Earnings Per Common Share of $0.33, or $1.28 as Adjusted (a)

Full-Year 2023 Earnings Per Common Share of $4.00, or $5.05 as Adjusted (a)

NEW YORK, January 12, 2024 – The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today has reported financial results for the fourth quarter 2023.

(b)    See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for additional information.

KEY DRIVERS (comparisons are 4Q23 vs. 4Q22, unless otherwise noted)

•Total revenue increased 10%, primarily reflecting:

•Fee revenue was flat, primarily reflecting lower foreign exchange volatility and volumes and the mix of AUM flows, partially offset by higher market values and the favorable impact of a weaker U.S. dollar.

•Investment and other revenue increased primarily reflecting the 4Q22 net loss from repositioning the securities portfolio, partially offset by the 4Q23 reduction in the fair value of a contingent consideration receivable related to a prior year divestiture.

•Net interest revenue increased 4%, primarily reflecting higher interest rates, partially offset by changes in balance sheet size and mix.

•Provision for credit losses was $84 million, primarily driven by reserve increases related to commercial real estate exposure.

•Noninterest expense increased 20%, primarily related to the FDIC special assessment. Excluding notable items (a), noninterest expense increased 4% primarily reflecting higher investments and the unfavorable impact of a weaker U.S. dollar, as well as inflation, partially offset by efficiency savings.

•Effective tax rate of 16.4%.

•AUC/A increased 8%, primarily reflecting higher market values.

•AUM increased 8%, primarily reflecting higher market values and the favorable impact of a weaker U.S. dollar, partially offset by cumulative net outflows.

•$328 million of dividends to common shareholders (b); $450 million of common share repurchases.

•Return on common equity (“ROE”) – 2.8%; Adjusted ROE – 10.9% (a).

•Return on tangible common equity (“ROTCE”) – 5.6% (a); Adjusted ROTCE – 20.9% (a).

•Common Equity Tier 1 (“CET1”) ratio – 11.6%.

•Tier 1 leverage ratio – 6.0%.

•Average liquidity coverage ratio (“LCR”) – 117%; Average net stable funding ratio (“NSFR”) – 135%.

•Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.

(a)    See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for additional information.

(b)    See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11.

KEY DRIVERS (comparisons are 2023 vs. 2022, unless otherwise noted)

•Total revenue increased 7%, primarily reflecting:

•Fee revenue decreased 1%, primarily reflecting lower foreign exchange volatility, the mix of AUM flows and the impact of a prior year divestiture, partially offset by the abatement of money market fee waivers, net new business and the 1Q22 accelerated amortization of deferred costs for depositary receipts services related to Russia.

•Investment and other revenue increased primarily reflecting the 4Q22 net loss from repositioning the securities portfolio, partially offset by the 4Q23 reduction in the fair value of a contingent consideration receivable related to a prior year divestiture.

•Net interest revenue increased 24%, primarily reflecting higher interest rates, partially offset by changes in balance sheet size and mix.

•Provision for credit losses was $119 million, primarily driven by reserve increases related to commercial real estate exposure and changes in the macroeconomic forecast.

•Noninterest expense increased 1%, primarily reflecting the 4Q23 FDIC special assessment, higher investments and revenue-related expenses, as well as inflation, partially offset by the impacts of the 3Q22 goodwill impairment in the Investment Management reporting unit, efficiency savings and a prior year divestiture. Excluding notable items, noninterest expense increased 3% (a).

•Effective tax rate of 19.7%.

•Returned $3.9 billion to common shareholders, including dividends of $1.3 billion (including dividend equivalents on share-based awards) and $2.6 billion of share repurchases.

•ROE – 8.8%; Adjusted ROE – 11.1% (a).

•ROTCE – 17.1% (a); Adjusted ROTCE – 21.6% (a).

(a)    See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for additional information.

(c)    Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Issuer Services line of 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, 2023 and $1.5 trillion at Sept. 30, 2023 and Dec. 31, 2022.

(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 $63 billion at Dec. 31, 2023, $63 billion at Sept. 30, 2023 and $68 billion at Dec. 31, 2022.

•The drivers of the total revenue variances by line of business are indicated below.

•Asset Servicing – Year-over-year was flat, primarily reflecting lower foreign exchange revenue and net interest revenue, partially offset by a strategic equity investment gain and higher market values. The sequential increase primarily reflects improved strategic equity investment results and higher net interest revenue.

•Issuer Services – The year-over-year increase primarily reflects net new business and higher client activity. The sequential increase primarily reflects higher net interest revenue.

•Noninterest expense increased year-over-year, primarily reflecting higher investments and higher revenue-related expenses, as well as inflation, partially offset by efficiency savings.

•The drivers of the total revenue variances by line of business are indicated below.

•Pershing – The year-over-year increase primarily reflects higher net interest revenue, higher market values and higher client activity, partially offset by lost business. The sequential increase primarily reflects higher net interest revenue.

•Treasury Services – The year-over-year and sequential increases primarily reflect higher net interest revenue.

•Clearance and Collateral Management – The year-over-year increase primarily reflects higher clearance volumes and collateral management balances. The sequential increase primarily reflects higher net interest revenue, higher clearance volumes and collateral management balances.

•Noninterest expense increased year-over-year, primarily reflecting higher investments and inflation, partially offset by efficiency savings.

