Bank of New York Mellon Corp - FORM 8-K - EX-99.2 - 3Q 2010 FINANCIAL TRENDS

Attached files

file	filename
8-K - FORM 8-K - Bank of New York Mellon Corp	d8k.htm
EX-99.1 - QUARTERLY EARNINGS REVIEW FOR THIRD QUARTER 2010 - Bank of New York Mellon Corp	dex991.htm

Exhibit 99.2

THE BANK OF NEW YORK MELLON CORPORATION

Financial Trends

Notes:

On July 1, 2007, The Bank of New York Company, Inc. (“The Bank of New York”) and Mellon Financial Corporation (“Mellon”) merged with and into The Bank of New York Mellon Corporation (“The Bank of New York Mellon” or “ BNY Mellon”), with BNY Mellon being the surviving entity (“the merger”).

The results prior to the consummation of the merger reflect the sum of The Bank of New York and Mellon’s historical results, but do not include the pro forma impact of purchase accounting adjustments. Combined results for the periods prior to the merger (1Q07, 2Q07) are presented on a pre-tax basis only. Average common equity and average goodwill/intangibles are not disclosed for the periods prior to the merger due to the impact of the merger on these line items. The business results are presented on a pre-tax basis for all periods and reflect actions taken to report consistent transfer pricing and cost allocation methodologies as well as intercompany eliminations between The Bank of New York and Mellon.

Summations may not equal due to rounding. As a result of this rounding convention, immaterial differences may exist between the business trends data versus business data on the Form 10-Q for the quarter ended September 30, 2010.

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

The following transactions/changes have impacted the reporting of our results:

On July 1, 2010 and August 2, 2010 we completed the acquisitions of Global Investment Servicing (“GIS”) and BHF Asset Servicing GmbH (“BAS”). The financial results for GIS are included in the Asset Servicing, Clearing Services and Treasury Services businesses. The financial results for BAS are included in the Asset Servicing business.

On Jan. 1, 2010, we adopted SFAS No. 167, “Amendments to FASB Interpretation No. 46 (R).” Certain asset management funds and seed capital investments are now disclosed separately on our balance sheet and securitizations are included in available for sale securities. The income statement separately discloses the operations of consolidated asset management funds and the net income attributable to noncontrolling interests of consolidated asset management funds; previously these were disclosed as asset and wealth management revenue and investment income.

On November 2, 2009, we completed the acquisition of Insight Asset Management (“Insight”) based in London. The financial results for Insight are included in the Asset Management business.

On June 30, 2009, we adopted discontinued operations accounting for Mellon United National Bank (MUNB) located in Miami, Florida. Previously, the financial results were included in the Other business. On January 15, 2010, we completed the sale of MUNB. The financial results for all periods were restated.

On January 1, 2009, we adopted FAS 160, which resulted in a reclassification of minority interest to equity from other liabilities on the balance sheet and to noncontrolling interest from other expense on the income statement.

During the first quarter of 2009, we moved the financial results of the Execution business from the Clearing Services business to the Other business. Historical business results have been restated to reflect these changes.

On June 3, 2008, we completed the sale of Mellon 1st Business Bank, National Association (N.A.). We moved the financial results from the Wealth Management business to the Other business. Historical results have been restated to reflect these changes.

On December 20, 2007, we acquired the remaining 50% interest in the ABN AMRO Mellon joint venture. The financial results are included in the Asset Servicing business.

The following items have impacted the reporting of our results:

Results for the first quarter of 2010 include a charge related to special litigation reserves.

Investment Securities Portfolio restructuring/ Investment Write-downs – Impacted total revenue levels in the fourth quarter of 2007, full year of 2008, and full year of 2009.

The TARP preferred dividends and related redemption premium impacted the fourth quarter of 2008 and the first and second quarters of 2009.

The FDIC Special Assessment of all depository institutions impacted the second quarter of 2009.

Global efficiency restructuring charges – Recorded charges in the fourth quarters of 2008 and 2009 and third quarter of 2010

SILO/LILO/Tax settlement charges – Incurred charges in the second and third quarters of 2008, while the second quarter of 2009 contains the benefit of final tax settlements.

Support agreement charges – Recorded a $163 million pre-tax charge in the fourth quarter of 2008 and a $726 million pre-tax charge in the third quarter of 2008. Minor amounts were recorded in other periods.

All of these items are detailed in the trends that follow.

Discontinued Operations Accounting:

The income/(loss) and average assets from discontinued operations accounting have not been allocated to any business.

Average Assets:

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

Return on Common and Tangible Common Equity/Pretax Operating Margin:

Ratios are presented for continuing operations basis only. Quarterly return on common and tangible common equity ratios are annualized.

Non-GAAP Measures:

Certain Non-GAAP measures are included in the following schedules. These measures are used by management to monitor financial performance, both on a company-wide and on a business basis. These Non-GAAP measures impact certain revenue/expense categories, percentages and ratios by the exclusion and/or adjustment of items listed above and described in footnotes. For further information, see ‘Non-GAAP Financial Measures’ and ‘Supplemental Information – Explanation of Non-GAAP Financial Measures’ in The Bank of New York Mellon Corporation Quarterly Earnings Review dated October 19, 2010, furnished as an exhibit to the Report on Form 8-K to which these Financial Trends are furnished as an exhibit.

Page 1 of 19

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend


*(dollar amounts in millions unless otherwise noted)*	2008												2009												2010
*(dollar amounts in millions unless otherwise noted)*	1st Qtr			2nd Qtr (a)			3rd Qtr (a), (b)			4th Qtr (b)			1st Qtr			2nd Qtr (c)			3rd Qtr (d)			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Securities servicing fees
Asset servicing	$	903		$	873		$	808		$	786		$	609		$	671		$	643		$	650		$	637		$	668		$	870
Issuer services		376			444			477			388			364			372			359			368			333			354			364
Clearing services		263			264			259			279			253			250			236			223			230			245			252

Total securities servicing fees		1,542			1,581			1,544			1,453			1,226			1,293			1,238			1,241			1,200			1,267			1,486
Asset and wealth management fees		862			860			795			701			622			645			664			746			686			686			696
Foreign exchange & other trading		259			308			385			510			307			237			246			246			262			220			146
Treasury services		124			129			129			132			125			132			128			134			131			125			132
Distribution and servicing		98			110			107			106			101			95			73			57			48			51			56
Financing-related fees		47			51			44			44			48			54			56			57			50			48			49
Investment and Other Income		123			102			84			112			(2	)		53			205			81			145			145			97

Total fee revenue		3,055			3,141			3,088			3,058			2,427			2,509			2,610			2,562			2,522			2,542			2,662
Securities gains (losses)		(73	)		(152	)		(162	)		(1,241	)		(295	)		(256	)		(4,833	)		15			7			13			6

Total fee and other revenue		2,982			2,989			2,926			1,817			2,132			2,253			(2,223	)		2,577			2,529			2,555			2,668
Income of consolidated asset management funds		—			—			—			—			—			—			—			—			65			65			37
Net interest revenue		743			388			681			1,047			775			700			716			724			765			722			718

Total revenue		3,725			3,377			3,607			2,864			2,907			2,953			(1,507	)		3,301			3,359			3,342			3,423
Provision for credit losses		14			13			23			54			59			61			147			65			35			20			(22	)
Noninterest expenses		2,357			2,471			3,090			2,468			2,091			2,145			2,158			2,266			2,146			2,219			2,429
Special Litigation Reserves		N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A			164			N/A			N/A
FDIC special assessment		—			—			—			—			—			61			—			—			—			—			—
Amortization of intangible assets		119			123			118			113			107			108			104			107			97			98			111
Restructuring charges		—			—			—			181			10			6			(5	)		139			7			(15	)		15
Merger & integration expense		126			149			111			97			68			59			54			52			26			14			56

Total noninterest expense		2,602			2,743			3,319			2,859			2,276			2,379			2,311			2,564			2,440			2,316			2,611
Income/ (loss) from continuing operations before taxes		1,109			621			265			(49	)		572			513			(3,965	)		672			884			1,006			834
Income taxes		358			312			(42	)		(137	)		161			12			(1,527	)		(41	)		258			304			220

