The Bank Of New York Mellon Corporation · NYSE:BNY

The Bank Of New York Mellon — Bank of New York Mellon — Q4 2014 Earnings Presentation

28 slides from The Bank Of New York Mellon's earnings presentation, Jan 23, 2015

  1. Slide 1: BNY Mellon Fourth Quarter 2014 Financial Highlights

    BNY Mellon Fourth Quarter 2014 Financial Highlights January 23, 2015

  2. Slide 2: Cautionary Statement

    2 Fourth Quarter 2014 – Financial Highlights Cautionary Statement A number of statements in our presentations, the accompanying slides and the responses to your questions are “forward-looking statements.” These statements relate to, among other things, The Bank of New York Mellon Corporation’s (the

  3. Slide 3: Fourth Quarter and Full Year 2014 Financial Highlights

    3 Fourth Quarter 2014 – Financial Highlights Fourth Quarter and Full Year 2014 Financial Highlights 4Q14 • Earnings per common share of $0.70 including: • $0.12 per common share primarily from the previously disclosed tax benefit, net of litigation and restructuring charges • Earnings per common sha

  4. Slide 4: Fourth Quarter 2014 Year-over-Year Performance

    4 Fourth Quarter 2014 – Financial Highlights Fourth Quarter 2014 Year-over-Year Performance • Earnings per common share1 of $0.58, +7% driven by significant progress on expense control • Investment management and performance fees (2)% reflecting the unfavorable impact of a stronger U.S. dollar and l

  5. Slide 5: Summary Financial Results for Fourth Quarter 2014

    5 Fourth Quarter 2014 – Financial Highlights Summary Financial Results for Fourth Quarter 2014 Growth vs. $ in millions, except per share data 4Q14 3Q14 4Q13 4Q13 3Q14 Revenue $ 3,689 $ 4,611 $ 3,611 2 % (20 )% Expenses $ 2,745 $ 2,968 $ 2,877 (5 )% (8 )% Income before income taxes $ 943 $ 1,662 $ 7

  6. Slide 6: Summary Financial Results for Fourth Quarter 2014 (Non-GAAP)

    6 Fourth Quarter 2014 – Financial Highlights Summary Financial Results for Fourth Quarter 2014 (Non-GAAP) Growth vs. $ in millions, except per share data 4Q14 3Q14 4Q13 4Q13 3Q14 Revenue1 $ 3,665 $ 3,752 $ 3,769 (3)% (2 )% Expenses1 $ 2,651 $ 2,673 $ 2,793 (5)% (1 )% Operating leverage1 232 bps (150

  7. Slide 7: Full-Year 2014 Performance

    7 Fourth Quarter 2014 – Financial Highlights Full-Year 2014 Performance • Earnings per common share1 of $2.39, +5% driven by significant progress on expense control • Investment management and performance fees +3% reflecting higher equity market values and net new business, partially offset by highe

  8. Slide 8: Summary Financial Results for Full-Year 2014

    8 Fourth Quarter 2014 – Financial Highlights Summary Financial Results for Full-Year 2014 Growth vs. $ in millions, except per share data FY 2014 FY 2013 FY 2013 Revenue $ 15,692 $ 15,048 4% Expenses $ 11,398 $ 11,306 1% Income before income taxes $ 4,342 $ 3,777 N/M Pre-tax operating margin 28 % 25

  9. Slide 9: Summary Financial Results for Full-Year 2014 (Non-GAAP)

    9 Fourth Quarter 2014 – Financial Highlights Summary Financial Results for Full-Year 2014 (Non-GAAP) Growth vs. $ in millions, except per share data FY 2014 FY 2013 FY 2013 Revenue1 $ 14,772 $ 14,968 (1)% Expenses1 $ 10,645 $ 10,882 (2)% Operating leverage1 87 bps Income before income taxes1 $ 4,175

  10. Slide 10: Investment Management Metrics

    10 Fourth Quarter 2014 – Financial Highlights Investment Management Metrics Assets Under Management (AUM)1 $ in billions 4Q14 FY 2014 Beginning balance of AUM $1,646 $1,583 Net inflows (outflows): Long-Term: Equity (4 ) (11 ) Fixed income 4 3 Index 1 5 Liability-driven investments2 24 45 Alternative

  11. Slide 11: Investment Management

    11 Fourth Quarter 2014 – Financial Highlights Investment Management . Growth vs. Drivers ($ in millions) 4Q14 4Q13 3Q14 Investment management and performance fees $ 882 (3 )% 1 % Investment management fees  YoY: Higher equity market values and unfavorable impact of stronger U.S. dollar  QoQ: Unfav

  12. Slide 12: Investment Services Metrics

    12 Fourth Quarter 2014 – Financial Highlights Investment Services Metrics Growth vs. 4Q14 4Q13 3Q14 Assets under custody /administration at period end (trillions)1,2 $ 28.5 3 % 1 % Market value of securities on loan at period end (billions)3 $ 289 23 % 2 % Average loans (millions) $ 35,448 14 % 5 %

  13. Slide 13: Investment Services

    13 Fourth Quarter 2014 – Financial Highlights Investment Services Growth vs. Drivers ($ in millions) 4Q14 4Q13 3Q14 Investment services fees: Asset Servicing  YoY: Organic growth and net new business, partially offset by unfavorable impact of stronger U.S. dollar  QoQ: Unfavorable impact of strong

  14. Slide 14: Fee and Other Revenue

    14 Fourth Quarter 2014 – Financial Highlights Fee and Other Revenue Growth vs. Drivers ($ in millions) 4Q14 4Q13 3Q14 Asset servicing1 $ 1,019 4 % (1 )% Asset Servicing  YoY: Organic growth and net new business, partially offset by unfavorable impact of stronger U.S. dollar  QoQ: Unfavorable impac

