BNY Mellon Reports Fourth Quarter Continuing EPS of $0.59 or $712 Million; Net Benefit of $0.04 Due To:
- Discrete tax benefit and securities gains partially offset by a restructuring charge related to global efficiency initiatives and M&I expenses
ASSET AND WEALTH MANAGEMENT FEES +13% SEQUENTIALLY
- $14 billion of net long-term asset flows
- Completed acquisition of Insight Investment Management
- Improved investment performance
SUCCESSFULLY COMPLETED RESTRUCTURING OF INVESTMENT SECURITIES PORTFOLIO
CAPITAL RATIOS REMAIN STRONG
- Tier 1 12.0%, Tier 1 Common 10.5%, TCE 5.2%
NEW YORK, Jan. 20 /PRNewswire-FirstCall/ -- The Bank of New York Mellon Corporation (NYSE: BK) today reported fourth quarter income from continuing operations applicable to common shareholders of $712 million, or $0.59 per common share, compared with $50 million, or $0.04 per common share, in the fourth quarter of 2008 and a loss of $2.439 billion, or $2.04 per common share, in the third quarter of 2009.
"We saw excellent growth in asset and wealth management revenues this quarter, which benefited from long-term flows, the contribution from Insight Investment Management, higher equity values and stronger investment performance. However, the persistent low interest rate environment globally increasingly challenged our net interest revenue and fee revenue," said Robert P. Kelly, chairman and chief executive officer of BNY Mellon.
"In 2009, we completed our merger, raised equity and repaid TARP, successfully completed the restructuring of our investment securities portfolio and ended the year with strong capital ratios. I want to thank all of our employees, as our accomplishments in a very challenging year reflect their excellent work and dedication," added Mr. Kelly.
The net loss from continuing operations applicable to common shareholders totaled $1.097 billion, or $0.93 per common share, for the full year 2009 compared to net income of $1.398 billion, or $1.21 per common share, for the full year 2008. Net loss applicable to common shareholders, including discontinued operations, for the full-year 2009 totaled $1.367 billion, or $1.16 per common share, compared to net income of $1.386 billion, or $1.20 per common share, for the full-year 2008.
Fourth Quarter Results - Unless otherwise noted, all comments begin with the results of the fourth quarter of 2009 and are compared to the fourth quarter of 2008, all information is reported on a continuing operations basis and sequential growth rates are unannualized. Please refer to the Quarterly Earnings Review for detailed business segment information.
Total revenue
-----------------------------------------------------------------------
Reconciliation of total revenue 4Q09 vs.
(dollar amounts in ------------
millions) 4Q09 3Q09 4Q08 4Q08 3Q09
-----------------------------------------------------------------------
Fee and other revenue –
GAAP $2,595 $(2,216) $1,817 N/M N/M
Less: Investment
securities gains (losses) 15 (4,833) (1,241) N/M N/M
-----------------------------------------------------------------------
Total fee revenue – GAAP 2,580 2,617 3,058 (16)% (1)%
Net interest revenue –
GAAP 724 716 1,047 (31) 1
-----------------------------------------------------------------------
Total revenue excluding
investment securities
gains (losses) – Non-GAAP $3,304 $3,333 $4,105 (20)% (1)%
-----------------------------------------------------------------------
N/M – Not meaningful
- Assets under custody and administration amounted to $22.3 trillion at Dec. 31, 2009, an increase of 10% compared with the prior year and an increase of 1% sequentially. The year-over-year increase reflects higher market values, and new business wins, while the sequential increase primarily reflects higher market values. Assets under management, excluding securities lending assets, amounted to $1.115 trillion at Dec. 31, 2009. This represents an increase of 20% compared with the prior year, and a 15% sequential increase. Both increases were primarily due to the acquisition of Insight Investment Management ("Insight") in the fourth quarter of 2009. Net long-term inflows of $14 billion in the fourth quarter of 2009 were more than offset by $22 billion of short-term outflows.