Income/ (loss) from continuing operations		751			309			307			88			411			501			(2,438	)		713			626			702			614
Income/ (loss) from discontinued operations, net of tax		4			6			—			4			(41	)		(91	)		(19	)		(119	)		(42	)		(10	)		(3	)
Net income attributable to noncontrolling interest		(9	)		(6	)		(4	)		(5	)		(1	)		2			(1	)		(1	)		(25	) (j)		(34	) (j)		11	(j)
Extraordinary (loss) on consolidation of commercial paper conduit, net of tax		—			—			—			(26	)		—			—			—			—			—			—			—
Redemption charge and preferred dividends		—			—			—			(33	)		(47	)		(236	)		—			—			—			—			—

Net income/ (loss) applicable to shareholders of The Bank of New York Mellon Corporation	$	746		$	309		$	303		$	28		$	322		$	176		$	(2,458	)	$	593		$	559		$	658		$	622

EPS from continuing operations	$	0.65		$	0.26		$	0.26		$	0.04		$	0.31		$	0.23		$	(2.04	)	$	0.59		$	0.49		$	0.55		$	0.51
EPS from continuing operations - Non-GAAP (e)	$	0.75		$	0.75		$	0.81		$	0.96		$	0.56		$	0.51		$	0.54		$	0.55		$	0.59		$	0.55		$	0.55
Market value of assets under management at period-end (in billions)	$	1,105		$	1,113		$	1,067		$	928		$	881		$	926		$	966		$	1,115		$	1,105		$	1,047		$	1,141
Market value of assets under custody and administration at period-end (in trillions)	$	23.1		$	23.0		$	22.4		$	20.2		$	19.5		$	20.7		$	22.1		$	22.3		$	22.4		$	21.8		$	24.4
Market value of securities on loan at period-end (in billions)	$	660		$	588		$	470		$	326		$	293		$	290		$	299		$	247		$	253		$	248		$	279
Pre-tax operating margin
GAAP-before extraordinary (loss)		30	%		19	%		7	%		(2	)%		20	%		17	%		N/M			20	%		26	%		30	%		24	%
Non-GAAP adjusted (f)		38	%		37	%		39	%		43	%		33	%		31	%		31	%		29	%		34	%		32	%		30	%
Return on tangible common equity (annualized):
GAAP-before extraordinary (loss)		35.4	%		18.5	%		18.9	%		6.5	%		28.8	%		18.4	%		N/M			33.0	%		25.8	%		25.8	%		26.3	%
Non-GAAP adjusted (g)		40.7	%		45.9	%		50.2	%		61.3	%		44.4	%		24.0	%		31.5	%		31.1	%		30.2	%		25.5	%		27.9	%
Return on common equity (annualized)
GAAP-before extraordinary (loss)		10.1	%		4.3	%		4.3	%		0.8	%		5.8	%		4.0	%		N/M			9.8	%		8.2	%		8.8	%		7.8	%
Non-GAAP adjusted - excluding intangible amortization (h)		12.7	%		13.2	%		14.2	%		16.8	%		10.6	%		6.6	%		9.9	%		10.1	%		10.6	%		9.5	%		9.2	%
Percent of non-US fee and net interest revenue - GAAP		33	%		39	%		35	%		44	%		31	%		32	%		N/M			36	%		34	%		35	%		36	%
Percent of non-US fee and net interest revenue - Non-GAAP (i)		33	%		34	%		32	%		31	%		29	%		31	%		31	%		36	%		35	%		35	%		36	%

(a)

The second and third quarters of 2008 include pretax SILO/LILO/tax settlement charges which reduced net interest revenue by $377 million and $112 million, respectively. See page 4 for additional details.

(b)

The third and fourth quarters of 2008 include pretax support agreement charges of $726 million and $163 million, respectively.

(c)

The second quarter of 2009 contains $134 million of tax benefits related to the final LILO/SILO tax settlement.

(d)

The third quarter of 2009 includes a $4.8 billion pretax charge related to investment securities portfolio restructuring.

(e)

Calculated excluding investment securities losses, TARP redemption premium/dividend, FDIC special assessment, SILO/LILO/tax settlements, 3rd and 4th quarters of 2008 support agreement charges, M&I expenses, restructuring charges, benefit of tax settlements and tax discrete benefits and 1st quarter 2010 special litigation reserves.

(f)

Calculated excluding investment securities losses, SILO/LILO charges, 3rd and 4th quarters of 2008 support agreement charges, asset-based taxes, FDIC special assessment, M&I expenses, restructuring charges, intangible amortization, 1st quarter 2010 special litigation reserves and 1st and 2nd quarters 2010 noncontrolling interests of consolidated asset management funds.

(g)

Calculated excluding investment securities losses, SILO/LILO/tax settlements, 2008 support agreement charges, FDIC special assessment, M&I expenses, restructuring charges and benefit of tax settlements and tax discrete benefits.

(h)

Calculated excluding the SILO/LILO/tax settlements, investment write-downs and expense related to consolidated asset management funds.

(i)

Calculated excluding the SILO/LILO/tax settlements and including noncontrolling interest related to consolidated asset management funds.

(j)

Includes $24 million for the first quarter of 2010, $33 million for the second quarter of 2010, ($12) million for the third quarter of 2010 related to consolidated asset management funds.

Note:

See pages 3 through 6 for additional details of revenue/expense items impacting continuing operations.

Page 2 of 19

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

FEE AND OTHER REVENUE

(dollar amounts in millions unless otherwise noted)

2008

2009

2010

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr (a)

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

Securities servicing fees

Asset servicing

658

671

653

599

519

574

600

621

608

622

832

Securities lending

245

202

155

187

Issuer services

376

444

477

388

364

372

359

368

333

354

364

Clearing services

263

264

259

279

253

250

236

223

230

245

252

Total securities servicing fees

1,542

1,581

1,544

1,453

1,226

1,293

1,238

1,241

1,200

1,267

1,486

Asset and wealth management fees

862

860

795

701

622

645

664

746

686

696

Foreign exchange & other trading

259

308

385

510

307

237

246

262

220

146

Treasury services

124

129

132

125

132

128

134

131

125

132

Distribution and servicing

110

107

106

101

Financing-related fees

Investment and Other Income

123

102

112

)

205

145

Total fee revenue

3,055

3,141

3,088

3,058

2,427

2,509

2,610

2,562

2,522

2,542

2,662

Income of consolidated asset management funds, net of noncontrolling interest

—

(c)

Total fee revenue - Non-GAAP

3,055

3,141

3,088

3,058

2,427

2,509

2,610

2,562

2,563

2,574

2,711

(d)

Net securities gains (losses)

(73

)

(152

)

(162

)

(1,241

)

(295

)

(256

)

(4,833

)

Total fee and other revenue - Non-GAAP

2,982

2,989

2,926

1,817

2,132

2,253

(2,223

)

2,577

2,570

2,587

2,717

Fee and other revenue as a percentage of total revenue

n/m

Fee and other revenue as a percentage of total revenue - Non-GAAP (b)

Market value of assets under management at period-end (in billions)

1,105

1,113

1,067

928

881

926

966

1,115

1,105

1,047

1,141

Market value of assets under custody and administration at period-end (in trillions)

23.1

23.0

22.4

20.2

19.5

20.7

22.1

22.3

22.4

21.8

24.4

Market value of securities on loan at period-end (in billions)

660

588

470

326

293

290

299

247

253

248

279

S&P 500 Index - period-end

1323

1280

1166

903

798

919

1057

1115

1169

1031

1141

S&P 500 Index - daily average

1353

1371

1252

916

809

891

995

1088

1123

1135

1095

(a)

The third quarter of 2009 includes a $4.8 billion charge related to investment securities portfolio restructuring.

(b)

Excludes net securities gains/(losses) and SILO/LILO charges.

