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Form 8-K Bank of New York Mellon For: Jul 15

July 15, 2022 6:43 AM EDT

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News Release
bnym_logox2q22b.jpg


BNY MELLON REPORTS SECOND QUARTER 2022 EARNINGS OF
$835 MILLION OR $1.03 PER COMMON SHARE
Revenue up 7%
EPS down 9% (a)
ROE 9%
ROTCE 19% (b)
CET1 10.0%
Tier 1 leverage 5.2%
(a)    Notable items related to increased litigation reserves reduced EPS by $0.12.


NEW YORK, July 15, 2022 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported:
2Q22 vs.
2Q221Q222Q211Q222Q21
Net income applicable to common shareholders (in millions)
$835 $699 $991 19 %(16)%
Diluted earnings per common share (c)
$1.03 $0.86 $1.13 20 %(9)%
(c)    Includes impact of notable items of $(0.12) per share in 2Q22, $(0.08) per share in 1Q22 and $0.00 per share in 2Q21.

Second Quarter Results
Total revenue of $4.3 billion, increased 7%
Fee revenue increased 4%
Net interest revenue increased 28%

Provision for credit losses of $47 million compared with a provision benefit of $86 million in 2Q21

Total noninterest expense of $3.1 billion, increased 12%;
includes 4% increase driven by litigation reserves

AUC/A of $43.0 trillion, decreased 4% primarily driven by market values
AUM of $1.9 trillion, decreased 17% primarily driven by market values

Securities Services
Total revenue increased 12%
Income before taxes decreased 24%; includes 40% reduction due to higher litigation reserves and provision for credit losses
Pre-tax operating margin of 17%; or 21% excluding higher litigation reserves (b)

Market and Wealth Services
Total revenue increased 10%
Income before taxes increased 9%
Pre-tax operating margin of 46%

Investment and Wealth Management
Total revenue decreased 10%
Income before taxes decreased 36%
Pre-tax operating margin of 23%; adjusted pre-tax operating margin – Non-GAAP of 26% (b)
CEO Commentary
Todd Gibbons, Chief Executive Officer, commented, “Our second quarter results once again demonstrated the strength and resilience of our business model, and we are pleased that our Board of Directors approved an increase of the quarterly cash dividend on our common shares by 9% to $0.37 per share.”

Mr. Gibbons added, “It has been an honor serving BNY Mellon over the last 36 years and I retire at the end of August confident that the company is in great hands.”

Robin Vince, President and CEO-elect, said, “On behalf of the company, I would like to thank Todd for the contributions he has made to our firm throughout the years, and more recently for working so closely with me during this transition.”

Mr. Vince commented on the financial results, “Reported revenue of $4.3 billion was up 7% year-over-year. Our results reflect the benefit of higher interest rates, the strength of our diversified platform, and our exceptional client franchise. We continued to see good sales momentum across most of our businesses, and healthy client volumes tempered the impact of lower market values. We deeply appreciate our employees’ commitment in these more volatile markets. Our clients clearly value our resilience, the quality of our services and insights, and the trusted relationship that they have with BNY Mellon.”
Media Relations: Garrett Marquis (949) 683-1503
Investor Relations: Marius Merz (212) 298-1480
(b) For information on these Non-GAAP measures, see “Explanation of GAAP and Non-GAAP financial measures” on page 10.
Note: Above comparisons are 2Q22 vs. 2Q21, unless otherwise noted.

BNY Mellon 2Q22 Earnings Release
CONSOLIDATED FINANCIAL HIGHLIGHTS

(in millions, except per share amounts and unless otherwise noted; not
meaningful - N/M)
2Q22 vs.
2Q221Q222Q211Q222Q21
Fee revenue$3,339 $3,158 $3,224 6 %4 %
Investment and other revenue 91 70 91 N/MN/M
Total fee and other revenue3,430 3,228 3,315 6 3 
Net interest revenue824 698 645 18 28 
Total revenue4,254 3,926 3,960 8 7 
Provision for credit losses47 (86)N/MN/M
Noninterest expense3,112 3,006 2,778 4 12 
Income before income taxes1,095 918 1,268 19 (14)
Provision for income taxes231 153 241 51 (4)
Net income$864 $765 $1,027 13 %(16)%
Net income applicable to common shareholders of The Bank of New York Mellon Corporation$835 $699 $991 19 %(16)%
Operating leverage (a)
483  bps(460) bps
Diluted earnings per common share$1.03 $0.86 $1.13 20 %(9)%
Average common shares and equivalents outstanding - diluted (in thousands)
813,590 813,986 873,475 
Pre-tax operating margin26 %23 %32 %
(a)    Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps basis points.


KEY DRIVERS (comparisons are 2Q22 vs. 2Q21, unless otherwise stated)

Total revenue increased 7%, primarily reflecting:
Fee revenue increased 4%, primarily reflecting lower money market fee waivers, higher client activity and higher foreign exchange revenue, partially offset by the unfavorable impact of a stronger U.S. dollar, lower market values and the impact of lost business in the prior year in both Pershing and Corporate Trust.
Investment and other revenue was unchanged primarily reflecting higher strategic equity investment gains, offset by lower seed capital results.
Net interest revenue increased 28%, primarily reflecting higher interest rates on interest-earning assets and a change in asset mix, partially offset by higher funding expense and lower interest-earning assets.
Provision for credit losses was $47 million compared with a benefit of $86 million primarily reflecting changes in the macroeconomic forecast.
Noninterest expense increased 12%, including 4% increase due to higher litigation reserves. The remainder of the increase primarily reflects higher investments in growth, infrastructure and efficiency initiatives and higher revenue-related expenses, including the impact of inflation, partially offset by the favorable impact of a stronger U.S. dollar.
Effective tax rate of 21.1%, includes ~1.5% impact due to increase in litigation reserves.

Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
AUC/A of $43.0 trillion, decreased 4%, primarily reflecting lower market values and the unfavorable impact of a stronger U.S. dollar, partially offset by client inflows and net new business.
AUM of $1.9 trillion, decreased 17%, primarily reflecting lower market values and the unfavorable impact of a stronger U.S. dollar, partially offset by net inflows.

Capital and liquidity
Dividends of $279 million to common shareholders (including dividend-equivalents on share-based awards).
Return on common equity (“ROE”) – 9%; Return on tangible common equity (“ROTCE”) – 19% (b).
Common Equity Tier 1 (“CET1”) ratio – 10.0%.
Tier 1 leverage ratio – 5.2%.
Average liquidity coverage ratio (“LCR”) – 111%.
Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
(b)    See “Explanation of GAAP and Non-GAAP financial measures” on page 10 for additional information.
Note: Throughout this document, sequential growth rates are unannualized.
Page - 2

BNY Mellon 2Q22 Earnings Release
SECURITIES SERVICES BUSINESS SEGMENT HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)2Q22 vs.
2Q221Q222Q211Q222Q21
Investment services fees:
Asset Servicing$995 $999 $960  %4 %
Issuer Services309 141 281 119 10 
Total investment services fees1,304 1,140 1,241 14 5 
Foreign exchange revenue155 148 129 5 20 
Other fees (a)
54 41 25 32 116 
Total fee revenue1,513 1,329 1,395 14 8 
Investment and other revenue36 74 38 N/MN/M
Total fee and other revenue1,549 1,403 1,433 10 8 
Net interest revenue457 377 354 21 29 
Total revenue2,006 1,780 1,787 13 12 
Provision for credit losses13 (10)(58)N/MN/M
Noninterest expense1,656 1,510 1,400 10 18 
Income before taxes$337 $280 $445 20 %(24)%
Total revenue by line of business:
Asset Servicing$1,534 $1,512 $1,382 1 %11 %
Issuer Services472 268 405 76 17 
Total revenue by line of business$2,006 $1,780 $1,787 13 %12 %
Pre-tax operating margin17 %(b)16 %25 %
Securities lending revenue (c)
$45 $39 $42 15 %7 %
Metrics:
Average loans$11,386 $10,150 $8,485 12 %34 %
Average deposits$191,191 $192,156 $203,147 (1)%(6)%
AUC/A at period end (in trillions) (current period is preliminary) (d)
$31.0 $33.7 $33.7 (8)%(8)%
Market value of securities on loan at period end (in billions) (e)
$441 $449 $456 (2)%(3)%
(a)    Other fees primarily include financing-related fees.
(b)    Excluding higher litigation reserves, adjusted pre-tax operating margin was 21% (Non-GAAP). See “Explanation of GAAP and Non-GAAP financial measures” on page 10 for information on this Non-GAAP measure.
(c)    Included in investment services fees in the Asset Servicing business.
(d)    Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Issuer Services business. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.5 trillion at June 30, 2022 and $1.7 trillion at March 31, 2022 and June 30, 2021.
(e)    Represents the total amount of securities on loan in our agency securities lending program. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $70 billion at June 30, 2022, $78 billion at March 31, 2022 and $63 billion at June 30, 2021.


KEY DRIVERS

The drivers of the total revenue variances by line of business are indicated below. Also see page 7 for information related to money market fee waivers.
Asset Servicing – The year-over-year increase primarily reflects higher net interest revenue, lower money market fee waivers, higher foreign exchange revenue and client activity, partially offset by the unfavorable impact of a stronger U.S. dollar and lower market values. The sequential increase was impacted by the same factors and was partially offset by a gain on a strategic equity investment recorded in 1Q22.
Issuer Services – The year-over-year increase primarily reflects higher net interest revenue in Corporate Trust, higher Depositary Receipts revenue and lower money market fee waivers, partially offset by the impact of lost business in the prior year in Corporate Trust. The sequential increase primarily reflects the accelerated amortization of deferred costs for depositary receipts services related to Russia recorded in 1Q22, higher Depositary Receipts revenue, higher net interest revenue in Corporate Trust and lower money market fee waivers.
Noninterest expense increased year-over-year, primarily reflecting higher investments in growth, infrastructure and efficiency initiatives, litigation reserves and revenue-related expenses, including the impact of inflation, partially offset by the favorable impact of a stronger U.S. dollar. The sequential increase primarily reflects higher litigation reserves.
Page - 3

