Bank of New York Mellon : Quarterly Financial Supplement 1Q 2020 (PDF)

The Bank of New York Mellon Corporation

Financial Supplement

First Quarter 2020

Table of Contents

Consolidated Results	Page
Consolidated Financial Highlights	3
Condensed Consolidated Income Statement	4
Condensed Consolidated Balance Sheet	5
Fee and Other Revenue	6
Average Balances and Interest Rates	7
Capital and Liquidity	8
Business Segment Results
Investment Services Business	9
Investment Management Business	11
AUM by Product, AUM Flows and Wealth Management Client Assets	12
Other Segment	13
Other
Securities Portfolio	14
Allowance for Credit Losses and Nonperforming Assets	15
Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures	16
Segment Reporting Changes	19

THE BANK OF NEW YORK MELLON CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS

(dollars in millions, except per common share amounts, or unless otherwise noted)				4Q19		3Q19		2Q19		1Q19	1Q20 vs.
	1Q20					4Q19	1Q19
Selected income statement data				3,971
Fee revenue	$	3,323	$	$	3,129	$	3,105	$	3,031		(16)%	10 %
Net securities gains (losses)		9		(25)		(1)		7		1		N/M	N/M
Total fee and other revenue		3,332		3,946		3,128		3,112		3,032		(16)	10
(Loss) income from consolidated investment management funds		(38)		17		3		10		26		N/M	N/M
Net interest revenue		814		815		730		802		841		-	(3)
Total revenue		4,108		4,778		3,861		3,924		3,899		(14)	5
Provision for credit losses		169		(8)		(16)		(8)		7		N/M	N/M
Noninterest expense		2,712		2,964		2,590		2,647		2,699		(9)	-
Income before income taxes		1,227		1,822		1,287		1,285		1,193		(33)	3
Provision for income taxes		265		373		246		264		237		(29)	12
Net income	$	962	$	1,449	$	1,041	$	1,021	$	956		(34)%	1 %
Net income applicable to common shareholders of The Bank of New York Mellon Corporation	$	944	$	1,391	$	1,002	$	969	$	910		(32)%	4 %
Diluted earnings per common share	$	1.05	$	1.52	$	1.07	$	1.01	$	0.94		(31)%	12 %
Average common shares and equivalents outstanding - diluted (in thousands)		896,689		914,739		935,677		953,928		965,960		(2)%	(7)%
Financial ratios(Quarterly returns are annualized)
Pre-tax operating margin		30%		38%		33%		33%		31%
Return on common equity		10.1%		14.6%		10.6%		10.4%		10.0%
Return on tangible common equity - Non-GAAP(a)		20.4%		29.3%		21.4%		21.2%		20.7%
Non-U.S. revenue as a percentage of total revenue		36%		31%		37%		36%		36%
Period end				37.1
Assets under custody and/or administration ("AUC/A") (in trillions) (b)	$	35.2	$	$	35.8	$	35.5	$	34.5		(5)%	2 %
Assets under management ("AUM") (in trillions)	$	1.80	$	1.91	$	1.88	$	1.84	$	1.84		(6)%	(2)%
Full-time employees		47,900		48,400		48,700		49,100		49,800		(1)%	(4)%
Book value per common share	$	42.47	$	42.12	$	40.75	$	40.30	$	39.36
Tangible book value per common share - Non-GAAP(a)	$	21.53	$	21.33	$	20.59	$	20.45	$	19.74
Cash dividends per common share	$	0.31	$	0.31	$	0.31	$	0.28	$	0.28
Common dividend payout ratio		30%		20%		29%		28%		30%
Closing stock price per common share	$	33.68	$	50.33	$	45.21	$	44.15	$	50.43
Market capitalization	$	29,822	$	45,331	$	41,693	$	41,619	$	48,288
Common shares outstanding (in thousands)		885,443		900,683		922,199		942,662		957,517
Capital ratios at period end(c)				11.5%
Common Equity Tier 1 ("CET1") ratio		11.3%			11.1%		11.1%		11.1%
Tier 1 capital ratio		13.5%		13.7%		13.2%		13.2%		13.2%
Total capital ratio		14.3%		14.4%		14.0%		14.0%		14.0%
Tier 1 leverage ratio		6.0%		6.6%		6.5%		6.8%		6.8%
Supplementary leverage ratio ("SLR")		5.6%		6.1%		6.0%		6.3%		6.3%

1. Non-GAAPinformation, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of Non-GAAP measures.
2. Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019, $1.4 trillion at Sept. 30, 2019 and June 30, 2019 and $1.3 trillion at March 31, 2019.
3. Regulatory capital ratios for March 31, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for the prior periods, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approaches for the CET1 and Tier 1 capital ratios and the Advanced Approach for the Total capital ratio.

N/M - Not meaningful.