(c)

Includes $25 million, $29 million and $36 million previously included in asset and wealth management fees and $16 million, $3 million and $13 million previously included in investment income for the first, second and third quarters of 2010, respectively.

(d)

Total fee revenue from the GIS/BAS acquisitions was $234 million in the third quarter of 2010.

Page 3 of 19

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS

Average Balances and Interest Rates

Quarter Ended

March 31, 2008

June 30, 2008

September 30, 2008

December 31, 2008

March 31, 2009

June 30, 2009

(dollar amounts in millions)

Average
balance

Average
rates

Average
balance

Average
rates

Average
balance

Average
rates

Average
balance

Average
rates

Average
balance

Average
rates

Average
balance

Average
rates

Assets

Interest-earning assets:

Interest-bearing deposits with banks (primarily foreign)

38,658

4.28

43,361

3.82

43,999

3.90

78,680

2.65

56,505

1.56

56,917

1.18

Interest-bearing deposits with Federal Reserve bank

—

23,192

0.37

6,338

0.37

Other Short Term Investment (FRB)

—

954

2.95

8,378

3.05

1,269

3.15

—

Federal funds sold and securities under resale agreements

8,191

3.15

6,736

2.21

7,019

1.97

4,050

1.32

2,310

0.81

2,899

1.29

Margin loans

5,258

4.47

5,802

3.36

5,764

3.27

4,885

2.35

4,219

1.63

4,134

1.62

Non-margin loans:

Domestic offices

27,885

4.37

26,550

(1.97

)(a)

25,932

1.60

(b)

28,233

2.70

21,630

2.91

20,740

3.18

Foreign offices

13,881

4.55

13,281

3.97

13,739

3.71

15,208

3.73

13,109

2.56

12,155

2.21

Total non-margin loans

41,766

4.43

39,831

0.01

(a)

39,671

2.33

(b)

43,441

3.06

34,739

2.78

32,895

2.82

Securities

U.S. government obligations

397

3.52

542

3.08

679

3.03

762

2.73

787

2.50

1,679

1.67

U.S. government agency obligations

10,613

4.78

10,433

4.29

10,894

4.33

11,438

4.29

12,063

3.71

14,748

3.74

Obligations of states and political subdivisions

681

7.64

654

5.74

701

7.44

941

7.73

767

6.71

710

6.92

Other securities

35,840

5.26

32,755

5.22

30,590

5.42

26,916

5.95

29,848

4.47

34,766

2.85

Trading securities

1,459

5.36

1,918

3.74

1,791

2.76

2,148

3.96

1,728

2.86

2,179

2.50

Total securities

48,990

5.18

46,302

4.93

44,655

5.04

42,205

5.38

45,193

4.22

54,082

3.10

Total interest-earning assets

142,863

4.55

142,032

3.02

(a)

142,062

3.69

(b)

181,639

3.36

167,427

2.37

157,265

2.16

Allowance for credit losses

(297

)

(295

)

(329

)

(334

)

(378

)

(426

)

Cash and due from banks

5,789

5,356

7,796

5,806

4,824

3,412

Other assets

49,782

46,504

46,937

54,499

45,880

45,975

Discontinued Operations

2,653

2,400

2,361

2,352

2,366

2,307

Total Asset Consol VIE FAS 167

—

Total Assets

200,790

195,997

198,827

243,962

220,119

208,533

Liabilities and total equity

Interest-bearing liabilities:

Money market rate accounts

12,577

1.67

12,869

0.98

11,785

0.88

18,274

0.53

18,563

0.10

19,037

0.10

Savings

902

1.89

971

1.50

979

0.93

1,013

0.64

1,165

0.61

1,070

0.44

Certificates of deposit of $100,000 & over

2,313

3.91

2,116

2.60

1,928

2.19

1,812

2.43

1,479

1.11

942

1.00

Other time deposits

8,300

2.45

6,335

1.88

5,393

1.99

5,052

1.34

5,574

0.55

4,190

0.48

Foreign offices

67,914

2.85

71,641

2.22

65,931

2.19

69,575

1.12

75,202

0.31

73,657

0.14

Total interest-bearing deposits

92,006

2.67

93,932

2.03

86,016

1.99

95,726

1.04

101,983

0.30

98,896

0.16

Federal funds purchased and securities under repurchase agreements

4,138

2.14

3,791

1.02

4,816

1.18

5,738

0.27

1,839

0.09

2,485

(0.46

)

Other borrowed funds

3,343

3.50

2,840

3.21

3,303

2.31

3,558

2.13

3,785

1.57

2,756

1.04

Borrowings from FRB Related to ABCP

—

954

2.25

8,378

2.25

1,269

2.25

—

Payables to customers and broker-dealers

4,942

1.94

5,550

1.32

5,910

1.19

5,570

0.62

3,797

0.20

4,901

0.13

Long-term debt

17,125

4.51

16,841

3.58

15,993

3.62

15,467

3.79

15,493

2.72

16,793

2.35

Total interest-bearing liabilities

121,554

2.91

122,954

2.21

116,992

2.15

134,437

1.41

128,166

0.64

125,831

0.46

Total noninterest-bearing deposits

25,726

24,300

32,953

51,729

43,051

32,852

Other liabilities

21,169

17,707

18,396

26,601

18,523

18,578

Discontinued Operations

2,653

2,400

2,361

2,352

2,366

2,307

VIE Liabilities & Obligations FAS 167

—

Total Shareholders’ Equity

29,551

28,507

27,996

28,771

27,978

28,934

Noncontrolling interest

137

129

Total liabilities and shareholders’ equity

200,790

195,997

198,827

243,962

220,119

208,533

Net interest margin – Taxable equivalent basis

2.09

1.11

1.92

2.32

1.87

1.80

Net interest margin excluding the SILO/LILO charge – Non-GAAP

2.17

2.24

(a)

Excluding the SILO/LILO charge, the rates on Domestic office loans, Non-margin loans and Interest-earning assets were 3.71%, 3.80% and 4.08%, respectively.

(b)

Excluding the SILO/LILO charge, the rates on Domestic office loans, Non-margin loans and Interest-earning assets were 3.33%, 3.46% and 4.01%, respectively.

Note:

Interest and average rates were calculated on a taxable equivalent basis, at tax rates of approximately 35%, using dollar amounts in thousands and the actual number of days in the year.

Page 4 of 19

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS

Average Balances and Interest Rates (continued)

Quarter Ended

September 30, 2009

December 31, 2009

March 31, 2010

June 30, 2010

September 30, 2010

(dollar amounts in millions)

Average
balance

Average
rates

Average
balance

Average
rates

Average
balance

Average
rates

Average
balance

Average
rates

Average
balance

Average
rates

Assets

Interest-earning assets:

Interest-bearing deposits with banks (primarily foreign)

54,343

1.08

55,467

1.09

55,800

1.03

50,741

1.01

60,431

0.93

Interest-bearing deposits with Federal Reserve bank

6,976

0.32

11,430

0.32

12,129

0.33

18,280

0.34

9,813

0.40

Other Short Term Investment (FRB)

—

Federal funds sold and securities under resale agreements

3,443

1.19

4,276

0.65

3,859

0.71

4,652

0.66

4,559

0.46

Margin loans

4,335

1.55

4,665

1.55

5,241

1.49

5,786

1.49

6,269

1.47

Non-margin loans:

Domestic offices

19,412

3.22

20,212

2.89

19,510

3.12

20,750

2.89

21,110

2.74

Foreign offices

10,788

1.99

10,362

1.75

9,463

1.62

10,128

1.53

9,390

1.61

Total non-margin loans

30,200

2.78

30,574

2.51

28,973

2.63

30,878

2.45

30,500

2.39

Securities

U.S. government obligations

4,605

1.45

5,729

1.44

6,600

1.40

6,162

1.46

7,229

1.63

U.S. government agency obligations

17,635

3.79

19,530

3.59

19,429

3.58

19,629

3.48

20,074

3.29

Obligations of states and political subdivisions

639

7.30

607

7.35

670

6.37

638

6.56

615

6.43

Other securities

31,010

3.04

29,707

3.49

28,653

4.20

27,601

4.14

30,075

3.86

Trading securities

1,973

2.30

2,090

2.53

2,075

2.49

2,752

2.62

3,194

2.57

Total securities

55,862

3.16

57,663

3.32

57,427

3.63

56,782

3.58

61,187

3.36

Total interest-earning assets

155,159

2.14

164,075

2.09

163,429

2.18

167,119

2.08

172,759

2.03

Allowance for credit losses

(425

)

