Bank of New York Mellon Corp - FORM 8-K - EX-99.2 - 1Q 2012 FINANCIAL TRENDS

Attached files

file	filename
8-K - FORM 8-K - Bank of New York Mellon Corp	d335107d8k.htm
EX-99.1 - QUARTERLY EARNINGS REVIEW - Bank of New York Mellon Corp	d335107dex991.htm

Exhibit 99.2

THE BANK OF NEW YORK MELLON CORPORATION

Financial Trends

Notes:

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

On December 31, 2011, BNY Mellon sold its Shareowner Services business. In the first quarter of 2012, we reclassified the results of the Shareowner Services business from the Investment Services business to the Other segment. The reclassification did not impact the consolidated results. All prior periods have been restated.

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 Investment Services and Other businesses. The financial results for BAS are included in the Investment Services business.

On January 1, 2010, we adopted SFAS No. 167, “Amendments to FASB Interpretation No. 46 (R).” Certain investment management funds are 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 investment management funds; previously these were disclosed as investment management and performance fees revenue and investment and other income.

The following items have impacted the comparability of our results:

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

Expense efficiency restructuring charges—Recorded charges in 2010 and 2011

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

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

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 April 18, 2012, furnished as an exhibit to the Report on Form 8-K to which these Financial Trends are furnished as an exhibit.

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-K for the year ended December 31, 2011.

Page 1 of 14

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS-9 Quarter Trend


	2010												2011												2012
(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
Revenue:
Investment services fees
Asset servicing	$	637		$	668		$	863		$	908		$	917		$	973		$	922		$	885		$	943
Issuer services		333			354			364			409			351			365			442			287			251
Clearing services		230			245			252			278			292			292			297			278			303
Treasury services		131			125			139			135			134			134			133			134			136

Total investment services fees		1,331			1,392			1,618			1,730			1,694			1,764			1,794			1,584			1,633
Investment management and performance fees		686			686			696			800			764			779			729			730			745
Foreign exchange & other trading revenue		262			220			146			258			198			222			200			228			191
Distribution and servicing		48			51			56			55			53			49			43			42			46
Financing-related fees		50			48			49			48			43			49			40			38			44
Investment and other income		145			145			97			80			81			145			83			146			139

Total fee revenue		2,522			2,542			2,662			2,971			2,833			3,008			2,889			2,768			2,798
Net Securities gains (losses)		7			13			6			1			5			48			(2	)		(3	)		40

Total fee and other revenue		2,529			2,555			2,668			2,972			2,838			3,056			2,887			2,765			2,838
Income of consolidated investment management funds		65			65			37			59			110			63			32			(5	)		43
Net interest revenue		765			722			718			720			698			731			775			780			765

Total revenue		3,359			3,342			3,423			3,751			3,646			3,850			3,694			3,540			3,646
Provision for credit losses		35			20			(22	)		(22	)		—			—			(22	)		23			5
Noninterest expenses		2,146			2,219			2,429			2,624			2,578			2,690			2,653			2,583			2,651
Special Litigation Reserves		164			N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A
Amortization of intangible assets		97			98			111			115			108			108			106			106			96
Restructuring charges		7			(15	)		15			21			(6	)		(7	)		(5	)		107			(9	)
Merger & integration expense		26			14			56			43			17			25			17			32			18

Total noninterest expense		2,440			2,316			2,611			2,803			2,697			2,816			2,771			2,828			2,756
Income/ (loss) from continuing operations before taxes		884			1,006			834			970			949			1,034			945			689			885
Income taxes		258			304			220			265			279			277			281			211			254

Income/ (loss) from continuing operations		626			702			614			705			670			757			664			478			631
Income/ (loss) from discontinued operations, net of tax		(42	)		(10	)		(3	)		(11	)		—			—			—			—			—
Net income attributable to noncontrolling interest		(25	)		(34	)		11			(15	)		(45	)		(22	)		(13	)		27			(12	)

Net income/ (loss) applicable to shareholders of The Bank of New York Mellon Corporation	$	559		$	658		$	622		$	679		$	625		$	735		$	651		$	505		$	619

