Attached files
| file | filename |
|---|---|
| EX-99.3 - EXHIBIT 99.3 - Bank of New York Mellon Corp | a4qinancialhighlights_fi.htm |
| EX-99.2 - EXHIBIT 99.2 - Bank of New York Mellon Corp | ex992_financialsupplementx.htm |
| 8-K - FORM 8-K - Bank of New York Mellon Corp | bk-20210120.htm |
| News Release |  | ||||
BNY MELLON REPORTS FOURTH QUARTER 2020 EARNINGS OF
$702 MILLION OR $0.79 PER COMMON SHARE,
INCLUDES $0.18 PER SHARE NEGATIVE IMPACT OF NOTABLE ITEMS
Revenue down 20% (a) | EPS down 48% (a) | ROE 7% ROTCE 13% (b) | CET1 13.1% Tier 1 leverage 6.3% | |||||||||||||||||
(a) Excluding notable items, revenue down 2% and EPS down 5%. See note (b).
NEW YORK, January 20, 2021 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported:
| 4Q20 vs. | |||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||
Net income applicable to common shareholders (in millions) | $ | 702 | $ | 876 | $ | 1,391 | (20) | % | (50) | % | |||||||
Net income applicable to common shareholders, excluding notable items (in millions) – Non-GAAP (b) | $ | 861 | $ | 876 | $ | 931 | (2) | % | (8) | % | |||||||
| Diluted earnings per common share | $ | 0.79 | $ | 0.98 | $ | 1.52 | (19) | % | (48) | % | |||||||
Diluted earnings per common share, excluding notable items – Non-GAAP (b) | $ | 0.96 | $ | 0.98 | $ | 1.01 | (2) | % | (5) | % | |||||||
| Notable items | ||
4Q20 results include $(159) million, or $(0.18) per share, for litigation, severance, losses on business sales and real estate charges.
4Q19 results include $460 million, or $0.50 per share, for the gain on sale of an equity investment, offset by severance, net securities losses and litigation.
| Fourth Quarter Results | ||
Total revenue of $3.8 billion, decreased 20%; 2% excluding notable items (b)
•Fee revenue decreased 22%; increased 1% excluding notable items (b)
•Money market fee waivers decreased fee revenue by 4%
•Net interest revenue decreased 17%
Provision for credit losses of $15 million
Total noninterest expense of $2.9 billion, decreased 1%; 1% excluding notable items (b)
Investment Services
•Total revenue decreased 4%
•Income before taxes decreased 17%
•AUC/A of $41.1 trillion, increased 11%
Investment and Wealth Management
•Total revenue increased 2%
•Income before taxes increased 30%
•AUM of $2.2 trillion, increased 15%
| CEO Commentary | ||
“During 2020, our business and operational resilience, enhanced by our technology and digital capabilities, enabled us to rapidly support our clients, employees and the financial system through immense stress and volatility. At the same time, we continued to advance our strategic priorities and longer-term growth agenda across all of our businesses. The investments we’ve made over the past several years, especially in technology and operations, served us and our clients well amid some difficult circumstances, and I want to thank our employees for their extraordinary efforts in supporting our clients during an unprecedented year,” Todd Gibbons, Chief Executive Officer, said.
“Full-year EPS was $3.83, down from $4.51, reflecting the impact of notable items. On an operating basis EPS was flat at $4.01, despite the impact of credit provisions, lower interest rates and associated money market fee waivers,” Mr. Gibbons added.
“While the full-year impact of low interest rates will be a significant headwind in 2021, we ended the year with momentum in our core franchise. We feel good about our business model and the power of the open architecture platforms and solutions we provide to help our clients grow their businesses. Our enterprise is incredibly strong and interconnected and our breadth of services and capabilities is unrivalled within our peer group, positioning us well for future growth. We have one of the industry’s best client rosters and a highly motivated group of talented employees executing our strategy, which is centered on driving growth and creating value for our clients, scaling and digitizing our operating model, and fostering a high-performance culture that is focused on delivering excellent client service in new and innovative ways,” Mr. Gibbons further noted.
“The combination of our capital generation, revenue growth and good cost control gives us the ability to drive meaningful EPS growth over time,” Mr. Gibbons concluded.
Media Relations: Madelyn McHugh (212) 635-1376 | Investor Relations: Magda Palczynska (212) 635-8529 | ||||
| (b) For information on this Non-GAAP measure and full-year diluted operating earnings per share, see “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” on page 10. | |||||
| Note: Above comparisons are 4Q20 vs. 4Q19, unless otherwise noted. | |||||
| BNY Mellon 4Q20 Earnings Release | ||
CONSOLIDATED FINANCIAL HIGHLIGHTS
| (in millions, except per share amounts and unless otherwise noted; not meaningful - N/M) | 4Q20 vs. | ||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||
| Fee revenue | $ | 3,116 | $ | 3,108 | $ | 3,971 | — | % | (22) | % | |||||||
| Net securities gains (losses) | 6 | 9 | (25) | N/M | N/M | ||||||||||||
| Total fee and other revenue | 3,122 | 3,117 | 3,946 | — | (21) | ||||||||||||
| Income from consolidated investment management funds | 41 | 27 | 17 | N/M | N/M | ||||||||||||
| Net interest revenue | 680 | 703 | 815 | (3) | (17) | ||||||||||||
| Total revenue | 3,843 | 3,847 | 4,778 | — | (20) | ||||||||||||
| Provision for credit losses | 15 | 9 | (8) | N/M | N/M | ||||||||||||
| Noninterest expense | 2,925 | 2,681 | 2,964 | 9 | (1) | ||||||||||||
| Income before income taxes | 903 | 1,157 | 1,822 | (22) | (50) | ||||||||||||
| Provision for income taxes | 148 | 213 | 373 | (31) | (60) | ||||||||||||
| Net income | $ | 755 | $ | 944 | $ | 1,449 | (20) | % | (48) | % | |||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 702 | $ | 876 | $ | 1,391 | (20) | % | (50) | % | |||||||
Operating leverage (a) | (921) | bps | (1,825) | bps | |||||||||||||
| Diluted earnings per common share | $ | 0.79 | $ | 0.98 | $ | 1.52 | (19) | % | (48) | % | |||||||
Average common shares and equivalents outstanding - diluted (in thousands) | 891,846 | 891,069 | 914,739 | ||||||||||||||
| Pre-tax operating margin | 24 | % | 30 | % | 38 | % | |||||||||||
Non-GAAP measures, excluding notable items (b): | |||||||||||||||||
| Fee revenue – Non-GAAP | $ | 3,177 | $ | 3,108 | $ | 3,156 | 2 | % | 1 | % | |||||||
| Net securities gains (losses) – Non-GAAP | 6 | 9 | — | N/M | N/M | ||||||||||||
Total revenue – Non-GAAP | 3,904 | 3,847 | 3,988 | 1 | (2) | ||||||||||||
| Noninterest expense – Non-GAAP | 2,760 | 2,681 | 2,778 | 3 | (1) | ||||||||||||
| Income before income taxes – Non-GAAP | 1,129 | 1,157 | 1,218 | (2) | (7) | ||||||||||||
| Provision for income taxes – Non-GAAP | 215 | 213 | 229 | 1 | (6) | ||||||||||||
Net income – Non-GAAP | 914 | 944 | 989 | (3) | (8) | ||||||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP | 861 | 876 | 931 | (2) | (8) | ||||||||||||
Operating leverage – Non-GAAP (a) | (146) | bps | (146) | bps | |||||||||||||
| Diluted earnings per common share – Non-GAAP | $ | 0.96 | $ | 0.98 | $ | 1.01 | (2) | % | (5) | % | |||||||
| Pre-tax operating margin – Non-GAAP | 29 | % | 30 | % | 31 | % | |||||||||||
(a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
(b) Notable items in 4Q20 include litigation expense, severance, losses on business sales and real estate charges. Notable items in 4Q19 include a gain on sale of an equity investment, severance, net securities losses and litigation expense. There were no notable items in 3Q20. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for additional information.
