Bank of New York Mellon Corp

For the period ended Sep 30, 2024. Filed Nov 1, 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.

Sep 30, 2024 · Filed Nov 1, 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 gain. Expense measures, excluding notable items, including severance expense, litigation reserves and the FDIC special assessment, 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
3Q24 vs. · vs.
(dollars in millions, except per share amounts) · 3Q24 · 2Q24 · 3Q23 · 2Q24 · 3Q23 · YTD24 · YTD23 · YTD23
Total revenue – GAAP	$4,648	$4,597	$4,420		1%		5%
Less: Disposal gain (a)	—	—	2
Adjusted total revenue – Non-GAAP	$4,648	$4,597	$4,418		1%		5%
Noninterest expense – GAAP	$3,100	$3,070	$3,089		1%		—%		$9,346	$9,300	—%
Less: Severance expense (b)	40	29	41					105	67
Litigation reserves (b)	2	2	5					6	47
FDIC special assessment (b)	(17)	(38)	—					(55)	—
Adjusted noninterest expense – Non-GAAP	$3,075	$3,077	$3,043		—%		1%		$9,290	$9,186	1%
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP	$1,110	$1,143	$958		(3)%		16%
Less: Disposal gain (a)	—	—	—
Severance expense (b)	(31)	(22)	(32)
Litigation reserves (b)	(2)	—	(4)
FDIC special assessment (b)	13	29	—
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation – Non-GAAP	$1,130	$1,136	$994		(1)%		14%
Diluted earnings per common share – GAAP	$1.50	$1.52	$1.23		(1)%		22%
Less: Disposal gain (a)	—	—	—
Severance expense (b)	(0.04)	(0.03)	(0.04)
Litigation reserves (b)	—	—	(0.01)
FDIC special assessment (b)	0.02	0.04	—
Total diluted earnings per common share impact of notable items	(0.03)(c)	0.01	(0.05)
Adjusted diluted earnings per common share – Non-GAAP	$1.52(c)	$1.51	$1.27(c)	1%		20%

(a) Reflected in investment and other revenue.

(b) Severance expense 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)	3Q24	2Q24	3Q23	YTD24	YTD23
Income before taxes – GAAP	$1,525	$1,527	$1,328	$4,376	$4,004
Impact of notable items (a)	(25)	7	(44)	(56)	(114)
Adjusted income before taxes, excluding notable items – Non-GAAP	$1,550	$1,520	$1,372	$4,432	$4,118
Total revenue – GAAP	$4,648	$4,597	$4,420	$13,772	$13,339
Impact of notable items (a)	—	—	2	—	—
Adjusted total revenue, excluding notable items – Non-GAAP	$4,648	$4,597	$4,418	$13,772	$13,339
Pre-tax operating margin – GAAP (b)	33%	33%	30%	32%	30%
Adjusted pre-tax operating margin – Non-GAAP (b)	33%	33%	31%	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	3Q24	2Q24	3Q23	YTD24	YTD23
(dollars in millions)
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP	$1,110	$1,143	$958	$3,206	$2,905
Add: Amortization of intangible assets	12	13	15	37	43
Less: Tax impact of amortization of intangible assets	3	3	3	9	10
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP	1,119	1,153	970	$3,234	$2,938
Impact of notable items (a)	(20)	7	(36)	(42)	(96)
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	$1,139	$1,146	$1,006	$3,276	$3,034
Average common shareholders’ equity	$36,772	$36,044	$35,873	$36,242	$35,672
Less: Average goodwill	16,281	16,229	16,237	16,250	16,206
Average intangible assets	2,827	2,834	2,875	2,836	2,887
Add: Deferred tax liability – tax deductible goodwill	1,220	1,213	1,197	1,220	1,197
Deferred tax liability – intangible assets	656	655	657	656	657
Average tangible common shareholders’ equity – Non-GAAP	$19,540	$18,849	$18,615	$19,032	$18,433
Return on common equity – GAAP (b)	12.0%	12.7%	10.6%	11.8%	10.9%
Adjusted return on common equity – Non-GAAP (b)	12.2%	12.7%	11.0%	12.0%	11.2%
Return on tangible common equity – Non-GAAP (b)	22.8%	24.6%	20.6%	22.7%	21.3%
Adjusted return on tangible common equity – Non-GAAP (b)	23.2%	24.4%	21.4%	23.0%	22.0%

(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	Sept. 30, 2024	June 30, 2024	Dec. 31, 2023	Sept. 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	$41,992	$40,843	$40,770	$40,858
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	37,649	36,500	36,427	36,020
Less: Goodwill	16,338	16,217	16,261	16,159
Intangible assets	2,824	2,826	2,854	2,859
Add: Deferred tax liability – tax deductible goodwill	1,220	1,213	1,205	1,197
Deferred tax liability – intangible assets	656	655	657	657
The Bank of New York Mellon Corporation tangible common shareholders’ equity at period end – Non-GAAP	$20,363	$19,325	$19,174	$18,856
Period-end common shares outstanding (in thousands)	727,078	737,957	759,344	769,073
Book value per common share – GAAP	$51.78	$49.46	$47.97	$46.84
Tangible book value per common share – Non-GAAP	$28.01	$26.19	$25.25	$24.52

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 · 3Q24 vs.
(dollars in millions)	3Q24	3Q23	3Q23
Investment management and performance fees – GAAP	$794	$777	2%
Impact of changes in foreign currency exchange rates	—	5
Adjusted investment management and performance fees – Non-GAAP	$794	$782	2%

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 · 3Q24 vs.
(dollars in millions)	3Q24	3Q23	3Q23
Investment management and performance fees – GAAP	$795	$778	2%
Impact of changes in foreign currency exchange rates	—	5
Adjusted investment management and performance fees – Non-GAAP	$795	$783	2%

The following table presents the reconciliation of 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)	3Q24	2Q24	1Q24	3Q23	YTD24	YTD23
Income before income taxes – GAAP	$176	$149	$107	$164	$432	$387
Total revenue – GAAP	$849	$821	$846	$830	$2,516	$2,476
Less: Distribution and servicing expense	91	88	96	87	275	266
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP	$758	$733	$750	$743	$2,241	$2,210
Pre-tax operating margin – GAAP (a)	21%	18%	13%	20%	17%	16%
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a)	23%	20%	14%	22%	19%	18%

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

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, 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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