Bank of New York Mellon : Financial Highlights (PDF)

Third Quarter 2020

Financial Highlights

O c t o b e r 1 6 , 2 0 2 0

3Q20 Financial Highlights

RevenueEPS

› Revenue relatively flat year-over-year despite low rate

$3.85 billion

Pre-tax income

$1.16 billion

Returns

ROE: 8.7%

ROTCE: 16.7%(a)

$0.98

Pre-tax margin

30%

Capital ratios

CET1: 13.0%

Tier 1 Leverage: 6.5%

environment and associated money market fee

waivers

› Both Investment Services ("IS") and Investment and

Wealth Management ("I&WM") benefited from market

appreciation, robust client activity and higher balances

across businesses

› Provision for credit losses of $9 million; no net charge-

offs and stable nonperforming assets

› Returned $0.3 billion to common shareholders in

dividends

› Accreting substantial capital with increases in both

CET1 and Tier 1 Leverage ratios

1. Represents a non-GAAPmeasure. See page 17 for corresponding reconciliation of ROTCE.
   2 Third Quarter 2020 - Financial Highlights

3Q20 Key Financial Trends

I S r e v e n u e	I & W M r e v e n u e	N o n i n t e r e s t e x p e n s e
	($ millions)			($ millions)	3% of increase	($ millions)
	(4)%
							driven by 3Q19
						+4%
					+3%			tax-related
							reserve reduction

	3,057	3,107	2,927						2,590	2,686	2,681
Net interest	761	768					918
681			887	886
revenue		Net interest
					49	48	47
					revenue
Total fee and	2,296	2,339	2,246		Total fee and	838	838	871
other revenue		other revenue
	3Q19	2Q20	3Q20			3Q19	2Q20	3Q20	3Q19	2Q20	3Q20
	P r e - t a x i n c o m e				E P S		R O T C E(a) / R O E
		($ millions)					($)			(%)
		(10)%					(8)%			(472) bps
	1,287	1,181	1,157	50		1.07	1.01	0.98	21.4	18.5		20
	33%			45					16.7
	29%	30%	40					10.6		15
		35					9.4
Pre-tax				30						8.7
			25							10
operating				20					ROE
margin				15								5
			10
				5								0
	3Q19	2Q20	3Q20	0		3Q19	2Q20	3Q20	3Q19	2Q20	3Q20

(a) Represents a non-GAAPmeasure. See page 17 for corresponding reconciliation of ROTCE.

3 Third Quarter 2020 - Financial Highlights

3Q20 Financial Highlights

($ millions, except per share data)

		3 Q 2 0	2 Q 2 0	3 Q 1 9
T O T A L R E V E N U E	$3,847		(4)%	-%
Fee revenue	3,108		(2)	(1)
Net interest revenue	703		(10)	(4)
Provision for credit losses	9		N/M	N/M
Noninterest expense	2,681		-	4
Income before income taxes	1,157		(2)	(10)
Net income applicable to common shareholders	$876		(3)%	(13)%
E A R N I N G S P E R C O M M O N S H A R E		$0.98		(3)%	(8)%
Operating leverage (a)				(388) bps	(388) bps
Pre-tax operating margin	30%		63 bps	(324) bps
Return on common equity (annualized)	8.7%		(69) bps	(185) bps
Return on tangible common equity - non-GAAP(annualized) (b)	16.7%		(184) bps	(472) bps

Notable items impacting 3Q19

Increase / (decrease)	Revenue	Expense	EPS
3Q19	(70)	(74)	$0.01

Note: See page 15 in the Appendix for corresponding footnotes.

4 Third Quarter 2020 - Financial Highlights

• 3Q19 included a lease-related impairment which negatively impacted net interest revenue and a net reduction of reserves for tax-related exposure of certain investment management funds benefiting expenses

Capital and Liquidity

	3 Q 2 0	2 Q 2 0	3 Q 1 9
Consolidated regulatory capital ratios: (a)
Common Equity Tier 1 ("CET1") ratio	13.0%	12.6%	11.1%
Tier 1 capital ratio	15.7	15.4	13.2
Total capital ratio	16.6	16.3	14.0
Tier 1 leverage ratio	6.5	6.2	6.5
Supplementary leverage ratio ("SLR")	8.5(b)	8.2(b)	6.0
Average liquidity coverage ratio ("LCR")	111%	112%	117%
Book value per common share	$45.58	$44.21	$40.75
Tangible book value per common share - non-GAAP(c)	$24.60	$23.31	$20.59
Cash dividends per common share	$0.31	$0.31	$0.31
Common shares outstanding (thousands)	886,136	885,862	922,199

Note: See page 15 in the Appendix for corresponding footnotes.