3

THE BANK OF NEW YORK MELLON CORPORATION

CONDENSED CONSOLIDATED INCOME STATEMENT

(dollars in millions, except per share amounts; common shares in thousands)		1Q20		4Q19		3Q19		2Q19		1Q19	1Q20 vs.
					4Q19	1Q19
Revenue
Investment services fees:
Asset servicing fees	$	1,159	$	1,148	$	1,152	$	1,141	$	1,122		1 %	3 %
Clearing services fees		470		421		419		410		398		12	18
Issuer services fees		263		264		324		291		251		-	5
Treasury services fees		149		147		140		140		132		1	13
Total investment services fees		2,041		1,980		2,035		1,982		1,903		3	7
Investment management and performance fees		862		883		832		833		841		(2)	2
Foreign exchange and other trading revenue		319		168		150		166		170		90	88
Financing-related fees		59		46		49		50		51		28	16
Distribution and servicing		31		34		33		31		31		(9)	-
Investment and other income		11		860		30		43		35		N/M	N/M
Total fee revenue		3,323		3,971		3,129		3,105		3,031		(16)	10
Net securities gains (losses)		9		(25)		(1)		7		1		N/M	N/M
Total fee and other revenue		3,332		3,946		3,128		3,112		3,032		(16)	10
(Loss) income from consolidated investment management funds		(38)		17		3		10		26		N/M	N/M
Net interest revenue		814		815		730		802		841		-	(3)
Total revenue		4,108		4,778		3,861		3,924		3,899		(14)	5
Provision for credit losses		169		(8)		(16)		(8)		7		N/M	N/M
Noninterest expense
Staff		1,482		1,639		1,479		1,421		1,524		(10)	(3)
Professional, legal and other purchased services		330		367		316		337		325		(10)	2
Software and equipment		326		326		309		304		283		-	15
Net occupancy		135		151		138		138		137		(11)	(1)
Sub-custodian and clearing		105		119		111		115		105		(12)	-
Distribution and servicing		91		92		97		94		91		(1)	-
Business development		42		65		47		56		45		(35)	(7)
Bank assessment charges		35		32		31		31		31		9	13
Amortization of intangible assets		26		28		30		30		29		(7)	(10)
Other		140		145		32		121		129		(3)	9
Total noninterest expense		2,712		2,964		2,590		2,647		2,699		(9)	-
Income before income taxes		1,227		1,822		1,287		1,285		1,193		(33)	3
Provision for income taxes		265		373		246		264		237		(29)	12
Net income		962		1,449		1,041		1,021		956		(34)	1
Net loss (income) attributable to noncontrolling interests		18		(9)		(3)		(4)		(10)		N/M	N/M
Preferred stock dividends		(36)		(49)		(36)		(48)		(36)		N/M	N/M
Net income applicable to common shareholders of The Bank of New York Mellon Corporation	$	944	$	1,391	$	1,002	$	969	$	910		(32)%	4 %
Average common shares and equivalents outstanding: Basic		894,122		911,324		933,264		951,281		962,397		(2)%	(7)%
Diluted		896,689		914,739		935,677		953,928		965,960		(2)%	(7)%
Earnings per common share: Basic	$	1.05	$	1.52	$	1.07	$	1.01	$	0.94		(31)%	12 %
Diluted	$	1.05	$	1.52	$	1.07	$	1.01	$	0.94		(31)%	12 %
N/M - Not meaningful.

4

THE BANK OF NEW YORK MELLON CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

		2020					2019
(in millions)		March 31			Dec. 31		Sept. 30		June 30		March 31
Assets
Cash and due from banks	$	5,091	$	4,830	$	6,718	$	5,556	$	5,980
Interest-bearing deposits with the Federal Reserve and other central banks		146,535			95,042		73,811		69,700		60,699
Interest-bearing deposits with banks		22,672			14,811		15,417		15,491		13,681
Federal funds sold and securities purchased under resale agreements		27,363			30,182		43,723		61,201		40,158
Securities		139,273			123,033		122,340		120,142		117,504
Trading assets		12,918			13,571		10,180		8,629		6,868
Loans		62,368			54,953		54,881		52,396		53,487
Allowance for loan losses		(140)			(122)		(127)		(146)		(146)
Net loans		62,228			54,831		54,754		52,250		53,341
Premises and equipment		3,514			3,625		3,149		2,970		3,010
Accrued interest receivable		576			624		596		658		651
Goodwill		17,240			17,386		17,248		17,337		17,367
Intangible assets		3,070			3,107		3,124		3,160		3,193
Other assets		27,446			20,221		21,727		23,737		23,228
Subtotal assets of operations		467,926			381,263		372,787		380,831		345,680
Assets of consolidated investment management funds, at fair value		229			245		381		337		452
Total assets	$	468,155	$	381,508	$	373,168	$	381,168	$	346,132
Liabilities
Deposits	$	336,717	$	259,466	$	249,660	$	252,877	$	222,382
Federal funds purchased and securities sold under repurchase agreements		13,128			11,401		11,796		11,757		11,761
Trading liabilities		6,625			4,841		4,756		3,768		3,892
Payables to customers and broker-dealers		24,016			18,758		18,364		18,946		19,310
Commercial paper		1,121			3,959		3,538		8,894		2,773
Other borrowed funds		1,544			599		820		1,921		3,932
Accrued taxes and other expenses		4,705			5,642		5,081		5,045		4,686
Other liabilities		11,425			7,612		9,796		7,916		8,050
Long-term debt		27,494			27,501		27,872		28,203		27,874
Subtotal liabilities of operations		426,775			339,779		331,683		339,327		304,660
Liabilities of consolidated investment management funds, at fair value		1			1		15		6		3
Total liabilities		426,776			339,780		331,698		339,333		304,663
Temporary equity
Redeemable noncontrolling interests		140			143		147		136		122
Permanent equity
Preferred stock		3,542			3,542		3,542		3,542		3,542
Common stock		14			14		14		14		14
Additional paid-in capital		27,644			27,515		27,471		27,406		27,349
Retained earnings		32,601			31,894		30,789		30,081		29,382
Accumulated other comprehensive loss, net of tax		(2,827)			(2,638)		(2,893)		(2,688)		(2,990)
Less: Treasury stock, at cost		(19,829)			(18,844)		(17,803)		(16,822)		(16,072)
Total The Bank of New York Mellon Corporation shareholders' equity		41,145			41,483		41,120		41,533		41,225
Nonredeemable noncontrolling interests of consolidated investment management funds		94			102		203		166		122
Total permanent equity		41,239			41,585		41,323		41,699		41,347
Total liabilities, temporary equity and permanent equity	$	468,155	$	381,508	$	373,168	$	381,168	$	346,132