  15. Slide 15: Net Interest Revenue

    15 Fourth Quarter 2014 – Financial Highlights Net Interest Revenue Growth vs. Drivers ($ in millions) 4Q14 4Q13 3Q14 Net interest revenue (non-FTE) $ 712 (6 )% (1 )% Net Interest Revenue  YoY: Lower asset yields, higher premium amortization on agency MBS, lower accretion, impact of interest rate he

  16. Slide 16: Noninterest Expense

    16 Fourth Quarter 2014 – Financial Highlights Noninterest Expense Growth vs. Drivers ($ in millions) 4Q14 4Q13 3Q14 Staff $ 1,418 (7 )% (4 )%  YoY: Lower staff expense primarily reflecting lower headcount as a result of streamlining actions, the benefit of replacing technology contractors with perm

  17. Slide 17: Capital Ratios Highlights

    17 Fourth Quarter 2014 – Financial Highlights Capital Ratios Highlights 12/31/14 9/30/14 12/31/13 Regulatory capital ratios:1,2,3  Capital ratios remain strong  FY14: Net CET1 increased $1.1 billion  In 4Q14, repurchased 11 million common shares for $432 million and a total of 46.2 million common

  18. Slide 18: Appendix

    APPENDIX

  19. Slide 19: Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation

    19 Fourth Quarter 2014 – Financial Highlights Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation 4Q14 3Q14 4Q13 FY 2014 FY 2013 ($ in millions) Total revenue – GAAP $ 3,689 $ 4,611 $ 3,611 $ 15,692 $ 15,048 Less: Net income attributable to noncontrolling interests of consolidated investmen

  20. Slide 20: Return on Tangible Common Equity Reconciliation

    20 Fourth Quarter 2014 – Financial Highlights Return on Tangible Common Equity Reconciliation 4Q14 3Q14 4Q13 FY 2014 FY 2013 ($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 807 $ 1,070 $ 513 $ 3,092 $ 2,040 Add: Amortization of intangi

  21. Slide 21: Earnings Per Share Reconciliation

    21 Fourth Quarter 2014 – Financial Highlights Earnings Per Share Reconciliation Growth vs. ($ in dollars) 4Q14 3Q14 4Q13 4Q13 3Q14 GAAP results $ 0.70 $ 0.93 $ 0.44 Add: Litigation and restructuring charges 0.01 0.16 — Loss related to an equity investment — — 0.10 Less: Gain on the sale of our inves

  22. Slide 22: Total Payout Ratio

    22 Fourth Quarter 2014 – Financial Highlights Total Payout Ratio Growth vs. ($ in millions) FY 2014 Total Payout Ratio Dividends $ 762 Common stock repurchased 1,669 Total Capital Deployed 2,431 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP 3,092 79%

  23. Slide 23: 4Q14 4Q13 3Q14 FY 2014 FY 2013 Asset servicing1 $ 1,019 $ 984 $

    23 Fourth Quarter 2014 – Financial Highlights ($ in millions) 4Q14 4Q13 3Q14 FY 2014 FY 2013 Asset servicing1 $ 1,019 $ 984 $ 1,025 $ 4,075 $ 3,905 Clearing services 347 324 337 1,335 1,264 Issuer services 193 237 315 968 1,090 Treasury services 145 137 142 564 554 Total investment services fees 1,7

  24. Slide 24: Operating leverage (ex. investment and other income & net securities gains)

    24 Fourth Quarter 2014 – Financial Highlights Operating leverage (ex. investment and other income & net securities gains) 1 Non-GAAP excludes M&I, litigation and restructuring charges, the gain on the sale of our investment in Wing Hang, the gain on the sale of the One Wall Street building, a charge

  25. Slide 25: Capital Ratio Footnotes

    25 Fourth Quarter 2014 – Financial Highlights Capital Ratio Footnotes 1 Dec. 31, 2014 consolidated regulatory capital ratios are preliminary. Please reference slides 26 and 27. See the “Capital Ratios” section in the Earnings Release for additional detail. 2 Risk-based capital ratios at Sept. 30, 20

  26. Slide 26: Estimated Fully Phased-In Basel III CET1 Ratio - Non-GAAP

    26 Fourth Quarter 2014 – Financial Highlights Estimated Fully Phased-In Basel III CET1 Ratio - Non-GAAP1 12/31/14 9/30/14 12/31/13 ($ in millions) Total Tier 1 capital2 $ 21,100 $ 21,015 $ 18,335 Adjustments to determine estimated fully phased-in Basel III CET1: Deferred tax liability – tax deductib

  27. Slide 27: Basel I CET1 Ratio & Estimated SLR - Non-GAAP Reconciliation

    27 Fourth Quarter 2014 – Financial Highlights Basel I CET1 Ratio & Estimated SLR - Non-GAAP Reconciliation Basel I CET1 ratio ($ in millions) 12/31/13 Total Tier 1 capital – Basel I $ 18,335 Less: Trust preferred securities 330 Preferred stock 1,562 Total CET1 – Basel I $ 16,443 Total risk-weighted

  28. Slide 28: Pre-Tax Operating Margin – Investment Management Reconciliation

    28 Fourth Quarter 2014 – Financial Highlights Pre-Tax Operating Margin – Investment Management Reconciliation 4Q14 3Q14 4Q13 ($ in millions) Income before income taxes – GAAP $ 247 $ 245 $ 266 Add: Amortization of intangible assets 30 31 35 Money market fee waivers 34 29 33 Income before income taxe

Bank of New York Mellon — Q4 2014 Earnings Presentation on 6ix