5 Third Quarter 2020 - Financial Highlights

Net Interest Revenue

D R I V E R S O F S E Q U E N T I A L N I R C H A N G E	USD LIBOR AVERAGE
	($ millions)			(%)	0.61
	(10)%		0.36
				0.16		0.25
780
+ Benefit of	+ Day	+ Benefit of		1m		3m
higher	count,	lower		703
securities	hedging	funding	- Impact of	US TREASURY AVERAGE
balances	and other	and
lower		(%)	0.68
and		deposit
	interest
balance		rates
	rates on			0.64
sheet mix				0.35
		interest-
			earning	0.19	0.27
			assets	0.14
				2Y	5Y	10Y
2Q20				3Q20	2Q20	3Q20

6 Third Quarter 2020 - Financial Highlights

Balance Sheet Trends

AV E R A G E D E P O S I T S

($ billions)

		+23%
					(1)%
283
279
226
0.98%
211	212

Interest-bearing	177
deposits
(0.03)%	(0.05)%

Noninterest-bearing	49	72	68
deposits
		3Q19	2Q20	3Q20
			Interest-bearing deposits rate

180

160

140

120(b)

Non-HQLA100

80

60

40

High Quality

Liquid Assets ("HQLA")20

0

AV E R A G E S E C U R I T I E S(a)

($ billions)

		+29%
					+6%			5
					164
		155		4.5
		32		33	4
127
						3.5
22
						3
2.25%							2.5
		1.50%				2
		1.28%	1.5
105	123		130	1
	0.5
3Q19	2Q20		3Q20	0

Average securities portfolio rate

Note: May not foot due to rounding. (a) Average securities include trading securities which are primarily non-HQLA. Excluding these, non-HQLA securities were $16 billion, $26 billion and $26 billion in 3Q19, 2Q20 and 3Q20, respectively.

(b) Non-HQLA in 2Q20 included approximately $4 billion of CP and CDs purchased from money market funds, majority of which has since matured.

7 Third Quarter 2020 - Financial Highlights

Credit Risk Profile

AV E R A G E I N T E R E S T -
	E A R N I N G A S S E T S
		($ billions)
		+22%
			-%
		358	358		L O A N S (a)
		57	54		( $ 5 5 b n )
	294			Overdrafts and other	12%
Loans	51
		Commercial	4%
		155		CRE	11%
		164
Securities	127			Financial institutions	20%
				Margin loans	24%
Cash/	116	146	140	Wealth management &
Reverse repo			29%
			Other residential mtges
	3Q19	2Q20	3Q20		3Q20

1. Preliminary data as of 9/30/20. May not foot due to rounding.
   8 Third Quarter 2020 - Financial Highlights

• Well collateralized with assets under custody
• $1.0bn services and other; $0.7bn manufacturing; $0.2bn energy and utilities
• 93% exposure is investment grade
• 75% secured loans, predominantly office and residential
• Unsecured consists of predominantly investment grade REITs and real estate operating companies
• Concentrated in NY Metro area
• Mostly secured, 95% exposure is investment grade; 89% due <1 year
• $6.1bn banks; $2.8bn securities industry
• Collateralized with marketable securities in excess of 100% of loan value
• Secured by marketable securities and/or residential property
• Net recoveries; limited forbearance requests

Noninterest Expense

($ millions)	3 Q 2 0	2 Q 2 0	3 Q 1 9	› Noninterest expenses up 4% year-over-year, 3% of
				which was driven by the 3Q19 tax-related reserve
Staff	$1,466	-%	(1)%
reduction
Professional, legal and other purchased services	355	5	12

Software and equipment	340	(1)	10	› The remainder of the increase primarily reflects
Net occupancy	136	(1)	(1)	continued investments in technology, higher
professional, legal and other purchased services
Sub-custodian and clearing	119	(1)	7
expense and the unfavorable impact of a weaker
Distribution and servicing	85	-	(12)	U.S. dollar, partially offset by lower staff and
Bank assessment charges	30	(14)	(3)	business development expenses
Business development	17	(15)	(64)	› Technology expenses are included in staff, software
Amortization of intangible assets	26	-	(13)	and .equipment and professional, legal and other
Other	107	(9)	234	purchased services
Total noninterest expense	$2,681	-%	4%

