EX-99.1 2 ex991_earningsreleasex4q21.htm EARNINGS RELEASE Document

News Release
bnym_logox4q21a.jpg


BNY MELLON REPORTS FOURTH QUARTER 2021 EARNINGS OF
$822 MILLION OR $1.01 PER COMMON SHARE
Revenue up 4% (a)
EPS up 28% (a)
ROE 9%
ROTCE 17% (c)
CET1 11.1%
Tier 1 leverage 5.5%
(a)    Excluding notable items revenue up 3% and EPS up 8%. See note (c).

NEW YORK, January 18, 2022 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported:
4Q21 vs.
4Q213Q214Q203Q214Q20
Net income applicable to common shareholders (in millions)
$822 $881 $702 (7)%17 %
Diluted earnings per common share (b)
$1.01 $1.04 $0.79 (3)%28 %
(b)    Includes impact of notable items of $(0.04) per share in 4Q21, $(0.05) per share in 3Q21 and $(0.18) per share in 4Q20. See note (c).
Fourth Quarter Results
Total revenue of $4.0 billion, increased 4%; or 3% excluding notable items (c)
•Fee revenue increased 4%; or 8% excluding money market fee waivers (c)
•Net interest revenue decreased slightly

Provision for credit losses was a benefit of $17 million

Total noninterest expense of $3.0 billion, increased 1%; or
6% excluding notable items (c)

AUC/A of $46.7 trillion, increased 14%
AUM of $2.4 trillion, increased 10%

Securities Services
•Total revenue increased 5%
•Income before taxes increased 63%; or 24% excluding notable items (c)
•Pre-tax operating margin of 19%

Market and Wealth Services
•Total revenue increased 1%
•Income before taxes increased 4%
•Pre-tax operating margin of 43%

Investment and Wealth Management
•Total revenue increased 3%
•Income before taxes decreased 11%
•Pre-tax operating margin of 27%; adjusted pre-tax operating margin – Non-GAAP of 29% (c)
CEO Commentary
“2021 was in many regards a remarkable year for BNY Mellon. We made significant progress towards advancing our strategic priorities and growth agenda, and we delivered solid and improved financial results. Three broad themes really stood out: Our outstanding sales performance and improved broad-based organic growth, the number of innovative products and solutions that we’re bringing to the market across our businesses, and our enhanced effectiveness in delivering the full breadth of Securities Services, Market and Wealth Services, and Investment and Wealth Management with better, more holistic solutions for our clients,” Todd Gibbons, Chief Executive Officer, said.
Mr. Gibbons added, “Full-year EPS of $4.14 was up 8% year-over-year as the benefits of a supportive market backdrop and a benign credit environment together with our meaningfully improved organic growth more than offset the stiff headwind of lower interest rates. Having started 2021 with a significant amount of excess capital combined with our strong capital generation throughout the year allowed us to return $5.7 billion – or 160% of earnings – to our shareholders through common dividends and share repurchases.”

“The pace of innovation across the firm, including in areas such as digital assets, real-time payments, the Future of Collateral and Pershing X – to name just a few – gives me great confidence in our growth prospects. As we look to 2022 and beyond, we expect double-digit EPS growth as we are determined to continue delivering consistent organic growth which, together with the current expectation for higher rates, should allow us to generate positive operating leverage, while at the same time continue investing in the growth and efficiency of our businesses,” Mr. Gibbons concluded.
Media Relations: Garrett Marquis (949) 683-1503
Investor Relations: Marius Merz (212) 298-1480
(c) For information on these Non-GAAP measures, see “Explanation of GAAP and Non-GAAP financial measures” on page 12.
Note: Above comparisons are 4Q21 vs. 4Q20, unless otherwise noted.
BNY Mellon 4Q21 Earnings Release
CONSOLIDATED FINANCIAL HIGHLIGHTS

(in millions, except per share amounts and unless otherwise noted; not
meaningful - N/M)		4Q21 vs.
4Q213Q214Q203Q214Q20
Fee revenue$3,231 $3,265 $3,114 (1)%4 %
Investment and other revenue 107 129 49 N/MN/M
Total fee and other revenue3,338 3,394 3,163 (2)6 
Net interest revenue677 641 680 6 — 
Total revenue4,015 4,035 3,843 — 4 
Provision for credit losses(17)(45)15 N/MN/M
Noninterest expense2,967 2,918 2,925 2 1 
Income before income taxes1,065 1,162 903 (8)18 
Provision for income taxes196 219 148 (11)32 
Net income$869 $943 $755 (8)%15 %
Net income applicable to common shareholders of The Bank of New York Mellon Corporation$822 $881 $702 (7)%17 %
Operating leverage (a)
(217) bps304  bps
Diluted earnings per common share$1.01 $1.04 $0.79 (3)%28 %
Average common shares and equivalents outstanding - diluted (in thousands)
817,345 849,028 891,846 
Pre-tax operating margin27 %29 %24 %
(a)    Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps – basis points.