bps – basis points.
KEY DRIVERS (comparisons are 4Q20 vs. 4Q19, unless otherwise stated)
•Total revenue decreased 20%, or 2% excluding the notable items (a) primarily reflecting:
•Fee revenue decreased 22% primarily reflecting the gain on sale of an equity investment recorded in 4Q19. Excluding the notable items, fee revenue increased 1% (a) primarily reflecting higher market values, foreign exchange revenue, other client volumes and balances and the favorable impact of a weaker U.S. dollar, partially offset by higher money market fee waivers.
•Net interest revenue decreased 17% primarily reflecting lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in foreign exchange and other trading revenue). This was partially offset by the benefit of lower deposit and funding rates, a larger securities portfolio and higher deposit balances.
•Provision for credit losses of $15 million reflects additional reserves in the commercial real estate portfolio.
•Noninterest expense decreased 1% primarily reflecting lower severance expense, partially offset by higher litigation expense and real estate charges. Excluding the notable items, noninterest expense decreased 1% (a) primarily reflecting lower business development (travel and marketing) and distribution and servicing expenses, partially offset by continued investments in technology and the unfavorable impact of a weaker U.S. dollar.
•Effective tax rate of 16.4%. The notable items decreased the effective tax rate by approximately 2.5% in 4Q20.
(a) See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for additional information.
Note: Throughout this document, sequential growth rates are unannualized.
Page - 2 | ||
| BNY Mellon 4Q20 Earnings Release | ||
Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
•AUC/A of $41.1 trillion, increased 11%, primarily reflecting higher market values and client inflows, the favorable impact of a weaker U.S. dollar and net new business.
•AUM of $2.2 trillion, increased 15%, primarily reflecting higher market values, net inflows and the favorable impact of a weaker U.S. dollar (principally versus the British pound).
Capital and liquidity
•Open market share repurchases temporarily suspended for 4Q20 for CCAR banks. Expect to resume open market share repurchases in 1Q21.
•Paid $278 million in dividends to common shareholders.
•Return on common equity (“ROE”) of 7%; Return on tangible common equity (“ROTCE”) of 13% (a).
•Common Equity Tier 1 (“CET1”) ratio – 13.1%.
•Tier 1 leverage ratio – 6.3%.
•Supplementary leverage ratio (“SLR”) – 8.6% (b).
•Average liquidity coverage ratio (“LCR”) – 110%.
•Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
(a) See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for additional information.
(b) See “Capital and Liquidity” on page 8 for additional information.
FULL-YEAR CONSOLIDATED FINANCIAL HIGHLIGHTS
| (in millions, except per share amounts and unless otherwise noted; not meaningful - N/M) | 2020 vs. | ||||||||||
| 2020 | 2019 | 2019 | |||||||||
| Fee revenue | $ | 12,714 | $ | 13,236 | (4) | % | |||||
| Net securities gains (losses) | 33 | (18) | N/M | ||||||||
| Total fee and other revenue | 12,747 | 13,218 | (4) | ||||||||
| Income from consolidated investment management funds | 84 | 56 | N/M | ||||||||
| Net interest revenue | 2,977 | 3,188 | (7) | ||||||||
| Total revenue | 15,808 | 16,462 | (4) | ||||||||
| Provision for credit losses | 336 | (25) | N/M | ||||||||
| Noninterest expense | 11,004 | 10,900 | 1 | ||||||||
| Income before income taxes | 4,468 | 5,587 | (20) | ||||||||
| Provision for income taxes | 842 | 1,120 | (25) | ||||||||
| Net income | $ | 3,626 | $ | 4,467 | (19) | % | |||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 3,423 | $ | 4,272 | (20) | % | |||||
Operating leverage (a) | (493) | bps | |||||||||
| Diluted earnings per common share | $ | 3.83 | $ | 4.51 | (15) | % | |||||
Average common shares and equivalents outstanding - diluted (in thousands) | 892,514 | 943,109 | |||||||||
| Pre-tax operating margin | 28 | % | 34 | % | |||||||
Non-GAAP measures, excluding notable items (b): | |||||||||||
| Fee revenue – Non-GAAP | $ | 12,775 | $ | 12,421 | 3 | % | |||||
| Net securities gains – Non-GAAP | 33 | 7 | N/M | ||||||||
| Net interest revenue – Non-GAAP | 2,977 | 3,258 | (9) | ||||||||
| Total revenue – Non-GAAP | 15,869 | 15,742 | 1 | ||||||||
| Noninterest expense – Non-GAAP | 10,839 | 10,787 | — | ||||||||
| Income before income taxes – Non-GAAP | 4,694 | 4,980 | (6) | ||||||||
| Provision for income taxes – Non-GAAP | 909 | 980 | (7) | ||||||||
| Net income – Non-GAAP | 3,785 | 4,000 | (5) | ||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP | 3,582 | 3,805 | (6) | ||||||||
Operating leverage – Non-GAAP (a) | 32 | bps | |||||||||
| Diluted earnings per common share – Non-GAAP | $ | 4.01 | $ | 4.02 | — | % | |||||
| Pre-tax operating margin – Non-GAAP | 30 | % | 32 | % | |||||||
(a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
(b) Notable items in 2020 include litigation expense, severance, losses on business sales and real estate charges recorded in 4Q20. Notable items in 2019 include a gain on sale of an equity investment, severance, net securities losses, litigation expense recorded in 4Q19 and a lease-related impairment and a net reduction of reserves for tax-related exposure of certain investment management funds both recorded in 3Q19. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for additional information.