(448

)

(502

)

(517

)

(538

)

Cash and due from banks

3,247

3,104

3,514

3,673

3,903

Other assets

45,728

45,481

45,346

46,266

50,007

Discontinued Operations

2,077

1,993

898

260

247

Total Asset Consol VIE FAS 167

—

12,730

12,040

13,947

Total Assets

205,786

214,205

225,415

228,841

240,325

Liabilities and total equity

Interest-bearing liabilities:

Money market rate accounts

16,817

0.09

20,062

0.08

21,741

0.09

24,279

0.10

25,696

0.11

Savings

1,115

0.32

1,196

0.49

1,372

0.27

1,389

0.27

1,389

0.26

Certificates of deposit of $100,000 & over

847

0.62

589

0.32

648

0.25

332

0.16

214

0.11

Other time deposits

5,058

0.40

4,872

0.43

5,224

0.30

5,902

0.26

6,210

0.23

Foreign offices

69,795

0.08

71,685

0.10

72,049

0.16

68,061

0.19

70,524

0.22

Total interest-bearing deposits

93,632

0.11

98,404

0.12

101,034

0.16

99,963

0.17

104,033

0.19

Federal funds purchased and securities under repurchase agreements

3,075

0.20

3,361

0.14

3,697

0.07

4,441

0.19

5,984

0.09

Other borrowed funds

2,286

1.49

2,618

1.86

2,805

1.97

4,223

2.08

4,029

1.66

Borrowings from FRB Related to ABCP

—

Payables to customers and broker-dealers

5,844

0.10

6,476

0.07

6,372

0.08

6,596

0.09

6,910

0.08

Long-term debt

17,393

1.74

17,863

1.89

16,808

1.50

16,462

1.75

16,798

2.04

Total interest-bearing liabilities

122,230

0.37

128,722

0.40

130,716

0.36

131,685

0.43

137,754

0.45

Total noninterest-bearing deposits

34,920

34,991

33,330

34,628

33,198

Other liabilities

18,386

19,633

18,420

20,042

23,770

Discontinued Operations

2,077

1,993

898

260

247

VIE Liabilities & Obligations FAS 167

—

11,540

11,046

12,778

Total Shareholders’ Equity

28,144

28,843

29,715

30,434

31,834

Noncontrolling interest

796

746

744

Total liabilities and total equity

205,786

214,205

225,415

228,841

240,325

Net interest margin - Taxable equivalent basis

1.85

1.77

1.89

1.74

1.67

Net interest margin excluding the SILO/LILO charge - Non-GAAP

Note:

Interest and average rates were calculated on a taxable equivalent basis, at tax rates of approximately 35%, using dollar amounts in thousands and the actual number of days in the year.

Page 5 of 19

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

NONINTEREST EXPENSE

2008

2009

2010

(dollar amounts in millions)

1st Qtr

2nd Qtr

3rd Qtr (a)

4th Qtr (a)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

Staff:

Compensation

803

818

836

785

732

740

747

766

753

763

850

Incentives

365

385

241

256

247

241

242

266

284

272

289

Employee benefits

190

200

171

139

190

172

168

189

183

199

205

Total staff

1,358

1,403

1,248

1,180

1,169

1,153

1,157

1,221

1,220

1,234

1,344

Professional, legal and other purchased services

238

259

251

273

237

265

278

241

256

282

Software and Equipment

158

166

158

172

158

169

171

178

169

162

187

Net occupancy

128

138

163

141

139

142

141

137

143

150

Distribution and servicing

130

131

133

123

103

102

Sub-custodian

Business development

Other

215

227

1,013

448

202

233

232

226

186

201

249

Subtotal

2,357

2,471

3,090

2,468

2,091

2,145

2,158

2,266

2,146

2,219

2,429

(c)

Special Litigation Reserves

N/A

164

N/A

FDIC special assessment

—

Amortization of intangible assets

119

123

118

113

107

108

104

107

111

Restructuring charges

—

181

)

139

(15

)

Merger & integration expense:

The Bank of New York Mellon Corporation

121

146

107

Acquired Corporate Trust Business

—

Total noninterest expense

2,602

2,743

3,319

2,859

2,276

2,379

2,311

2,564

2,440

2,316

2,611

Employees at period-end (b)

42,000

42,500

42,900

42,500

41,700

41,800

42,000

42,200

42,300

42,700

47,700

(a)

The third and fourth quarters of 2008 include support agreement charges of $726 million and $163 million, respectively.

(b)

Represents full time employees.

(c)

Noninterest expense from the GIS/BAS acquisitions was $185 million in the third quarter of 2010.

Page 6 of 19

THE BANK OF NEW YORK MELLON CORPORATION

ASSETS UNDER MANAGEMENT/ CUSTODY AND ADMINISTRATION / SECURITIES LENDING - 11 Quarter Trend


	2008												2009												2010
*(dollar amounts in billions unless otherwise noted)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Market value of assets under management at period-end (in billions)
Institutional	$	636		$	625		$	585		$	445		$	394		$	425		$	461		$	611		$	620		$	595		$	639
Mutual Funds		373			393			384			400			413			421			421			416			396			370			418
Private Client		96			95			98			83			74			80			84			88			89			82			84

Total market value of assets under management		1,105			1,113			1,067			928			881			926			966			1,115			1,105			1,047			1,141
Composition of assets under management at period-end
Equity		40	%		38	%		36	%		29	%		27	%		31	%		34	%		31	%		32	%		30	%		31	%
Money Market		29	%		31	%		34	%		43	%		45	%		43	%		39	%		32	%		30	%		30	%		30	%
Fixed Income		18	%		18	%		20	%		18	%		19	%		17	%		17	%		21	%		21	%		23	%		22	%
Alternative investments and overlay		13	%		13	%		10	%		10	%		9	%		9	%		10	%		16	%		17	%		17	%		17	%

Total		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
Market value of assets under custody and administration at period-end (in trillions)	$	23.1		$	23.0		$	22.4		$	20.2		$	19.5		$	20.7		$	22.1		$	22.3		$	22.4		$	21.8		$	24.4
Market value of securities on loan at period-end	$	660		$	588		$	470		$	326		$	293		$	290		$	299		$	247		$	253		$	248		$	279
Market Indices
S&P 500 Index (a)		1323			1280			1166			903			798			919			1057			1115			1169			1031			1141
S&P 500 Index - daily average		1353			1371			1252			916			809			891			995			1088			1123			1135			1095
FTSE 100 Index (a)		5702			5626			4902			4434			3926			4249			5134			5413			5680			4917			5549
FTSE 100 Index-daily average		5891			5979			5359			4270			4040			4258			4708			5235			5431			5361			5312
NASDAQ Composite Index (a)		2279			2293			2092			1577			1529			1835			2122			2269			2398			2109			2369
Lehman Brothers Aggregate Bond Index (a)		281			270			256			275			262			280			304			301			300			299			329
MSCI EAFE Index (a)		2039			1967			1553			1237			1056			1307			1553			1581			1584			1348			1561
NYSE Volume (in billions)		159			141			180			181			161			151			126			112			103			140			104
NASDAQ Volume (in billions)		149			135			145			148			136			152			144			131			143			159			129

(a)

Period end

Page 7 of 19

THE BANK OF NEW YORK MELLON CORPORATION

ASSETS UNDER MANAGEMENT NET FLOWS - 11 Quarter Trend


	2008												2009												2010
*(dollar amounts in billions)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Market value of assets under management at beginning of period	$	1,121		$	1,105		$	1,113		$	1,067		$	928		$	881		$	926		$	966		$	1,115		$	1,105		$	1,047
Net Flows
Long-term		(6	)		(8	)		(6	)		(22	)		(1	)		(17	)		(2	)		14			16			12			11
Money market		29			21			14			28			(11	)		(2	)		(14	)		(22	)		(25	)		(17	)		18

Total net inflows		23			13			8			6			(12	)		(19	)		(16	)		(8	)		(9	)		(5	)		29
Net Market appreciation/(depreciation)		(39	)		(6	)		(54	)		(137	)		(35	)		64			56			10			(1	)		(53	)		65
Acquisitions/other		—			1			—			(8	)		—			—			—			147	(a)		—			—			—

Market value of assets under management at end of period	$	1,105		$	1,113		$	1,067		$	928		$	881		$	926		$	966		$	1,115		$	1,105		$	1,047		$	1,141

(a)

Represents acquisitions of Insight ($139 billion) and 20% interest in Siguler Guff ($8 billion).