5

THE BANK OF NEW YORK MELLON CORPORATION

FEE AND OTHER REVENUE

				4Q19		3Q19		2Q19		1Q19	1Q20 vs.
(dollars in millions)		1Q20					4Q19	1Q19
Investment services fees:
Asset servicing fees (a)	$	1,108	$	1,104	$	1,109	$	1,097	$	1,074		- %	3%
Securities lending revenue		51		44		43		44		48		16	6
Clearing services fees (b)		470		421		419		410		398		12	18
Issuer services fees		263		264		324		291		251		-	5
Treasury services fees		149		147		140		140		132		1	13
Total investment services fees		2,041		1,980		2,035		1,982		1,903		3	7
Investment management and performance fees (c)
Investment management fee		812		835		830		831		810		(3)	-
Performance fees		50		48		2		2		31		N/M	N/M
Total investment management and performance fees (d)		862		883		832		833		841		(2)	2
Foreign exchange and other trading revenue:
Foreign exchange		253		138		129		150		160		83	58
Other trading revenue		66		30		21		16		10		N/M	N/M
Total foreign exchange and other trading revenue		319		168		150		166		170		90	88
Financing-related fees		59		46		49		50		51		28	16
Distribution and servicing		31		34		33		31		31		(9)	-
Investment and other income:
Corporate/bank-owned life insurance		36		43		33		32		30		N/M	N/M
Expense reimbursements from joint venture		21		20		21		19		19		N/M	N/M
Asset-related gains		4		815		2		1		1		N/M	N/M
Seed capital (losses) gains (c)		(31)		4		-		8		2		N/M	N/M
Other (loss)		(19)		(22)		(26)		(17)		(17)		N/M	N/M
Total investment and other income (c)		11		860		30		43		35		N/M	N/M
Total fee revenue		3,323		3,971		3,129		3,105		3,031		(16)	10
Net securities gains (losses)		9		(25)		(1)		7		1		N/M	N/M
Total fee and other revenue	$	3,332	$	3,946	$	3,128	$	3,112	$	3,032		(16)%	10%

1. Asset servicing fees include the fees from the Clearance and Collateral Management business.
2. Clearing services fees are almost entirely earned by our Pershing business.
3. Excludes seed capital gains related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds.
4. On a constant currency basis (Non-GAAP), investment management and performance fees increased 3% compared with 1Q19. See "Supplemental Information - Explanation of GAAP and Non- GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.

N/M - Not meaningful.

6

THE BANK OF NEW YORK MELLON CORPORATION

AVERAGE BALANCES AND INTEREST RATES

		1Q20				4Q19			3Q19				2Q19			1Q19
		Average	Average			Average	Average		Average	Average			Average	Average		Average	Average
(dollars in millions; average rates are annualized)		balance	rate			balance	rate		balance	rate			balance	rate		balance	rate
Assets
Interest-earning assets:
Interest-bearing deposits with the Federal Reserve and other central banks	$	80,403	0.39%	$	61,627	0.60%	$	60,030	0.67%		$	61,756	0.72%	$	63,583	0.87%
Interest-bearing deposits with banks (primarily foreign banks)		17,081	1.37			15,788	1.63		15,324	1.89			13,666	1.87		13,857	1.85
Federal funds sold and securities purchased under resale agreements (a)		34,109	4.67			38,846	4.62		40,816	6.42			38,038	5.99		28,968	6.63
Margin loans		12,984	2.69			11,609	3.25		10,303	4.02			10,920	4.36		12,670	4.34
Non-margin loans:
Domestic offices		31,720	3.02			29,690	3.36		29,285	2.75	(b)		29,492	3.86		28,177	3.85
Foreign offices		11,170	2.55			11,418	2.70		11,247	2.97			9,961	3.29		10,511	3.32
Total non-margin loans		42,890	2.89			41,108	3.18		40,532	2.81	(b)		39,453	3.71		38,688	3.70
Securities:
U.S. government obligations		23,175	1.87			18,444	2.08		19,315	2.11			18,870	2.19		23,597	2.22
U.S. government agency obligations		69,046	2.32			67,494	2.36		67,235	2.49			66,445	2.58		64,867	2.63
State and political subdivisions (c)		1,033	3.06			1,134	3.03		1,217	3.05			1,735	2.89		2,206	2.71
Other securities (c)		36,375	0.95			35,242	1.64		33,729	1.75			30,770	2.04		28,647	2.13
Trading securities (c)		6,840	2.36			6,695	2.41		5,653	2.80			5,764	2.72		5,102	2.91
Total securities (c)		136,469	1.88			129,009	2.13		127,149	2.25			123,584	2.40		124,419	2.45
Total interest-earning assets (c)	$	323,936	1.95%	$	297,987	2.30%	$	294,154	2.63% (b)	$	287,417	2.74%	$	282,185	2.75%
Noninterest-earning assets		61,342				56,354			56,525				54,967			53,980
Total assets	$	385,278		$	354,341		$	350,679			$	342,384		$	336,165
Liabilities and equity
Interest-bearing liabilities:
Interest-bearing deposits:
Domestic offices	$	99,915	0.69%	$	87,162	0.98%	$	82,663	1.28%		$	74,180	1.36%	$	70,562	1.29%
Foreign offices		97,717	0.29			95,262	0.49		94,738	0.71			93,365	0.78		89,317	0.76
Total interest-bearing deposits		197,632	0.49			182,424	0.73		177,401	0.98			167,545	1.04		159,879	0.99
Federal funds purchased and securities sold under repurchase		13,919	7.96			12,668	9.11		13,432	13.08			11,809	12.64		11,922	11.26
agreements (a)
Trading liabilities		1,626	1.61			1,504	2.25		1,371	2.33			1,735	2.47		1,305	2.25
Other borrowed funds		719	2.27			709	2.83		1,148	3.24			2,455	3.36		3,305	2.87
Commercial paper		1,581	1.56			1,792	1.66		3,796	2.26			2,957	2.43		1,377	2.44
Payables to customers and broker-dealers		16,386	0.73			15,178	1.07		15,440	1.52			15,666	1.76		16,108	1.76
Long-term debt		27,231	2.83			28,117	3.09		28,386	3.24			27,681	3.45		28,254	3.52
Total interest-bearing liabilities	$	259,094	1.17%	$	242,392	1.48%	$	240,974	1.99%		$	229,848	2.03%	$	222,150	1.96%
Total noninterest-bearing deposits		60,577				49,632			49,027				52,956			54,583
Other noninterest-bearing liabilities		24,229				20,681			19,280				18,362			18,628
Total The Bank of New York Mellon Corporation shareholders' equity		41,206				41,384			41,139				41,029			40,628
Noncontrolling interests		172				252			259				189			176
Total liabilities and equity	$	385,278		$	354,341		$	350,679			$	342,384		$	336,165
Net interest margin			1.01%				1.09%			0.99% (b)			1.12%			1.20%
Net interest margin (FTE) - Non-GAAP(d)			1.01%				1.09%			1.00% (b)			1.12%			1.20%