bps – basis points.
Page - 3 | ||
| BNY Mellon 4Q20 Earnings Release | ||
INVESTMENT SERVICES BUSINESS HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 4Q20 vs. | ||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||
| Total revenue by line of business: | |||||||||||||||||
| Asset Servicing | $ | 1,357 | $ | 1,354 | $ | 1,411 | — | % | (4) | % | |||||||
| Pershing | 563 | 538 | 579 | 5 | (3) | ||||||||||||
| Issuer Services | 385 | 435 | 415 | (11) | (7) | ||||||||||||
| Treasury Services | 325 | 323 | 329 | 1 | (1) | ||||||||||||
| Clearance and Collateral Management | 275 | 277 | 280 | (1) | (2) | ||||||||||||
| Total revenue by line of business | 2,905 | 2,927 | 3,014 | (1) | (4) | ||||||||||||
Provision for credit losses | 31 | (10) | (5) | N/M | N/M | ||||||||||||
Noninterest expense | 2,174 | 2,020 | 2,179 | 8 | — | ||||||||||||
| Income before taxes | $ | 700 | $ | 917 | $ | 840 | (24) | % | (17) | % | |||||||
| Pre-tax operating margin | 24 | % | 31 | % | 28 | % | |||||||||||
| Foreign exchange and other trading revenue | $ | 180 | $ | 146 | $ | 151 | 23 | % | 19 | % | |||||||
| Securities lending revenue | $ | 36 | $ | 37 | $ | 40 | (3) | % | (10) | % | |||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 41,437 | $ | 40,308 | $ | 38,721 | 3 | % | 7 | % | |||||||
| Average deposits | $ | 292,631 | $ | 263,621 | $ | 215,388 | 11 | % | 36 | % | |||||||
AUC/A at period end (in trillions) (current period is preliminary) (a) | $ | 41.1 | $ | 38.6 | $ | 37.1 | 6 | % | 11 | % | |||||||
Market value of securities on loan at period end (in billions) (b) | $ | 435 | $ | 378 | $ | 378 | 15 | % | 15 | % | |||||||
(a) Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and Wealth Management businesses. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.5 trillion at Dec. 31, 2020, $1.4 trillion at Sept. 30, 2020 and $1.5 trillion at Dec. 31, 2019.
(b) Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $68 billion at Dec. 31, 2020, $62 billion at Sept. 30, 2020 and $60 billion at Dec. 31, 2019.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below.
•Asset Servicing - The year-over-year decrease includes lower interest rates and higher money market fee waivers, partially offset by higher market values and foreign exchange volumes and volatility. Sequentially, higher foreign exchange volumes and market values were offset by the impact of some repricing on client renewals, lower interest rates and higher money market fee waivers.
•Pershing - The year-over-year decrease primarily reflects the impact of money market fee waivers, partially offset by higher clearing revenue, higher balances and the positive impact of equity markets. The sequential increase primarily reflects higher clearing revenue and market values, partially offset by higher money market fee waivers.
•Issuer Services - The year-over-year decrease primarily reflects lower interest rates and higher money market fee waivers in Corporate Trust. The sequential decrease primarily reflects the timing of Depositary Receipts revenue, higher money market fee waivers and lower interest rates in Corporate Trust.
•Treasury Services - The year-over-year decrease primarily reflects lower interest rates, including higher money market fee waivers, partially offset by higher client deposits, payment fees and money market balances. The sequential increase reflects higher foreign exchange revenue and payment volumes, partially offset by higher money market fee waivers.
•Clearance and Collateral Management - The year-over-year decrease primarily reflects lower investment income due to the 4Q19 sale of an equity investment and lower intraday credit fees, partially offset by growth in non-U.S. collateral management.
•Noninterest expense decreased slightly year-over-year primarily reflecting lower severance offset by higher litigation expense. Excluding the notable items, noninterest expense increased slightly (a), primarily reflecting the unfavorable impact of a weaker U.S. dollar, partially offset by lower business development (travel and marketing) expense. Sequentially, noninterest expense increased 8%, primarily reflecting higher litigation and severance expenses. Excluding the notable items, noninterest expense increased 2% (a), primarily reflecting higher professional, legal and other purchased services and the unfavorable impact of a weaker U.S. dollar. Both comparisons also reflect continued investments in technology.
(a) Notable items in 4Q20 and 4Q19 include severance and litigation expense. There were no notable items in 3Q20. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for additional information.