Page 8 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

ASSET MANAGEMENT - 11 Quarter Trend


	2008												2009												2010
(dollar amounts in millions unless otherwise noted)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr (a)			1st Qtr (a), (b)			2nd Qtr (a), (b)			3rd Qtr (a), (b)
Revenue:
Asset and wealth management
Mutual funds		323			340			328			297			267			271			283			272			246			254			270
Institutional clients		304			290			265			193			183			178			202			231			268			262			264
Private clients		45			47			43			35			32			31			34			38			38			37			38
Performance fees		20			16			3			44			7			26			1			59			13			19			16

Total asset and wealth management		692			693			639			569			489			506			520			600			565			572			588
Distribution and servicing		86			99			93			93			82			78			63			56			47			49			52
Other fee revenue (c)		(27	)		4			(47	)		(100	)		(96	)		(59	)		2			6			17			—			25

Total fee and other revenue		751			796			685			562			475			525			585			662			629			621			665
Net interest revenue (expense)		12			9			9			45			15			7			7			3			—			1			(1	)

Total revenue		763			805			694			607			490			532			592			665			629			622			664
Noninterest expenses (ex. intangible amortization and support agreement charges)		557			528			488			478			408			415			408			447			433			458			470

Income before taxes (ex. intangible amortization and support agreement charges)		206			277			206			129			82			117			184			218			196			164			194
Support agreement charges		—			5			328			2			(14	)		—			32			—			—			(7	)		26
Amortization of intangible assets		62			68			64			61			55			55			53			56			50			50			50

Income before taxes		144			204			(186	)		66			41			62			99			162			146			121			118
Average assets	$	13,238		$	13,410		$	13,286		$	13,135		$	12,663		$	12,404		$	12,424		$	12,859		$	25,187		$	24,895		$	27,389
Market value of assets under management at period-end (in billions) (d)	$	1,029		$	1,040		$	995		$	862		$	818		$	860		$	897		$	1,045		$	1,034		$	980		$	1,071
Pre-tax operating margin
GAAP		19	%		25	%		-27	%		11	%		8	%		12	%		17	%		24	%		23	%		19	%		18	%
Non-GAAP (ex. intangible amortization) (e)		27	%		34	%		-18	%		21	%		19	%		22	%		26	%		33	%		31	%		27	%		25	%

(a)

Insight Investment Management acquisition closed November 2, 2009.

(b)

Total fee and other revenue for the first, second and third quarters of 2010 includes income from consolidated asset management funds of $65 million, $65 million and $37 million, respectively, and net income attributable to noncontrolling interest of $24 million, $33 million, and ($12) million respectively. The net of these income statement line items is included above in institutional client revenue of $25 million, $29 million, and $36 million respectively, and other revenue of $16 million, $3 million and $13 million, respectively.

(c)

Includes investment write-downs of $24 million and $51 million in the first and fourth quarters of 2008, $34 million and $45 million in the first and second quarters of 2009.

(d)

Includes amounts subadvised for/by other businesses.

(e)

Excluding support agreement charges, securities gains/losses and intangible amortization, pre-tax operating margin (Non-GAAP) was 29%, 35%, 30% and 27% for the first, second, third and fourth quarters of 2008, respectively, and 22%, 28%, 31% and 33% for the first, second, third and fourth quarters of 2009, respectively, and 31%, 26% and 29% for the first, second and third quarters of 2010, respectively.

Page 9 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

WEALTH MANAGEMENT - 11 Quarter Trend


*(dollar amounts in millions unless otherwise noted)*	2008												2009												2010
*(dollar amounts in millions unless otherwise noted)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Asset and wealth management		153			150			141			119			122			128			133			136			136			134			133
Other fee revenue		13			11			22			15			19			12			13			15			10			13			11

Total fee and other revenue		166			161			163			134			141			140			146			151			146			147			144
Net interest revenue (expense)		46			48			50			56			50			49			49			46			55			56			58

Total revenue		212			209			213			190			191			189			195			197			201			203			202
Provision for credit losses		—			(1	)		1			—			—			—			—			1			—			—			—
Noninterest expenses (ex. intangible amortization and support agreement charges)		142			143			142			143			129			136			135			138			136			145			140

Income before taxes (ex. intangible amortization and support agreement charges)		70			67			70			47			62			53			60			58			65			58			62
Support agreement charges		—			—			15			—			—			—			—			—			—			—			—
Amortization of intangible assets		13			13			14			14			11			11			12			11			9			9			9

Income before taxes		57			54			41			33			51			42			48			47			56			49			53
Average loans	$	4,390		$	4,816		$	5,231		$	5,309		$	5,388		$	5,684		$	6,010		$	6,191		$	6,302		$	6,350		$	6,503
Average assets	$	10,496		$	10,254		$	9,801		$	9,632		$	9,611		$	9,131		$	9,122		$	9,246		$	9,722		$	10,399		$	10,806
Average deposits	$	7,993		$	7,782		$	7,318		$	7,131		$	7,058		$	6,628		$	6,602		$	6,804		$	7,310		$	7,991		$	8,416
Market value of total client assets at period-end (in billions) (a)	$	164		$	162		$	158		$	139		$	132		$	142		$	151		$	154		$	157		$	150		$	161
Pre-tax operating margin
GAAP		27	%		26	%		20	%		18	%		27	%		22	%		25	%		24	%		28	%		24	%		26	%
Non-GAAP adjusted (excluding intangible amortization)		33	%		32	%		26	%(b)		25	%		32	%		28	%		31	%		29	%		32	%		28	%		31	%

(a)

Includes assets under management, before amounts subadvised by/for other businesses, of $76 billion, $71 billion and $75 billion in the first, second and third quarters of 2010; $66 billion, $69 billion, $74 billion and $75 billion in the first, second, third and fourth quarters of 2009; $84 billion, $81 billion, $77 billion and $69 billion in the first, second, third and fourth quarters of 2008.

(b)

Excluding support agreement charges, pre-tax operating margin (Non-GAAP) was 34% for the third quarter of 2008.

Note:

On June 3, 2008, we completed the sale of Mellon 1st Business Bank, National Association (N.A.); the financial results have been moved from the Wealth Management business to the Other business.

Historical business results have been restated to reflect these changes.