- Securities servicing fees, excluding securities lending fee revenue, totaled $1.212 billion, a decrease of $54 million year-over-year and an increase of $17 million sequentially. A year-over-year increase in asset servicing revenue was offset by lower clearing and issuer services revenue. Sequentially, higher asset servicing and issuer services revenue were primarily offset by lower clearing revenue. Comparisons to both prior periods were negatively impacted by lower money market distribution fees. Securities lending fee revenue totaled $29 million in the fourth quarter of 2009 compared with $187 million in the prior year period and $43 million sequentially. The year over year and sequential decreases reflect lower spreads and volumes.
- Asset and wealth management fees totaled $736 million, an increase of 5% compared with the prior year period and 13% sequentially. Both increases reflect the impact of the Insight acquisition, stronger investment performance and improved market values, partially offset by a reduction in money market related fees due to outflows in money market products and higher fee waivers. The sequential increase also reflects positive long-term net inflows of $14 billion. Asset and wealth management fees, excluding performance fees, increased 4% sequentially.
- Foreign exchange and other trading activities totaled $246 million, a decrease of 52% compared with a record $510 million in the prior year period and unchanged compared with the third quarter of 2009. The decrease year-over-year primarily reflects lower foreign exchange revenue, driven by lower volatility and spreads, as well as a lower valuation of the credit derivatives used to hedge the loan portfolio. The sequential results reflect higher foreign exchange revenue and lower mark to market adjustments on credit default swaps, offset by lower fixed income trading revenue.
- Investment income totaled $78 million, increasing $33 million year-over-year and decreasing $43 million sequentially. The increase compared with the prior year period reflects higher seed capital and private equity investment revenue, partially offset by lower lease residual gains. The sequential decrease primarily reflects lower lease residual gains.
- Net interest revenue (FTE) totaled $729 million with a net interest margin of 1.77% compared with $721 million and 1.85%, sequentially.
- Investment securities pre-tax net gains totaled $15 million compared to pre-tax net losses of $1.241 billion in the fourth quarter of 2008 and $4.833 billion in the third quarter of 2009.
The provision for credit losses decreased to $65 million in the fourth quarter of 2009 compared with $147 million in the third quarter of 2009. The decrease in the provision reflects a lower number of downgrades in the fourth quarter of 2009. During the fourth quarter of 2009, the total allowance for credit losses increased $32 million and net charge-offs totaled $33 million.
Total noninterest expense
---------------------------------------------------------------------
Reconciliation of noninterest expense 4Q09 vs.
(dollar amounts in -----------
millions) 4Q09 3Q09 4Q08 4Q08 3Q09
---------------------------------------------------------------------
Noninterest expense – GAAP $2,582 $2,318 $2,859 (10)% 11%
Restructuring charges
(See page 10) 139 (5) 181 N/M N/M
Support agreement charges (5) 13 163 N/M N/M
M&I expenses 52 54 97 (46) (4)
Amortization of intangible
assets 107 104 113 (5) 3
---------------------------------------------------------------------
Total noninterest expense,
excluding restructuring
charges, support agreement
charges, M&I expenses and
intangible amortization –
Non-GAAP $2,289 $2,152 $2,305 (1)% 6%
---------------------------------------------------------------------
N/M – Not meaningful.
- Total noninterest expense (excluding restructuring charges, support agreement charges, M&I expenses and intangible amortization) decreased 1% compared with the prior year period and increased 6% sequentially. The decrease compared with the prior year reflects the impact of merger related synergies and the workforce reduction program announced in the fourth quarter of 2008, primarily offset by expenses relating to the Insight acquisition. The sequential increase principally reflects a seasonal increase in business development expense, the Insight acquisition, employee benefit adjustments, and higher legal and FDIC expenses.