KEY DRIVERS (comparisons are 4Q21 vs. 4Q20, unless otherwise stated)

•Total revenue increased 4%, or 3% excluding notable items (a) primarily reflecting:
•Fee revenue increased 4% primarily reflecting the positive impact of higher market values and client volumes, partially offset by higher money market fee waivers. Excluding money market fee waivers, fee revenue increased 8% (a).
•Investment and other revenue increased primarily reflecting the 4Q20 losses on business sales.
•Net interest revenue decreased slightly primarily reflecting lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in fee and other revenue). This was partially offset by the benefit of lower funding and deposits rates and larger deposit and loan balances.
•Provision for credit losses was a benefit of $17 million primarily driven by an improvement in the macroeconomic forecast.
•Noninterest expense increased 1% primarily reflecting higher investments in growth, infrastructure and efficiency initiatives and higher revenue-related expenses, partially offset by lower litigation reserves, severance expense and real estate charges recorded in 4Q20. Excluding the notable items, noninterest expense increased 6% (a).
•Effective tax rate of 18.4%.

Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)
•AUC/A of $46.7 trillion, increased 14%, primarily reflecting net client inflows and higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar.
•AUM of $2.4 trillion, increased 10%, primarily reflecting higher market values and net inflows.

Capital and liquidity
•Repurchased 22 million common shares for $1.2 billion; Dividends of $280 million to common shareholders (including dividend-equivalents on share-based awards).
•Return on common equity (“ROE”) of 9%; Return on tangible common equity (“ROTCE”) of 17% (a).
•Common Equity Tier 1 (“CET1”) ratio – 11.1%.
•Tier 1 leverage ratio – 5.5%.
•Average liquidity coverage ratio (“LCR”) – 109%.
•Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.
(a)    See “Explanation of GAAP and Non-GAAP financial measures” on page 12 for additional information.
Note: Throughout this document, sequential growth rates are unannualized.
Page - 2
BNY Mellon 4Q21 Earnings Release
FULL-YEAR CONSOLIDATED FINANCIAL HIGHLIGHTS

(in millions, except per share amounts and unless otherwise noted; not meaningful - N/M)2021 vs.
202120202020
Fee revenue$12,977 $12,515 4 %
Investment and other revenue 336 316 N/M
Total fee and other revenue13,313 12,831 4 
Net interest revenue2,618 2,977 (12)
Total revenue15,931 15,808 1 
Provision for credit losses(231)336 N/M
Noninterest expense11,514 11,004 5 
Income before income taxes4,648 4,468 4 
Provision for income taxes877 842 4 
Net income$3,771 $3,626 4 %
Net income applicable to common shareholders of The Bank of New York Mellon Corporation$3,552 $3,423 4 %
Operating leverage (a)
(386) bps
Diluted earnings per common share$4.14 $3.83 8 %
Average common shares and equivalents outstanding - diluted (in thousands)
856,359 892,514 
Pre-tax operating margin29 %28 %
(a)    Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense.
bps – basis points.


KEY DRIVERS (comparisons are 2021 vs. 2020, unless otherwise stated)

•Total revenue increased 1% primarily reflecting:
•Fee revenue increased 4% primarily reflecting the positive impact of higher market values and client volumes, and the favorable impact of a weaker U.S. dollar, partially offset by higher money market fee waivers. Excluding money market fee waivers, fee revenue increased 9% (a).
•Net interest revenue decreased 12% primarily reflecting lower interest rates on interest-earning assets, partially offset by the benefit of lower funding and deposits rates and larger deposit, loan and securities balances.
•Provision for credit losses was a benefit of $231 million compared with a provision of $336 million in 2020. The decrease was primarily driven by an improvement in the macroeconomic forecast.
•Noninterest expense increased 5% primarily reflecting incremental investments in growth, infrastructure and efficiency initiatives, higher revenue-related expenses and the unfavorable impact of a weaker U.S. dollar, partially offset by lower occupancy (including the impact of real estate charges recorded in 2020) and lower severance expense.
•Effective tax rate of 18.9%.