Page 10 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

ASSET SERVICING - 11 Quarter Trend


	2008												2009												2010
*(dollar amounts in millions unless otherwise noted)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Securities servicing fees - ex. securities lending (a)		634			648			631			583			504			557			573			581			569			586			786
Securities lending revenue		229			182			143			163			79			85			32			25			24			30			26
Foreign Exchange and other trading activities		202			228			262			372			210			216			190			177			170			207			135
Other fee revenue		44			36			47			25			48			46			50			33			35			83			42

Total fee and other revenue		1,109			1,094			1,083			1,143			841			904			845			816			798			906			989
Net interest revenue (expense)		222			213			240			411			249			211			229			205			210			216			215

Total revenue		1,331			1,307			1,323			1,554			1,090			1,115			1,074			1,021			1,008			1,122			1,204
Noninterest expenses (ex. intangible amortization and support agreement charges)		733			826			825			835			704			721			748			788			740			765			895

Income before taxes (ex. intangible amortization and support agreement charges)		598			481			498			719			386			394			326			233			268			357			309
Support agreement charges		14			(14	)		381			160			6			(15	)		(19	)		(5	)		(23	)		16			(11	)
Amortization of intangible assets		7			5			6			6			7			9			6			6			6			5			18

Income before taxes		577			490			111			553			373			400			339			232			285			336			302
Average loans (a)	$	8,967		$	7,284		$	8,538		$	10,376		$	5,743		$	4,744		$	3,727		$	3,962		$	3,378		$	4,683		$	4,763
Average assets	$	52,468		$	54,763		$	57,795		$	71,455		$	65,204		$	58,339		$	59,914		$	59,980		$	59,704		$	62,940		$	69,026
Average deposits	$	46,092		$	48,436		$	51,492		$	64,500		$	57,084		$	50,583		$	52,271		$	51,755		$	52,183		$	55,343		$	57,849
Pre-tax operating margin
GAAP		43	%		37	%		8	%		36	%		34	%		36	%		32	%		23	%		28	%		30	%		25	%
Non-GAAP adjusted (excluding intangible amortization)		43	%		38	%		9	%(c)		36	%(c)		35	%		37	%		32	%		23	%		29	%		30	%		27	%
MEMO:
Market value of securities on loan at period-end (in billions) (b)	$	660		$	588		$	470		$	326		$	293		$	290		$	299		$	247		$	253		$	248		$	279

(a)

Loan balances are primarily related to Broker-Dealer Services business within Asset Servicing.

(b)

Represents the total amount of securities on loan (both cash and non-cash) managed by the Asset Servicing business.

(c)

Excluding support agreement charges, pre-tax operating margin (Non-GAAP) was 38% in the third quarter of 2008 and 46% in the fourth quarter of 2008.

Page 11 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

ISSUER SERVICES - 11 Quarter Trend


	2008												2009												2010
*(dollar amounts in millions unless otherwise noted)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Securities servicing fees - Issuer services		374			443			475			392			363			373			359			367			333			353			364
Other fee revenue		35			38			56			46			42			40			30			43			25			27			35

Total fee and other revenue		409			481			531			438			405			413			389			410			358			380			399
Net interest revenue (expense)		153			176			170			211			200			185			180			203			252			216			204

Total revenue		562			657			701			649			605			598			569			613			610			596			603
Provision for credit losses		—			—			—			—			—			—			—			—			—			—			—
Noninterest expenses (ex. intangible amortization)		318			349			349			319			297			305			304			318			304			318			304

Income before taxes (ex. intangible amortization)		244			308			352			330			308			293			265			295			306			278			299
Amortization of intangible assets		20			20			21			20			21			20			20			20			20			21			21

Income before taxes		224			288			331			310			287			273			245			275			286			257			278
Average assets	$	32,227		$	35,167		$	34,264		$	38,987		$	50,864		$	52,161		$	47,975		$	52,028		$	52,838		$	48,938		$	48,451
Average deposits	$	27,632		$	30,557		$	29,546		$	34,294		$	45,963		$	47,293		$	43,183		$	47,320		$	48,470		$	44,560		$	44,085
Pre-tax operating margin
GAAP		40	%		44	%		47	%		48	%		48	%		46	%		43	%		45	%		47	%		43	%		46	%
Non-GAAP adjusted (excluding intangible amortization)		43	%		47	%		50	%		51	%		51	%		49	%		47	%		48	%		50	%		47	%		50	%

Page 12 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

CLEARING SERVICES - 11 Quarter Trend


	2008												2009												2010
*(dollar amounts in millions unless otherwise noted)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Securities servicing fees - Clearing services		250			259			254			277			249			248			232			219			227			240			251
Other fee revenue		53			64			63			72			72			66			59			45			44			36			42

Total fee and other revenue		303			323			317			349			321			314			291			264			271			276			293
Net interest revenue (expense)		75			75			75			96			82			87			81			90			95			93			90

Total revenue		378			398			392			445			403			401			372			354			366			369			383
Provision for credit losses		—			—			—			—			—			—			—			—			—			—			—
Noninterest expenses (ex. intangible amortization)		263			291			282			268			252			256			245			241			255			270			279

Income before taxes (ex. intangible amortization)		115			107			110			177			151			145			127			113			111			99			104
Amortization of intangible assets		6			6			8			6			7			7			6			7			6			7			8

Income before taxes		109			101			102			171			144			138			121			106			105			92			96
Average loans	$	6,629		$	7,263		$	7,384		$	6,735		$	5,927		$	5,918		$	6,058		$	6,847		$	7,622		$	8,448		$	9,112
Average assets	$	16,408		$	17,395		$	18,471		$	21,128		$	18,600		$	17,014		$	17,827		$	20,365		$	20,338		$	21,550		$	21,456
Pre-tax operating margin
GAAP		29	%		25	%		26	%		38	%		36	%		34	%		33	%		30	%		29	%		25	%		25	%
Non-GAAP adjusted (excluding intangible amortization)		30	%		27	%		28	%		40	%		38	%		36	%		34	%		32	%		30	%		27	%		27	%

Note:

During the first quarter of 2009, we moved the financial results of the Execution business from the Clearing Services business to the Other business. Historical results have been restated to reflect these changes.

Page 13 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

TREASURY SERVICES - 11 Quarter Trend


	2008												2009												2010
*(dollar amounts in millions unless otherwise noted)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Treasury services		121			125			125			129			121			128			124			130			127			121			127
Other fee revenue		103			125			135			93			106			52			82			92			98			75			87

Total fee and other revenue		224			250			260			222			227			180			206			222			225			196			214
Net interest revenue (expense)		185			155			159			231			159			157			149			148			176			161			148

Total revenue		409			405			419			453			386			337			355			370			401			357			362
Provision for credit losses		—			—			—			—			—			—			—			—			—			—			—
Noninterest expenses (ex. intangible amortization)		203			200			201			200			189			191			180			187			182			188			188

Income before taxes (ex. intangible amortization)		206			205			218			253			197			146			175			183			219			169			174
Amortization of intangible assets		7			7			6			7			6			7			6			6			6			5			6

Income before taxes		199			198			212			246			191			139			169			177			213			164			168
Average loans	$	15,690		$	15,938		$	14,995		$	16,353		$	13,921		$	13,228		$	11,648		$	10,982		$	10,436		$	10,290		$	9,885
Average assets	$	24,153		$	21,227		$	22,384		$	34,585		$	28,665		$	24,764		$	24,223		$	26,275		$	26,716		$	26,485		$	25,748
Average deposits	$	20,056		$	17,316		$	18,397		$	30,052		$	24,867		$	20,321		$	19,989		$	22,138		$	22,257		$	22,209		$	21,912
Pre-tax operating margin
GAAP		49	%		49	%		51	%		54	%		50	%		41	%		48	%		48	%		53	%		46	%		47	%
Non-GAAP adjusted (excluding intangible amortization)		50	%		51	%		52	%		56	%		51	%		43	%		50	%		50	%		55	%		47	%		48	%

Page 14 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

OTHER - 11 Quarter Trend


	2008												2009												2010
*(dollar amounts in millions unless otherwise noted)*	1st Qtr			2nd Qtr (b)			3rd Qtr (b)			4th Qtr (c)			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr (c)			1st Qtr (d)			2nd Qtr			3rd Qtr
Revenue:
Total fee and other revenue (a)		20			(116	)		(113	)		(1,031	)		(278	)		(223	)		(4,685	)		52			143			61			13
Net interest revenue (expense)		50			(288	)		(22	)		(3	)		20			4			21			29			(23	)		(21	)		4

Total revenue		70			(404	)		(135	)		(1,034	)		(258	)		(219	)		(4,664	)		81			120			40			17
Provision for credit losses		14			14			22			54			59			61			147			64			35			20			(22	)
Noninterest expenses (ex. intangible amortization and merger & integration expense)		127			143			79			63			120			136			125			152			119			66			138