9 Third Quarter 2020 - Financial Highlights

Investment Services

F I N A N C I A L H I G H L I G H T S	3 Q 2 0	2 Q 2 0	3 Q 1 9
($ millions unless otherwise noted)
Total revenue by line of business:
Asset Servicing	$1,354	(7)%	(4)%
Pershing	538	(7)	(6)
Issuer Services	435	1	(7)
Treasury Services	323	(5)	4
Clearance and Collateral Management	277	(6)	(5)
Total revenue	2,927	(6)	(4)
Provision for credit losses	(10)	N/M	N/M
Noninterest expense	2,020	2	2
Income before taxes	$917	(6)%	(17)%
Pre-tax operating margin	31%	- bp	(463) bps
K E Y M E T R I C S
Foreign exchange and other trading revenue	$146	(18)%	(9)%
Securities lending revenue	37	(27)	(5)
Average loans	40,308	(7)	9
Average deposits	263,621	(2)	27
AUC/A at period end (tr) (a)	38.6	3	8
Market value of securities on loan at period end (bn) (b)	378	(2)	4
Pershing
Net new assets (U.S. platform) (bn) (c)		N/M	N/M
$12
Average active clearing accounts (U.S. platform) (thousands)	6,556	1	4
Clearance and Collateral Management
Average tri-party collateral mgmt. balances (tr)	$3.4	(4)%	(4)%

Note: See page 15 in the Appendix for corresponding footnotes.

10 Third Quarter 2020 - Financial Highlights

• Asset Servicing down year-over-year primarily on lower interest rates, partially offset by higher client deposits and client volumes
• Pershing down primarily on the impact of rate-driven money market fee waivers, partially offset by higher money market balances
• Issuer Services down primarily on lower Depositary Receipts revenue
• Treasury Services up primarily on higher client deposits and money market balances
• Clearance and Collateral Management down primarily on lower investment income due to the 4Q19 sale of an equity investment
• AUC/A of $38.6 trillion up primarily on higher market values, net new business, higher client inflows and the favorable impact of a weaker U.S. dollar

Investment Services - Revenue Drivers

($ millions)
	(4)%
1,411	1,354
3Q19	3Q20
A S S E T
S E R V I C I N G

	(6)%
575	538
3Q19	3Q20
P E R S H I N G

	(7)%
466	435
3Q19	3Q20
I S S U E R
S E R V I C E S

	+4%
312	323
3Q19	3Q20
T R E A S U R Y
S E R V I C E S

	(5)%
293	277
3Q19	3Q20
C L E A R A N C E A N D
C O L L A T E R A L

- Interest rates	- Money market fee	- Depositary Receipts
+ Client volumes	waivers	dividend fees
+ AUC/A	+ Money market balances	+ Corporate Trust new
+ Deposit balances	+ Clearing volumes	business
+ Liquidity services

Note: Graphs not to scale.

11 Third Quarter 2020 - Financial Highlights

• Deposit balances
• Liquidity services - Interest rates

• Equity investment income - investment sold in 4Q19
• Clearance volumes

• Non-U.S.average tri-party repo balances
• Deposit balances

Investment and Wealth Management

F I N A N C I A L H I G H L I G H T S	3 Q 2 0	2 Q 2 0	3 Q 1 9
($ millions unless otherwise noted)
Total revenue by line of business:
Investment Management	$641	3%	5%
Wealth Management	277	5	(1)
Total revenue		4	3
918
Provision for credit losses		N/M	N/M
12
Noninterest expense	661	-	12
Income before taxes	$245	11%	(17)%
Pre-tax operating margin	27%	166 bps	(671) bps
Adjusted pre-tax operating margin - non-GAAP(a)	29%	171 bps	(814) bps
K E Y M E T R I C S
Average loans	$11,503	(2)%	(4)%
Average deposits	17,570	-	25
Wealth Management client assets (bn) (b)	265	4	2

C H A N G E S I N A U M ( b n ) ( C )	3 Q 2 0	2 Q 2 0	3 Q 1 9
Beginning balance	$1,961	$1,796	$1,843
Equity	(4)	(2)	(4)
Fixed income		4	2
1
Liability-driven investments		(2)	(4)
14
Multi-asset and alternatives investments	(3)	-	(1)
Index	(3)	9	(3)
Cash	(10)	11	11
Total net (outflows) inflows	(5)	20	1
Net market impact	41	143	66
Net currency impact		2	(29)
44
Ending balance	$2,041	$1,961	$1,881

Note: See page 15 in the Appendix for corresponding footnotes.