EPS from continuing operations	$	0.49		$	0.55		$	0.51		$	0.55		$	0.50		$	0.59		$	0.53		$	0.42		$	0.52
EPS from continuing operations-Non-GAAP (a)	$	0.59		$	0.55		$	0.55		$	0.59		$	0.50		$	0.60		$	0.53		$	0.49		$	0.52
Market value of assets under management at period-end (in billions)	$	1,105		$	1,047		$	1,141		$	1,172		$	1,229		$	1,274		$	1,198		$	1,260		$	1,308
Market value of assets under custody and administration at period-end (in trillions)	$	22.4		$	21.8		$	24.4		$	25.0		$	25.5		$	26.3		$	25.9		$	25.8		$	26.6
`
Market value of securities on loan at period-end (in billions)	$	253		$	248		$	279		$	278		$	278		$	273		$	250		$	269		$	265
Pre-tax operating margin
GAAP		26	%		30	%		24	%		26	%		26	%		27	%		26	%		19	%		24	%
Non-GAAP adjusted (b)		34	%		32	%		30	%		30	%		28	%		30	%		30	%		27	%		27	%
Return on common equity (annualized)
GAAP		8.2	%		8.8	%		7.8	%		8.5	%		7.7	%		8.8	%		7.6	%		5.9	%		7.4	%
Return on tangible common equity (annualized):
Non-GAAP		25.8	%		25.7	%		26.3	%		27.5	%		24.3	%		26.3	%		22.1	%		17.7	%		21.0	%
Percent of non-US fee and net interest revenue-GAAP		34	%		35	%		36	%		38	%		36	%		37	%		39	%		34	%		36	%
Percent of non-US fee and net interest revenue-Non-GAAP (c)		35	%		35	%		36	%		38	%		37	%		37	%		39	%		34	%		37	%

(a)

Calculated excluding M&I expenses, restructuring charges and 1st quarter 2010 special litigation reserves.

(b)

Calculated excluding M&I expenses, restructuring charges, intangible amortization and 1st quarter 2010 special litigation reserves, and noncontrolling interest related to consolidated asset management funds.

(c)

Calculated excluding net securities gains (losses) and including noncontrolling interest 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 14

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS—9 Quarter Trend

FEE AND OTHER REVENUE

2010

2011

2012

(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

Investment services fees

Asset servicing

608

622

826

870

880

911

881

842

894

Securities lending

Issuer services

333

354

364

409

351

365

442

287

251

Memo: Issuer Services excluding Shareowner Services

283

298

318

360

292

314

400

245

251

Clearing services

230

245

252

278

292

297

278

303

Treasury services

131

125

139

135

134

133

134

136

Total investment services fees

1,331

1,392

1,618

1,730

1,694

1,764

1,794

1,584

1,633

Investment management and

performance fees

686

696

800

764

779

729

730

745

Foreign exchange & other trading

revenue

262

220

146

258

198

222

200

228

191

Distribution and servicing

Financing-related fees

Investment and other income

145

146

139

Total fee revenue

2,522

2,542

2,662

2,971

2,833

3,008

2,889

2,768

2,798

Income of consolidated asset management funds, net of noncontrolling interest

Total fee revenue - Non-GAAP (a)

2,563

2,574

2,711

3,016

2,899

3,050

2,908

2,791

2,830

Net securities gains (losses)

)

Total fee and other revenue - Non-GAAP

2,570

2,587

2,717

3,017

2,904

3,098

2,906

2,788

2,870

Less: Fee and Other revenue related to Shareowner Services

142

—

Total fee and other revenue ex Shareowner Services - Non-GAAP

2,516

2,529

2,670

2,965

2,842

3,044

2,862

2,646

2,870

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

1,047

1,141

1,172

1,229

1,274

1,198

1,260

1,308

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

22.4

21.8

24.4

25.0

25.5

26.3

25.9

25.8

26.6

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

253

248

279

278

273

250

269

265

S&P 500 Index-period-end

1169

1031

1141

1258

1326

1321

1131

1258

1408

S&P 500 Index-daily average

1123

1135

1095

1204

1302

1318

1227

1224

1347

(a)

The GIS and BAS acquisitions were completed on July 1, 2010 and August 2, 2010, respectively.

(b)

Excludes net securities gains/(losses).

Page 3 of 14

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS

Average Balances and Interest Rates

March 31,
2010

June 30,
2010

September 30,
2010

December 31,
2010

(dollar amounts in millions)

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)

55,800

0.94

50,741

0.89

60,431

0.83

59,660

0.81

Interest-bearing deposits with Federal Reserve bank

12,097

0.33

18,276

0.34

9,812

0.40

16,787

0.32

Other Short Term Investment (FRB)

—

Federal funds sold and securities under resale agreements

3,859

0.71

4,652

0.66

4,559

0.46

5,553

3.15

Margin loans

5,241

1.49

5,786

1.49

6,269

1.47

6,289

1.55

Non-margin loans:

Domestic offices

19,495

3.12

20,735

2.89

21,072

2.74

21,754

2.55

Foreign offices

9,478

1.62

10,143

1.53

9,428

1.61

9,486

1.53

Total non-margin loans

28,973

2.63

30,878

2.45

30,500

2.39

31,240

2.24

Securities

U.S. government obligations

6,600

1.40

6,162

1.46

7,229

1.63

11,390

1.51

U.S. government agency obligations

19,429

3.58

19,629

3.48

20,074

3.29

21,406

2.95

Obligations of states and political subdivisions

670

6.37

638

6.56

615

6.43

587

6.53

Other securities

28,653

4.20

27,601

4.14

30,075

3.86

31,987

3.55

Trading securities

2,075

2.49

2,752

2.62

3,194

2.57

2,698

3.02

Total securities

57,427

3.63

56,782

3.58

61,187

3.36

68,068

3.02

Total interest-earning assets

163,397

2.15

167,115

2.04

172,758

1.99

187,597

1.90

Allowance for credit losses

(502

)

(517

)

(538

)

(530

)

Cash and due from banks

3,546

3,677

3,904

4,224

Other assets

45,346

46,266

50,007

50,220

Discontinued Operations

898

260

247

223

Total Asset Consol VIE FAS 167

12,730

12,040

13,947

14,675

Total Assets

225,415

228,841

240,325

256,409

Liabilities and total equity

Interest-bearing liabilities:

Money market rate accounts

3,164

0.43

3,892

0.48

4,466

0.52

6,296

0.40

Savings

1,372

0.27

1,389

0.27

1,389

0.26

1,433

0.22

Certificates of deposit of $100,000 & over

648

0.25

332

0.16

214

0.11

285

0.08

Demand Deposits

—

Other time deposits

23,801

0.09

26,289

0.08

27,440

0.07

29,002

0.07

Foreign offices

72,049

0.10

68,061

0.10

70,524

0.13

74,760

0.14

Total interest-bearing deposits

101,034

0.11

99,963

0.11

104,033

0.13

111,776

0.14

Federal funds purchased and securities under repurchase agreements

3,697

0.07

4,441

0.19

5,984

0.09

7,256

2.13

Trading Liabilities

1,178

2.91

1,668

2.69

1,961

2.51

1,704

2.06

Other borrowed funds

1,627

1.29

2,555

1.69

2,068

0.85

1,999

0.80

Payables to customers and broker-dealers

6,372

0.08

6,596

0.09

6,910

0.08

5,878

0.11

Long-term debt

16,808

1.50

16,462

1.75

16,798

2.04

16,624

1.87

Total interest-bearing liabilities

130,716

0.33

131,685

0.37

137,754

0.41

145,237

0.47

Total noninterest-bearing deposits

33,330

34,628

33,198

39,625

Other liabilities

18,420

20,042

23,770

24,740

Discontinued Operations

898

260

247

223

VIE Liabilities & Obligations FAS 167

11,540

11,046

12,778

13,481

Total Shareholders’ Equity

29,715

30,462

31,868

32,379

Noncontrolling interest

796

718

710

724

Total liabilities and shareholders’ equity

225,415

228,841

240,325

256,409

Net interest margin-Taxable equivalent basis

1.89

1.74

1.67

1.54

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 14

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS

Average Balances and Interest Rates (continued)

PRELIMINARY

Quarter End

March 31,
2011

June 30,
2011

September 30,
2011

December 31,
2011

March 31,
2012

(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)

57,637

0.90

59,291

0.98

60,412

1.00

43,628

1.08

35,095

1.30

Interest-bearing deposits with Federal Reserve bank

20,367

0.32

34,068

0.32

61,115

0.31

72,118

0.32

63,526

0.27

Other Short Term Investment (FRB)

—

Federal funds sold and securities under resale agreements

4,514

0.50

4,577

0.46

4,865

0.71

5,271

0.64

5,174

0.72

Margin loans

7,484

1.48

9,508

1.34

9,379

1.34

11,886

1.26

12,901

1.29

Non-margin loans:

Domestic offices

21,856

2.57

21,093

2.54

21,583

2.43

21,794

2.37

20,128

2.46

Foreign offices

9,226

1.44

9,727

1.53

9,527

1.52

10,556

1.54

10,180

1.77

Total non-margin loans

31,082

2.22

30,820

2.23

31,110

2.15

32,350

2.10

30,308

2.23

Securities

U.S. government obligations

12,849

1.61

14,337

1.63

14,079

1.57

18,693

1.45

17,268

1.56

U.S. government agency obligations

20,221

2.98

20,466

3.09

20,998

2.93

25,006

2.58

32,347

2.41

Obligations of states and political subdivisions

557

6.37

934

5.32

1,611

4.13

2,452

3.47

3,354

2.97

Other securities

31,770

3.43

33,045

3.25

34,175

3.30

33,830

3.19

33,840

2.87

Trading securities

3,698

2.44

2,877

2.44

2,509

2.62

2,490

2.94

2,518

2.78

Total securities

69,095

2.96

71,659

2.87

73,372

2.86

82,471

2.60

89,327

2.44

Total interest-earning assets

190,179

1.80

209,923

1.70

240,253

1.55

247,724

1.50

236,331

1.56

Allowance for credit losses

(494

)