Income before taxes and extraordinary (loss) (ex. intangible amortization and merger & integration expense)		(71	)		(561	)		(236	)		(1,151	)		(437	)		(416	)		(4,936	)		(135	)		(34	)		(46	)		(99	)
Amortization of intangible assets		4			4			(1	)		(1	)		—			(1	)		1			1			—			1			(1	)
Special Litigation Reserves		N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A			164			N/A			N/A
FDIC special assessment		—			—			—			—			—			61			—			—			—			—			—
Restructuring		—			—			—			181			10			6			(5	)		139			7			(15	)		15
Merger & integration expenses		126			149			111			97			68			59			54			52			26			14			56

Income before taxes and extraordinary (loss)		(201	)		(714	)		(346	)		(1,428	)		(515	)		(541	)		(4,986	)		(327	)		(231	)		(46	)		(169	)
Average loans	$	11,348		$	10,332		$	9,287		$	9,553		$	7,979		$	7,455		$	7,092		$	7,257		$	6,476		$	6,836		$	6,458
Average assets	$	49,147		$	41,381		$	40,465		$	52,688		$	32,146		$	32,413		$	32,224		$	31,459		$	30,012		$	33,374		$	37,202
Average deposits	$	15,959		$	14,141		$	12,216		$	11,478		$	10,062		$	6,923		$	6,507		$	5,378		$	4,144		$	4,457		$	4,924

(a)

Total fee and other revenue includes investment write-downs of $51 million, $151 million, $156 million and $1,176 million for the first, second, third and fourth quarters of 2008; $316 million, $209 million and $4.8 billion in the first, second and third quarters of 2009.

(b)

The second and third quarter of 2008 include SILO/LILO charges which reduced net interest revenue by $377 million and $112 million, respectively.

(c)

The fourth quarter of 2008 and the fourth quarter of 2009 includes a pretax global efficiency restructuring charge of $181 million and $139 million, respectively.

(d)

The first quarter of 2010 includes a $164 million pretax charge related to special litigation reserves.

Notes:

The Other business primarily includes the results of leasing operations, corporate treasury activities, business exits and corporate overhead.

On June 3, 2008, we completed the sale of Mellon 1st Business Bank, National Association (N.A.); the financial results have been moved from the Wealth Management business to the Other business. During the first quarter of 2009, the financial results of the Execution business have been moved from the Clearing Services business to the Other business. On June 30, 2009, we adopted discontinued operations accounting for Mellon United National Bank (MUNB) located in Miami, Florida; previously, the financial results were included in the Other business. On January 15, 2010, we completed the sale of MUNB. Historical business results have been restated to reflect all of these changes.

Page 15 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES


	Asset Management									Wealth Management									Asset Servicing									Issuer Services
*(dollar amounts in millions unless otherwise noted)*	2009			2008			2007			2009			2008			2007			2009			2008			2007			2009			2008			2007
Revenue:
Securities servicing fees
Asset servicing		86			124			99			27			27			16			2,436			3,213			2,763			1			23			—
Issuer services		—			—			—			—			—			—			1			1			—			1,462			1,684			1,660
Clearing services		12			14			12			—			—			—			—			—			—			—			—			—

Total securities servicing fees		98			138			111			27			27			16			2,437			3,214			2,763			1,463			1,707			1,660
Asset and wealth management		2,022			2,510			2,724			519			563			609			—			—			—			1			—			—
Performance fees		93			83			171			—			—			—			—			—			—			—			—			—
Foreign exchange & other trading		20			20			14			7			14			3			793			1,064			604			85			80			37
Treasury services		—			—			—			3			3			3			10			8			11			2			1			—
Distribution and service fees		279			371			357			1			4			1			9			10			2			—			—			1
Financing-related fees		6			10			8			3			4			8			11			14			40			—			—			—
Investment and Other Income		(193	)		(260	)		(87	)		15			9			(9	)		146			130			170			66			71			66

Total fee revenue		2,325			2,872			3,298			575			624			631			3,406			4,440			3,590			1,617			1,859			1,764
Securities gains (losses)		(78	)		(78	)		(9	)		3			—			—			—			(11	)		—			—			—			1

Total fee and other revenue		2,247			2,794			3,289			578			624			631			3,406			4,429			3,590			1,617			1,859			1,765
Net interest revenue (expense)		32			75			5			194			200			170			894			1,086			755			768			710			617

Total revenue		2,279			2,869			3,294			772			824			801			4,300			5,515			4,345			2,385			2,569			2,382
Provision for credit losses		—			—			—			1			—			—			—			—			—			—			—			—
Noninterest expenses (ex. M&I expenses and intangible amortization)		1,696			2,386			2,158			538			585			558			2,928			3,760			2,999			1,224			1,335			1,203

Income before taxes and extraordinary (loss) (ex. M&I expenses and intangible amortization)		583			483			1,136			233			239			243			1,372			1,755			1,346			1,161			1,234			1,179
Amortization of intangible assets		219			255			166			45			54			29			28			24			18			81			81			75
Merger & integration expense		—			—			—			—			—			—			—			—			—			—			—			—

Income before taxes, noncontrolling interest and extraordinary (loss)		364			228			970			188			185			214			1,344			1,731			1,328			1,080			1,153			1,104
Average loans	$	—		$	—		$	—		$	5,821		$	4,938		$	4,089		$	4,537		$	8,795		$	7,810		$	—		$	—		$	—
Average assets	$	12,564		$	13,267		$	9,413		$	9,276		$	10,044		$	8,387		$	60,842		$	59,150		$	42,818		$	50,752		$	35,169		$	26,742
Average deposits	$	—		$	—		$	—		$	6,772		$	7,554		$	6,950		$	52,907		$	52,659		$	38,034		$	45,936		$	30,515		$	22,361
Market value of assets under management at period-end (in billions)	$	1,045		$	862		$	1,044		$	70		$	66		$	77		$	—		$	—		$	—		$	—		$	—		$	—
Market value of assets under custody and administration at period-end (in billions)	$	6		$	3		$	4		$	80		$	70		$	85		$	22,171		$	20,086		$	22,988		$	—		$	—		$	—
Market value of securities on loan at period-end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	247		$	326		$	633		$	—		$	—		$	—
Pre-tax operating margin - GAAP		16	%		8	%		29	%		24	%		23	%		27	%		31	%		31	%		31	%		45	%		45	%		46	%
Pre-tax operating margin (ex. intangible amortization) - Non-GAAP		26	%		17	%		34	%		30	%		29	%		30	%		32	%		32	%		31	%		49	%		48	%		49	%
Pre-tax operating margin - Non-GAAP (a)		30	%		30	%		34	%		31	%		30	%		30	%		42	%		42	%		31	%		48	%		48	%		49	%

(a)

Excludes M&I expenses, the SILO/LILO/tax settlements, support agreement charges, restructuring charges, investment write-downs and intangible amortization expense.

Note:

See pages 9-15 for details of revenue/expense items impacting respective business results.

