Bank of New York Mellon Corp

For the period ended Jun 30, 2024. Filed Aug 2, 2024.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Jun 30, 2024 · Filed Aug 2, 2024

BNY$151.23+2.4%Stored close · as of Nov 9, 2026

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Contents

Supplemental information – Explanation of GAAP

Supplemental information– Explanation of GAAP and Non-GAAP financial measures

BNY has included in this Form 10-Q 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.

BNY has also included revenue measures excluding notable items, including the reduction in the fair value of a contingent consideration receivable related to a prior year divestiture and a disposal loss. Expense measures, excluding notable items, including the FDIC special assessment, severance expense and litigation reserves, are also presented. Litigation reserves represent accruals for loss contingencies that are both probable and reasonably estimable, but exclude standard business-related legal fees. Net income applicable to common shareholders of The Bank of New York Mellon Corporation, diluted earnings per share, return on common equity, return on tangible common equity and pre-tax operating

margin, excluding the notable items mentioned above, are also provided. These measures are provided to permit investors to view the financial measures on a basis consistent with how management views the businesses.

The presentation of the growth rates of investment management and performance fees on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. We believe that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates.

BNY 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.

BNY 43

Reconciliation of Non-GAAP measures, excluding notable items · YTD24
2Q24 vs. · vs.
(dollars in millions, except per share amounts)	2Q24	1Q24	2Q23	1Q24	2Q23	YTD24	YTD23	YTD23
Total revenue – GAAP	$4,597	$4,527	$4,504	2%	2%
Less: Disposal (losses) (a)	—	—	(1)
Adjusted total revenue – Non-GAAP	$4,597	$4,527	$4,505	2%	2%
Noninterest expense – GAAP	$3,070	$3,176	$3,111	(3)%	(1)%	$6,246	$6,211	1%
Less: Severance (b)	29	36	26			65	26
Litigation reserves (b)	2	2	36			4	42
FDIC special assessment (b)	(38)	—	—			(38)	—
Adjusted noninterest expense – Non-GAAP	$3,077	$3,138	$3,049	(2)%	1%	$6,215	$6,143	1%
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP	$1,143	$953	$1,036	20%	10%
Less: Disposal (losses) (a)	—	—	—
Severance (b)	(22)	(27)	(20)
Litigation reserves (b)	—	(2)	(36)
FDIC special assessment (b)	29	—	—
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP	$1,136	$982	$1,092	16%	4%
Diluted earnings per common share – GAAP	$1.52	$1.25	$1.31	22%	16%
Less: Disposal (losses) (a)	—	—	—
Severance (b)	(0.03)	(0.04)	(0.02)
Litigation reserves (b)	—	—	(0.05)
FDIC special assessment (b)	$0.04	$—	$—
Total diluted earnings per common share impact of notable items	0.01	(0.04)	(0.07)
Adjusted diluted earnings per common share – Non-GAAP	$1.51	$1.29	$1.38	17%	9%

(a) Reflected in investment and other revenue.

(b) Severance is reflected in staff expense, litigation reserves in other expense, and FDIC special assessment in bank assessment charges, respectively.

The following table presents the reconciliation of the pre-tax operating margin.

Pre-tax operating margin reconciliation
(dollars in millions)	2Q24	1Q24	2Q23	YTD24	YTD23
Income before taxes – GAAP	$1,527	$1,324	$1,388	$2,851	$2,676
Impact of notable items (a)	7	(38)	(63)	(31)	(70)
Adjusted income before taxes, excluding notable items – Non-GAAP	$1,520	$1,362	$1,451	$2,882	$2,746
Total revenue – GAAP	$4,597	$4,527	$4,504	$9,124	$8,919
Impact of notable items (a)	—	—	(1)	—	(2)
Adjusted total revenue, excluding notable items – Non-GAAP	$4,597	$4,527	$4,505	$9,124	$8,921
Pre-tax operating margin – GAAP (b)	33%	29%	31%	31%	30%
Adjusted pre-tax operating margin – Non-GAAP (b)	33%	30%	32%	32%	31%

(a) See above for details of notable items and line items impacted.

(b) Income before taxes divided by total revenue.

44 BNY

The following table presents the reconciliation of the return on common equity and tangible common equity.