Results for the fourth quarter of 2009 include a net income tax benefit of $41 million which consists primarily of a $51 million benefit from a higher proportion of foreign earnings, as well as a $133 million benefit from discrete tax items primarily related to a tax loss on mortgages. Excluding the impact of the restructuring charges, M&I expenses, securities gains and the discrete tax benefit, the effective tax rate was approximately 22% (Non-GAAP) in the fourth quarter of 2009.
The unrealized net of tax losses on our investment securities portfolio was $783 million at Dec. 31, 2009 compared with a net of tax unrealized loss of $1.0 billion at Sept. 30, 2009.
------------------------------------------------------------------------
Capital ratios (a) Dec. 31, Sept. 30, Dec. 31,
2009 2009 2008
------------------------------------------------------------------------
Tier 1 capital ratio 12.0% 11.4% 13.2%
Tier 1 common equity to risk-weighted
assets ratio (b) 10.5 9.9 9.4
Total (Tier 1 plus Tier 2) capital ratio 15.9 15.3 16.9
Leverage capital ratio 6.5 6.5 6.9
Common shareholders' equity to assets
ratio (b) 13.7 13.3 10.6
Tangible common shareholders' equity to
tangible assets ratio – Non-GAAP (b) 5.2 5.2 3.8
------------------------------------------------------------------------
(a) Includes discontinued operations.
(b) See the Supplemental information section beginning on page 10 for a
calculation of these ratios.
Nonperforming assets totaled $550 million, a decrease of $10 million compared with Sept. 30, 2009.
Declaration of quarterly dividend – On Jan. 20, 2010, The Bank of New York Mellon Corporation declared a quarterly common stock dividend of $0.09 per common share. This cash dividend is payable on Feb. 9, 2010 to shareholders of record as of the close of business on Feb. 1, 2010.
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $22.3 trillion in assets under custody and administration, $1.1 trillion in assets under management, services $12.0 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day. Additional information is available at www.bnymellon.com.
Supplemental Financial Information
The Quarterly Earnings Review and supplemental financial trends for The Bank of New York Mellon Corporation have been updated through Dec. 31, 2009 and are available at www.bnymellon.com (Investor Relations - Financial Reports).
Conference Call Data
Robert P. Kelly, chairman and chief executive officer; Gerald L. Hassell, president; and Thomas P. Gibbons, chief financial officer, along with other members of executive management from BNY Mellon, will host a conference call and simultaneous live audio webcast at 8:00 a.m. EST on Wednesday, Jan. 20, 2010. This conference call and audio webcast will include forward-looking statements and may include other material information. Persons wishing to access the conference call and audio webcast may do so by dialing (888) 677-5383 (U.S.) and (210) 838-9221 (International) Passcode: Earnings, or by logging on to www.bnymellon.com. The Earnings Release, together with the Quarterly Earnings Review and supplemental financial trends, will be available at www.bnymellon.com beginning at approximately 6:30 a.m. EST on Jan. 20, 2010. Replays of the conference call and audio webcast will be available beginning Jan. 20, 2010 at approximately 2:00 p.m. EST through Wednesday, Feb. 3, 2010 by dialing (800) 664-4219 (U.S.) or (203) 369-3307 (International). The archived version of the conference call and audio webcast will also be available at www.bnymellon.com for the same time period.