Page - 4 | ||
| BNY Mellon 4Q20 Earnings Release | ||
INVESTMENT AND WEALTH MANAGEMENT BUSINESS HIGHLIGHTS
| (dollars in millions, unless otherwise noted; not meaningful - N/M) | 4Q20 vs. | ||||||||||||||||
| 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | |||||||||||||
| Total revenue by line of business: | |||||||||||||||||
| Investment Management | $ | 714 | $ | 641 | $ | 692 | 11 | % | 3 | % | |||||||
| Wealth Management | 276 | 277 | 279 | — | (1) | ||||||||||||
| Total revenue by line of business | 990 | 918 | 971 | 8 | 2 | ||||||||||||
Provision for credit losses | (8) | 12 | — | N/M | N/M | ||||||||||||
Noninterest expense | 687 | 661 | 731 | 4 | (6) | ||||||||||||
| Income before taxes | $ | 311 | $ | 245 | $ | 240 | 27 | % | 30 | % | |||||||
| Pre-tax operating margin | 32 | % | 27 | % | 25 | % | |||||||||||
Adjusted pre-tax operating margin – Non-GAAP (a) | 34 | % | 29 | % | 27 | % | |||||||||||
| Metrics: | |||||||||||||||||
| Average loans | $ | 11,497 | $ | 11,503 | $ | 12,022 | — | % | (4) | % | |||||||
| Average deposits | $ | 18,144 | $ | 17,570 | $ | 15,195 | 3 | % | 19 | % | |||||||
AUM (in billions) (current period is preliminary) (b) | $ | 2,197 | $ | 2,041 | $ | 1,910 | 8 | % | 15 | % | |||||||
Wealth Management client assets (in billions) (current period is preliminary) (c) | $ | 286 | $ | 265 | $ | 266 | 8 | % | 8 | % | |||||||
(a) Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for information on this Non-GAAP measure.
(b) Excludes securities lending cash management assets and assets managed in the Investment Services business.
(c) Includes AUM and AUC/A in the Wealth Management business.
KEY DRIVERS
•The drivers of the total revenue variances by line of business are indicated below.
•Investment Management - The year-over-year increase primarily reflects higher market values and the favorable impact of a weaker U.S. dollar, partially offset by the impact of money market fee waivers. The sequential increase primarily reflects the timing of performance fees, higher market values and seed capital gains, net of hedges.
•Wealth Management - Total revenue decreased 1% year-over-year and decreased slightly sequentially primarily reflecting a loss on a business sale. Excluding the notable item, total revenue increased 1% (a) year-over-year and sequentially primarily reflecting higher market values, partially offset by a shift to lower fee investment products and the impact of net outflows.
•Noninterest expense decreased 6% year-over-year primarily reflecting lower staff expense, including severance, and lower business development expense. Excluding the notable items, noninterest expense decreased 5% (a), primarily reflecting lower incentives, business development and distribution and servicing expenses. Sequentially, noninterest expense increased 4% primarily reflecting higher severance expense. Excluding the notable items, noninterest expense increased 2% (a), primarily reflecting higher incentive and technology-related expenses.
(a) Notable items in 4Q20 include severance and a loss on a business sale. Notable items in 4Q19 include severance. There were no notable items in 3Q20. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for additional information.
Page - 5 | ||
| BNY Mellon 4Q20 Earnings Release | ||
OTHER SEGMENT primarily includes leasing operations, certain corporate treasury activities, derivatives, business exits and other corporate revenue and expense items.
| (in millions) | 4Q20 | 3Q20 | 4Q19 | ||||||||
| Fee (loss) revenue | $ | (23) | $ | 11 | $ | 817 | |||||
| Net securities gains (losses) | 6 | 9 | (23) | ||||||||
| Total fee and other (loss) revenue | (17) | 20 | 794 | ||||||||
| Net interest (expense) | (40) | (25) | (10) | ||||||||
| Total (loss) revenue | (57) | (5) | 784 | ||||||||
| Provision for credit losses | (8) | 7 | (3) | ||||||||
Noninterest expense | 64 | — | 54 | ||||||||
| (Loss) income before taxes | $ | (113) | $ | (12) | $ | 733 | |||||
KEY DRIVERS
•Fee revenue, net securities gains (losses) and net interest expense include corporate treasury and other investment activity, including hedging activity which offsets between fee revenue and net interest expense. Fee revenue decreased year-over-year primarily reflecting the gain on sale of an equity investment recorded in 4Q19. The sequential decrease in fee revenue primarily reflects a loss on a sale of a business, partially offset by higher corporate treasury activity. Net interest expense increased year-over-year and sequentially primarily reflecting corporate treasury activity.
•Noninterest expense for 4Q20 includes a notable item related to real estate. Both the 4Q20 and 4Q19 include severance expense.
NOTABLE ITEMS BY BUSINESS SEGMENT
Notable items by business segment (a) | 4Q20 | 4Q19 | |||||||||||||||||||||||||||
| (in millions) | IS | IWM | Other | Total | IS | IWM | Other | Total | |||||||||||||||||||||
| Fee and other revenue | $ | — | $ | (5) | $ | (56) | $ | (61) | $ | — | $ | — | $ | 790 | $ | 790 | |||||||||||||
| Net interest revenue | — | — | — | — | — | — | — | — | |||||||||||||||||||||
| Total revenue | — | (5) | (56) | (61) | — | — | 790 | 790 | |||||||||||||||||||||
| Total noninterest expense | 107 | 11 | 47 | 165 | 119 | 16 | 51 | 186 | |||||||||||||||||||||
| (Loss) income before taxes | $ | (107) | $ | (16) | $ | (103) | $ | (226) | $ | (119) | $ | (16) | $ | 739 | $ | 604 | |||||||||||||
(a) Notable items in 4Q20 include litigation expense, severance, losses on business sales and real estate charges. Notable items in 4Q19 include a gain on sale of an equity investment, severance, net securities losses and litigation expense.
Page - 6 | ||
| BNY Mellon 4Q20 Earnings Release | ||
MONEY MARKET FEE WAIVERS
The following table presents the impact of money market fee waivers on our consolidated fee revenue, net of distribution and servicing expense. In 4Q20, the net impact of money market fee waivers was $134 million, up from $101 million in 3Q20, driven by low short-term interest rates.
