072
|
|
7,660
|
|
|
Other
liabilities
|
17
|
|
91
|
|
9
|
|
|
Subtotal liabilities
of consolidated investment management funds, at fair
value
|
246
|
|
1,163
|
|
7,669
|
|
|
Total
liabilities
|
354,805
|
|
338,172
|
|
346,600
|
|
|
Temporary
equity
|
|
|
|
|
Redeemable
noncontrolling interests
|
200
|
|
247
|
|
229
|
|
|
Permanent
equity
|
|
|
|
|
Preferred stock – par
value $0.01 per share; authorized 100,000,000 shares; issued
25,826, 25,826 and 15,826 shares
|
2,552
|
|
2,552
|
|
1,562
|
|
|
Common stock – par
value $0.01 per share; authorized 3,500,000,000 shares; issued
1,312,941,113, 1,310,436,554 and 1,290,222,821 shares
|
13
|
|
13
|
|
13
|
|
|
Additional paid-in
capital
|
25,262
|
|
25,168
|
|
24,626
|
|
|
Retained
earnings
|
19,974
|
|
19,525
|
|
17,683
|
|
|
Accumulated other
comprehensive loss, net of tax
|
(2,600)
|
|
(2,355)
|
|
(1,634)
|
|
|
Less: Treasury
stock of 227,598,128, 217,483,962 and 171,995,262 common shares, at
cost
|
(7,164)
|
|
(6,733)
|
|
(4,809)
|
|
|
Total The Bank of New
York Mellon Corporation shareholders' equity
|
38,037
|
|
38,170
|
|
37,441
|
|
|
Nonredeemable
noncontrolling interests of consolidated investment management
funds
|
738
|
|
782
|
|
1,033
|
|
|
Total permanent
equity
|
38,775
|
|
38,952
|
|
38,474
|
|
|
Total liabilities,
temporary equity and permanent equity
|
$
|
393,780
|
|
$
|
377,371
|
|
$
|
385,303
|
|
|
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP
FINANCIAL MEASURES
BNY Mellon has included in this Earnings Release certain
Non-GAAP financial measures based on fully phased-in Basel III CET1
and other risk-based capital ratios, SLR and tangible common
shareholders' equity. BNY Mellon believes that the Basel III
CET1 and other risk-based capital ratios on a fully phased-in
basis, the SLR on a fully phased-in basis and the ratio of tangible
common shareholders' equity to tangible assets of operations are
measures of capital strength that provide additional useful
information to investors, supplementing the capital ratios which
are, or were, required by regulatory authorities. The
tangible common shareholders' equity ratio includes changes in
investment securities valuations which are reflected in total
shareholders' equity. In addition, this ratio is expressed as
a percentage of the actual book value of assets, as opposed to a
percentage of a risk-based reduced value established in accordance
with regulatory requirements, although BNY Mellon in its
reconciliation has excluded certain assets which are given a zero
percent risk-weighting for regulatory purposes and the assets of
consolidated investment management funds to which BNY Mellon has
limited economic exposure. Further, BNY Mellon believes that
the return on tangible common equity measure, which excludes
goodwill and intangible assets net of deferred tax liabilities, is
a useful additional measure for investors because it presents a
measure of those assets that can generate income. BNY Mellon
has provided a measure of tangible book value per common share,
which it believes provides additional useful information as to the
level of tangible assets in relation to shares of common stock
outstanding.
BNY Mellon has presented revenue measures which exclude the
effect of noncontrolling interests related to consolidated
investment management funds, a gain on the sale of our investment
in Wing Hang and a gain on the sale of the One Wall Street
building; and expense measures which exclude M&I expenses,
litigation charges, restructuring charges and amortization of
intangible assets. Earnings per share, return on equity
measures and operating margin measures, which exclude some or all
of these items, as well as the impairment charge related to a
recent court decision, are also presented. Earnings per share
and return on equity measures also exclude the benefit primarily
related to a tax carryback claim. Operating margin measures
may also exclude amortization of intangible assets and the net
negative impact of money market fee waivers, net of distribution
and servicing expense. BNY Mellon believes that these
measures are useful to investors because they permit a focus on
period-to-period comparisons, which relate to the ability of BNY
Mellon to enhance revenues and limit expenses in circumstances
where such matters are within BNY Mellon's control. The
excluded items, in general, relate to certain charges as a result
of prior transactions. M&I expenses primarily relate to
acquisitions and generally continue for approximately three years
after the transaction. Litigation charges represent accruals
for loss contingencies that are both probable and reasonably
estimable, but exclude standard business-related legal fees.