(463

)

(437

)

(384

)

(392

)

Cash and due from banks

4,094

4,335

5,204

4,695

4,271

Other assets

49,577

50,459

53,305

52,200

49,690

Discontinued Operations

—

Total Asset Consol VIE FAS 167

14,342

14,226

13,138

11,839

11,444

Total Assets

257,698

278,480

311,463

316,074

301,344

Liabilities and total equity

Interest-bearing liabilities:

Money market rate accounts

5,417

0.38

4,029

0.41

4,532

0.35

4,666

0.27

4,299

0.27

Savings

1,600

0.16

1,646

0.16

1,692

0.15

1,163

0.19

787

0.30

Certificates of deposit of $100,000 & over

296

0.06

369

0.05

394

0.05

396

0.05

0.39

Demand Deposits

—

0.01

Other time deposits

31,823

0.09

34,484

0.08

35,597

0.07

35,624

0.07

33,588

0.08

Foreign offices

77,379

0.19

85,430

0.26

83,580

0.26

88,494

0.22

86,670

0.15

Total interest-bearing deposits

116,515

0.17

125,958

0.22

125,795

0.21

130,343

0.18

125,438

0.14

Federal funds purchased and securities under repurchase agreements

5,172

0.07

10,894

0.06

10,164

0.03

8,008

(0.07

)

8,584

(0.02

)

Trading Liabilities

2,764

1.86

1,524

2.35

1,911

1.25

1,225

1.62

1,153

1.55

Other borrowed funds

1,821

1.61

1,877

0.99

2,256

0.77

2,159

0.93

2,579

0.79

Payables to customers and broker- dealers

6,701

0.10

6,843

0.09

7,692

0.10

8,023

0.08

7,555

0.11

Long-term debt

17,014

1.87

17,380

1.63

18,256

1.60

19,546

1.55

20,538

1.79

Total interest-bearing liabilities

149,987

0.40

164,476

0.38

166,074

0.37

169,304

0.34

165,847

0.34

Total noninterest-bearing deposits

38,616

43,038

73,389

76,309

66,613

Other liabilities

22,350

23,694

25,462

25,433

24,248

Discontinued Operations

—

VIE Liabilities & Obligations FAS 167

13,114

12,966

11,728

10,516

10,159

Total Shareholders’ Equity

32,827

33,464

34,008

33,761

33,718

Noncontrolling interest

804

842

802

752

759

Total liabilities and total equity

257,698

278,480

311,463

316,074

301,344

Net interest margin - Taxable equivalent basis

1.49

1.41

1.30

1.27

1.32

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 14

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS - 9 Quarter Trend

NONINTEREST EXPENSE

2010

2011

2012

(dollar amounts in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

Staff:

Compensation

753

763

850

871

876

903

885

861

Incentives

284

272

289

348

325

328

281

352

Employee benefits

183

199

205

198

223

232

226

216

240

Total staff

1,220

1,234

1,344

1,417

1,424

1,463

1,457

1,382

1,453

Professional, legal and other purchased services

241

256

282

320

283

301

311

322

299

Software and equipment

169

162

187

207

206

203

193

213

205

Net occupancy

137

143

150

158

153

161

151

159

147

Distribution and servicing

104

111

109

100

101

Sub-custodian

Business development

Other

186

201

249

260

277

292

304

274

320

Subtotal (a)

2,146

2,219

2,429

2,624

2,578

2,690

2,653

2,583

2,651

Special Litigation Reserves

164

N/A

Amortization of intangible assets

111

115

108

106

Restructuring charges

(15

)

107

)

Merger & integration expense

Total noninterest expense

2,440

2,316

2,611

2,803

2,697

2,816

2,771

2,828

2,756

Memo:

Total noninterest expense excluding amortization of intangible and direct expense related to Shareowner Services -Non-GAAP

2,263

2,170

2,387

2,574

2,532

2,643

2,616

2,537

2,651

Full Time Employees at period-end (b)

42,300

42,700

47,700

48,000

48,400

48,900

49,600

48,700

47,800

(a)

The GIS and BAS acquisitions were completed on July 1, 2010 and August 2, 2010, respectively. The Shareowner Services business was sold on December 31, 2011.