1. Includes the average impact of offsetting under enforceable netting agreements of approximately $80 billion for 1Q20, $60 billion for 4Q19, $68 billion for 3Q19, $51 billion for 2Q19 and $44 billion for 1Q19. On a Non-GAAP basis, excluding the impact of offsetting, the yield on federal funds sold and securities purchased under resale agreements would have been 1.39% for 1Q20, 1.82% for 4Q19, 2.42% for 3Q19, 2.57% for 2Q19 and 2.63% for 1Q19. On a Non-GAAP basis, excluding the impact of offsetting, the rate on federal funds purchased and securities sold under repurchase agreements would have been 1.18% for 1Q20, 1.59% for 4Q19, 2.17% for 3Q19, 2.39% for 2Q19 and 2.40% for 1Q19. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid.
2. Includes the impact of the lease-related impairment of $70 million in 3Q19. On a Non-GAAP basis, excluding the lease-related impairment, the yield on non-margin loans in domestic offices would have been 3.70%, the yield on total non-margin loans would have been 3.50%, the yield on total interest-earning assets would have been 2.72% and the net interest margin and the net interest margin (FTE) - Non-GAAP would have been 1.09% in 3Q19.
3. Average rates were calculated on an FTE basis, at tax rates of approximately 21%.
4. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.

7

THE BANK OF NEW YORK MELLON CORPORATION

CAPITAL AND LIQUIDITY

		2020					2019
(dollars in millions)		March 31			Dec. 31		Sept. 30		June 30		March 31
Consolidated regulatory capital ratios (a)
Standardized Approach:
CET1 capital	$	18,465	$	18,540	$	18,196	$	18,534	$	18,156
Tier 1 capital		21,934			21,996		21,677		22,015		21,639
Total capital		23,491			23,449		23,145		23,500		23,136
Risk-weighted assets		162,872			148,695		148,399		149,226		151,101
CET1 ratio		11.3 %			12.5%		12.3%		12.4%		12.0%
Tier 1 capital ratio		13.5			14.8		14.6		14.8		14.3
Total capital ratio		14.4			15.8		15.6		15.7		15.3
Advanced Approaches:
CET1 capital	$	18,465	$	18,540	$	18,196	$	18,534	$	18,156
Tier 1 capital		21,934			21,996		21,677		22,015		21,639
Total capital		23,241			23,233		22,921		23,300		22,941
Risk-weighted assets		162,386			160,898		164,172		166,570		163,618
CET1 ratio		11.4 %			11.5%		11.1%		11.1%		11.1%
Tier 1 capital ratio		13.5			13.7		13.2		13.2		13.2
Total capital ratio		14.3			14.4		14.0		14.0		14.0
Tier 1 leverage ratio		6.0 %			6.6%		6.5%		6.8%		6.8%
SLR:
Leverage exposure	$	392,708	$	362,452	$	359,023	$	350,747	$	344,829
SLR		5.6 %			6.1%		6.0%		6.3%		6.3%
Average liquidity coverage ratio		115 %			120%		117%		117%		118%

1. Regulatory capital ratios for March 31, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for the prior periods, was the Advanced Approaches, and for March 31, 2020 was the Standardized Approaches for the CET1 and Tier 1 capital ratios and the Advanced Approach for the Total capital ratio.
   .

8

THE BANK OF NEW YORK MELLON CORPORATION

INVESTMENT SERVICES BUSINESS

												1Q20 vs.
(dollars in millions)		1Q20		4Q19 (a)		3Q19 (a)		2Q19 (a)		1Q19 (a)	4Q19	1Q19
Revenue:
Investment services fees:
Asset servicing fees (ex. securities lending revenue) (b)	$	1,101	$	1,098	$	1,099	$	1,086	$	1,067		-%	3%
Securities lending revenue		46		40		39		40		44		15	5
Clearing services fees (c)		470		421		419		411		398		12	18
Issuer services fees		263		264		324		291		251		-	5
Treasury services fees		149		147		139		140		132		1	13
Total investment services fees		2,029		1,970		2,020		1,968		1,892		3	7
Foreign exchange and other trading revenue		261		151		160		153		157		73	66
Other (d)		146		115		116		112		112		27	30
Total fee and other revenue		2,436		2,236		2,296		2,233		2,161		9	13
Net interest revenue		806		778		761		783		804		4	-
Total revenue		3,242		3,014		3,057		3,016		2,965		8	9
Provision for credit losses		149		(5)		(15)		(4)		8		N/M	N/M
Noninterest expense (ex. amortization of intangible assets)		1,969		2,160		1,952		1,943		1,961		(9)	-
Amortization of intangible assets		18		19		21		20		20		(5)	(10)
Total noninterest expense		1,987		2,179		1,973		1,963		1,981		(9)	-
Income before taxes	$	1,106	$	840	$	1,099	$	1,057	$	976		32%	13%
Pre-tax operating margin		34%		28%		36%		35%		33%
Total revenue by line of business:
Asset Servicing	$	1,531	$	1,411	$	1,411	$	1,397	$	1,415		9%	8%
Pershing		653		579		575		572		561		13	16
Issuer Services		419		415		466		446		396		1	6
Treasury Services		339		329		312		317		317		3	7
Clearance and Collateral Management		300		280		293		284		276		7	9
Total revenue by line of business	$	3,242	$	3,014	$	3,057	$	3,016	$	2,965		8%	9%

1. Prior periods have been restated. See "Segment Reporting Changes" on page 19 for additional information.
2. Asset servicing fees include the fees from the Clearance and Collateral Management business.
3. Clearing services fees are almost entirely earned by our Pershing business.
4. Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue, securities gains and losses and investment and other income. N/M - Not meaningful.