Restructuring charges relate to our streamlining actions,
Operational Excellence Initiatives and migrating positions to
Global Delivery Centers. Excluding these charges mentioned
above permits investors to view expenses on a basis consistent with
how management views the business.
The presentation of revenue growth on a constant currency basis
permits investors to assess the significance of changes in foreign
currency exchange rates. Growth rates on a constant currency
basis were determined by applying the current period foreign
currency exchange rates to the prior period revenue. BNY
Mellon believes that this presentation, as a supplement to GAAP
information, gives investors a clearer picture of the related
revenue results without the variability caused by fluctuations in
foreign currency exchange rates.
The presentation of income from consolidated investment
management funds, net of net income attributable to noncontrolling
interests related to the consolidation of certain investment
management funds permits investors to view revenue on a basis
consistent with how management views the business. BNY Mellon
believes that these presentations, as a supplement to GAAP
information, give investors a clearer picture of the results of its
primary businesses.
In this Earnings Release, the net interest margin is presented
on an FTE basis. We believe that this presentation provides
comparability of amounts arising from both taxable and tax-exempt
sources, and is consistent with industry practice. The
adjustment to an FTE basis has no impact on net income. Each
of these measures as described above is used by management to
monitor financial performance, both on a company-wide and on a
business-level basis.
Reconciliation of
net income and diluted EPS – GAAP to Non-GAAP
|
Net income
|
|
Diluted
EPS
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per common share amounts)
|
YTD15
|
YTD14
|
|
YTD15
|
YTD14
|
|
Inc
|
Net income applicable
to common shareholders of The Bank of New York Mellon
Corporation –
GAAP
|
$
|
3,053
|
|
$
|
2,494
|
|
|
$
|
2.71
|
|
$
|
2.15
|
|
|
|
Less:
Gain on the sale of our investment in Wing Hang Bank
|
N/A
|
|
315
|
|
|
N/A
|
|
0.27
|
|
|
|
Gain on the sale of
the One Wall Street building
|
N/A
|
|
204
|
|
|
N/A
|
|
0.18
|
|
|
|
Benefit primarily
related to a tax carryback claim
|
N/A
|
|
150
|
|
|
N/A
|
|
0.13
|
|
|
|
Add:
Litigation and restructuring charges
|
56
|
|
860
|
|
|
0.05
|
|
0.74
|
|
|
|
Impairment charge
related to a recent court decision
|
106
|
|
N/A
|
|
|
0.09
|
|
N/A
|
|
|
|
Charge related to
investment management funds, net of incentives
|
N/A
|
|
81
|
|
|
N/A
|
|
0.07
|
|
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon Corporation –
Non-GAAP
|
$
|
3,215
|
|
$
|
2,766
|
|
|
$
|
2.85
|
|
$
|
2.39
|
|
(a)
|
19
|
%
|
(a) Does not foot due to rounding.
N/A
- Not applicable.
The following table presents the reconciliation of the pre-tax
operating margin ratio.