(b)

Represents full time employees.

Page 6 of 14

THE BANK OF NEW YORK MELLON CORPORATION

ASSETS UNDER MANAGEMENT/ CUSTODY AND ADMINISTRATION / SECURITIES LENDING - 9 Quarter Trend


	2010												2011												2012
(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
Market value of assets under management at period-end (in billions)
Institutional	$	620		$	595		$	639		$	639		$	701		$	733		$	719		$	757		$	829
Mutual Funds		396			370			418			454			451			462			406			427			404
Private Client		89			82			84			79			77			79			73			76			75

Total market value of assets under management (a)		1,105			1,047			1,141			1,172			1,229			1,274			1,198			1,260			1,308
Composition of assets under management at period-end
Equity		31	%		30	%		31	%		32	%		34	%		34	%		30	%		31	%		33	%
Fixed Income		28	%		30	%		30	%		29	%		30	%		31	%		35	%		35	%		35	%
Money Market		30	%		30	%		29	%		29	%		27	%		26	%		27	%		26	%		24	%
Alternative investments and overlay		11	%		10	%		10	%		10	%		9	%		9	%		8	%		8	%		8	%

Total		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
Market value of assets under custody and administration at period-end (in trillions)	$	22.4		$	21.8		$	24.4		$	25.0		$	25.5		$	26.3		$	25.9		$	25.8		$	26.6
Market value of securities on loan at period-end (b)	$	253		$	248		$	279		$	278		$	278		$	273		$	250		$	269		$	265
Market Indices
S&P 500 Index (c)		1169			1031			1141			1258			1326			1321			1131			1258			1408
S&P 500 Index-daily average		1123			1135			1095			1204			1302			1318			1227			1224			1347
FTSE 100 Index (c)		5680			4917			5549			5900			5909			5946			5128			5572			5768
FTSE 100 Index-daily average		5431			5361			5312			5760			5945			5906			5470			5424			5818
Barclays Capital Aggregate Bond Index (c)		300			299			329			323			328			341			346			347			351
MSCI Emerging Markets (EM) IMI Index (c)		1004			914			1074			1151			1164			1140			874			904			1030
NYSE & NASDAQ Share Volume (in billions)		246			299			233			219			225			213			250			206			186
JP Morgan G7 Currency Volatility Index-daily average		11.93			12.92			12.07			12.46			11.07			11.21			12.60			12.95			10.39

(a)

Excludes securities lending cash management assets.

(b)

Represents the securities on loan managed by the Investment Services business.

(c)

Period end.

Page 7 of 14

THE BANK OF NEW YORK MELLON CORPORATION

ASSETS UNDER MANAGEMENT NET FLOWS - 9 Quarter Trend


	2010										2011											2012
(dollar amounts in billions )	1st Qtr			2nd Qtr			3rd Qtr		4th Qtr		1st Qtr			2nd Qtr			3rd Qtr			4th Qtr		1st Qtr
Market value of assets under management at beginning of period	$	1,115		$	1,105		$	1,047	$	1,141	$	1,172		$	1,229		$	1,274		$	1,198	$	1,260
Net Flows
Long-term		16			12			11		9		31			32			4			16		7
Money market		(25	)		(17	)		18		6		(5	)		(1	)		(15	)		7		(9	)

Total net flows		(9	)		(5	)		29		15		26			31			(11	)		23		(2	)
Net Market and currency impact/other		(1	)		(53	)		65		16		31			14			(65	)		39		50

Market value of assets under management at end of period (a)	$	1,105		$	1,047		$	1,141	$	1,172	$	1,229		$	1,274		$	1,198		$	1,260	$	1,308

(a)

Excludes securities lending cash management assets.

Page 8 of 14

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

INVESTMENT MANAGEMENT - 9 Quarter Trend


	2010												2011												2012
(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
Revenue:
Investment management:
Mutual funds		249			254			270			293			283			290			263			237			260
Institutional clients		280			279			282			300			319			319			311			299			322
Wealth management fees		159			153			153			157			164			163			157			154			157
Performance fees		13			19			16			75			17			18			11			47			16

Total investment management revenue		701			705			721			825			783			790			742			737			755
Distribution and servicing		47			49			53			52			51			48			41			41			45
Other fee revenue (a)		21			9			17			17			34			24			(26	)		(11	)		52

Total fee and other revenue		769			763			791			894			868			862			757			767			852
Net interest revenue		52			53			49			51			52			48			51			55			55