BNY Mellon 2Q22 Earnings Release
MARKET AND WEALTH SERVICES BUSINESS SEGMENT HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)2Q22 vs.
2Q221Q222Q211Q222Q21
Investment services fees:
Pershing$479 $433 $439 11 %9 %
Treasury Services176 170 160 4 10 
Clearance and Collateral Management240 243 228 (1)5 
Total investment services fees895 846 827 6 8 
Foreign exchange revenue22 26 23 (15)(4)
Other fees (a)
46 34 32 35 44 
Total fee revenue963 906 882 6 9 
Investment and other revenue11 — 21 N/MN/M
Total fee and other revenue974 906 903 8 8 
Net interest revenue340 296 289 15 18 
Total revenue1,314 1,202 1,192 9 10 
Provision for credit losses4 (2)(19)N/MN/M
Noninterest expense702 708 652 (1)8 
Income before taxes$608 $496 $559 23 %9 %
Total revenue by line of business:
Pershing$636 $570 $590 12 %8 %
Treasury Services373 338 319 10 17 
Clearance and Collateral Management305 294 283 4 8 
Total revenue by line of business$1,314 $1,202 $1,192 9 %10 %
Pre-tax operating margin46 %41 %47 %
Metrics:
Average loans$42,391 $42,113 $38,360 1 %11 %
Average deposits$94,716 $95,704 $102,896 (1)%(8)%
AUC/A at period end (in trillions) (current period is preliminary) (b)
$11.8 $11.6 $11.1 2 %6 %
(a)    Other fees primarily include financing-related fees.
(b)    Consists of AUC/A from the Clearance and Collateral Management and Pershing lines of business.


KEY DRIVERS

The drivers of the total revenue variances by line of business are indicated below. Also see page 7 for information related to money market fee waivers.
Pershing – The year-over-year increase primarily reflects lower money market fee waivers and higher transaction activity, partially offset by the impact of prior year lost business. The sequential increase primarily reflects lower money market fee waivers, partially offset by lower equity markets and lower transaction activity.
Treasury Services – The year-over-year increase primarily reflects higher net interest revenue, lower money market fee waivers and higher payment volumes. The sequential increase primarily reflects higher net interest revenue and lower money market fee waivers.
Clearance and Collateral Management – The year-over-year increase primarily reflects higher net interest revenue and clearance volumes. The sequential increase primarily reflects higher net interest revenue.
Noninterest expense increased year-over-year, primarily reflecting higher investments in growth, infrastructure and efficiency initiatives, including the impact of inflation. The sequential decrease primarily reflects lower staff expense.
Page - 4

BNY Mellon 2Q22 Earnings Release
INVESTMENT AND WEALTH MANAGEMENT BUSINESS SEGMENT HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)2Q22 vs.
2Q221Q222Q211Q222Q21
Investment management fees$825 $848 $876 (3)%(6)%
Performance fees5 34 14 N/M(64)
Investment management and performance fees830 882 890 (6)(7)
Distribution and servicing fees51 32 28 59 82 
Other fees (a)
(31)16 N/MN/M
Total fee revenue850 915 934 (7)(9)
Investment and other revenue (b)
(13)(8)18 N/MN/M
Total fee and other revenue (b)
837 907 952 (8)(12)
Net interest revenue62 57 47 9 32 
Total revenue899 964 999 (7)(10)
Provision for credit losses (3)(4)N/MN/M
Noninterest expense691 755 677 (8)2 
Income before taxes$208 $212 $326 (2)%(36)%
Total revenue by line of business:
Investment Management$603 $658 $700 (8)%(14)%
Wealth Management296 306 299 (3)(1)
Total revenue by line of business$899 $964 $999 (7)%(10)%
Pre-tax operating margin23 %22 %33 %
Adjusted pre-tax operating margin – Non-GAAP (c)
26 %24 %35 %
Metrics:
Average loans$14,087 $13,228 $11,871 6 %19 %
Average deposits$20,802 $22,501 $17,466 (8)%19 %
AUM (in billions) (current period is preliminary) (d)
$1,937 $2,266 $2,320 (15)%(17)%
Wealth Management client assets (in billions) (current period is preliminary) (e)
$264 $305 $305 (13)%(13)%
(a)    Other fees primarily include investment services fees.
(b)    Investment and other revenue and total fee and other revenue are net of income (loss) attributable to noncontrolling interests related to consolidated investment management funds.
(c)    Net of distribution and servicing expense. See “Explanation of GAAP and Non-GAAP financial measures” on page 10 for information on this Non-GAAP measure.
(d)    Excludes assets managed outside of the Investment and Wealth Management business segment.
(e)    Includes AUM and AUC/A in the Wealth Management business.


KEY DRIVERS

The drivers of the total revenue variances by line of business are indicated below. Also see page 7 for information related to money market fee waivers.
Investment Management – The year-over-year decrease primarily reflects the unfavorable impact of a stronger U.S. dollar, lower seed capital results and market values, an unfavorable change in the mix of AUM and lower equity income, partially offset by lower money market fee waivers. The sequential decrease primarily reflects lower market values, timing of performance fees and the unfavorable impact of a stronger U.S. dollar, partially offset by lower money market fee waivers.
Wealth Management – The year-over-year and sequential decreases primarily reflect lower market values, partially offset by higher net interest revenue.
Noninterest expense increased year-over-year, primarily reflecting higher investments in growth initiatives and distribution and servicing expenses, partially offset by favorable impact of a stronger U.S. dollar. The sequential decrease primarily reflects lower staff expense.
Page - 5

BNY Mellon 2Q22 Earnings Release
OTHER SEGMENT primarily includes the leasing portfolio, corporate treasury activities, including our securities portfolio, derivatives and other trading activity, renewable energy and other corporate investments, certain business exits and other corporate revenue and expense items.