Reconciliation of
income before income taxes – pre-tax
operating
margin
|
|
|
|
|
|
|
|
|
|
(dollars in
millions)
|
4Q15
|
|
3Q15
|
|
2Q15
|
|
1Q15
|
|
4Q14
|
Income before income
taxes – GAAP
|
$
|
871
|
|
|
$
|
1,109
|
|
|
$
|
1,165
|
|
|
$
|
1,090
|
|
|
$
|
164
|
|
Less: Net
income (loss) attributable to noncontrolling interests of
consolidated investment management funds
|
5
|
|
|
(5)
|
|
|
37
|
|
|
31
|
|
|
24
|
|
Add:
Amortization of intangible assets
|
64
|
|
|
66
|
|
|
65
|
|
|
66
|
|
|
73
|
|
M&I, litigation
and restructuring charges (recoveries)
|
18
|
|
|
11
|
|
|
59
|
|
|
(3)
|
|
|
800
|
|
Impairment
charge related to a recent court decision
|
170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income before income
taxes, as adjusted – Non-GAAP (a)
|
$
|
1,118
|
|
|
$
|
1,191
|
|
|
$
|
1,252
|
|
|
$
|
1,122
|
|
|
$
|
1,013
|
|
|
|
|
|
|
|
|
|
|
|
Fee and other revenue
– GAAP
|
$
|
2,950
|
|
|
$
|
3,053
|
|
|
$
|
3,067
|
|
|
$
|
3,012
|
|
|
$
|
2,935
|
|
Income (loss) from
consolidated investment management funds – GAAP
|
16
|
|
|
(22)
|
|
|
40
|
|
|
52
|
|
|
42
|
|
Net interest revenue
– GAAP
|
760
|
|
|
759
|
|
|
779
|
|
|
728
|
|
|
712
|
|
Total revenue –
GAAP
|
3,726
|
|
|
3,790
|
|
|
3,886
|
|
|
3,792
|
|
|
3,689
|
|
Less: Net
income (loss) attributable to noncontrolling interests of
consolidated investment management funds
|
5
|
|
|
(5)
|
|
|
37
|
|
|
31
|
|
|
24
|
|
Total revenue, as
adjusted – Non-GAAP (a)
|
$
|
3,721
|
|
|
$
|
3,795
|
|
|
$
|
3,849
|
|
|
$
|
3,761
|
|
|
$
|
3,665
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax operating
margin (b)
|
23
|
%
|
(c)
|
29
|
%
|
(c)
|
30
|
%
|
(c)
|
29
|
%
|
(c)
|
4
|
%
|
Pre-tax operating
margin – Non-GAAP (a)(b)
|
30
|
%
|
(c)
|
31
|
%
|
(c)
|
33
|
%
|
(c)
|
30
|
%
|
(c)
|
28
|
%
|
(a) Non-GAAP excludes net income (loss)
attributable to noncontrolling interests of consolidated investment
management funds, amortization of intangible assets, M&I,
litigation and restructuring charges (recoveries), and the
impairment charge related to a recent court decision, if
applicable.
(b) Income before taxes divided
by total revenue.
(c) Our GAAP
earnings include tax-advantaged investments such as low income
housing, renewable energy, bank-owned life insurance and tax-exempt
securities. The benefits of these investments are primarily
reflected in tax expense. If reported on a tax-equivalent
basis these investments would increase revenue and income before
taxes by $73 million for 4Q15,
$53 million for 3Q15, $52 million for 2Q15 and $64 million for 1Q15 and would increase our
pre-tax operating margin by approximately 1.5% for 4Q15, 1.0% for
3Q15, 0.9% for 2Q15 and 1.2% for 1Q15.
Pre-tax operating
leverage
|
|
|
YTD15
vs.
|
(dollars in
millions)
|
YTD15
|
YTD14
|
YTD14
|
Total revenue -
GAAP
|
$
|
15,194
|
|
$
|
15,692
|
|
|
Less: Net
income (loss) attributable to noncontrolling interests of
consolidated investment management funds
|
68
|
|
84
|
|
|
Gain on the sale of
our investment in Wing Hang Bank
|
—
|
|
490
|
|
|
Gain on the sale of
the One Wall Street building
|
—
|
|
346
|
|
|
Total revenue, as
adjusted - Non-GAAP
|
$
|
15,126
|
|
$
|
14,772
|
|
2.40
|
%
|
|
|
|
|
Total noninterest
expense - GAAP
|
$
|
10,799
|
|
$
|
12,177
|
|
|
Less:
Amortization of intangible assets
|
261
|
|
298
|
|
|
M&I, litigation
and restructuring charges
|
85
|
|
1,130
|
|
|
Charge related to
investment management funds, net of incentives
|
—
|
|
104
|
|
|
Total noninterest
expense, as adjusted - Non-GAAP
|
$
|
10,453
|
|
$
|
10,645
|
|
(1.80)
|
%
|
|
|
|
|
Pre-tax operating
leverage, as adjusted - Non-GAAP (a)(b)
|
|
|
420
|
bps
|
(a) Pre-tax operating leverage is the rate of
increase in total revenue less the rate of increase in total
noninterest expense.