Capital and liquidity
•Repurchased 89.7 million common shares for $4.6 billion; Dividends of $1.1 billion to common shareholders (including dividend-equivalents on share-based awards).
•ROE of 9%; ROTCE of 17% (a).








(a)    See “Explanation of GAAP and Non-GAAP financial measures” on page 12 for additional information.
Page - 3
BNY Mellon 4Q21 Earnings Release
SECURITIES SERVICES BUSINESS SEGMENT HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)4Q21 vs.
4Q213Q214Q203Q214Q20
Investment services fees:
Asset Servicing$984 $979 $896 1 %10 %
Issuer Services253 281 260 (10)(3)
Total investment services fees1,237 1,260 1,156 (2)7 
Foreign exchange revenue148 125 139 18 6 
Other fees (a)
28 30 39 (7)(28)
Total fee revenue1,413 1,415 1,334 — 6 
Investment and other revenue53 73 30 N/MN/M
Total fee and other revenue1,466 1,488 1,364 (1)7 
Net interest revenue367 349 378 5 (3)
Total revenue1,833 1,837 1,742 — 5 
Provision for credit losses(7)(19)23 N/MN/M
Noninterest expense1,490 1,543 1,504 (3)(1)
Income before taxes$350 $313 $215 12 %63 %
Total revenue by line of business:
Asset Servicing$1,456 $1,437 $1,357 1 %7 %
Issuer Services377 400 385 (6)(2)
Total revenue by line of business$1,833 $1,837 $1,742 — %5 %
Pre-tax operating margin19 %17 %12 %
Securities lending revenue (b)
$45 $45 $36 — %25 %
Metrics:
Average loans$9,764 $8,389 $8,498 16 %15 %
Average deposits$200,272 $198,680 $188,151 1 %6 %
AUC/A at period end (in trillions) (current period is preliminary) (c)
$34.6 $33.8 $30.6 2 %13 %
Market value of securities on loan at period end (in billions) (d)
$447 $443 $435 1 %3 %
(a)    Other fees primarily include financing-related fees.
(b)    Included in investment services fees in the Asset Servicing business.
(c)    Consists of AUC/A primarily from the Asset Servicing business and, to a lesser extent, the Issuer Services business. Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.7 trillion at Dec. 31, 2021 and Sept. 30, 2021 and $1.5 trillion at Dec. 31, 2020.
(d)    Represents the total amount of securities on loan in our agency securities lending program. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $71 billion at Dec. 31, 2021 and $68 billion at Sept. 30, 2021 and Dec. 31, 2020.


KEY DRIVERS

•The drivers of the total revenue variances by line of business are indicated below. Also see page 9 for information related to money market fee waivers.
•Asset Servicing – The year-over-year increase primarily reflects higher activity from existing clients, higher market values, strategic equity investment gains and net new business, partially offset by higher money market fee waivers and lower net interest revenue. The sequential increase primarily reflects higher foreign exchange revenue and net interest revenue, partially offset by lower strategic equity investment gains.
•Issuer Services – The year-over-year decrease primarily reflects higher money market fee waivers and lower fees in Corporate Trust, partially offset by higher Depositary Receipts revenue. The sequential decrease primarily reflects seasonally lower Depositary Receipts revenue and lower Corporate Trust fees, partially offset by higher net interest revenue.
•Noninterest expense decreased 1% year-over-year primarily reflecting lower litigation reserves and severance expense, partially offset by higher investments in growth, infrastructure and efficiency initiatives. Excluding the notable items, noninterest expense increased 3%. Sequentially, noninterest expense decreased 3% primarily reflecting lower litigation reserves, partially offset by higher severance. Excluding the notable items, noninterest expense decreased slightly (a).
(a)    Notable items in 4Q21, 3Q21 and 4Q20 include litigation reserves and severance expense. See “Explanation of GAAP and Non-GAAP financial measures” on page 12 for additional information.
Page - 4
BNY Mellon 4Q21 Earnings Release
MARKET AND WEALTH SERVICES BUSINESS SEGMENT HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)4Q21 vs.
4Q213Q214Q203Q214Q20
Investment services fees:
Pershing$412 $427 $422 (4)%(2)%
Treasury Services170 168 163 1 4 
Clearance and Collateral Management236 228 220 4 7 
Total investment services fees818 823 805 (1)2 
Foreign exchange revenue21 23 24 (9)(13)
Other fees (a)
31 31 33 — (6)
Total fee revenue870 877 862 (1)1 
Investment and other revenue6 13 9 N/MN/M
Total fee and other revenue876 890 871 (2)1 
Net interest revenue297 283 292 5 2 
Total revenue1,173 1,173 1,163 — 1 
Provision for credit losses(3)(16)8 N/MN/M
Noninterest expense674 668 670 1 1 
Income before taxes$502 $521 $485 (4)%4 %
Total revenue by line of business:
Pershing$553 $566 $563 (2)%(2)%
Treasury Services331 326 325 2 2 
Clearance and Collateral Management289 281 275 3 5 
Total revenue by line of business$1,173 $1,173 $1,163 — %1 %
Pre-tax operating margin43 %44 %42 %
Metrics:
Average loans$40,812 $39,041 $32,939 5 %24 %
Average deposits$100,653 $101,253 $98,670 (1)%2 %
AUC/A at period end (in trillions) (current period is preliminary) (b)
$11.8 $11.2 $10.2 5 %16 %
(a)    Other fees primarily include financing-related fees.
(b)    Consists of AUC/A primarily from the Clearance and Collateral Management and Pershing businesses.