(in millions)2Q221Q222Q21
Fee revenue$13 $$13 
Investment and other revenue62 12 
Total fee and other revenue75 20 22 
Net interest (expense)(35)(32)(45)
Total revenue40 (12)(23)
Provision for credit losses30 17 (5)
Noninterest expense63 33 49 
(Loss) before taxes$(53)$(62)$(67)


KEY DRIVERS

Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense. The year-over-year and sequential increases in total revenue primarily reflect a strategic equity investment gain in 2Q22.

Provision for credit losses was $30 million in 2Q22 primarily related to changes in the macroeconomic forecast and an increase in cash balances with exposure to Russia.

Noninterest expense increased year-over-year and sequentially, primarily reflecting higher staff expense.

Page - 6

BNY Mellon 2Q22 Earnings Release
MONEY MARKET FEE WAIVERS

The following table presents the impact of money market fee waivers on our consolidated fee revenue, net of distribution and servicing expense. In 2Q22, the net impact of money market fee waivers was $66 million, down from $199 million in 1Q22, driven by higher interest rates.

Money market fee waivers
(in millions)2Q221Q224Q213Q212Q21YTD22YTD21
Investment services fees (see table below)$(26)$(126)$(148)$(142)$(148)$(152)$(257)
Investment management and performance fees(40)(85)(116)(109)(115)(125)(204)
Distribution and servicing fees(2)(11)(14)(11)(13)(13)(26)
Total fee revenue(68)(222)(278)(262)(276)(290)(487)
Less: Distribution and servicing expense2 23 35 29 24 25 47 
Net impact of money market fee waivers$(66)$(199)$(243)$(233)$(252)$(265)$(440)
Impact to investment services fees by line of business (a):
Asset Servicing$ $(19)$(31)$(29)$(30)$(19)$(45)
Issuer Services(1)(11)(18)(17)(16)(12)(27)
Pershing(25)(90)(89)(86)(91)(115)(168)
Treasury Services (6)(10)(10)(11)(6)(17)
Total impact to investment services fees by line of business$(26)$(126)$(148)$(142)$(148)$(152)$(257)
Impact to fee revenue by line of business (a):
Asset Servicing$(1)$(28)$(50)$(47)$(50)$(29)$(79)
Issuer Services(1)(14)(24)(22)(22)(15)(37)
Pershing(29)(107)(106)(102)(99)(136)(193)
Treasury Services (8)(14)(13)(16)(8)(25)
Investment Management(37)(63)(81)(76)(85)(100)(146)
Wealth Management (2)(3)(2)(4)(2)(7)
Total impact to fee revenue by line of business$(68)$(222)$(278)$(262)$(276)$(290)$(487)
(a)    The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses.

Page - 7

BNY Mellon 2Q22 Earnings Release
CAPITAL AND LIQUIDITY

Capital and liquidity ratiosJune 30, 2022March 31, 2022Dec. 31, 2021
Consolidated regulatory capital ratios: (a)
CET1 ratio10.0 %10.1 %11.2 %
Tier 1 capital ratio12.8 12.9 14.0 
Total capital ratio13.6 13.7 14.9 
Tier 1 leverage ratio5.2 5.3 5.5 
Supplementary leverage ratio6.2 6.2 6.6 
BNY Mellon shareholders’ equity to total assets ratio9.1 %8.8 %9.7 %
BNY Mellon common shareholders’ equity to total assets ratio8.0 %7.8 %8.6 %
Average LCR111 %109 %109 %
Book value per common share$44.73 $45.76 $47.50 
Tangible book value per common share – Non-GAAP (b)
$22.02 $22.76 $24.31 
Common shares outstanding (in thousands)
808,103 807,798 804,145 
(a)    Regulatory capital ratios for June 30, 2022 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 June 30, 2022 was the Advanced Approaches and for March 31, 2022 and Dec. 31, 2021 was the Standardized Approach.
(b)    Tangible book value per common shareNon-GAAP excludes goodwill and intangible assets, net of deferred tax liabilities. See “Explanation of GAAP and Non-GAAP financial measures” on page 10 for information on this Non-GAAP measure.


CET1 capital totaled $17.1 billion and Tier 1 capital totaled $21.8 billion at June 30, 2022, both decreasing approximately $515 million, compared with March 31, 2022. The decreases primarily reflect unrealized losses on securities available-for-sale, foreign currency translation and capital deployed through dividends, partially offset by capital generated through earnings. The Tier 1 leverage ratio decreased compared with March 31, 2022, driven by the decrease in capital, partially offset by lower average assets.


NET INTEREST REVENUE

Net interest revenue2Q22 vs.
(dollars in millions; not meaningful - N/M)2Q221Q222Q211Q222Q21
Net interest revenue$824 $698 $645 18%28%
Add: Tax equivalent adjustment3 N/MN/M
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a)
$827 $701 $648 18%28%
Net interest margin0.89 %0.75 %0.67 %14  bps22  bps
Net interest margin (FTE) – Non-GAAP (a)
0.89 %0.76 %0.67 %13  bps22  bps
(a)    Net interest revenue (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income. See “Explanation of GAAP and Non-GAAP financial measures” on page 10 for information on this Non-GAAP measure.
bps – basis points.


Net interest revenue increased year-over-year, primarily reflecting higher interest rates on interest-earning assets and a change in asset mix, partially offset by higher funding expense and lower interest-earning assets.