Total revenue		821			816			840			945			920			910			808			822			907
Provision for credit losses		—			—			1			2			—			1			—			—			—
Noninterest expenses (ex. intangible amortization)		565			594			621			664			627			641			622			632			619

Income before taxes (ex. intangible amortization)		256			222			218			279			293			268			186			190			288
Amortization of intangible assets		59			59			58			61			55			53			53			53			48

Income before taxes		197			163			160			218			238			215			133			137			240
Average assets	$	33,800		$	33,941		$	36,194		$	37,645		$	37,315		$	36,741		$	36,949		$	37,163		$	36,475

Market value of assets under management at period-end (in billions) (b)	$	1,105		$	1,047		$	1,141		$	1,172		$	1,229		$	1,274		$	1,198		$	1,260		$	1,308

Pre-tax operating margin
GAAP		24	%		20	%		19	%		23	%		26	%		24	%		16	%		17	%		26	%
Non-GAAP (ex. intangible amortization and net distribution and servicing expense) (c)		35	%		31	%		29	%		33	%		36	%		33	%		26	%		26	%		36	%

(a)

Other revenue includes asset servicing and treasury services revenue.

(b)

Excludes securities lending cash management assets.

(c)

Distribution and servicing expense totaled $88 million, $90 million, $94 million, and $104 million, respectively, for the quarters of 2010 and $110 million, $108 million, $99 million and $95 million, respectively, for the quarters of 2011 and $100 million for the first quarter of 2012.

Page 9 of 14

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

INVESTMENT SERVICES - 9 Quarter Trend

2010

2011

2012

(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

Revenue:

Investment services fees

Asset servicing fees—ex. securities lending

584

595

813

855

863

891

862

823

876

Securities lending revenue

Issuer services

283

298

318

360

292

314

401

245

251

Clearing services

230

245

252

278

292

297

278

303

Treasury services

130

124

138

134

133

134

132

133

136

Total investment services fees

1,251

1,292

1,547

1,653

1,607

1,683

1,724

1,514

1,605

Foreign Exchange and other trading revenue

227

251

186

232

209

203

236

196

176

Other fee revenue (a)

117

Total fee and other revenue (a)

1,542

1,660

1,820

1,963

1,889

1,967

2,028

1,781

1,854

Net interest revenue

629

586

570

578

621

650

661

634

644

Total revenue (b)

2,171

2,246

2,390

2,541

2,510

2,617

2,689

2,415

2,498

Provision for credit losses

—

Noninterest expenses (ex. intangible amortization) (b)

1,358

1,457

1,576

1,697

1,702

1,775

1,851

1,706

1,781

Income before taxes (ex. intangible amortization)

813

789

814

844

808

842

838

709

701

Amortization of intangible assets

Income before taxes

778

754

766

794

758

792

789

659

653

Average loans

14,273

17,053

17,941

19,053

20,554

22,891

22,879

26,804

25,902

Average assets

150,826

151,915

158,110

176,722

176,162

191,756

220,930

228,668

215,899

Average deposits

120,322

120,394

123,298

137,964

139,342

153,863

181,848

188,539

176,811

Pre-tax operating margin

GAAP

Non-GAAP adjusted (excluding intangible amortization)

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

22.4

21.8

24.4

25.0

25.5

26.3

25.9

25.8

26.6

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

253

248

279

278

273

250

269

265

Note:

(a)

Total fee and other revenue includes investment management fees and distribution and servicing revenue.

(b)

On July 1, 2010 and August 2, 2010 the GIS and BAS acquisitions were completed.

(c)

Represents the securities on loan managed by the Investment Services business.

Page 10 of 14

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES

OTHER-9 Quarter Trend


	2010												2011												2012
(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
Revenue:
Fee and other revenue		259			164			106			160			147			269			121			240			164
Net interest revenue		84			83			99			91			25			33			63			91			66

Total revenue		343			247			205			251			172			302			184			331			230
Provision for credit losses		35			20			(23	)		(24	)		—			(1	)		(22	)		23			(11	)
Noninterest expenses (ex. special litigation reserves, intangible amortization, M&I expenses and restructuring charges)		223			168			232			263			249			274			180			245			251

Income before taxes (ex. special litigation reserves, intangible amortization, M&I expenses and restructuring charges)		85			59			(4	)		12			(77	)		29			26			63			(10	)
Amortization of intangible assets		3			4			5			4			3			5			4			3			—
Special Litigation Reserves		164			N/A			N/A			N/A			N/A			N/A			N/A			N/A			N/A
Restructuring charges		7			(15	)		15			21			(6	)		(7	)		(5	)		107			(9	)
Merger & integration expenses		26			14			56			43			17			25			17			32			18