KEY DRIVERS

•The drivers of the total revenue variances by line of business are indicated below. Also see page 9 for information related to money market fee waivers.
•Pershing – The year-over-year decrease primarily reflects higher money market fee waivers and the impact of lost business, partially offset by higher market values, client balances and activity from existing clients. The sequential decrease primarily reflects the impact of lost business.
•Treasury Services – The year-over-year increase primarily reflects higher payment volumes and higher net interest revenue driven by higher deposit balances, partially offset by higher money market fee waivers. The sequential increase primarily reflects higher net interest revenue and payment volumes.
•Clearance and Collateral Management – The year-over-year increase primarily reflects higher collateral management fees driven by balances and higher clearance volumes. The sequential increase primarily reflects higher clearance volumes.

•Noninterest expense increased year-over-year primarily reflecting higher investments in growth, infrastructure and efficiency initiatives and revenue-related expenses, partially offset by lower severance expense. The sequential increase in noninterest expense primarily reflects higher severance expense.
Page - 5
BNY Mellon 4Q21 Earnings Release
INVESTMENT AND WEALTH MANAGEMENT BUSINESS SEGMENT HIGHLIGHTS

(dollars in millions, unless otherwise noted; not meaningful - N/M)4Q21 vs.
4Q213Q214Q203Q214Q20
Investment management fees$864 $893 $839 (3)%3 %
Performance fees32 21 45 N/M(29)
Investment management and performance fees896 914 884 (2)1 
Distribution and servicing fees28 28 29 — (3)
Other fees (a)
22 20 (6)N/MN/M
Total fee revenue946 962 907 (2)4 
Investment and other revenue (b)
23 23 33 N/MN/M
Total fee and other revenue (b)
969 985 940 (2)3 
Net interest revenue51 47 50 9 2 
Total revenue1,020 1,032 990 (1)3 
Provision for credit losses(6)(7)(8)N/MN/M
Noninterest expense748 691 687 8 9 
Income before taxes$278 $348 $311 (20)%(11)%
Total revenue by line of business:
Investment Management$709 $727 $714 (2)%(1)%
Wealth Management311 305 276 2 13 
Total revenue by line of business$1,020 $1,032 $990 (1)%3 %
Pre-tax operating margin27 %34 %32 %
Adjusted pre-tax operating margin – Non-GAAP (c)
29 %36 %34 %
Metrics:
Average loans$12,737 $12,248 $11,497 4 %11 %
Average deposits$18,374 $17,270 $18,144 6 %1 %
AUM (in billions) (current period is preliminary) (d)
$2,434 $2,310 $2,211 5 %10 %
Wealth Management client assets (in billions) (current period is preliminary) (e)
$321 $307 $286 5 %12 %
(a)    Other fees primarily include investment services fees.
(b)    Investment and other revenue and total fee and other revenue are net of income attributable to noncontrolling interests related to consolidated investment management funds.
(c)    Net of distribution and servicing expense. See “Explanation of GAAP and Non-GAAP financial measures” on page 12 for information on this Non-GAAP measure.
(d)    Excludes assets managed outside of the Investment and Wealth Management business segment.
(e)    Includes AUM and AUC/A in the Wealth Management business.