| Money market fee waivers | |||||||||||||||||
| (in millions) | 4Q20 | 3Q20 | 2Q20 | 1Q20 | YTD20 | ||||||||||||
| Investment services fees: | |||||||||||||||||
| Asset servicing fees | $ | (13) | $ | (1) | $ | — | $ | — | $ | (14) | |||||||
| Clearing services fees | (64) | (57) | (50) | (9) | (180) | ||||||||||||
| Issuer services fees | (6) | (1) | (1) | — | (8) | ||||||||||||
| Treasury services fees | (2) | (3) | (2) | — | (7) | ||||||||||||
| Total investment services fees | (85) | (62) | (53) | (9) | (209) | ||||||||||||
| Investment management and performance fees | (56) | (42) | (30) | (14) | (142) | ||||||||||||
| Distribution and servicing revenue | (8) | (6) | (3) | — | (17) | ||||||||||||
| Total fee and other revenue | (149) | (110) | (86) | (23) | (368) | ||||||||||||
| Less: Distribution and servicing expense | 15 | 9 | 7 | — | 31 | ||||||||||||
| Net impact of money market fee waivers | $ | (134) | $ | (101) | $ | (79) | $ | (23) | $ | (337) | |||||||
Impact to revenue by line of business (a): | |||||||||||||||||
| Asset Servicing | $ | (13) | $ | (4) | $ | (1) | $ | — | $ | (18) | |||||||
| Pershing | (85) | (73) | (60) | (9) | (227) | ||||||||||||
| Issuer Services | (10) | (2) | (1) | — | (13) | ||||||||||||
| Treasury Services | (5) | (1) | — | — | (6) | ||||||||||||
| Investment Management | (34) | (28) | (24) | (14) | (100) | ||||||||||||
| Wealth Management | (2) | (2) | — | — | (4) | ||||||||||||
| Total impact to revenue by line of business | $ | (149) | $ | (110) | $ | (86) | $ | (23) | $ | (368) | |||||||
(a) The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses.
Page - 7 | ||
| BNY Mellon 4Q20 Earnings Release | ||
CAPITAL AND LIQUIDITY
| Capital and liquidity ratios | Dec. 31, 2020 | Sept. 30, 2020 | Dec. 31, 2019 | ||||||||||||||
Consolidated regulatory capital ratios: (a) | |||||||||||||||||
| CET1 ratio | 13.1 | % | 13.0 | % | 11.5 | % | |||||||||||
| Tier 1 capital ratio | 15.8 | 15.7 | 13.7 | ||||||||||||||
| Total capital ratio | 16.7 | 16.6 | 14.4 | ||||||||||||||
| Tier 1 leverage ratio | 6.3 | 6.5 | 6.6 | ||||||||||||||
| SLR | 8.6 | (b) | 8.5 | (b) | 6.1 | ||||||||||||
| BNY Mellon shareholders’ equity to total assets ratio | 9.8 | % | 10.5 | % | 10.9 | % | |||||||||||
| BNY Mellon common shareholders’ equity to total assets ratio | 8.8 | % | 9.4 | % | 9.9 | % | |||||||||||
| Average LCR | 110 | % | 111 | % | 120 | % | |||||||||||
| Book value per common share | $ | 46.53 | $ | 45.58 | $ | 42.12 | |||||||||||
Tangible book value per common share – Non-GAAP (c) | $ | 25.44 | $ | 24.60 | $ | 21.33 | |||||||||||
Common shares outstanding (in thousands) | 886,764 | 886,136 | 900,683 | ||||||||||||||
(a) Regulatory capital ratios for Dec. 31, 2020 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for the periods noted above was the Advanced Approaches.
(b) Reflects the application of a rule effective April 1, 2020 to exclude certain central bank placements. Also effective on April 1, 2020 was the temporary exclusion of U.S. Treasury securities from the leverage exposure used in the SLR calculation which increased our consolidated SLR by 72 basis points at Dec. 31, 2020 and 78 basis points at Sept. 30, 2020.
(c) Tangible book value per common share – Non-GAAP excludes goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for information on this Non-GAAP measure.
•CET1 capital totaled $21.9 billion at Dec. 31, 2020, an increase of $704 million compared with Sept. 30, 2020. The increase primarily reflects capital generated through earnings and foreign currency translation, partially offset by capital deployed through dividend payments.
NET INTEREST REVENUE
| Net interest revenue | 4Q20 vs. | ||||||||||||||||
| (dollars in millions; not meaningful - N/M) | 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | ||||||||||||
Net interest revenue | $ | 680 | $ | 703 | $ | 815 | (3) | % | (17) | % | |||||||
Add: Tax equivalent adjustment | 3 | 2 | 2 | N/M | N/M | ||||||||||||
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a) | $ | 683 | $ | 705 | $ | 817 | (3) | % | (16) | % | |||||||
| Net interest margin | 0.72 | % | 0.79 | % | 1.09 | % | (7) | bps | (37) | bps | |||||||
Net interest margin (FTE) – Non-GAAP (a) | 0.72 | % | 0.79 | % | 1.09 | % | (7) | bps | (37) | bps | |||||||
(a) Net interest revenue (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” on page 10 for information on this Non-GAAP measure.
bps – basis points.
•Net interest revenue decreased 17% year-over-year. The decrease primarily reflects lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in foreign exchange and other trading revenue). This was partially offset by the benefit of lower deposit and funding rates, a larger securities portfolio and higher deposit balances.
•Sequentially, the decrease was primarily driven by lower interest rates on interest-earning assets. This was partially offset by higher deposit balances and lower debt balances.