9

THE BANK OF NEW YORK MELLON CORPORATION

INVESTMENT SERVICES BUSINESS

																1Q20 vs.
(dollars in millions, unless otherwise noted)		1Q20		4Q19			3Q19			2Q19			1Q19			4Q19	1Q19
Average loans	$	41,789	$	38,721	(a)	$	37,005	(a)	$	36,404	(a)	$	37,235	(a)		8%	12%
Average assets	$	304,089	$	278,098	(a)	$	269,926	(a)	$	264,781	(a)	$	256,034	(a)	9%	19%
Average deposits	$	242,187	$	215,388	(a)	$	208,044	(a)	$	201,146	(a)	$	195,082	(a)	12%	24%
AUC/A at period end (in trillions) (b)(c)	$	35.2	$	37.1		$	35.8		$	35.5		$	34.5			(5)%	2%
Market value of securities on loan at period end (in billions) (d)	$	389	$	378		$	362		$	369		$	377			3%	3%
Pershing
Net new assets (U.S. platform) (in billions) (e)	$	31	$	33		$	19		$	21		$	-			(6)%	N/M
Average active clearing accounts (U.S. platform) (in thousands)		6,437		6,340			6,283			6,254			6,169			2%	4%
Average long-term mutual fund assets (U.S. platform)	$	549,206	$	573,475		$	547,522		$	532,384		$	507,606			(4)%	8%
Average investor margin loans (U.S. platform)	$	9,419	$	9,420		$	9,222		$	9,440		$	10,093			-%	(7)%
Clearance and Collateral Management
Average tri-party collateral management balances (in billions)	$	3,724	$	3,562		$	3,550		$	3,400		$	3,266			5%	14%

1. Prior periods have been restated. See "Segment Reporting Changes" on page 19 for additional information.
2. March 31, 2020 information is preliminary.
3. Includes the AUC/A of CIBC Mellon of $1.2 trillion at March 31, 2020, $1.5 trillion at Dec. 31, 2019, $1.4 trillion at Sept. 30, 2019 and June 30, 2019 and $1.3 trillion at March 31, 2019.
4. Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $59 billion at March 31, 2020, $60 billion at Dec. 31, 2019, $66 billion at Sept. 30, 2019, $64 billion at June 30, 2019 and $62 billion at March 31, 2019.
5. Net new assets represents net flows of assets (e.g., net cash deposits and net securities transfers) in customer accounts in Pershing LLC, a U.S. broker-dealer.

N/M - Not meaningful.

10

THE BANK OF NEW YORK MELLON CORPORATION

INVESTMENT MANAGEMENT BUSINESS

												1Q20 vs.
(dollars in millions)		1Q20		4Q19 (a)		3Q19 (a)		2Q19 (a)		1Q19 (a)	4Q19	1Q19
Revenue:
Investment management fees (b)	$	812	$	836	$	830	$	831	$	810		(3)%	- %
Performance fees		50		48		2		2		31		N/M	61
Investment management and performance fees (c)		862		884		832		833		841		(2)	2
Distribution and servicing		43		44		45		44		45		(2)	(4)
Other (b)		(59)		(4)		(39)		(23)		(17)		N/M	N/M
Total fee and other revenue (b)		846		924		838		854		869		(8)	(3)
Net interest revenue		52		47		49		59		67		11	(22)
Total revenue		898		971		887		913		936		(8)	(4)
Provision for credit losses		9		-		-		(2)		1		N/M	N/M
Noninterest expense (ex. amortization of intangible assets)		687		722		582		646		660		(5)	4
Amortization of intangible assets		8		9		10		9		9		(11)	(11)
Total noninterest expense		695		731		592		655		669		(5)	4
Income before taxes	$	194	$	240	$	295	$	260	$	266		(19)%	(27)%
Pre-tax operating margin		22%		25%		33%		29%		28%
Adjusted pre-tax operating margin - Non-GAAP(d)		24%		27%		37%		32%		31%
Total revenue by line of business:
Asset Management	$	620	$	692	$	608	$	622	$	640		(10)%	(3)%
Wealth Management		278		279		279		291		296		-	(6)
Total revenue by line of business	$	898	$	971	$	887	$	913	$	936		(8)%	(4)%
Average loans	$	12,124	$	12,022	$	12,013	$	12,205	$	12,339		1 %	(2)%
Average assets	$	30,543	$	28,481	$	27,840	$	29,793	$	31,857		7 %	(4)%
Average deposits	$	16,144	$	15,195	$	14,083	$	14,615	$	15,815		6 %	2 %

1. Prior periods have been restated. See "Segment Reporting Changes" on page 19 for additional information.
2. Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. Additionally, other revenue includes asset servicing fees, treasury services fees, foreign exchange and other trading revenue and investment and other income.
3. On a constant currency basis (Non-GAAP), investment management and performance fees increased 3% compared with 1Q19. See "Supplemental Information - Explanation of GAAP and Non- GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.
4. Net of distribution and servicing expense. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 16 for the reconciliation of this Non-GAAP measure.

N/M - Not meaningful.