Sequentially, the increase primarily reflects higher interest rates on interest-earning assets. This was partially offset by higher funding expense.
Page - 8

BNY Mellon 2Q22 Earnings Release
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement

(in millions)Quarter endedYear-to-date
June 30, 2022March 31, 2022June 30, 2021June 30, 2022June 30, 2021
Fee and other revenue
Investment services fees$2,206 $1,993 $2,076 $4,199 $4,132 
Investment management and performance fees833 883 889 1,716 1,779 
Foreign exchange revenue222 207 184 429 415 
Financing-related fees44 45 48 89 99 
Distribution and servicing fees34 30 27 64 56 
Total fee revenue3,339 3,158 3,224 6,497 6,481 
Investment and other revenue91 70 91 161 100 
Total fee and other revenue3,430 3,228 3,315 6,658 6,581 
Net interest revenue
Interest revenue1,159 778 685 1,937 1,423 
Interest expense335 80 40 415 123 
Net interest revenue824 698 645 1,522 1,300 
Total revenue4,254 3,926 3,960 8,180 7,881 
Provision for credit losses47 (86)49 (169)
Noninterest expense
Staff1,623 1,702 1,518 3,325 3,120 
Software and equipment405 399 365 804 727 
Professional, legal and other purchased services379 370 363 749 706 
Sub-custodian and clearing131 118 132 249 256 
Net occupancy125 122 122 247 245 
Distribution and servicing90 79 73 169 147 
Business development43 30 22 73 41 
Bank assessment charges37 35 35 72 69 
Amortization of intangible assets17 17 20 34 44 
Other 262 134 128 396 274 
Total noninterest expense3,112 3,006 2,778 6,118 5,629 
Income
Income before income taxes1,095 918 1,268 2,013 2,421 
Provision for income taxes 231 153 241 384 462 
Net income864 765 1,027 1,629 1,959 
Net loss (income) attributable to noncontrolling interests related to consolidated investment management funds5 (5)13 (10)
Net income applicable to shareholders of The Bank of New York Mellon Corporation869 773 1,022 1,642 1,949 
Preferred stock dividends(34)(74)(31)(108)(100)
Net income applicable to common shareholders of The Bank of New York Mellon Corporation$835 $699 $991 $1,534 $1,849 


Earnings per share applicable to the common shareholders of The Bank of New York Mellon CorporationQuarter endedYear ended
June 30, 2022March 31, 2022June 30, 2021June 30, 2022June 30, 2021
(in dollars)
Basic$1.03 $0.86 $1.14 $1.89 $2.11 
Diluted$1.03 $0.86 $1.13 $1.88 $2.10 

Page - 9

BNY Mellon 2Q22 Earnings Release
EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

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

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

BNY Mellon has also included the adjusted pre-tax operating margin – Non-GAAP, which is the pre-tax operating margin for the Investment and Wealth Management business segment, net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. We believe that this measure is useful when evaluating the performance of the Investment and Wealth Management business segment relative to industry competitors.

For the reconciliations of these Non-GAAP measures, see “Explanation of GAAP and Non-GAAP Financial Measures” in the Financial Supplement available at www.bnymellon.com.

BNY Mellon has presented pre-tax operating margin, excluding an increase in litigation reserves for the Securities Services business segment. This measure is provided to permit investors to view the financial measures on a basis consistent with how management views the businesses.

Pre-tax operating margin reconciliation - Securities Services business segment
(dollars in millions)2Q22
Income before income taxes – GAAP$337 
Add: Increase in litigation reserves92 
Adjusted income before income taxes, excluding increase in litigation reserves – Non-GAAP$429 
Total revenue – GAAP$2,006 
Pre-tax operating margin - GAAP (a)17 %
Adjusted pre-tax operating margin, excluding increase in litigation reserves – Non-GAAP21 %
(a)    Income before taxes divided by total revenue.


CAUTIONARY STATEMENT

A number of statements (i) in this Earnings Release, (ii) in our Financial Supplement, (iii) in our presentations and (iv) 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 statements about our capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, resiliency, capabilities, revenue, net interest revenue, money market fee waivers, fees, expenses, cost discipline, sustainable growth, innovation in products and services, company management, human capital management (including related ambitions, objectives, aims and goals), deposits, interest rates and yield curves, securities portfolio, taxes, business opportunities, divestments, volatility, preliminary business metrics and regulatory capital ratios and statements regarding our aspirations, as well as our 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 statements may be expressed in a variety of ways, including the use of future or present tense language. Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,”
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BNY Mellon 2Q22 Earnings Release
“could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “ambition,” “objective,” “aim,” “future,” “potentially,” “outlook” and words of similar meaning may signify forward-looking statements. These statements and other forward-looking statements contained in other public disclosures of BNY Mellon 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 a number of factors, 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, 2021 and BNY Mellon’s other filings with the Securities and Exchange Commission. Statements about the effects of the current and near-term market and macroeconomic outlook on BNY Mellon, 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 BNY Mellon’s control), including geopolitical risks (including those related to Russia’s invasion of Ukraine), as well as the scope and duration of the pandemic, actions taken by governmental authorities and other third parties in response to the pandemic, the availability, use and effectiveness of vaccines and the direct and indirect impact of the pandemic on us, our clients, customers and third parties. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as BNY Mellon completes its Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. All forward-looking statements in this Earnings Release speak only as of July 15, 2022, 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.