Page 16 of 19

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES


	Clearing Services									Treasury Services									Other									Consolidated Results
*(dollar amounts in millions unless otherwise noted)*	2009			2008			2007			2009			2008			2007			2009			2008			2007			2009			2008			2007
Revenue:
Securities servicing fees
Asset servicing		—			—			—			24			6			13			(1	)		(23	)		(2	)		2,573			3,370			2,889
Issuer services		—			—			—			—			—			—			—			—			—			1,463			1,685			1,660
Clearing services		948			1,040			955			—			—			—			2			11			205			962			1,065			1,172

Total securities servicing fees		948			1,040			955			24			6			13			1			(12	)		203			4,998			6,120			5,721
Asset and wealth management		29			41			46			—			—			—			13			21			19			2,584			3,135			3,398
Performance fees		—			—			—			—			—			—			—			—			—			93			83			171
Foreign exchange & other trading		134			108			51			7			232			167			(10	)		(56	)		25			1,036			1,462			901
Treasury services		—			—			—			503			500			456			1			2			9			519			514			479
Distribution and service fees		—			—			—			45			41			14			(8	)		(5	)		—			326			421			375
Financing-related fees		1			2			2			196			160			176			(2	)		(4	)		1			215			186			235
Investment Income and other		78			101			76			62			20			66			163			350			298			337			421			580

Total fee revenue		1,190			1,292			1,130			837			959			892			158			296			555			10,108			12,342			11,860
Securities gains (losses)		—			—			—			(2	)		(3	)		—			(5,292	)		(1,536	)		(189	)		(5,369	)		(1,628	)		(197	)

Total fee and other revenue		1,190			1,292			1,130			835			956			892			(5,134	)		(1,240	)		366			4,739			10,714			11,663
Net interest revenue (expense)		340			321			303			613			730			576			74			(263	)		20			2,915			2,859			2,446

Total revenue		1,530			1,613			1,433			1,448			1,686			1,468			(5,060	)		(1,503	)		386			7,654			13,573			14,109
Provision for credit losses		—			—			—			—			—			—			331			104			(10	)		332			104			(10	)
Noninterest expenses (ex. M&I expenses and intangible amortization)		994			1,104			1,023			747			804			798			744			593			756			8,871			10,567			9,495

Income before taxes and extraordinary (loss) (ex. M&I expenses and intangible amortization)		536			509			410			701			882			670			(6,135	)		(2,200	)		(360	)		(1,549	)		2,902			4,624
Amortization of intangible assets		27			26			24			25			27			14			1			6			13			426			473			339
Merger & integration expense		—			—			—			—			—			—			233			483			528			233			483			528

Income before taxes, noncontrolling interest and extraordinary (loss)		509			483			386			676			855			656			(6,369	)		(2,689	)		(901	)		(2,208	)		1,946			3,757
Average loans	$	6,190		$	7,003		$	6,843		$	12,434		$	15,744		$	13,815		$	7,442		$	10,126		$	10,662		$	36,424		$	46,606		$	43,219
Average assets	$	18,455		$	18,358		$	14,967		$	25,971		$	25,603		$	20,736		$	32,079		$	45,925		$	44,451		$	209,939		$	207,516		$	167,514
Average deposits	$	—		$	—		$	—		$	21,816		$	21,470		$	17,144		$	7,221		$	13,441		$	14,876		$	134,652		$	125,639		$	99,365
Market value of assets under management at period-end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	1,115		$	928		$	1,121
Market value of assets under custody and administration at period-end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	22,257		$	20,159		$	23,077
Market value of securities on loan at period-end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	247		$	326		$	633
Pre-tax operating margin - GAAP		33	%		30	%		27	%		47	%		51	%		45	%		n/m			179	%		n/m			n/m			14	%		27	%
Pre-tax operating margin (ex. intangible amortization) - Non-GAAP		35	%		32	%		29	%		48	%		52	%		46	%		n/m			179	%		n/m			n/m			18	%		29	%
Pre-tax operating margin - Non-GAAP (a)		32	%		32	%		29	%		52	%		52	%		46	%		n/m			n/m			n/m			31	%		39	%		35	%

MEMO:
Securities lending revenue																													259			789			441

(a)

Excludes M&I expenses, the SILO/LILO/tax settlements, support agreement charges, restructuring charges, investment write-downs and intangible amortization expense.

Note:

See pages 9-15 for details of revenue/expense items impacting respective business results.

n/m - not meaningful

Page 17 of 19

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

NONPERFORMING ASSETS


	2008												2009												2010
*(dollar amounts in millions)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Loans:
Commercial real estate	$	49		$	106		$	118		$	130		$	197		$	63		$	63		$	61		$	50		$	49		$	39
Financial Institutions	$	—			—			—			41			30			39			180			172			102			20			16
Other residential mortgages		33			55			75			97			143			163			183			190			204			229			238
Commercial		50			52			65			14			34			43			71			65			40			40			35
Wealth Management		—			—			—			2			6			63			58			58			58			62			66
Foreign		78			60			1			—			2			1			—			—			—			—			—
Lease finance assets		—			—			—			—			—			—			—			—			—			—			—

Total nonperforming loans		210			273			259			284			412			372			555			546			454			400			394
Other assets owned		5			6			8			8			9			6			5			4			5			6			7
Total acquired property		—			—			—			—			—			—			—			—			—			—			—

Total nonperforming assets (a)	$	215		$	279		$	267		$	292		$	421		$	378		$	560		$	550		$	459		$	406		$	401

Nonperforming assets ratio		0.4	%		0.6	%		0.5	%		0.7	%		1.0	%		1.0	%		1.5	%		1.5	%		1.4	%		1.1	%		1.1	%
Allowance for loan losses/nonperforming loans		149.5			129.3			140.9			146.1			114.1			116.7			82.2			92.1			114.5			135.5			135.5
Allowance for loan losses/nonperforming assets		146.0			126.5			136.7			142.1			111.6			114.8			81.4			91.5			113.3			133.5			133.2
Total allowance for credit losses/nonperforming loans		231.9			178.0			190.7			186.3			135.7			141.4			107.4			115.0			140.5			161.3			154.3
Total allowance for credit losses/nonperforming assets		226.5			174.2			185.0			181.2			132.8			139.2			106.4			114.2			139.0			158.9			151.6

(a)

Nonperforming assets for all periods prior to June 30, 2009 include discontinued operations.

Note:

The adoption of ASC 810 resulted in BNY Mellon consolidating loans of consolidated asset management funds of $11.3 billion at March 31, 2010, $12.1 billion at June 30, 2010 and $13.4 billion at Sept. 30, 2010. These loans are not part of BNY Mellon's loan portfolio. Included in these loans are $150 million, $131 million and $231 million of nonperforming loans, respectively. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above.

Page 18 of 19

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

ALLOWANCE FOR CREDIT LOSSES, PROVISION AND NET CHARGE-OFFS


	2008												2009												2010
*(dollar amounts in millions)*	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Allowance for credit losses:
Allowance for loan losses	$	327		$	314		$	353		$	365		$	415		$	470		$	434		$	456		$	503		$	520		$	542
Allowance for lending-related commitments		167			173			133			129			114			89			92			140			125			118			103

Allowance at beginning of period		494			487			486			494			529			559			526			596			628			638			645

Net (charge-offs)/recoveries
Charge-offs		(14	)		(14	)		(27	)		(27	)		(51	)		(54	)		(77	)		(33	)		(37	)		(14	)		(17	)
Recoveries		1			1			5			2			1			—			—			—			12			1			2

Total Net (charge-offs)/recoveries		(13	)		(13	)		(22	)		(25	)		(50	)		(54	)		(77	)		(33	)		(25	)		(13	)		(15	)

Provision for credit losses (a)		16			25			30			60			59			61			147			65			35			20			(22	)
Impact of Merger		—			—			—			—			—			—			—			—			—			—			—
Transfer to Discontinued Operations		—			—			—			—			21			(40	)		—			—			—			—			—
Sale of Mellon 1st Business Bank		—			(13	)		—			—			—			—			—			—			—			—			—
SFAS 159 Adoption		(10	)		—			—			—			—			—			—			—			—			—			—

Allowance at end of period		487			486			494			529			559			526			596			628			638			645			608

Allowance for loan losses	$	314		$	353		$	365		$	415		$	470		$	434		$	456		$	503		$	520		$	542		$	534
Allowance for lending related-commitments		173			133			129			114			89			92			140			125			118			103			74

Allowance at end of period (a)		487			486			494			529			559			526			596			628			638			645			608

Allowance for loan losses as a percentage of total loans (b)		0.60	%		0.70	%		0.62	%		0.96	%		1.13	%		1.14	%		1.26	%		1.37	%		1.54	%		1.46	%		1.41	%

(a)

The allowance and provision for credit losses for the periods from the first quarter 2007 through the first quarter 2009 exclude discontinued operations.

(b)

Excluding purchase accounting adjustments.

Page 19 of 19

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