KEY DRIVERS

•The drivers of the total revenue variances by line of business are indicated below. Also see page 9 for information related to money market fee waivers.
•Investment Management – The year-over-year decrease primarily reflects higher money market fee waivers, lower seed capital gains and lower performance fees, partially offset by higher market values and net inflows. The sequential decrease primarily reflects lower equity income, the unfavorable impact of a stronger U.S. dollar and higher money market fee waivers, partially offset by the timing of performance fees.
•Wealth Management – The year-over-year increase primarily reflects higher market values, the loss on a business sale in 4Q20 and higher net interest revenue. The sequential increase primarily reflects higher market values and net interest revenue.

•Noninterest expense increased year-over-year and sequentially primarily reflecting higher revenue-related expenses and investments in growth initiatives, partially offset by lower severance expense. The sequential increase was also partially offset by the favorable impact of a stronger U.S. dollar.
Page - 6
BNY Mellon 4Q21 Earnings Release
OTHER SEGMENT primarily includes leasing operations, certain corporate treasury activities, derivatives, business exits and other corporate revenue and expense items.

(in millions)4Q213Q214Q20
Fee revenue$2 $12 $11 
Investment and other revenue19 23 (28)
Total fee and other revenue21 35 (17)
Net interest (expense)(38)(38)(40)
Total revenue(17)(3)(57)
Provision for credit losses(1)(3)(8)
Noninterest expense55 16 64 
(Loss) before taxes$(71)$(16)$(113)


KEY DRIVERS

•Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense. The increase in total revenue year-over-year primarily reflects the 4Q20 losses on business sales. The decrease in total revenue sequentially primarily reflects disposal gains recorded in 3Q21.

•Noninterest expense decreased year-over-year primarily reflecting the 4Q20 real estate charges and severance expense, partially offset by higher staff expense. The sequential increase primarily reflects higher staff expense, non-staff-related expenses and severance expense.





Page - 7
BNY Mellon 4Q21 Earnings Release
NOTABLE ITEMS BY BUSINESS SEGMENT

Notable items by business segment (a)
4Q214Q20
(in millions)Securities
Services		Market and Wealth ServicesInvestment and Wealth ManagementOtherTotalSecurities
Services		Market and Wealth ServicesInvestment and Wealth ManagementOtherTotal
Fee and other revenue$— $— $— $— $— $— $— $(5)$(56)$(61)
Net interest revenue— — — — — — — — — — 
Total revenue— — — — — — — (5)(56)(61)
Total noninterest expense21 6 1 9 37 84 15 9 57 165 
(Loss) income before income taxes$(21)$(6)$(1)$(9)$(37)$(84)$(15)$(14)$(113)$(226)
(a)    Notable items in 4Q21 include severance expense and litigation reserves. Notable items in 4Q20 include litigation reserves, severance expense, losses on business sales (reflected in investment and other revenue) and real estate charges.


Notable items by business segment (a)
3Q21
(in millions)Securities
Services		Market and Wealth ServicesInvestment and Wealth ManagementOtherTotal
Fee and other revenue$— $— $— $9 $9 
Net interest revenue— — — — — 
Total revenue— — — 9 9 
Total noninterest expense70 1 1 1 73 
(Loss) income before income taxes$(70)$(1)$(1)$8 $(64)
(a)    Notable items in 3Q21 include litigation reserves, gains on disposals (reflected in investment and other revenue) and severance expense.


Notable items by business segment (a)
20212020
(in millions)Securities
Services		Market and Wealth ServicesInvestment and Wealth ManagementOtherTotalSecurities
Services		Market and Wealth ServicesInvestment and Wealth ManagementOtherTotal
Fee and other revenue$— $— $(1)$14 $13 $— $— $(5)$(56)$(61)
Net interest revenue— — — — — — — — — — 
Total revenue— — (1)14 13 — — (5)(56)(61)
Total noninterest expense84 23 4 18 129 84 15 9 57 165 
(Loss) income before income taxes$(84)$(23)$(5)$(4)$(116)$(84)$(15)$(14)$(113)$(226)
(a)    Notable items in 2021 include litigation reserves, severance expense and gains on disposals (reflected in investment and other revenue). Notable items in 2020 include litigation reserves, severance expense, losses on business sales (reflected in investment and other revenue) and real estate charges recorded in 4Q20.
Page - 8
BNY Mellon 4Q21 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 4Q21, the net impact of money market fee waivers was $243 million, up from $233 million in 3Q21, driven by higher money market balances.