Income before taxes		(115	)		56			(80	)		(56	)		(91	)		6			10			(79	)		(19	)
Average loans and leases	$	13,639		$	13,261		$	12,308		$	11,808		$	11,187		$	10,553		$	10,652		$	10,223		$	9,885
Average assets	$	39,891		$	42,725		$	45,774		$	41,819		$	44,221		$	49,983		$	53,584		$	50,243		$	48,970

Note:

Page 11 of 14

THE BANK OF NEW YORK MELLON CORPORATION

BUSINESSES


(dollar amounts in millions unless otherwise noted)	Investment Management									Investment Services									Other									Consolidated Results
(dollar amounts in millions unless otherwise noted)	2011			2010			2009			2011			2010			2009			2011			2010			2009			2011 (b)			2010 (b)			2009
Revenue:
Investment services fees
Asset servicing		112			122			113			3,585			2,953			2,459			—			1			1			3,697			3,076			2,573
Issuer services		—			—			—			1,252			1,259			1,235			193			201			228			1,445			1,460			1,463
Clearing services		—			—			—			1,159			1,005			958			—			—			4			1,159			1,005			962
Treasury services		2			3			3			532			526			515			1			1			1			535			530			519

Total investment services fees		114			125			116			6,528			5,743			5,167			194			203			234			6,836			6,071			5,517
Investment management fees		2,959			2,829			2,541			53			37			30			3			4			13			3,015			2,870			2,584
Performance fees		93			123			93			1			—			—			—			—			—			94			123			93
Foreign exchange and other trading revenue		—			10			3			844			896			1,081			4			(20	)		(48	)		848			886			1,036
Distribution and servicing		181			201			279			6			8			54			—			1			(7	)		187			210			326
Financing-related fees		6			6			10			46			47			49			118			142			156			170			195			215
Investment and other income		(100	)		(89	)		(165	)		187			254			289			411			344			213			498			509			337

Total fee revenue		3,253			3,205			2,877			7,665			6,985			6,670			730			674			561			11,648			10,864			10,108
Net Securities gains (losses)		1			12			(76	)		—			—			—			47			15			(5,293	)		48			27			(5,369	)

Total fee and other revenue		3,254			3,217			2,801			7,665			6,985			6,670			777			689			(4,732	)		11,696			10,891			4,739
Net interest revenue (expense)		206			205			242			2,566			2,363			2,242			212			357			431			2,984			2,925			2,915

Total revenue		3,460			3,422			3,043			10,231			9,348			8,912			989			1,046			(4,301	)		14,680			13,816			7,654
Provision for credit losses		1			3			1			—			—			—			—			8			331			1			11			332
Noninterest expenses (ex. M&I expenses and intangible amortization)		2,522			2,444			2,221			7,034			6,088			5,473			1,037			1,078			1,177			10,593			9,610			8,871

Income before taxes and extraordinary (loss) (ex. M&I expenses and intangible amortization)		937			975			821			3,197			3,260			3,439			(48	)		(40	)		(5,809	)		4,086			4,195			(1,549	)
Amortization of intangible assets		214			237			264			199			168			146			15			16			16			428			421			426
Merger & integration expense		—			—			—			—			—			—			91			139			233			91			139			233

Income before taxes, noncontrolling interest and extraordinary (loss)		723			738			557			2,998			3,092			3,293			(154	)		(195	)		(6,058	)		3,567			3,635			(2,208	)
Average loans	$	6,970		$	6,461		$	5,821		$	23,298		$	17,096		$	13,754		$	10,651		$	12,748		$	16,849		$	40,919		$	36,305		$	36,424
Average assets	$	37,041		$	35,408		$	21,836		$	204,569		$	158,675		$	151,005		$	49,535		$	43,353		$	37,098		$	291,145		$	237,436		$	209,939
Average deposits	$	10,113		$	8,240		$	6,788		$	166,076		$	124,969		$	120,494		$	6,490		$	6,229		$	7,370		$	182,679		$	139,438		$	134,652

Market value of assets under management at period-end (in billions)	$	1,260		$	1,172		$	1,115		$	—		$	—		$	—		$	—		$	—		$	—		$	1,260		$	1,172		$	1,115

Market value of assets under custody and administration at period-end (in trillions)	$	—		$	—		$	—		$	25.8		$	25.0		$	22.3		$	—		$	—		$	—		$	25.8		$	25.0		$	22.3

Market value of securities on loan at period-end (in billions)	$	—		$	—		$	—		$	269		$	278		$	247		$	—		$	—		$	—		$	269		$	278		$	247