12 Third Quarter 2020 - Financial Highlights

• Investment Management up year-over-year primarily on the impact of hedging activities in 3Q19, higher market values, the favorable impact of a weaker U.S. dollar and higher performance fees, partially offset by the impact of money market fee waivers
• Wealth Management down primarily on lower net interest revenue and a shift to lower fee investment products, partially offset by higher market values
• Noninterest expense up primarily on the net reduction of reserves for tax-related exposure for certain investment management funds in 3Q19
• AUM of $2.0 trillion up primarily on higher market values, the favorable impact of a weaker U.S. dollar and net inflows

Other Segment

F I N A N C I A L H I G H L I G H T S	3 Q 2 0	2 Q 2 0	3 Q 1 9
($ millions unless otherwise noted)
Fee revenue (loss)	$11	$29	$(5)
Net securities gains (losses)	9	9	(1)
Total fee and other revenue (loss)	20	38	(6)
Net interest (expense)	(25)	(36)	(80)
Total (loss) revenue	(5)	2	(86)
Provision for credit losses	7	(9)	(1)
Noninterest expense	-	39	25
(Loss) before taxes	$(12)	$(28)	$(110)

13 Third Quarter 2020 - Financial Highlights

• Fee revenue increased year-over-year primarily reflecting higher corporate treasury activity and equity investment income
• Net interest expense decreased year-over-year primarily reflecting the lease-related impairment of $70 million recorded in 3Q19 and corporate treasury activity
• Noninterest expense decreased year-over-year reflecting lower staff expense

Appendix

Footnotes

3Q20 Financial Highlights, Page 4

1. Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
2. See page 17 for corresponding reconciliation of this non-GAAP measure.

Capital and Liquidity, Page 5

1. Regulatory capital ratios for September 30, 2020, are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for the periods presented was the Advanced Approaches.
2. Reflects the application of a new rule effective April 1, 2020, to exclude certain central bank placements. Also effective on April 1, 2020 was the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation which increased our consolidated SLR by 78 basis points at Sept. 30, 2020 and 40 basis points at June 30, 2020.
3. Tangible book value per common share - non-GAAP - excludes goodwill and intangible assets, net of deferred tax liabilities. See page 17 for corresponding reconciliation of this non-GAAP measure.

Investment Services, Page 10

1. Current period is preliminary. Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and
   Wealth Management businesses. Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.4 trillion at September 30, 2020, $1.3 trillion at June 30, 2020 and $1.4 trillion at September 30, 2019.
2. Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon

acts as agent on behalf of CIBC Mellon clients, which totaled $62 billion at September 30, 2020 and June 30, 2020 and $66 billion at September 30, 2019.

(c) 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.

Investment and Wealth Management, Page 12

1. Net of distribution and servicing expense. See page 18 for corresponding reconciliation of this non-GAAP measure.
2. Current period is preliminary. Includes AUM and AUC/A in the Wealth Management business.
3. Current period is preliminary. Excludes securities lending cash management assets and assets managed in the Investment Services business.

15 Third Quarter 2020 - Financial Highlights

Money Market Fee Waiver Impact

($ millions)	3 Q 2 0	2 Q 2 0	1 Q 2 0	Y T D 2 0
Investment services fees:
Asset servicing fees	$(1)	$ -	$ -	$(1)
Clearing services fees	(57)	(50)	(9)	(116)
Issuer services fees	(1)	(1)	-	(2)
Treasury services fees	(3)	(2)	-	(5)
Total investment services fees	(62)	(53)	(9)	(124)
Investment management and performance fees	(42)	(30)	(14)	(86)
Distribution and servicing revenue	(6)	(3)	-	(9)
Total fee and other revenue	(110)	(86)	(23)	(219)
Less: Distribution and servicing expense	9	7	-	16
Net impact of money market fee waivers	$(101)	$(79)	$(23)	$(203)
Impact to revenue by line of business: (a)
Asset Servicing	$(4)	$(1)	$ -	$(5)
Pershing	(73)	(60)	(9)	(142)
Issuer Services	(2)	(1)	-	(3)
Treasury Services	(1)	-	-	(1)
Investment Management	(28)	(24)	(14)	(66)
Wealth Management	(2)	-	-	(2)
Total impact to revenue by line of business	$(110)	$(86)	$(23)	$(219)

(a) The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses.

16 Third Quarter 2020 - Financial Highlights

Return on Common Equity and Tangible Common Equity Reconciliation

($ millions)

Net income applicable to common shareholders of The Bank of New York Mellon Corporation - GAAP Add: Amortization of intangible assets

Less: Tax impact of amortization of intangible assets

Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets - non-GAAP

Average common shareholders' equity

Less: Average goodwill

Average intangible assets

Add: Deferred tax liability - tax deductible goodwill

Deferred tax liability - intangible assets

Average tangible common shareholders' equity - non-GAAP

Return on common equity (annualized) - GAAP

Return on tangible common equity (annualized) - non-GAAP

3 Q 2 0	2 Q 2 0	3 Q 1 9
$876	$901	$1,002
26	26	30
7	6	7
$895	$921	$1,025
$39,924	$38,476	$37,597
17,357	17,243	17,267
3,039	3,058	3,141
1,132	1,119	1,103
666	664	679
$21,326	$19,958	$18,971
8.7%	9.4%	10.6%
16.7%	18.5%	21.4%