Money market fee waivers
(in millions)4Q213Q212Q211Q214Q20FY21FY20
Investment services fees (see table below)$(148)$(142)$(148)$(109)$(85)$(547)$(209)
Investment management and performance fees(116)(109)(115)(89)(56)(429)(142)
Distribution and servicing fees(14)(11)(13)(13)(8)(51)(17)
Total fee revenue(278)(262)(276)(211)(149)(1,027)(368)
Less: Distribution and servicing expense35 29 24 23 15 111 31 
Net impact of money market fee waivers$(243)$(233)$(252)$(188)$(134)$(916)$(337)
Impact to investment services fees by line of business (a):
Asset Servicing$(31)$(29)$(30)$(15)$(9)$(105)$(10)
Issuer Services(18)(17)(16)(11)(7)(62)(9)
Pershing(89)(86)(91)(77)(65)(343)(186)
Treasury Services(10)(10)(11)(6)(4)(37)(4)
Total impact to investment services fees by line of business$(148)$(142)$(148)$(109)$(85)$(547)$(209)
Impact to fee revenue by line of business (a):
Asset Servicing$(50)$(47)$(50)$(29)$(13)$(176)$(18)
Issuer Services(24)(22)(22)(15)(10)(83)(13)
Pershing(106)(102)(99)(94)(85)(401)(227)
Treasury Services(14)(13)(16)(9)(5)(52)(6)
Investment Management(81)(76)(85)(61)(34)(303)(100)
Wealth Management(3)(2)(4)(3)(2)(12)(4)
Total impact to fee revenue by line of business$(278)$(262)$(276)$(211)$(149)$(1,027)$(368)
(a)    The line of business revenue for management reporting purposes reflects the impact of revenue transferred between the businesses.

Page - 9
BNY Mellon 4Q21 Earnings Release
CAPITAL AND LIQUIDITY

Capital and liquidity ratiosDec. 31, 2021Sept. 30, 2021Dec. 31, 2020
Consolidated regulatory capital ratios: (a)
CET1 ratio11.1 %11.7 %13.1 %
Tier 1 capital ratio13.9 14.4 15.8 
Total capital ratio14.8 15.2 16.7 
Tier 1 leverage ratio5.5 5.7 6.3 
SLR6.6 7.0 8.6 (b)
BNY Mellon shareholders’ equity to total assets ratio9.7 %9.3 %9.8 %
BNY Mellon common shareholders’ equity to total assets ratio8.6 %8.3 %8.8 %
Average LCR109 %111 %110 %
Book value per common share$47.50 $47.30 $46.53 
Tangible book value per common share – Non-GAAP (c)
$24.31 $24.88 $25.44 
Common shares outstanding (in thousands)
804,145 825,821 886,764 
(a)    Regulatory capital ratios for Dec. 31, 2021 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 Dec. 31, 2021 was the Standardized Approach, for Sept. 30, 2021 was the Standardized Approach for the CET1 and Tier 1 capital ratios and the Advanced Approaches for the Total capital ratio, and for Dec. 31, 2020, was the Advanced Approaches.
(b)    Reflects 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. The temporary exclusion ceased to apply beginning April 1, 2021.
(c)    Tangible book value per common share – Non-GAAP excludes goodwill and intangible assets, net of deferred tax liabilities. See “Explanation of GAAP and Non-GAAP financial measures” on page 12 for information on this Non-GAAP measure.


•CET1 capital totaled $18.7 billion at Dec. 31, 2021, a decrease of $1.1 billion compared with Sept. 30, 2021. The decrease primarily reflects capital deployed through common stock repurchases, unrealized losses on securities available-for-sale and dividends, partially offset by capital generated through earnings and a favorable adjustment to the pension liability.

•During 4Q21, we had net issuances of preferred stock of $297 million which benefited Tier 1 capital at Dec. 31, 2021.