ABOUT BNY MELLON

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 and wealth management and investment services in 35 countries. As of June 30, 2022, BNY Mellon had $43.0 trillion in assets under custody and/or administration, and $1.9 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.


CONFERENCE CALL INFORMATION

Todd Gibbons, Chief Executive Officer, Robin Vince, President and Chief Executive Officer-Elect and Emily Portney, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 8:00 a.m. ET on July 15, 2022. This conference call and audio webcast will include forward-looking statements and may include other material information.

Investors and analysts wishing to access the conference call and audio webcast may do so by dialing (800) 390-5696 (U.S.) or (720) 452-9082 (International), and using the passcode: 200200, or by logging onto www.bnymellon.com/investorrelations. Earnings materials will be available at www.bnymellon.com/investorrelations beginning at approximately 6:30 a.m. ET on July 15, 2022. Replays of the conference call and audio webcast will be available beginning July 15, 2022 at approximately 2:00 p.m. ET through Aug. 15, 2022 by dialing (888) 203-1112 (U.S.) or (719) 457-0820 (International), and using the passcode: 5049084. The archived version of the conference call and audio webcast will also be available at www.bnymellon.com/investorrelations for the same time period.
Page - 11


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The Bank of New York Mellon Corporation
Financial Supplement
Second Quarter 2022




Table of Contents
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Consolidated ResultsPage
Consolidated Financial Highlights
Condensed Consolidated Income Statement
Condensed Consolidated Balance Sheet
Fee and Other Revenue
Average Balances and Interest Rates
Capital and Liquidity
Business Segment Results
Securities Services Business Segment
Market and Wealth Services Business Segment
Investment and Wealth Management Business Segment
AUM by Product Type, Changes in AUM and Wealth Management Client Assets
Other Segment
Other
Securities Portfolio
Allowance for Credit Losses and Nonperforming Assets
Supplemental Information
Explanation of GAAP and Non-GAAP Financial Measures




THE BANK OF NEW YORK MELLON CORPORATION

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CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in millions, except per common share amounts, or unless otherwise noted)2Q22 vs.YTD22 vs.
2Q221Q224Q213Q212Q211Q222Q21YTD22YTD21YTD21
Selected income statement data
Fee and other revenue$3,430 $3,228 $3,338 $3,394 $3,315 %%$6,658 $6,581 %
Net interest revenue824 698 677 641 645 18 28 1,522 1,300 17 
Total revenue4,254 3,926 4,015 4,035 3,960 8 7 8,180 7,881 4 
Provision for credit losses47 2 (17)(45)(86)N/MN/M49 (169)N/M
Noninterest expense3,112 3,006 2,967 2,918 2,778 4 12 6,118 5,629 9 
Income before income taxes1,095 918 1,065 1,162 1,268 19 (14)2,013 2,421 (17)
Provision for income taxes231 153 196 219 241 51 (4)384 462 (17)
Net income$864 $765 $869 $943 $1,027 13 %(16)%$1,629 $1,959 (17)%
Net income applicable to common shareholders of
The Bank of New York Mellon Corporation
$835 $699 $822 $881 $991 19 %(16)%$1,534 $1,849 (17)%
Diluted earnings per common share$1.03 $0.86 $1.01 $1.04 $1.13 20 %(9)%$1.88 $2.10 (10)%
Average common shares and equivalents outstanding – diluted (in thousands)
813,590 813,986 817,345 849,028 873,475 — %(7)%813,894 879,409 (7)%
Financial ratios (Returns are annualized)
Pre-tax operating margin26 %23 %27 %29 %32 %25 %31 %
Return on common equity9.3 %7.6 %8.6 %8.8 %9.8 %8.4 %9.2 %
Return on tangible common equity – Non-GAAP (a)
19.2 %15.4 %17.2 %16.8 %18.6 %17.2 %17.3 %
Non-U.S. revenue as a percentage of total revenue 36 %35 %38 %38 %38 %35 %38 %
Period end
Assets under custody and/or administration (“AUC/A”) (in trillions) (b)
$43.0 $45.5 $46.7 $45.3 $45.0 (5)%(4)%
Assets under management (“AUM”) (in trillions)
$1.94 $2.27 $2.43 $2.31 $2.32 (15)%(17)%
Full-time employees50,800 49,600 49,100 48,900 48,800 %%
Book value per common share$44.73 $45.76 $47.50 $47.30 $47.20 
Tangible book value per common share – Non-GAAP (a)
$22.02 $22.76 $24.31 $24.88 $25.64 
Cash dividends per common share$0.34 $0.34 $0.34 $0.34 $0.31 
Common dividend payout ratio33 %40 %34 %34 %28 %
Closing stock price per common share$41.71 $49.63 $58.08 $51.84 $51.23 
Market capitalization$33,706 $40,091 $46,705 $42,811 $44,220 
Common shares outstanding (in thousands)
808,103 807,798 804,145 825,821 863,174 
Capital ratios at period end (c)
Common Equity Tier 1 ("CET1") ratio10.0 %10.1 %11.2 %11.7 %12.6 %
Tier 1 capital ratio12.8 %12.9 %14.0 %14.4 %15.2 %
Total capital ratio13.6 %13.7 %14.9 %15.2 %16.0 %
Tier 1 leverage ratio5.2 %5.3 %5.5 %5.7 %6.0 %
Supplementary leverage ratio ("SLR")6.2 %6.2 %6.6 %7.0 %7.5 %
(a) Non-GAAP information, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of Non-GAAP measures.
(b) Includes the AUC/A of CIBC Mellon Global Securities Services Company ("CIBC Mellon"), a joint venture with the Canadian Imperial Bank of Commerce, of $1.5 trillion at June 30, 2022 and $1.7 trillion at March 31, 2022, Dec. 31, 2021, Sept. 30, 2021 and June 30, 2021.
(c) Regulatory capital ratios for June 30, 2022 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 June 30, 2022 was the Advanced Approaches, for March 31, 2022 and Dec. 31, 2021 was the Standardized Approach, and for Sept. 30, 2021 and June 30, 2021 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio.
N/M – Not meaningful.
3