11

THE BANK OF NEW YORK MELLON CORPORATION

AUM BY PRODUCT, AUM FLOWS AND WEALTH MANAGEMENT CLIENT ASSETS

												1Q20 vs.
(dollars in billions)		1Q20		4Q19		3Q19		2Q19		1Q19	4Q19	1Q19
AUM by product type (a)(b)
Equity	$	120	$	154	$	147	$	152	$	149		(22)%	(19)%
Fixed income		211		224		211		209		208		(6)	1
Index		274		339		321		322		333		(19)	(18)
Liability-driven investments		705		728		742		709		709		(3)	(1)
Multi-asset and alternative investments		171		192		182		184		178		(11)	(4)
Cash		315		273		278		267		264		15	19
Total AUM by product type	$	1,796	$	1,910	$	1,881	$	1,843	$	1,841		(6)%	(2)%
Changes in AUM (a)(b)
Beginning balance of AUM	$	1,910	$	1,881	$	1,843	$	1,841	$	1,722
Net (outflows) inflows:
Long-term strategies:
Equity		(2)		(6)		(4)		(2)		(4)
Fixed income		-		5		2		(4)		3
Liability-driven investments		(5)		(3)		(4)		1		5
Multi-asset and alternative investments		(1)		3		(1)		1		(4)
Total long-term active strategies (outflows)		(8)		(1)		(7)		(4)		-
Index		3		(5)		(3)		(22)		(2)
Total long-term strategies (outflows)		(5)		(6)		(10)		(26)		(2)
Short-term strategies:
Cash		43		(7)		11		2		2
Total net inflows (outflows)		38		(13)		1		(24)		-
Net market impact		(91)		(20)		66		42		103
Net currency impact		(61)		62		(29)		(16)		16
Ending balance of AUM	$	1,796	$	1,910	$	1,881	$	1,843	$	1,841		(6)%	(2)%
Wealth Management client assets (a)(c)	$	236	$	266	$	259	$	257	$	253		(11)%	(7)%

1. March 31, 2020 information is preliminary.
2. Excludes securities lending cash management assets and assets managed in the Investment Services business.
3. Includes AUM and AUC/A in the Wealth Management business.

12

THE BANK OF NEW YORK MELLON CORPORATION

OTHER SEGMENT

(in millions)		1Q20		4Q19	(a)	3Q19	(a)	2Q19	(a)	1Q19 (a)
Fee revenue	$	21	$	817	(b) $	(5)	$	24	$	17
Net securities gains (losses)		9		(23)		(1)		7		1
Total fee and other revenue		30		794		(6)		31		18
Net interest (expense)		(44)		(10)		(80)		(40)		(30)
Total (loss) revenue		(14)		784		(86)		(9)		(12)
Provision for credit losses		11		(3)		(1)		(2)		(2)
Noninterest expense		30		54		25		29		49
(Loss) income before taxes	$	(55)	$	733	$	(110)	$	(36)	$	(59)
Average loans and leases	$	1,961	$	1,974	$	1,817	$	1,764	$	1,784
Average assets	$	50,646	$	47,762	$	52,913	$	47,810	$	48,274

1. Prior periods have been restated. See "Segment Reporting Changes" on page 19 for additional information.
2. Includes a gain on sale of an equity investment.

13

THE BANK OF NEW YORK MELLON CORPORATION

SECURITIES PORTFOLIO

		Dec. 31,		1Q20		March 31, 2020	Fair value						Ratings (b)
			change in					as a % of
		2019		Amortized			Unrealized		AAA/	A+/	BBB+/	BB+ and	A1+/	Not
		unrealized			amortized
(dollars in millions)		Fair value	gain (loss)		cost	Fair value	cost (a)	gain (loss)		AA-	A-	BBB-	lower	A1	rated
Agency RMBS	$	54,646	$	809	$	56,002	$	57,078	102% $	1,076		100%	-%	-%	-%	-%	-%
U.S. Treasury		18,865		368		24,367		24,803	102		436		100	-	-	-	-	-
Sovereign debt/sovereign guaranteed		13,404		23		13,710		13,833	101		123		72	6	21	1	-	-
Agency commercial MBS		10,613		295		11,183		11,534	103		351		100	-	-	-	-	-
Foreign covered bonds		4,276		(20)		5,361		5,349	100		(12)		100	-	-	-	-	-
Supranational		3,734		13		4,316		4,339	101		23		100	-	-	-	-	-
CLOs		4,063		(228)		4,341		4,098	94		(243)		99	-	-	-	-	1
Commercial paper and certificates of		-		1		3,464		3,465	100		1		-	-	-	-	100	-
deposits (c)(d)
U.S. government agencies		2,933		98		3,303		3,421	104		118		100	-	-	-	-	-
Foreign government agencies		2,641		22		2,736		2,761	101		25		95	5	-	-	-	-
Non-agency commercial MBS		2,165		(80)		2,501		2,452	98		(49)		100	-	-	-	-	-
Other asset-backed securities		2,143		(39)		2,257		2,220	98		(37)		100	-	-	-	-	-
Non-agency RMBS (e)		1,316		(129)		1,479		1,548	105		69		47	8	2	26	-	17
State and political subdivisions		1,061		(9)		983		1,001	102		18		76	23	-	-	-	1
Corporate bonds		853		(7)		804		818	102		14		18	69	13	-	-	-
Other		1		-		1		1	100		-		-	-	-	-	-	100
Total securities	$	122,714	(f) $	1,117	$	136,808	$	138,721 (f)(g)	101% $	1,913	(f)(h)	94%	1%	2%	-%	3%	-%

1. Amortized cost reflects historical impairments.
2. Represents ratings by S&P, or the equivalent.
3. Includes $2,145 million purchased from affiliated money market funds at March 31, 2020.
4. Includes $651 million funded by borrowings from the Federal Reserve Bank under its Money Market Mutual Fund Liquidity Facility ("MMLF") program at March 31, 2020.
5. Includes RMBS that were included in the former Grantor Trust of $640 million at Dec. 31, 2019 and $535 million at March 31, 2020.
6. Includes net unrealized losses on derivatives hedging securities available-for-sale of $641 million at Dec. 31, 2019 and $1,665 million at March 31, 2020.