(b) Non-GAAP excludes
the gains on the sales of our investment in Wing Hang Bank and the
One Wall Street building, amortization of intangible assets,
M&I, litigation and restructuring charges and the charge
related to investment management funds, net of incentives, if
applicable.
The following table presents the reconciliation of the returns
on common equity and tangible common equity.
Return on common
equity and tangible common equity
|
|
|
|
|
|
|
(dollars in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
YTD15
|
Net income applicable
to common shareholders of The Bank of New York Mellon Corporation –
GAAP
|
$
|
637
|
|
$
|
820
|
|
$
|
830
|
|
$
|
766
|
|
$
|
209
|
|
$
|
3,053
|
|
Add:
Amortization of intangible assets, net of tax
|
42
|
|
43
|
|
44
|
|
43
|
|
47
|
|
172
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon Corporation
excluding amortization of intangible assets – Non-GAAP
|
679
|
|
863
|
|
874
|
|
809
|
|
256
|
|
3,225
|
|
Less: Benefit
primarily related to a tax carryback claim
|
—
|
|
—
|
|
—
|
|
—
|
|
150
|
|
—
|
|
Add: M&I,
litigation and restructuring charges (recoveries)
|
12
|
|
8
|
|
38
|
|
(2)
|
|
608
|
|
56
|
|
Impairment
charge related to a recent court decision
|
106
|
|
—
|
|
—
|
|
—
|
|
—
|
|
106
|
|
Net income applicable
to common shareholders of The Bank of New York Mellon Corporation,
as adjusted – Non-GAAP (a)
|
$
|
797
|
|
$
|
871
|
|
$
|
912
|
|
$
|
807
|
|
$
|
714
|
|
$
|
3,387
|
|
|
|
|
|
|
|
|
Average common
shareholders' equity
|
$
|
35,664
|
|
$
|
35,588
|
|
$
|
35,516
|
|
$
|
35,486
|
|
$
|
36,859
|
|
$
|
35,564
|
|
Less: Average
goodwill
|
17,673
|
|
17,742
|
|
17,752
|
|
17,756
|
|
17,924
|
|
17,731
|
|
Average intangible
assets
|
3,887
|
|
3,962
|
|
4,031
|
|
4,088
|
|
4,174
|
|
3,992
|
|
Add: Deferred
tax liability – tax deductible goodwill (b)
|
1,401
|
|
1,379
|
|
1,351
|
|
1,362
|
|
1,340
|
|
1,401
|
|
Deferred tax liability
– intangible assets (b)
|
1,148
|
|
1,164
|
|
1,179
|
|
1,200
|
|
1,216
|
|
1,148
|
|
Average tangible
common shareholders' equity – Non-GAAP
|
$
|
16,653
|
|
$
|
16,427
|
|
$
|
16,263
|
|
$
|
16,204
|
|
$
|
17,317
|
|
$
|
16,390
|
|
|
|
|
|
|
|
|
Return on common
equity – GAAP (c)
|
7.1
|
%
|
9.1
|
%
|
9.4
|
%
|
8.8
|
%
|
2.2
|
%
|
8.6
|
%
|
Return on common
equity – Non-GAAP (a)(c)
|
8.9
|
%
|
9.7
|
%
|
10.3
|
%
|
9.2
|
%
|
7.7
|
%
|
9.5
|
%
|
|
|
|
|
|
|
|
Return on tangible
common equity – Non-GAAP (c)
|
16.2
|
%
|
20.8
|
%
|
21.5
|
%
|
20.3
|
%
|
5.9
|
%
|
19.7
|
%
|
Return on tangible
common equity – Non-GAAP adjusted (a)(c)
|
19.0
|
%
|
21.0
|
%
|
22.5
|
%
|
20.2
|
%
|
16.3
|
%
|
20.7
|
%
|
(a) Non-GAAP excludes amortization of intangible
assets, net of tax, the benefit primarily related to a tax
carryback claim, M&I, litigation and restructuring charges
(recoveries) and the impairment charge related to a recent court
decision, if applicable.
(b) Deferred tax
liabilities are based on fully phased-in Basel III rules.
(c) Annualized.
The following table presents the reconciliation of the equity to
assets ratio and book value per common share.
Equity to assets
and book value per common share
|
Dec.