Page - 8 | ||
| BNY Mellon 4Q20 Earnings Release | ||
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement
| (in millions) | Quarter ended | Year-to-date | ||||||||||||||||||
| Dec. 31, 2020 | Sept. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | ||||||||||||||||
| Fee and other revenue | ||||||||||||||||||||
| Investment services fees: | ||||||||||||||||||||
Asset servicing fees | $ | 1,138 | $ | 1,168 | $ | 1,148 | $ | 4,638 | $ | 4,563 | ||||||||||
Clearing services fees | 418 | 397 | 421 | 1,716 | 1,648 | |||||||||||||||
Issuer services fees | 257 | 295 | 264 | 1,092 | 1,130 | |||||||||||||||
Treasury services fees | 156 | 152 | 147 | 601 | 559 | |||||||||||||||
Total investment services fees | 1,969 | 2,012 | 1,980 | 8,047 | 7,900 | |||||||||||||||
| Investment management and performance fees | 884 | 835 | 883 | 3,367 | 3,389 | |||||||||||||||
| Foreign exchange and other trading revenue | 167 | 137 | 168 | 789 | 654 | |||||||||||||||
| Financing-related fees | 46 | 49 | 46 | 212 | 196 | |||||||||||||||
| Distribution and servicing | 28 | 29 | 34 | 115 | 129 | |||||||||||||||
| Investment and other income | 22 | 46 | 860 | 184 | 968 | |||||||||||||||
Total fee revenue | 3,116 | 3,108 | 3,971 | 12,714 | 13,236 | |||||||||||||||
| Net securities gains (losses) | 6 | 9 | (25) | 33 | (18) | |||||||||||||||
Total fee and other revenue | 3,122 | 3,117 | 3,946 | 12,747 | 13,218 | |||||||||||||||
Operations of consolidated investment management funds | ||||||||||||||||||||
| Investment income | 42 | 27 | 17 | 85 | 57 | |||||||||||||||
| Interest of investment management fund note holders | 1 | — | — | 1 | 1 | |||||||||||||||
| Income from consolidated investment management funds | 41 | 27 | 17 | 84 | 56 | |||||||||||||||
| Net interest revenue | ||||||||||||||||||||
| Interest revenue | 776 | 820 | 1,721 | 4,109 | 7,548 | |||||||||||||||
| Interest expense | 96 | 117 | 906 | 1,132 | 4,360 | |||||||||||||||
Net interest revenue | 680 | 703 | 815 | 2,977 | 3,188 | |||||||||||||||
Total revenue | 3,843 | 3,847 | 4,778 | 15,808 | 16,462 | |||||||||||||||
| Provision for credit losses | 15 | 9 | (8) | 336 | (25) | |||||||||||||||
| Noninterest expense | ||||||||||||||||||||
| Staff | 1,554 | 1,466 | 1,639 | 5,966 | 6,063 | |||||||||||||||
| Professional, legal and other purchased services | 381 | 355 | 367 | 1,403 | 1,345 | |||||||||||||||
| Software and equipment | 359 | 340 | 326 | 1,370 | 1,222 | |||||||||||||||
| Net occupancy | 173 | 136 | 151 | 581 | 564 | |||||||||||||||
| Sub-custodian and clearing | 116 | 119 | 119 | 460 | 450 | |||||||||||||||
| Distribution and servicing | 75 | 85 | 92 | 336 | 374 | |||||||||||||||
| Bank assessment charges | 24 | 30 | 32 | 124 | 125 | |||||||||||||||
| Business development | 26 | 17 | 65 | 105 | 213 | |||||||||||||||
| Amortization of intangible assets | 26 | 26 | 28 | 104 | 117 | |||||||||||||||
| Other | 191 | 107 | 145 | 555 | 427 | |||||||||||||||
Total noninterest expense | 2,925 | 2,681 | 2,964 | 11,004 | 10,900 | |||||||||||||||
| Income | ||||||||||||||||||||
| Income before income taxes | 903 | 1,157 | 1,822 | 4,468 | 5,587 | |||||||||||||||
| Provision for income taxes | 148 | 213 | 373 | 842 | 1,120 | |||||||||||||||
Net income | 755 | 944 | 1,449 | 3,626 | 4,467 | |||||||||||||||
| Net (income) attributable to noncontrolling interests related to consolidated investment management funds | (5) | (7) | (9) | (9) | (26) | |||||||||||||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation | 750 | 937 | 1,440 | 3,617 | 4,441 | |||||||||||||||
Preferred stock dividends | (48) | (61) | (49) | (194) | (169) | |||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 702 | $ | 876 | $ | 1,391 | $ | 3,423 | $ | 4,272 | ||||||||||
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation | Quarter ended | Year-to-date | ||||||||||||||||||
| Dec. 31, 2020 | Sept. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | ||||||||||||||||
| (in dollars) | ||||||||||||||||||||
| Basic | $ | 0.79 | $ | 0.98 | $ | 1.52 | $ | 3.84 | $ | 4.53 | ||||||||||
Diluted | $ | 0.79 | $ | 0.98 | $ | 1.52 | $ | 3.83 | $ | 4.51 | ||||||||||
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| BNY Mellon 4Q20 Earnings Release | ||
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
BNY Mellon has included in this Earnings Release certain Non-GAAP financial measures on a tangible basis as a supplement to GAAP information, which exclude goodwill and intangible assets, net of deferred tax liabilities. We believe that the return on tangible common equity is additional useful information for investors because it presents a measure of those assets that can generate income, and the tangible book value per common share is additional useful information because it presents the level of tangible assets in relation to shares of common stock outstanding.
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP and net interest margin (FTE) – Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income which allows for the comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.
BNY Mellon has also included the adjusted pre-tax operating margin – Non-GAAP, which is the pre-tax operating margin for the Investment and Wealth Management business net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. We believe that this measure is useful when evaluating the performance of the Investment and Wealth Management business relative to industry competitors.
For the reconciliations of these Non-GAAP measures, see “Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures” in the Financial Supplement available at www.bnymellon.com.
BNY Mellon has presented revenue measures excluding notable items, including the gain on the sale of an equity investment, a lease-related impairment, losses on business sales and investment securities losses related to the sale of certain securities. Expense measures, excluding notable items, including severance, litigation, a net reduction of reserves for tax-related exposure of certain investment management funds and real estate charges are also presented. Litigation expense represents accruals for loss contingencies that are both probable and reasonably estimable, but exclude standard business-related legal fees. Income before tax measures, excluding the notable items mentioned above are provided. In addition, operating leverage, operating margins and diluted earnings per share, excluding the notable items impacting revenue, expense and income tax items mentioned above are adjusted to permit investors to view the financial measures on a basis consistent with how management views the businesses.