(c)    Excluding notable items, income before taxes decreased 11% (Non-GAAP) compared with 3Q23 and increased 1% (Non-GAAP) compared with 4Q22. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for information on these Non-GAAP measures.

(d)    Net of distribution and servicing expense. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for information on this Non-GAAP measure.

(e)    Excluding notable items and net of distribution and servicing expense, the adjusted pre-tax operating margin was 21% (Non-GAAP) for 4Q23. See “Explanation of GAAP and Non-GAAP financial measures” beginning on page 11 for information on this Non-GAAP measure.

•The drivers of the total revenue variances by line of business are indicated below.

•Investment Management – The year-over-year decrease primarily reflects the 4Q23 reduction in the fair value of a contingent consideration receivable and the impact of the prior year divestiture, as well as the mix of AUM flows, partially offset by higher market values, seed capital gains and the favorable impact of a weaker U.S. dollar. The sequential decrease primarily reflects the reduction in the fair value of a contingent consideration receivable related to a prior year divestiture and the timing of performance fees, partially offset by seed capital gains.

•Wealth Management – The year-over-year decrease primarily reflects changes in product mix, partially offset by higher market values.

•Noninterest expense decreased year-over-year, primarily reflecting efficiency savings and the impact of a prior year divestiture, partially offset by higher investments and the unfavorable impact of a weaker U.S. dollar, as well as inflation.

The Other segment primarily includes the leasing portfolio, corporate treasury activities, including our securities portfolio, derivatives and other trading activity, renewable energy and other corporate investments, certain business exits and other corporate revenue and expense items.

•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. Total revenue increased year-over-year primarily reflecting the net loss from repositioning the securities portfolio recorded in 4Q22. Total revenue decreased sequentially primarily reflecting net securities losses in 4Q23 and debt extinguishment gains in 3Q23.

•Noninterest expense increased year-over-year primarily driven by the FDIC special assessment. The sequential increase in noninterest expense primarily reflects the FDIC special assessment, higher severance expense and litigation reserves.

(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” beginning on page 11 for information on this Non-GAAP measure.

•CET1 capital totaled $18.7 billion at Dec. 31, 2023, and increased compared with Sept. 30, 2023, primarily reflecting a net increase in accumulated other comprehensive income and capital generated through earnings, partially offset by capital deployed through common stock repurchases and dividends. Tier 1 capital totaled $23.1 billion at Dec. 31, 2023, and decreased slightly compared with Sept. 30, 2023, reflecting the redemption of preferred stock. The Tier 1 leverage ratio decreased compared with Sept. 30, 2023, primarily reflecting higher average assets.

(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” beginning on page 11 for information on this Non-GAAP measure.

•Net interest revenue increased year-over-year primarily reflecting higher interest rates, partially offset by changes in balance sheet size and mix.

•The sequential increase in net interest revenue primarily reflects the higher balance sheet size and mix.

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 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.

See “Explanation of GAAP and Non-GAAP Financial Measures” in the Financial Supplement available at www.bnymellon.com for additional reconciliations of Non-GAAP measures.

BNY Mellon has also included revenue measures excluding notable items, including a net loss from repositioning the securities portfolio, the reduction in the fair value of a contingent consideration receivable related to a prior year divestiture, disposal gains and losses and the revenue reduction related to Russia, primarily accelerated amortization of deferred costs for depositary receipts services. Expense measures, excluding notable items, including goodwill impairment, 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, operating leverage, 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.

A number of statements in this Earnings Release and in our Financial Supplement may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our strategic priorities, financial performance and financial targets. Preliminary business metrics and regulatory capital ratios are subject to change, possibly materially, as we complete our Annual Report on Form 10-K for the year ended Dec. 31, 2023. Forward-looking statements are not guarantees of future results or occurrences, are inherently uncertain and are based upon current beliefs and expectations of future events, many of which are, by their nature, difficult to predict, outside of our control and subject to change.

By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results may differ, possibly materially, from the anticipated results expressed or implied in these forward-looking statements as a result of a number of important factors, including the risk factors and other uncertainties set forth in our Annual Report on Form 10-K for the year ended Dec. 31, 2022 and our other filings with the Securities and Exchange Commission.

You should not place undue reliance on any forward-looking statement. All forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events.

Established in 1784, BNY Mellon is America’s oldest bank and the first company listed on the New York Stock Exchange (NYSE: BK). Today, BNY Mellon powers capital markets around the world through comprehensive solutions that help clients manage and service their financial assets throughout the investment life cycle. BNY Mellon had $47.8 trillion in assets under custody and/or administration and $2.0 trillion in assets under management as of Dec. 31, 2023. BNY Mellon has been named among Fortune’s World’s Most Admired Companies and Fast Company’s Best Workplaces for Innovators. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Additional information is available on www.bnymellon.com. Follow us on LinkedIn or visit our Newsroom for the latest company news.

Robin Vince, President and Chief Executive Officer, and Dermot McDonogh, Chief Financial Officer, will host a conference call and simultaneous live audio webcast at 1:00 p.m. ET on Jan. 12, 2024. 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: 200200, 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. 12, 2024. An archived version of the fourth quarter conference call and audio webcast will be available beginning on Jan. 12, 2024 at approximately 5:00 p.m. ET through Feb. 12, 2024 at www.bnymellon.com/investorrelations.