31,
2015
|
Sept. 30,
2015
|
June 30,
2015
|
March 31,
2015
|
Dec. 31,
2014
|
(dollars in
millions, unless otherwise noted)
|
BNY Mellon
shareholders' equity at period end – GAAP
|
$
|
38,037
|
|
$
|
38,170
|
|
$
|
38,270
|
|
$
|
37,328
|
|
$
|
37,441
|
|
Less: Preferred
stock
|
2,552
|
|
2,552
|
|
2,552
|
|
1,562
|
|
1,562
|
|
BNY Mellon common
shareholders' equity at period end – GAAP
|
35,485
|
|
35,618
|
|
35,718
|
|
35,766
|
|
35,879
|
|
Less:
Goodwill
|
17,618
|
|
17,679
|
|
17,807
|
|
17,663
|
|
17,869
|
|
Intangible
assets
|
3,842
|
|
3,914
|
|
4,000
|
|
4,047
|
|
4,127
|
|
Add: Deferred
tax liability – tax deductible goodwill (a)
|
1,401
|
|
1,379
|
|
1,351
|
|
1,362
|
|
1,340
|
|
Deferred tax liability
– intangible assets (a)
|
1,148
|
|
1,164
|
|
1,179
|
|
1,200
|
|
1,216
|
|
BNY Mellon tangible
common shareholders' equity at period end – Non-GAAP
|
$
|
16,574
|
|
$
|
16,568
|
|
$
|
16,441
|
|
$
|
16,618
|
|
$
|
16,439
|
|
|
|
|
|
|
|
Total assets at
period end – GAAP
|
$
|
393,780
|
|
$
|
377,371
|
|
$
|
395,254
|
|
$
|
392,337
|
|
$
|
385,303
|
|
Less: Assets of
consolidated investment management funds
|
1,401
|
|
2,297
|
|
2,231
|
|
1,681
|
|
9,282
|
|
Subtotal assets of
operations – Non-GAAP
|
392,379
|
|
375,074
|
|
393,023
|
|
390,656
|
|
376,021
|
|
Less:
Goodwill
|
17,618
|
|
17,679
|
|
17,807
|
|
17,663
|
|
17,869
|
|
Intangible
assets
|
3,842
|
|
3,914
|
|
4,000
|
|
4,047
|
|
4,127
|
|
Cash on deposit with
the Federal Reserve and other central banks (b)
|
116,211
|
|
86,426
|
|
106,628
|
|
93,044
|
|
99,901
|
|
Tangible total assets
of operations at period end – Non-GAAP
|
$
|
254,708
|
|
$
|
267,055
|
|
$
|
264,588
|
|
$
|
275,902
|
|
$
|
254,124
|
|
|
|
|
|
|
|
BNY Mellon
shareholders' equity to total assets ratio – GAAP
|
9.7
|
%
|
10.1
|
%
|
9.7
|
%
|
9.5
|
%
|
9.7
|
%
|
BNY Mellon common
shareholders' equity to total assets ratio – GAAP
|
9.0
|
%
|
9.4
|
%
|
9.0
|
%
|
9.1
|
%
|
9.3
|
%
|
BNY Mellon tangible
common shareholders' equity to tangible assets of operations ratio
– Non-GAAP
|
6.5
|
%
|
6.2
|
%
|
6.2
|
%
|
6.0
|
%
|
6.5
|
%
|
|
|
|
|
|
|
Period-end common
shares outstanding (in thousands)
|
1,085,343
|
|
1,092,953
|
|
1,106,518
|
|
1,121,512
|
|
1,118,228
|
|
|
|
|
|
|
|
Book value per common
share – GAAP
|
$
|
32.69
|
|
$
|
32.59
|
|
$
|
32.28
|
|
$
|
31.89
|
|
$
|
32.09
|
|
Tangible book value
per common share – Non-GAAP
|
$
|
15.27
|
|
$
|
15.16
|
|
$
|
14.86
|
|
$
|
14.82
|
|
$
|
14.70
|
|
(a) Deferred tax liabilities are based on fully
phased-in Basel III rules.
(b) Assigned a
zero percent risk-weighting by the regulators.
The following table presents income from consolidated investment
management funds, net of noncontrolling interests.