Pre-tax operating margin-GAAP		21	%		22	%		18	%		29	%		33	%		37	%		n/m			n/m			n/m			24	%		26	%		n/m
Pre-tax operating margin (ex. intangible amortization)-Non-GAAP		27	%		28	%		27	%		31	%		35	%		39	%		n/m			n/m			n/m			27	%		29	%		n/m
Pre-tax operating margin-Non-GAAP (a)		27	%		29	%		30	%		31	%		35	%		42	%		n/m			n/m			n/m			28	%		32	%		31	%

Memo:
Securities Lending Revenue																													183			150			259

Note:

(a)

Excludes M&I expenses, tax settlements, support agreement charges, restructuring charges, special litigation, investment write-downs and intangible amortization expense.

(b)

Total fee and other revenue and income before taxes for the years 2010 and 2011 includes income from consolidated investment management funds of $226 million and $200 million, respectively, net of income attributable to noncontrolling interests of $59 million and $50 million, respectively. The net of these income statement line items of $167 million and $150 million, respectively, are included above in fee and other revenue.

n/m - not meaningful

Note: See pages 9-11 for details of revenue/expense items impacting respective business results.

Page 12 of 14

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS - 9 Quarter Trend

NONPERFORMING ASSETS


	2010												2011												2012
(dollar amounts in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr
Loans:
Other residential mortgages	$	204		$	229		$	238		$	244		$	245		$	236		$	228		$	203		$	188
Wealth Management		58			62			66			59			56			31			32			32			35
Commercial real estate		50			49			39			44			36			28			28			40			39
Commercial		40			40			35			34			32			31			21			21			32
Foreign		7			7			—			7			7			13			13			10			10
Financial Institutions		95			13			16			5			4			4			12			23			14

Total nonperforming loans		454			400			394			393			380			343			334			329			318
Other assets owned		5			6			7			6			6			8			10			12			13

Total nonperforming assets (a)	$	459		$	406		$	401		$	399		$	386		$	351		$	344		$	341		$	331

Nonperforming assets ratio		1.35	%		1.09	%		1.06	%		1.06	%		0.96	%		0.83	%		0.76	%		0.78	%		0.77	%
Nonperforming assets ratio excluding margin loans		1.58	%		1.29	%		1.26	%		1.29	%		1.26	%		1.08	%		0.98	%		1.09	%		1.11	%
Allowance for loan losses/nonperforming loans		114.5			135.5			135.5			126.7			122.9			128.6			117.4			119.8			121.4
Allowance for loan losses/nonperforming assets		113.3			133.5			133.2			124.8			121.0			125.6			114.0			115.5			116.6
Total allowance for credit losses/nonperforming loans		140.5			161.3			154.3			145.3			145.8			156.0			149.1			151.1			155.3
Total allowance for credit losses/nonperforming assets		139.0			158.9			151.6			143.1			143.5			152.4			144.8			145.7			149.2

(a)

Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in these loans are nonperforming loans for the 1st, 2nd, 3rd and 4th quarters of 2010 of $150 million, $131 million, $231 million and $218 million, respectively, and for 1st, 2nd, 3rd and 4th quarters of 2011 of $239 million, $216 million, $265 million, and $101 million, respectively, and for the 1st quarter of 2012 $180 million. 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 13 of 14

THE BANK OF NEW YORK MELLON CORPORATION

CONTINUING OPERATIONS - 9 Quarter Trend

ALLOWANCE FOR CREDIT LOSSES, PROVISION AND NET CHARGE-OFFS

2010

2011

2012

(dollar amounts in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

Allowance for credit losses:

Allowance for credit losses

503

520

542

534

498

467

441

392

394

Allowance for unfunded commitments

125

118

103

106

103

Allowance for credit losses—beginning of period

628

638

645

608

571

554

535

498

497

Net (charge-offs)/recoveries

Charge-offs

(37

)

(14

)

(17

)

(17

)

(19

)

(21

)

(17

)

(25

)

(10

)

Recoveries

Total Net (charge-offs)/recoveries

(25

)

(13

)

(15

)

(15

)

(17

)

(19

)

(15

)

(24

)

Provision for credit losses

(22

)

(22

)

—

(22

)

Allowance for credit losses—end of period

638

645

608

571

554

535

498

497

494

Allowance for loan losses

520

542

534

498

467

441

392

394

386

Allowance for unfunded commitments

118

103

106

103

108

Allowance for credit losses—end of period (a)

638

645

608

571

554

535

498

497

494

Allowance for loan losses as a percentage of total loans

1.54

1.46

1.41

1.32

1.17

1.05

0.87

0.90

Page 14 of 14

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