THE BANK OF NEW YORK MELLON CORPORATION
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CONDENSED CONSOLIDATED INCOME STATEMENT
(dollars in millions, except per share amounts; common shares in thousands)2Q22 vs.YTD22 vs.
2Q221Q224Q213Q212Q211Q222Q21YTD22YTD21YTD21
Revenue
Investment services fees$2,206 $1,993 $2,061 $2,091 $2,076 11 %%$4,199 $4,132 %
Investment management and performance fees833 883 896 913 889 (6)(6)1,716 1,779 (4)
Foreign exchange revenue222 207 199 185 184 21 429 415 
Financing-related fees44 45 47 48 48 (2)(8)89 99 (10)
Distribution and servicing fees34 30 28 28 27 13 26 64 56 14 
Total fee revenue3,339 3,158 3,231 3,265 3,224 6 4 6,497 6,481  
Investment and other revenue91 70 107 129 91 N/MN/M161 100 N/M
Total fee and other revenue3,430 3,228 3,338 3,394 3,315 6 3 6,658 6,581 1 
Net interest revenue824 698 677 641 645 18 28 1,522 1,300 17 
Total revenue4,254 3,926 4,015 4,035 3,960 8 7 8,180 7,881 4 
Provision for credit losses47 2 (17)(45)(86)N/MN/M49 (169)N/M
Noninterest expense
Staff1,623 1,702 1,633 1,584 1,518 (5)3,325 3,120 
Software and equipment405 399 379 372 365 11 804 727 11 
Professional, legal and other purchased services379 370 390 363 363 749 706 
Sub-custodian and clearing131 118 120 129 132 11 (1)249 256 (3)
Net occupancy 125 122 133 120 122 247 245 
Distribution and servicing90 79 75 76 73 14 23 169 147 15 
Business development43 30 44 22 22 43 95 73 41 78 
Bank assessment charges37 35 30 34 35 72 69 
Amortization of intangible assets17 17 19 19 20 — (15)34 44 (23)
Other262 134 144 199 128 96 105 396 274 45 
Total noninterest expense3,112 3,006 2,967 2,918 2,778 4 12 6,118 5,629 9 
Income before income taxes 1,095 918 1,065 1,162 1,268 19 (14)2,013 2,421 (17)
Provision for income taxes 231 153 196 219 241 51 (4)384 462 (17)
Net income 864 765 869 943 1,027 13 (16)1,629 1,959 (17)
Net loss (income) attributable to noncontrolling interests(6)(5)N/MN/M13 (10)N/M
Preferred stock dividends(34)(74)(41)(66)(31)N/MN/M(108)(100)N/M
Net income applicable to common shareholders of The Bank of New York Mellon Corporation$835 $699 $822 $881 $991 19 %(16)%$1,534 $1,849 (17)%
Average common shares and equivalents outstanding: Basic810,903 809,469 811,463 844,088 869,460 — %(7)%810,233 876,006 (8)%
Diluted813,590 813,986 817,345 849,028 873,475 — %(7)%813,894 879,409 (7)%
Earnings per common share: Basic$1.03 $0.86 $1.01 $1.04 $1.14 20 %(10)%$1.89 $2.11 (10)%
Diluted$1.03 $0.86 $1.01 $1.04 $1.13 20 %(9)%$1.88 $2.10 (10)%
N/M – Not meaningful.
4