Income from
consolidated investment management funds, net of noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
Income (loss) from
consolidated investment management funds
|
$
|
16
|
|
$
|
(22)
|
|
$
|
40
|
|
$
|
52
|
|
$
|
42
|
|
Less: Net
income (loss) attributable to noncontrolling interests of
consolidated investment management funds
|
5
|
|
(5)
|
|
37
|
|
31
|
|
24
|
|
Income (loss) from
consolidated investment management funds, net of noncontrolling
interests
|
$
|
11
|
|
$
|
(17)
|
|
$
|
3
|
|
$
|
21
|
|
$
|
18
|
|
The following table presents the impact of changes in foreign
currency exchange rates on our consolidated investment management
and performance fees.
Investment
management and performance fees – Consolidated
|
|
|
4Q15
vs.
|
(dollars in
millions)
|
4Q15
|
4Q14
|
4Q14
|
Investment management
and performance fees – GAAP
|
$
|
864
|
|
885
|
|
(2)%
|
|
Impact of changes in
foreign currency exchange rates
|
—
|
|
(27)
|
|
|
Investment management
and performance fees, as adjusted – Non-GAAP
|
$
|
864
|
|
$
|
858
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
The following table presents the revenue line items in the
Investment Management business impacted by the consolidated
investment management funds.
Income (loss) from
consolidated investment management funds, net of
noncontrolling interests - Investment
Management business
|
|
|
|
|
|
(in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
Investment management
fees
|
$
|
7
|
|
$
|
3
|
|
$
|
4
|
|
$
|
1
|
|
$
|
15
|
|
Other (Investment
income (loss))
|
4
|
|
(20)
|
|
(1)
|
|
20
|
|
3
|
|
Income (loss) from
consolidated investment management funds, net of noncontrolling
interests
|
$
|
11
|
|
$
|
(17)
|
|
$
|
3
|
|
$
|
21
|
|
$
|
18
|
|
The following table presents the impact of changes in foreign
currency exchange rates on investment management fees reported in
the Investment Management segment.
Investment
management fees - Investment Management business
|
|
|
4Q15
vs.
|
(dollars in
millions)
|
4Q15
|
4Q14
|
4Q14
|
Investment management
fees – GAAP
|
$
|
799
|
|
$
|
827
|
|
(3)
|
%
|
Impact of changes in
foreign currency exchange rates
|
—
|
|
(24)
|
|
|
Investment management
fees, as adjusted – Non-GAAP
|
$
|
799
|
|
$
|
803
|
|
—
|
%
|
The following table presents the reconciliation of the pre-tax
operating margin for the Investment Management business.
Pre-tax operating
margin - Investment Management business
|
|
|
|
|
|
(dollars in
millions)
|
4Q15
|
3Q15
|
2Q15
|
1Q15
|
4Q14
|
Income before income
taxes – GAAP
|
$
|
287
|
|
$
|
237
|
|
$
|
263
|
|
$
|
263
|
|
$
|
236
|
|
Add:
Amortization of intangible assets
|
24
|
|
24
|
|
25
|
|
24
|
|
29
|
|
Money market fee
waivers
|
23
|
|
28
|
|
29
|
|
33
|
|
33
|
|
Income before income
taxes excluding amortization of intangible assets and money market
fee waivers – Non-GAAP
|
$
|
334
|
|
$
|
289
|
|
$
|
317
|
|
$
|
320
|
|
$
|
298
|
|
|
|
|
|
|
|
Total revenue –
GAAP
|
$
|
1,002
|
|
$
|
929
|
|
$
|
991
|
|
$
|
997
|
|
$
|
981
|
|
Less:
Distribution and servicing expense
|
92
|
|
94
|
|
95
|
|
97
|
|
101
|
|
Money market fee
waivers benefiting distribution and servicing expense
|
27
|
|
35
|
|
37
|
|
38
|
|
37
|
|
Add: Money
market fee waivers impacting total revenue
|
50
|
|
63
|
|
66
|
|
71
|
|
70
|
|
Total revenue net of
distribution and servicing expense
and excluding money
market fee waivers – Non-GAAP
|
$
|
933
|
|
$
|
863
|
|
$
|
925
|
|
$
|
933
|
|
$
|
913
|
|
|
|
|
|
|
|
Pre-tax operating
margin (a)
|
29
|
%
|
26
|
%
|
27
|
%
|
26
|
%
|
24
|
%
|
Pre-tax operating
margin excluding amortization of intangible assets, money market
fee waivers and net of distribution and servicing expense –
Non-GAAP (a)
|
36
|
%
|
34
|
%
|
34
|
%
|
34
|
%
|
33
|
%
|
(a) Income before taxes divided by total
revenue.