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| BNY Mellon 4Q20 Earnings Release | ||
| Reconciliations of Non-GAAP measures, excluding notable items | 4Q20 vs. | ||||||||||||||||
| (in millions, except per share amounts) | 4Q20 | 4Q19 | 4Q19 | ||||||||||||||
| Fee revenue – GAAP | $ | 3,116 | $ | 3,971 | (22) | % | |||||||||||
Impact of notable items (a) | (61) | 815 | |||||||||||||||
| Fee revenue – Non-GAAP | $ | 3,177 | $ | 3,156 | 1 | % | |||||||||||
| Net securities gains (losses) – GAAP | $ | 6 | $ | (25) | N/M | ||||||||||||
Impact of notable items (a) | — | (25) | |||||||||||||||
| Net securities gains – Non-GAAP | $ | 6 | $ | — | N/M | ||||||||||||
| Total revenue – GAAP | $ | 3,843 | $ | 4,778 | (20) | % | |||||||||||
Impact of notable items (a) | (61) | 790 | |||||||||||||||
| Total revenue – Non-GAAP | $ | 3,904 | $ | 3,988 | (2) | % | |||||||||||
| Noninterest expense – GAAP | $ | 2,925 | $ | 2,964 | (1) | % | |||||||||||
Impact of notable items (a) | 165 | 186 | |||||||||||||||
| Noninterest expense – Non-GAAP | $ | 2,760 | $ | 2,778 | (1) | % | |||||||||||
| Income before income taxes – GAAP | $ | 903 | $ | 1,822 | (50) | % | |||||||||||
Impact of notable items (a) | (226) | 604 | |||||||||||||||
| Income before income taxes – Non-GAAP | $ | 1,129 | $ | 1,218 | (7) | % | |||||||||||
| Provision for income taxes – GAAP | $ | 148 | $ | 373 | (60) | % | |||||||||||
Impact of notable items (a) | (67) | 144 | |||||||||||||||
| Provision for income taxes – Non-GAAP | $ | 215 | $ | 229 | (6) | % | |||||||||||
| Net income – GAAP | $ | 755 | $ | 1,449 | (48) | % | |||||||||||
Impact of notable items (a) | (159) | 460 | |||||||||||||||
| Net income – Non-GAAP | $ | 914 | $ | 989 | (8) | % | |||||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 702 | $ | 1,391 | (50) | % | |||||||||||
Impact of notable items (a) | (159) | 460 | |||||||||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP | $ | 861 | $ | 931 | (8) | % | |||||||||||
| Diluted earnings per common share – GAAP | $ | 0.79 | $ | 1.52 | (48) | % | |||||||||||
Impact of notable items (a) | (0.18) | 0.50 | |||||||||||||||
| Diluted earnings per common share – Non-GAAP | $ | 0.96 | (b) | $ | 1.01 | (b) | (5) | % | |||||||||
(a) Notable items in 4Q20 include litigation expense, severance, losses on business sales (reflected in fee revenue) and real estate charges. Notable items in 4Q19 include a gain on sale of an equity investment, severance, net securities losses and litigation expense.
(b) Does not foot due to rounding.
| Pre-tax operating margin reconciliation | ||||||||
| (dollars in millions) | 4Q20 | 4Q19 | ||||||
| Income before income taxes – GAAP | $ | 903 | $ | 1,822 | ||||
Impact of notable items (a) | (226) | 604 | ||||||
| Income before income taxes – Non-GAAP | $ | 1,129 | $ | 1,218 | ||||
| Total revenue – GAAP | $ | 3,843 | $ | 4,778 | ||||
Impact of notable items (a) | (61) | 790 | ||||||
| Total revenue – Non-GAAP | $ | 3,904 | $ | 3,988 | ||||
Pre-tax operating margin – GAAP (b) | 24 | % | 38 | % | ||||
Pre-tax operating margin, net of notable items – Non-GAAP (b) | 29 | % | 31 | % | ||||
(a) Notable items in 4Q20 include litigation expense, severance, losses on business sales and real estate charges. Notable items in 4Q19 include a gain on sale of an equity investment, severance, net securities losses and litigation expense.
(b) Income before income taxes divided by total revenue.
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| BNY Mellon 4Q20 Earnings Release | ||
| Reconciliations of Non-GAAP measures, excluding notable items | 2020 vs. | ||||||||||
| (in millions, except per share amounts) | 2020 | 2019 | 2019 | ||||||||
| Fee revenue – GAAP | $ | 12,714 | $ | 13,236 | (4) | % | |||||
Impact of notable items (a) | (61) | 815 | |||||||||
| Fee revenue – Non-GAAP | $ | 12,775 | $ | 12,421 | 3 | % | |||||
| Net securities gains (losses) – GAAP | $ | 33 | $ | (18) | N/M | ||||||
Impact of notable items (a) | — | (25) | |||||||||
| Net securities gains – Non-GAAP | $ | 33 | $ | 7 | N/M | ||||||
| Net interest revenue – GAAP | $ | 2,977 | $ | 3,188 | (7) | % | |||||
Impact of notable items (a) | — | (70) | |||||||||
| Net interest revenue – Non-GAAP | $ | 2,977 | $ | 3,258 | (9) | % | |||||
| Total revenue – GAAP | $ | 15,808 | $ | 16,462 | (4) | % | |||||
Impact of notable items (a) | (61) | 720 | |||||||||
| Total revenue – Non-GAAP | $ | 15,869 | $ | 15,742 | 1 | % | |||||
| Noninterest expense – GAAP | $ | 11,004 | $ | 10,900 | 1 | % | |||||
Impact of notable items (a) | 165 | 113 | |||||||||
| Noninterest expense – Non-GAAP | $ | 10,839 | $ | 10,787 | — | % | |||||
| Income before income taxes – GAAP | $ | 4,468 | $ | 5,587 | (20) | % | |||||
Impact of notable items (a) | (226) | 607 | |||||||||
| Income before income taxes – Non-GAAP | $ | 4,694 | $ | 4,980 | (6) | % | |||||
| Provision for income taxes – GAAP | $ | 842 | $ | 1,120 | (25) | % | |||||
Impact of notable items (a) | (67) | 140 | |||||||||
| Provision for income taxes – Non-GAAP | $ | 909 | $ | 980 | (7) | % | |||||
| Net income – GAAP | $ | 3,626 | $ | 4,467 | (19) | % | |||||
Impact of notable items (a) | (159) | 467 | |||||||||
| Net income – Non-GAAP | $ | 3,785 | $ | 4,000 | (5) | % | |||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 3,423 | $ | 4,272 | (20) | % | |||||
Impact of notable items (a) | (159) | 467 | |||||||||
| Net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP | $ | 3,582 | $ | 3,805 | (6) | % | |||||
| Diluted earnings per common share – GAAP | $ | 3.83 | $ | 4.51 | (15) | % | |||||
Impact of notable items (a) | (0.18) | 0.49 | |||||||||
| Diluted earnings per common share – Non-GAAP | $ | 4.01 | $ | 4.02 | — | % | |||||
(a) Notable items in 2020 include litigation expense, severance, losses on business sales (reflected in fee revenue) and real estate charges recorded in 4Q20. Notable items in 2019 include a gain on sale of an equity investment, severance, net securities losses, litigation expense recorded in 4Q19 and a lease-related impairment and a net reduction of reserves for tax-related exposure of certain investment management funds both recorded in 3Q19.