NET INTEREST REVENUE

Net interest revenue4Q21 vs.
(dollars in millions; not meaningful - N/M)4Q213Q214Q203Q214Q20
Net interest revenue$677 $641 $680 6%—%
Add: Tax equivalent adjustment4 3 3 N/MN/M
Net interest revenue, on a fully taxable equivalent (“FTE”) basis – Non-GAAP (a)
$681 $644 $683 6%—%
Net interest margin0.71 %0.67 %0.72 %4  bps(1) bps
Net interest margin (FTE) – Non-GAAP (a)
0.71 %0.68 %0.72 %3  bps(1) bps
(a)    Net interest revenue (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income. See “Explanation of GAAP and Non-GAAP financial measures” on page 12 for information on this Non-GAAP measure.
bps – basis points.


•Net interest revenue decreased slightly year-over-year primarily reflecting lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in fee and other revenue). This was partially offset by the benefit of lower funding and deposit rates and larger deposit and loan balances.

•Sequentially, the increase primarily reflects the impact of larger deposit, loan and securities balances and higher short-term rates.
Page - 10
BNY Mellon 4Q21 Earnings Release
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement

(in millions)Quarter endedYear ended
Dec. 31, 2021Sept. 30, 2021Dec. 31, 2020Dec. 31, 2021Dec. 31, 2020
Fee and other revenue
Investment services fees$2,061 $2,091 $1,969 $8,284 $8,047 
Investment management and performance fees896 913 884 3,588 3,367 
Foreign exchange revenue199 185 187 799 774 
Financing-related fees47 48 46 194 212 
Distribution and servicing28 28 28 112 115 
Total fee revenue3,231 3,265 3,114 12,977 12,515 
Investment and other revenue107 129 49 336 316 
Total fee and other revenue3,338 3,394 3,163 13,313 12,831 
Net interest revenue
Interest revenue729 693 776 2,845 4,109 
Interest expense52 52 96 227 1,132 
Net interest revenue677 641 680 2,618 2,977 
Total revenue4,015 4,035 3,843 15,931 15,808 
Provision for credit losses(17)(45)15 (231)336 
Noninterest expense
Staff1,633 1,584 1,554 6,337 5,966 
Software and equipment379 372 359 1,478 1,370 
Professional, legal and other purchased services390 363 381 1,459 1,403 
Sub-custodian and clearing120 129 116 505 460 
Net occupancy133 120 173 498 581 
Distribution and servicing75 76 75 298 336 
Bank assessment charges30 34 24 133 124 
Business development44 22 26 107 105 
Amortization of intangible assets19 19 26 82 104 
Other 144 199 191 617 555 
Total noninterest expense2,967 2,918 2,925 11,514 11,004 
Income
Income before income taxes1,065 1,162 903 4,648 4,468 
Provision for income taxes 196 219 148 877 842 
Net income869 943 755 3,771 3,626 
Net (income) loss attributable to noncontrolling interests related to consolidated investment management funds(6)4 (5)(12)(9)
Net income applicable to shareholders of The Bank of New York Mellon Corporation863 947 750 3,759 3,617 
Preferred stock dividends(41)(66)(48)(207)(194)
Net income applicable to common shareholders of The Bank of New York Mellon Corporation$822 $881 $702 $3,552 $3,423 


Earnings per share applicable to the common shareholders of The Bank of New York Mellon CorporationQuarter endedYear ended
Dec. 31, 2021Sept. 30, 2021Dec. 31, 2020Dec. 31, 2021Dec. 31, 2020
(in dollars)
Basic$1.01 $1.04 $0.79 $4.17 $3.84 
Diluted$1.01 $1.04 $0.79 $4.14 $3.83 

Page - 11
BNY Mellon 4Q21 Earnings Release
EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

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

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

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

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

BNY Mellon has presented the measure of fee revenue, excluding money market fee waivers – Non-GAAP. We believe that this measure is useful information for investors for evaluating the impact of current interest rates and market conditions on fee revenue growth rates and the performance of our business.

Fee revenue reconciliation4Q21 vs.2021 vs.
(dollars in millions)4Q214Q204Q20202120202020
Fee revenue$3,231 $3,114 4 %$12,977 $12,515 4 %
Less: Money market fee waivers(278)(149)(1,027)(368)
Fee revenue, excluding money market fee waivers – Non-GAAP$3,509 $3,263 8 %$14,004 $12,883 9 %


BNY Mellon has presented revenue measures excluding notable items, including losses on business sales. Expense measures, excluding notable items, including litigation reserves, severance expense and real estate charges are also presented. Litigation reserves 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. These measures are provided to permit investors to view the financial measures on a basis consistent with how management views the businesses.