THE BANK OF NEW YORK MELLON CORPORATION
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CONDENSED CONSOLIDATED BALANCE SHEET
20222021
(in millions)June 30March 31Dec. 31Sept. 30June 30
Assets
Cash and due from banks$5,185 $6,143 $6,061 $6,752 $5,154 
Interest-bearing deposits with the Federal Reserve and other central banks125,372 135,691 102,467 126,959 126,355 
Interest-bearing deposits with banks16,639 18,268 16,630 20,057 21,270 
Federal funds sold and securities purchased under resale agreements22,940 27,131 29,607 28,497 29,762 
Securities150,844 153,396 158,705 157,274 155,906 
Trading assets10,759 14,703 16,577 17,854 15,520 
Loans69,347 68,052 67,787 64,328 63,547 
Allowance for loan losses(181)(171)(196)(233)(269)
Net loans
69,166 67,881 67,591 64,095 63,278 
Premises and equipment3,354 3,359 3,431 3,422 3,442 
Accrued interest receivable548 467 457 464 492 
Goodwill17,271 17,462 17,512 17,420 17,487 
Intangible assets2,934 2,968 2,991 2,941 2,964 
Other assets27,609 26,342 22,409 24,798 25,333 
Total assets
$452,621 $473,811 $444,438 $470,533 $466,963 
Liabilities
Deposits$325,813 $345,565 $319,694 $343,139 $338,670 
Federal funds purchased and securities sold under repurchase agreements11,434 13,181 11,566 11,973 12,425 
Trading liabilities5,595 5,587 5,469 5,152 6,451 
Payables to customers and broker-dealers25,769 26,608 25,150 26,002 23,704 
Other borrowed funds520 312 749 767 451 
Accrued taxes and other expenses5,011 4,534 5,767 5,609 5,213 
Other liabilities9,724 10,626 6,721 8,796 8,626 
Long-term debt27,610 25,246 25,931 25,043 25,629 
Total liabilities
411,476 431,659 401,047 426,481 421,169 
Temporary equity
Redeemable noncontrolling interests154 155 161 178 169 
Permanent equity
Preferred stock4,838 4,838 4,838 4,541 4,541 
Common stock14 14 14 14 14 
Additional paid-in capital28,316 28,258 28,128 28,075 28,006 
Retained earnings37,644 37,088 36,667 36,125 35,540 
Accumulated other comprehensive loss, net of tax(5,307)(3,881)(2,213)(2,003)(1,670)
Less: Treasury stock, at cost
(24,521)(24,518)(24,400)(23,151)(21,150)
Total The Bank of New York Mellon Corporation shareholders’ equity40,984 41,799 43,034 43,601 45,281 
Nonredeemable noncontrolling interests of consolidated investment management funds
198 196 273 344 
Total permanent equity
40,991 41,997 43,230 43,874 45,625 
Total liabilities, temporary equity and permanent equity
$452,621 $473,811 $444,438 $470,533 $466,963 
5



THE BANK OF NEW YORK MELLON CORPORATION
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FEE AND OTHER REVENUE
2Q22 vs.YTD22 vs.
(dollars in millions)2Q221Q224Q213Q212Q211Q222Q21YTD22YTD21YTD21
Investment services fees$2,206 $1,993 $2,061 $2,091 $2,076 11 %%$4,199 $4,132 %
Investment management and performance fees:
Investment management fees (a)
828 849 864 892 875 (2)(5)1,677 1,725 (3)
Performance fees34 32 21 14 N/M(64)39 54 (28)
Total investment management and performance fees (b)
833 883 896 913 889 (6)(6)1,716 1,779 (4)
Foreign exchange revenue222 207 199 185 184 21 429 415 
Financing-related fees44 45 47 48 48 (2)(8)89 99 (10)
Distribution and servicing fees34 30 28 28 27 13 26 64 56 14 
Total fee revenue3,339 3,158 3,231 3,265 3,224 6 4 6,497 6,481  
Investment and other revenue:
(Loss) income from consolidated investment management funds(24)(20)(7)13 N/MN/M(44)30 N/M
Seed capital (losses) gains (c)
(24)(8)12 18 N/MN/M(32)21 N/M
Other trading revenue (loss)45 (6)20 (1)N/MN/M50 (8)N/M
Renewable energy investment (losses)(44)(44)(37)(42)(41)N/MN/M(88)(122)N/M
Corporate/bank-owned life insurance28 33 45 33 29 N/MN/M61 62 N/M
Other investments gains (d)
78 61 55 70 23 N/MN/M139 34 N/M
Disposal gains— — — N/MN/M— N/M
Expense reimbursements from joint venture26 27 23 25 25 N/MN/M53 48 N/M
Other income12 14 17 N/MN/M18 27 N/M
Net securities gains— N/MN/MN/M
Total investment and other revenue91 70 107 129 91 N/MN/M161 100 N/M
Total fee and other revenue$3,430 $3,228 $3,338 $3,394 $3,315 6 %3 %$6,658 $6,581 1 %
(a) Excludes seed capital gains (losses) related to consolidated investment management funds.
(b) On a constant currency basis (Non-GAAP), investment management and performance fees decreased 3% compared with 2Q21. See "Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure.
(c) Includes gains (losses) on investments in BNY Mellon funds which hedge deferred incentive awards.
(d) Includes strategic equity, private equity and other investments.
N/M – Not meaningful.

6



THE BANK OF NEW YORK MELLON CORPORATION
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AVERAGE BALANCES AND INTEREST RATES
2Q221Q224Q213Q212Q21
Average balanceAverage rateAverage balanceAverage rateAverage balanceAverage rateAverage balanceAverage rateAverage balanceAverage rate
(dollars in millions; average rates are annualized)
Assets
Interest-earning assets:
Interest-bearing deposits with the Federal Reserve and other central banks$102,844 0.38 %$100,303 0.01 %$105,065 (0.06)%$108,110 (0.07)%$114,564 (0.09)%
Interest-bearing deposits with banks (primarily foreign banks)18,097 0.74 17,181 0.33 18,818 0.23 20,465 0.22 22,465 0.20 
Federal funds sold and securities purchased under resale agreements (a)
24,212 1.91 27,006 0.56 27,780 0.45 29,304 0.44 27,857 0.36 
Loans69,036 2.15 66,810 1.57 64,650 1.55 61,206 1.55 60,520 1.57 
Securities:
U.S. government obligations41,267 1.07 40,868 0.74 39,169 0.73 36,255 0.73 33,212 0.71 
U.S. government agency obligations64,939 1.59 67,055 1.46 69,691 1.35