Book Value and Tangible Book Value Per Common Share Reconciliation

	($ millions, except common shares)	September 30, 2020	June 30, 2020	September 30, 2019
	BNY Mellon shareholders' equity at period end - GAAP	$44,917	$43,697	$41,120
	Less: Preferred stock	4,532	4,532	3,542
	BNY Mellon common shareholders' equity at period end - GAAP	40,385	39,165	37,578
	Less: Goodwill	17,357	17,253	17,248
	Intangible assets	3,026	3,045	3,124
	Add: Deferred tax liability - tax deductible goodwill	1,132	1,119	1,103
	Deferred tax liability - intangible assets	666	664	679
	BNY Mellon tangible common shareholders' equity at period end - non-GAAP	$21,800	$20,650	$18,988
	Period-end common shares outstanding (in thousands)	886,136	885,862	922,199
	Book value per common share - GAAP	$45.58	$44.21	$40.75
	Tangible book value per common share - non-GAAP	$24.60	$23.31	$20.59
17	Third Quarter 2020 - Financial Highlights

Pre-tax Operating Margin Reconciliation - Investment and Wealth Management Business

($ millions)	3 Q 2 0	2 Q 2 0	3 Q 1 9
Income before income taxes - GAAP	$245	$221	$295
Total revenue - GAAP	$918	$886	$887
Less: Distribution and servicing expense	85	86	98
Adjusted total revenue, net of distribution and servicing expense - non-GAAP	$833	$800	$789
Pre-tax operating margin - GAAP (a)	27%	25%	33%
Adjusted pre-tax operating margin, net of distribution and servicing expense - non-GAAP(a)	29%	28%	37%

(a) Income before income taxes divided by total revenue.

18 Third Quarter 2020 - Financial Highlights

Cautionary Statement

A number of statements in The Bank of New York Mellon Corporation's (the "Corporation") presentations, the accompanying slides and the responses to your questions are "forward-looking statements." Words such as "estimate," "forecast," "project," "anticipate," "likely," "target," "expect," "intend," "continue," "seek," "believe," "plan," "goal," "could," "should," "would," "may," "might," "will," "strategy," "synergies," "opportunities," "trends," "future", "potentially", "outlook" and words of similar meaning may signify forward-looking statements. These statements relate to, among other things, the Corporation's expectations regarding: capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, capabilities, resiliency, revenue, net interest revenue, money market fee waivers, fees, expenses, cost discipline, sustainable growth, company management, deposits, interest rates and yield curves, securities portfolio, taxes, business opportunities, divestments, volatility, preliminary business metrics and regulatory capital ratios and statements regarding the Corporation's aspirations, as well as the Corporation's overall plans, strategies, goals, objectives, expectations, outlooks, estimates, intentions, targets, opportunities, focus and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing. These forward-looking statements are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond the Corporation's control).

Actual outcomes may differ materially from those expressed or implied as a result of a number of factors, including, but not limited to, those discussed in "Risk Factors" in the Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (the "Second Quarter 2020 Form 10-Q") and the Corporation's Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 Annual Report") and in other filings of the Corporation with the Securities and Exchange Commission (the "SEC"). Statements about the effects of the current and near-term market and macroeconomic outlook on the Corporation, including on its business, operations, financial performance and prospects, may constitute forward-looking statements, and are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond the Corporation's control), including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on the Corporation, its clients, customers and third

parties. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as the Corporation completes its Form 10-Q for the third quarter of 2020. All forward- looking statements speak only as of October 16, 2020, and the Corporation 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. For additional information regarding the Corporation, please refer to the Corporation's SEC filings available at www.bnymellon.com/investorrelations.

Non-GAAP Measures: In this presentation we discuss certain non-GAAP measures in detailing the Corporation's performance, which exclude certain items or otherwise include components that differ from GAAP. We believe these measures are useful to the investment community in analyzing the financial results and trends of ongoing operations. We believe they facilitate comparisons with prior periods and reflect the principal basis on which the Corporation's management monitors financial performance. Additional disclosures relating to non-GAAP measures are contained in the Corporation's reports filed with the SEC, including the Second Quarter 2020 Form 10-Q and the 2019 Annual Report, and are available at www.bnymellon.com/investorrelations.

19 Third Quarter 2020 - Financial Highlights