Return on common equity and tangible common equity reconciliation	2Q24	1Q24	2Q23	YTD24	YTD23
(dollars in millions)
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP	$1,143	$953	$1,036	$2,096	$1,947
Add: Amortization of intangible assets	13	12	14	25	28
Less: Tax impact of amortization of intangible assets	3	3	4	6	7
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP	1,153	962	1,046	$2,115	$1,968
Impact of notable items (a)	7	(29)	(56)	(22)	(60)
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets and notable items – Non-GAAP	$1,146	$991	$1,102	$2,137	$2,028
Average common shareholders’ equity	$36,044	$35,905	$35,655	$35,975	$35,569
Less: Average goodwill	16,229	16,238	16,219	16,234	16,190
Average intangible assets	2,834	2,848	2,888	2,841	2,894
Add: Deferred tax liability – tax deductible goodwill	1,213	1,209	1,193	1,213	1,193
Deferred tax liability – intangible assets	655	655	660	655	660
Average tangible common shareholders’ equity – Non-GAAP	$18,849	$18,683	$18,401	$18,768	$18,338
Return on common equity – GAAP (b)	12.7%	10.7%	11.7%	11.7%	11.0%
Adjusted return on common equity – Non-GAAP (b)	12.7%	11.0%	12.3%	11.8%	11.4%
Return on tangible common equity – Non-GAAP (b)	24.6%	20.7%	22.8%	22.7%	21.7%
Adjusted return on tangible common equity – Non-GAAP (b)	24.4%	21.3%	24.1%	22.9%	22.3%

(a) See page 44 for details of notable items and line items impacted.

(b) Returns are annualized.

The following table presents the reconciliation of book value and tangible book value per common share.

Book value and tangible book value per common share reconciliation	June 30, 2024	March 31, 2024	Dec. 31, 2023	June 30, 2023
(dollars in millions, except per share amounts and unless otherwise noted)
The Bank of New York Mellon Corporation shareholders’ equity at period end – GAAP	$40,843	$40,569	$40,770	$40,824
Less: Preferred stock	4,343	4,343	4,343	4,838
The Bank of New York Mellon Corporation common shareholders’ equity at period end – GAAP	36,500	36,226	36,427	35,986
Less: Goodwill	16,217	16,228	16,261	16,246
Intangible assets	2,826	2,839	2,854	2,881
Add: Deferred tax liability – tax deductible goodwill	1,213	1,209	1,205	1,193
Deferred tax liability – intangible assets	655	655	657	660
The Bank of New York Mellon Corporation tangible common shareholders’ equity at period end – Non-GAAP	$19,325	$19,023	$19,174	$18,712
Period-end common shares outstanding (in thousands)	737,957	747,816	759,344	778,782
Book value per common share – GAAP	$49.46	$48.44	$47.97	$46.21
Tangible book value per common share – Non-GAAP	$26.19	$25.44	$25.25	$24.03

The following table presents the impact of changes in foreign currency exchange rates on our consolidated investment management and performance fees.

Constant currency reconciliation – Consolidated · 2Q24 vs.
(dollars in millions)	2Q24	2Q23	2Q23
Investment management and performance fees – GAAP	$761	$762	—%
Impact of changes in foreign currency exchange rates	—	(1)
Adjusted investment management and performance fees – Non-GAAP	$761	$761	—%

BNY 45

The following table presents the impact of changes in foreign currency exchange rates on investment management and performance fees reported in the Investment and Wealth Management business segment.

Constant currency reconciliation – Investment and Wealth Management business segment · 2Q24 vs.
(dollars in millions)	2Q24	2Q23	2Q23
Investment management and performance fees – GAAP	$762	$763	—%
Impact of changes in foreign currency exchange rates	—	(1)
Adjusted investment management and performance fees – Non-GAAP	$762	$762	—%

The following table presents the reconciliations of income before income taxes, total revenue and the pre-tax operating margin for the Investment and Wealth Management business segment.

Pre-tax operating margin reconciliation – Investment and Wealth Management business segment
(dollars in millions)	2Q24	1Q24	3Q23	2Q23	YTD24	YTD23
Income before income taxes – GAAP	$149	$107	$164	$130	$256	$223
Total revenue – GAAP	$821	$846	$830	$816	$1,667	$1,646
Less: Distribution and servicing expense	88	96	87	93	184	179
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP	$733	$750	$743	$723	$1,483	$1,467
Pre-tax operating margin – GAAP (a)	18%	13%	20%	16%	15%	14%
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a)	20%	14%	22%	18%	17%	15%

(a) Income before income taxes divided by total revenue.

Pre-tax operating margin reconciliation, excluding notable items – Investment and Wealth Management business segment
(dollars in millions)	4Q23
(Loss) before income taxes – GAAP	$(4)
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a)	(144)
Severance expense (b)	(12)
Adjusted income before income taxes – Non-GAAP	$152
Total revenue – GAAP	$679
Less: Reduction in the fair value of a contingent consideration receivable related to a prior year divestiture (a)	(144)
Adjusted total revenue – Non-GAAP	$823
Less: Distribution and servicing expense	89
Adjusted total revenue excluding notable items, net of distribution and servicing expense – Non-GAAP	$734
Pre-tax operating margin – GAAP (c)	(1)%
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (c)	(1)%
Adjusted pre-tax operating margin, net of distribution and servicing expense and excluding notable items – Non-GAAP (c)	21%

(a) Reflected in investment and other revenue on the consolidated income statement.

(b) Reflected in staff expense on the consolidated income statement.

46 BNY

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