Reconciliations of Non-GAAP measures, excluding notable items4Q21 vs.
(in millions, except per share amounts)4Q214Q204Q20
Total revenue – GAAP$4,015 $3,843 4 %
Impact of notable items (a)
— (61)
Total revenue – Non-GAAP$4,015 $3,904 3 %
Noninterest expense – GAAP$2,967 $2,925 1 %
Impact of notable items (a)
37 165 
Noninterest expense – Non-GAAP$2,930 $2,760 6 %
Diluted earnings per common share – GAAP$1.01 $0.79 28 %
Impact of notable items (a)
(0.04)(0.18)
Diluted earnings per common share – Non-GAAP$1.04 (b)$0.96 (b)8 %
(a)    Notable items in 4Q21 include severance expense and litigation reserves. Notable items in 4Q20 include litigation reserves, severance expense, losses on business sales (reflected in investment and other revenue) and real estate charges.
(b)    Does not foot due to rounding.
Page - 12
BNY Mellon 4Q21 Earnings Release
Reconciliations of Non-GAAP measures, excluding notable items - Securities Services business segment4Q21 vs.
(in millions)4Q213Q214Q203Q214Q20
Noninterest expense – GAAP$1,490 $1,543 $1,504 (3)%(1)%
Impact of notable items (a)
21 70 84 
Noninterest expense – Non-GAAP$1,469 $1,473 $1,420 — %3 %
Income before taxes – GAAP$350 $313 $215 12 %63 %
Impact of notable items (a)
(21)(70)(84)
Income before taxes – Non-GAAP$371 $383 $299 (3)%24 %
(a)    Notable items in 4Q21, 3Q21 and 4Q20 include litigation reserves and severance expense.


Note: In 4Q21, we disaggregated our former Investment Services business segment into two new business segments, Securities Services and Market and Wealth Services. See the Current Report for Form 8-K dated Dec. 8, 2021 for additional information.


CAUTIONARY STATEMENT

A number of statements (i) in this Earnings Release, (ii) in our Financial Supplement, (iii) in our presentations and (iv) in the responses to questions on our conference call discussing our quarterly results and other public events may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our capital plans, strategic priorities, financial goals, organic growth, performance, organizational quality and efficiency, investments, including in technology and product development, resiliency, capabilities, revenue, net interest revenue, money market fee waivers, fees, expenses, cost discipline, sustainable growth, innovation in products and services, company management, human capital management (including related ambitions, objectives, aims and goals), deposits, interest rates and yield curves, securities portfolio, taxes, business opportunities, divestments, volatility, preliminary business metrics and regulatory capital ratios and statements regarding our aspirations, as well as our overall plans, strategies, goals, objectives, expectations, outlooks, estimates, intentions, targets, opportunities, focus and initiatives, including the potential effects of the coronavirus pandemic on any of the foregoing. These statements may be expressed in a variety of ways, including the use of future or present tense language. Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,” “goal,” “could,” “should,” “would,” “may,” “might,” “will,” “strategy,” “synergies,” “opportunities,” “trends,” “ambition,” “objective,” “aim,” “future,” “potentially,” “outlook” and words of similar meaning may signify forward-looking statements. These statements and other forward-looking statements contained in other public disclosures of BNY Mellon which make reference to the cautionary factors described in this Earnings Release are based upon current beliefs and expectations and are subject to significant risks and uncertainties (some of which are beyond BNY Mellon’s control). Actual results may differ materially from those expressed or implied as a result of a number of factors, including, but not limited to, the risk factors and other uncertainties set forth in BNY Mellon’s Annual Report on Form 10-K for the year ended Dec. 31, 2020 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, 2021. All forward-looking statements in this Earnings Release speak only as of Jan. 18, 2022, and BNY Mellon undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.

Page - 13
BNY Mellon 4Q21 Earnings Release
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, 2021, BNY Mellon had $46.7 trillion in assets under custody and/or administration, and $2.4 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. 18, 2022. This conference call and audio webcast will include forward-looking statements and may include other material information.

Investors and analysts wishing to access the conference call and audio webcast may do so by dialing (800) 390-5696 (U.S.) or (720) 452-9082 (International), and using the passcode: 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. 18, 2022. Replays of the conference call and audio webcast will be available beginning Jan. 18, 2022 at approximately 2:00 p.m. ET through Feb. 18, 2022 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.
Page - 14