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| BNY Mellon 4Q20 Earnings Release | ||
| Pre-tax operating margin reconciliation | ||||||||
| (dollars in millions) | 2020 | 2019 | ||||||
| Income before income taxes – GAAP | $ | 4,468 | $ | 5,587 | ||||
Impact of notable items (a) | (226) | 607 | ||||||
| Income before income taxes – Non-GAAP | $ | 4,694 | $ | 4,980 | ||||
| Total revenue – GAAP | $ | 15,808 | $ | 16,462 | ||||
Impact of notable items (a) | (61) | 720 | ||||||
| Total revenue – Non-GAAP | $ | 15,869 | $ | 15,742 | ||||
Pre-tax operating margin – GAAP (b) | 28 | % | 34 | % | ||||
Pre-tax operating margin, net of notable items – Non-GAAP (b) | 30 | % | 32 | % | ||||
(a) Notable items in 2020 include litigation expense, severance, losses on business sales and real estate charges recorded in 4Q20. Notable items in 2019 include a gain on sale of an equity investment, severance, net securities losses, litigation expense recorded in 4Q19 and a lease-related impairment and a net reduction of reserves for tax-related exposure of certain investment management funds both recorded in 3Q19.
(b) Income before income taxes divided by total revenue.
| Reconciliations of Non-GAAP measures, excluding notable items - by business segment | 4Q20 vs. | ||||||||||||||||
| (in millions) | 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | ||||||||||||
| Investment Services | |||||||||||||||||
| Noninterest expense – GAAP | $ | 2,174 | $ | 2,020 | $ | 2,179 | 8 | % | — | % | |||||||
Impact of notable items (a) | 107 | — | 119 | ||||||||||||||
| Noninterest expense – Non-GAAP | $ | 2,067 | $ | 2,020 | $ | 2,060 | 2 | % | — | % | |||||||
| Investment and Wealth Management | |||||||||||||||||
| Noninterest expense – GAAP | $ | 687 | $ | 661 | $ | 731 | 4 | % | (6) | % | |||||||
Impact of notable items (a) | 11 | — | 16 | ||||||||||||||
| Noninterest expense – Non-GAAP | $ | 676 | $ | 661 | $ | 715 | 2 | % | (5) | % | |||||||
(a) Notable items in 4Q20 and 4Q19 include severance for both business segments. Notable items in 4Q20 and 4Q19 also include litigation expenses in the Investment Services business segment.
| Reconciliations of Non-GAAP measures, excluding notable items - by line of business | 4Q20 vs. | ||||||||||||||||
| (in millions) | 4Q20 | 3Q20 | 4Q19 | 3Q20 | 4Q19 | ||||||||||||
| Wealth Management | |||||||||||||||||
| Total revenue - GAAP | $ | 276 | $ | 277 | $ | 279 | — | % | (1) | % | |||||||
Impact of notable items (a) | (5) | — | — | ||||||||||||||
| Total revenue - Non-GAAP | $ | 281 | $ | 277 | $ | 279 | 1 | % | 1 | % | |||||||
(a) Notable items in 4Q20 includes a loss on business sale.
CAUTIONARY STATEMENT
A number of statements (i) in this Earnings Release, (ii) in our Financial Supplement, (iii) in our presentations and (iv) in the responses to questions on our conference call discussing our quarterly results and other public events may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, resiliency, capabilities, revenue, net interest revenue, money market fee waivers, fees, expenses, cost discipline, sustainable growth, company management, deposits, interest rates and yield curves, securities portfolio, taxes, business opportunities, divestments, volatility, preliminary business metrics and regulatory capital ratios and statements regarding our aspirations, as well as our overall plans, strategies, goals, objectives, expectations, outlooks, estimates, intentions, targets, opportunities, focus and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing. These statements may be expressed in a variety of ways, including the use of future or present tense language. Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,”
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| BNY Mellon 4Q20 Earnings Release | ||
“could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “future,” “potentially,” “outlook” and words of similar meaning may signify forward-looking statements. These statements and other forward-looking statements contained in other public disclosures of BNY Mellon which make reference to the cautionary factors described in this Earnings Release are based upon current beliefs and expectations and are subject to significant risks and uncertainties (some of which are beyond BNY Mellon’s control). Actual results may differ materially from those expressed or implied as a result of a number of factors, including, but not limited to, the risk factors and other uncertainties set forth in BNY Mellon’s Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2020, the Annual Report on Form 10-K for the year ended Dec. 31, 2019 and BNY Mellon’s other filings with the Securities and Exchange Commission. Statements about the effects of the current and near-term market and macroeconomic outlook on BNY Mellon, including on its business, operations, financial performance and prospects, may constitute forward-looking statements, and are based on assumptions that involve risks and uncertainties and that are subject to change based on various important factors (some of which are beyond BNY Mellon’s control), including the scope and duration of the pandemic, actions taken by governmental authorities and other third parties in response to the pandemic, the availability, use and effectiveness of vaccines and the direct and indirect impact of the pandemic on us, our clients, customers and third parties. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as BNY Mellon completes its Annual Report on Form 10-K for the year ended Dec. 31, 2020. All forward-looking statements in this Earnings Release speak only as of Jan. 20, 2021, and BNY Mellon undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.
ABOUT BNY MELLON
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment and wealth management and investment services in 35 countries. As of Dec. 31, 2020, BNY Mellon had $41.1 trillion in assets under custody and/or administration, and $2.2 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
CONFERENCE CALL INFORMATION
Todd Gibbons, Chief Executive Officer, and Emily Portney, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 8:00 a.m. ET on Jan. 20, 2021. This conference call and audio webcast will include forward-looking statements and may include other material information.
Investors and analysts wishing to access the conference call and audio webcast may do so by dialing (800) 390-5696 (U.S.) or (720) 452-9082 (International), and using the passcode: 444308, or by logging onto www.bnymellon.com/investorrelations. Earnings materials will be available at www.bnymellon.com/investorrelations beginning at approximately 6:30 a.m. ET on Jan. 20, 2021. Replays of the conference call and audio webcast will be available beginning Jan. 20, 2021 at approximately 2:00 p.m. ET through Feb. 19, 2021 by dialing (888) 203-1112 (U.S.) or (719) 457-0820 (International), and using the passcode: 3619155. The archived version of the conference call and audio webcast will also be available at www.bnymellon.com/investorrelations for the same time period.
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