1. Includes unrealized gains of $800 million at March 31, 2020 related to available-for-sale securities, net of hedges.

1. At March 31, 2020, the securities portfolio, including the impact of interest rate swap hedges, is 69% fixed rate and 31% floating rate.

14

THE BANK OF NEW YORK MELLON CORPORATION

ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS

		2020							2019
(dollars in millions)		March 31			Dec. 31		Sept. 30		June 30			March 31
Allowance for credit losses - beginning of period:
Allowance for loan losses	$	122		$	127	$	146	$	146		$	146
Allowance for lending-related commitments		94			97		95		102			106
Allowance for credit losses - beginning of period	$	216		$	224	$	241	$	248		$	252
Impact of adopting ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on		(55)	(a)		N/A		N/A		N/A			N/A
Financial Instruments, effective Jan. 1, 2020
Net (charge-offs) recoveries:
Charge-offs		(1)			(1)		(1)		(1)			(11)
Recoveries		-			1		-		2			-
Total net (charge-offs) recoveries		(1)			-		(1)		1			(11)
Provision for credit losses		169	(a)		(8)		(16)		(8)			7
Allowance for credit losses - end of period	$	329		$	216	$	224	$	241		$	248
Allowance for credit losses - end of period:
Allowance for loan losses	$	140		$	122	$	127	$	146		$	146
Allowance for lending-related commitments		148			94		97		95			102
Allowance for other financial instruments		41	(b)		N/A		N/A		N/A			N/A
Allowance for credit losses - end of period	$	329		$	216	$	224	$	241		$	248
Allowance for loan losses as a percentage of total loans		0.22%			0.22%		0.23%		0.28%			0.27%
Nonperforming assets	$	88		$	89	$	88	$	186	(c)	$	174	(c)

1. Includes all instruments within the scope of ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.
2. Includes allowance for credit losses on federal funds sold and securities purchased under resale agreements, available-for-sale securities, accounts receivable, cash and due from banks and interest-bearing deposits with banks.
3. Includes nonperforming loans to a California utility company that filed for bankruptcy that were sold in 3Q19.

N/A - Not applicable.

15

THE BANK OF NEW YORK MELLON CORPORATION

SUPPLEMENTAL INFORMATION - EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

BNY Mellon has included in this Financial Supplement certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. BNY Mellon believes that the return on tangible common equity is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding.

Net interest revenue, on a fully taxable equivalent ("FTE") basis - Non-GAAP and net interest margin (FTE) - Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.

BNY Mellon has also included the operating margin for the Investment Management business net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. BNY Mellon believes that this measure is useful when evaluating the performance of the Investment Management business relative to industry competitors.

The presentation of the growth rates of investment management and performance fees on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. 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.

Notes:

Certain immaterial reclassifications/revisions have been made to prior periods to place them on a basis comparable with the current period's presentation.

In businesses where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference.

Quarterly return on common and tangible common equity ratios are annualized.

Return on common equity and tangible common equity reconciliation
(dollars in millions)		1Q20		4Q19		3Q19		2Q19		1Q19
Net income applicable to common shareholders of The Bank of New York Mellon Corporation - GAAP	$	944	$	1,391	$	1,002	$	969	$	910
Add: Amortization of intangible assets		26		28		30		30		29
Less: Tax impact of amortization of intangible assets		6		7		7		7		7
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding	$	964	$	1,412	$	1,025	$	992	$	932
amortization of intangible assets - Non-GAAP
Average common shareholders' equity	$	37,664	$	37,842	$	37,597	$	37,487	$	37,086
Less: Average goodwill		17,311		17,332		17,267		17,343		17,376
Average intangible assets		3,089		3,119		3,141		3,178		3,209
Add: Deferred tax liability - tax deductible goodwill		1,109		1,098		1,103		1,094		1,083
Deferred tax liability - intangible assets		666		670		679		687		690
Average tangible common shareholders' equity - Non-GAAP	$	19,039	$	19,159	$	18,971	$	18,747	$	18,274
Return on common equity - GAAP		10.1%		14.6%		10.6%		10.4%		10.0%
Return on tangible common equity - Non-GAAP		20.4%		29.3%		21.4%		21.2%		20.7%

16

THE BANK OF NEW YORK MELLON CORPORATION

SUPPLEMENTAL INFORMATION - EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

Book value and tangible book value per common share reconciliation		2020					2019
(dollars in millions, except common shares)		March 31			Dec. 31		Sept. 30		June 30		March 31
BNY Mellon shareholders' equity at period end - GAAP	$	41,145	$	41,483	$	41,120	$	41,533	$	41,225
Less: Preferred stock		3,542			3,542		3,542		3,542		3,542
BNY Mellon common shareholders' equity at period end - GAAP		37,603			37,941		37,578		37,991		37,683
Less: Goodwill		17,240			17,386		17,248		17,337		17,367
Intangible assets		3,070			3,107		3,124		3,160		3,193
Add: Deferred tax liability - tax deductible goodwill		1,109			1,098		1,103		1,094		1,083
Deferred tax liability - intangible assets		666			670		679		687		690
BNY Mellon tangible common shareholders' equity at period end - Non-GAAP	$	19,068	$	19,216	$	18,988	$	19,275	$	18,896
Period-end common shares outstanding (in thousands)		885,443			900,683		922,199		942,662		957,517
Book value per common share - GAAP	$	42.47	$	42.12	$	40.75	$	40.30	$	39.36
Tangible book value per common share - Non-GAAP	$	21.53	$	21.33	$	20.59	$	20.45	$	19.74

Net interest margin reconciliation
(dollars in millions)		1Q20		4Q19		3Q19		2Q19		1Q19
Net interest revenue - GAAP	$	814	$	815	$	730	$	802	$	841
Add: Tax equivalent adjustment		2		2		3		4		4
Net interest revenue (FTE) - Non-GAAP	$	816	$	817	$	733	$	806	$	845
Average interest-earning assets	$	323,936	$	297,987	$	294,154	$	287,417	$	282,185
Net interest margin - GAAP (a)		1.01%		1.09%		0.99%		1.12%		1.20%
Net interest margin (FTE) - Non-GAAP(a)		1.01%		1.09%		1.00%		1.12%		1.20%
(a) Net interest margin is annualized.