DIVIDENDS
Common – On Jan. 21, 2016,
The Bank of New York Mellon Corporation declared a quarterly common
stock dividend of $0.17 per common
share. This cash dividend is payable on Feb. 12, 2016 to shareholders of record as of the
close of business on Feb. 2,
2016.
Preferred – On Jan. 21,
2016, The Bank of New York Mellon Corporation also declared
the following dividends for the noncumulative perpetual preferred
stock, liquidation preference $100,000 per share, for the dividend period
ending in March 2016, in each case
payable on March 21, 2016 to holders
of record as of the close of business on March 5, 2016:
- $1,011.11 per share on the Series
A Preferred Stock (equivalent to $10.1111 per Normal Preferred Capital Security of
Mellon Capital IV, each representing a 1/100th interest in a share
of the Series A Preferred Stock); and
- $1,300.00 per share on the Series
C Preferred Stock (equivalent to $0.3250 per depositary share, each representing a
1/4,000th interest in a share of the Series C Preferred
Stock).
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial
services for institutions, corporations or individual investors,
BNY Mellon delivers informed investment management and investment
services in 35 countries and more than 100 markets. As of
Dec. 31, 2015, BNY Mellon had
$28.9 trillion in assets under
custody and/or administration, and $1.6
trillion in assets under management. BNY Mellon can
act as a single point of contact for clients looking to create,
trade, hold, manage, service, distribute or restructure
investments. BNY Mellon is the corporate brand of The Bank of
New York Mellon Corporation (NYSE: BK). Additional
information is available on www.bnymellon.com. Follow us on
Twitter @BNYMellon or visit our newsroom at
www.bnymellon.com/newsroom for the latest company news.
CAUTIONARY STATEMENT
A number of statements (i) in this Earnings Release, (ii) in our
presentations and (iii) in the responses to questions on our
conference call discussing our quarterly results and other public
events may contain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 including
our estimated capital ratios and expectations relating to those
ratios, preliminary business metrics and statements regarding our
acquisition of Atherton, enhancing
the client experience, our focus on delivering value-added
solutions, investment excellence and actionable, data-driven
insights, capital plans, strategic priorities and our business
improvement process. These statements may be expressed in a
variety of ways, including the use of future or present tense
language. Words such as "estimate", "forecast", "project",
"anticipate", "target", "expect", "intend", "continue", "seek",
"believe", "plan", "goal", "could", "should", "may", "will",
"strategy", "opportunities", "trends" and words of similar meaning
signify forward-looking statements. These statements and
other forward-looking statements contained in other public
disclosures of The Bank of New York Mellon Corporation which make
reference to the cautionary factors described in this Earnings
Release are based upon current beliefs and expectations and are
subject to significant risks and uncertainties (some of which are
beyond BNY Mellon's control). Actual results may differ
materially from those expressed or implied as a result of these
risks and uncertainties, including, but not limited to, the risk
factors and other uncertainties set forth in BNY Mellon's Annual
Report on Form 10-K for the year ended Dec.
31, 2014 and BNY Mellon's other filings with the Securities
and Exchange Commission. All forward-looking statements in
this Earnings Release speak only as of Jan.
21, 2016, and BNY Mellon undertakes no obligation to update
any forward-looking statement to reflect events or circumstances
after that date or to reflect the occurrence of unanticipated
events.
Contacts:
MEDIA:
Kevin Heine
(212) 635-1590
kevin.heine@bnymellon.com
ANALYSTS:
Valerie Haertel
(212)
635-8529
valerie.haertel@bnymellon.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/bny-mellon-reports-fourth-quarter-earnings-of-637-million-or-057-per-common-share-including-011-per-common-share-for-the-previously-disclosed-impairment-charge-related-to-a-recent-court-decision-litigation-and-restructurin-300207738.html
SOURCE BNY Mellon