17

THE BANK OF NEW YORK MELLON CORPORATION

SUPPLEMENTAL INFORMATION - EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

Pre-tax operating margin reconciliation - Investment Management business
(dollars in millions)		1Q20		4Q19		3Q19		2Q19		1Q19
Income before income taxes - GAAP	$	194	$	240	$	295	$	260	$	266
Total revenue - GAAP	$	898	$	971	$	887	$	913	$	936
Less: Distribution and servicing expense		91		93		98		94		91
Adjusted total revenue, net of distribution and servicing expense - Non-GAAP	$	807	$	878	$	789	$	819	$	845
Pre-tax operating margin - GAAP (a)		22%		25%		33%		29%		28%
Adjusted pre-tax operating margin, net of distribution and servicing expense - Non-GAAP(a)		24%		27%		37%		32%		31%
(a) Income before income taxes divided by total revenue.
Constant currency reconciliations						1Q20 vs.
(dollars in millions)		1Q20		1Q19		1Q19
Consolidated:
Investment management and performance fees - GAAP	$	862	$	841		2%
Impact of changes in foreign currency exchange rates		-		(5)
Adjusted investment management and performance fees - Non-GAAP	$	862	$	836		3%
Investment Management business:
Investment management and performance fees - GAAP	$	862	$	841		2%
Impact of changes in foreign currency exchange rates		-		(5)
Adjusted investment management and performance fees - Non-GAAP	$	862	$	836		3%

18

THE BANK OF NEW YORK MELLON CORPORATION

SEGMENT REPORTING CHANGES

In the first quarter of 2020, we reclassified the results of certain services provided between the segments from noninterest expense to fee and other revenue. This activity is offset in the Other segment and relates to services that are also provided to third-parties and provides consistency with the reporting of the revenues. This adjustment had no impact on income before taxes of the businesses. Prior periods have been restated.

In the first quarter of 2020, we reclassified the results related to certain lending activities from the Wealth Management business to the Pershing business. These loans were originated by the Wealth Management business as a service to Pershing clients. This resulted in an increase in total revenue, noninterest expense and income before taxes in the Pershing business and corresponding decrease in the Wealth Management business. Prior periods have been restated.

	INVESTMENT SERVICES BUSINESS
(dollars in millions)	4Q19	3Q19	2Q19	1Q19
Before restatement

INVESTMENT MANAGEMENT BUSINESS			OTHER SEGMENT
4Q19	3Q19	2Q19	1Q19		4Q19	3Q19	2Q19	1Q19

Fee and other revenue	$	2,222	$	2,291	$	2,227	$	2,154
Net interest revenue		769		753		775		796
Total revenue		2,991		3,044		3,002		2,950
Provision for credit losses		(5)		(15)		(4)		8
Total noninterest expense		2,161		1,965		1,954		1,969
Income before taxes	$	835	$	1,094	$	1,052	$	973
Restatements: (a)

$	919	$	833	$	850	$	864
	56		57		67		75
	975		890		917		939
	-		-		(2)		1
	730		590		654		669
$	245	$	300	$	265	$	269

$	813	$	4	$	41	$	30
	(10)		(80)		(40)		(30)
	803		(76)		1		-
	(3)		(1)		(2)		(2)
	73		35		39		61
$	733	$	(110)	$	(36)	$	(59)

Fee and other revenue	$	14	$	5	$	6	$	7
Net interest revenue		9		8		8		8
Total revenue		23		13		14		15
Provision for credit losses		-		-		-		-
Total noninterest expense		18		8		9		12
Income before taxes	$	5	$	5	$	5	$	3
After restatement

$	5	$	5	$	4	$	5	$	(19)	$	(10)	$	(10)	$	(12)
	(9)		(8)		(8)		(8)			-		-		-		-
	(4)		(3)		(4)		(3)			(19)		(10)		(10)		(12)
	-		-		-		-			-		-		-		-
	1		2		1		-			(19)		(10)		(10)		(12)
$	(5)	$	(5)	$	(5)	$	(3)		$	-	$	-	$	-	$	-

Fee and other revenue	$	2,236	$	2,296	$	2,233	$	2,161
Net interest revenue		778		761		783		804
Total revenue		3,014		3,057		3,016		2,965
Provision for credit losses		(5)		(15)		(4)		8
Total noninterest expense		2,179		1,973		1,963		1,981
Income before taxes	$	840	$	1,099	$	1,057	$	976

$	924	$	838	$	854	$	869
	47		49		59		67
	971		887		913		936
	-		-		(2)		1
	731		592		655		669
$	240	$	295	$	260	$	266

$	794	$	(6)	$	31	$	18
	(10)		(80)		(40)		(30)
	784		(86)		(9)		(12)
	(3)		(1)		(2)		(2)
	54		25		29		49
$	733	$	(110)	$	(36)	$	(59)

1. The impact to fee and other revenue is primarily due to the change in reporting of inter-segment activity and primarily impacted the Asset Servicing and Asset Management lines of business. The impact to net interest revenue is primarily related to the Wealth Management to Pershing reclassification. The impact to noninterest expense reflects the impact of both changes, which had a mostly offsetting impact in Investment Management.

19