THE BANK OF NEW YORK MELLON CORPORATION
Financial Highlights
----------------------------------------------------------------------
Quarter ended
(dollar amounts in millions, --------------------------------
except per common share amounts Dec. 31, Sept. 30, Dec. 31,
and unless otherwise noted) 2009 2009 2008
----------------------------------------------------------------------
Continuing operations
---------------------
Return on common equity
(annualized)(a) 9.8% N/M 0.8% (b)
Non-GAAP adjusted (a) 10.1% 10.0% 16.8% (b)
Return on tangible common equity
(annualized) – Non-GAAP (a) 33.0% N/M 6.5% (b)
Non-GAAP adjusted (a) 31.0% 31.8% 61.3% (b)
Fee and other revenue as a percent
Of total revenue (a) 78% N/M 63%
Non-GAAP adjusted (a) 78% 79% 74%
Annualized fee revenue per employee
(based on average headcount) (in
thousands) $243 $248 $285
Percent of non-U.S. fee and net
Interest revenue 36% 31% 31%
Pre-tax operating margin (a) 20% N/M (2)%
Non-GAAP adjusted (a) 29% 32% 43%
Net interest margin (FTE) (d) 1.77% 1.85% 2.32%
Selected average balances
-------------------------
Interest-earning assets (e) $164,075 $155,159 $181,639
Total assets $214,205 $205,786 $243,962
Interest-bearing deposits (e) $98,404 $93,632 $95,726
Noninterest-bearing deposits (e) $34,991 $34,920 $51,729
Total shareholders' equity $28,843 $28,144 $28,771
Average common shares and
equivalents outstanding
(in thousands):
Basic 1,200,359 1,197,414 1,144,839
Diluted (f) 1,203,469 1,197,414 1,146,127
Period-end data
---------------
Assets under custody and
administration (in trillions) $22.3 $22.1 $20.2
Cross-border assets (in
trillions) $8.8 $8.6 $7.5
Market value of securities on loan
(in billions) (g) $247 $299 $326
Assets under management (in
billions) $1,115 $966 $928
Employees 42,200 42,000 42,500
Book value per common share –
GAAP(a) $23.99 $23.50 $22.00
Tangible book value per common
share – Non-GAAP (a) $7.90 $7.54 $5.18
Dividends per common share $0.09 $0.09 $0.24
Closing common stock price per
common share $27.97 $28.99 $28.33
Market capitalization $33,783 $34,911 $32,536
----------------------------------------------------------------------
----------------------------------------------------------------------
Year ended
(dollar amounts in millions, except per -------------------
common share amounts and unless otherwise Dec. 31, Dec. 31,
noted) 2009 2008
----------------------------------------------------------------------
Continuing operations
---------------------
Return on common equity (annualized)(a) N/M 5.0% (b)
Non-GAAP adjusted (a) 9.3% 14.2% (b)
Return on tangible common equity (annualized)
– Non-GAAP (a) N/M 20.5% (b)
Non-GAAP adjusted (a) 32.2% 48.7% (b)
Fee and other revenue as a percent of
total revenue (a) 62% 79%
Non-GAAP adjusted (a) 78% 79%
Annualized fee revenue per employee (based
on average headcount) (in thousands) $242 $290
Percent of non-U.S. fee and net interest
revenue 32% 33% (c)
Pre-tax operating margin (a) N/M 14%
Non-GAAP adjusted (a) 31% 39%
Net interest margin (FTE) (d) 1.82% 1.89% (c)
Selected average balances
-------------------------
Interest-earning assets (e) $160,955 $152,201
Total assets $212,127 $209,955
Interest-bearing deposits (e) $98,206 $91,913
Noninterest-bearing deposits (e) $36,446 $33,724
Total shareholders' equity $28,476 $28,704
Average common shares and equivalents
outstanding (in thousands):
Basic 1,178,907 1,142,239
Diluted (f) 1,178,907 1,148,358
Period-end data
---------------
Assets under custody and administration
(in trillions) $22.3 $20.2
Cross-border assets
(in trillions) $8.8 $7.5
Market value of securities on loan
(in billions) (g) $247 $326
Assets under management (in billions) $1,115 $928
Employees 42,200 42,500
Book value per common share – GAAP(a) $23.99 $22.00
Tangible book value per common share –
Non-GAAP (a) $7.90 $5.18
Dividends per common share $0.51 $0.96
Closing common stock price per common share $27.97 $28.33
Market capitalization $33,783 $32,536
----------------------------------------------------------------------
(a) See Supplemental information beginning on page 10 for a
calculation of these ratios.
(b) Calculated before extraordinary loss.
(c) Excluding the SILO/LILO charges, the percentage of non-U.S. fee
and net interest revenue was 32% and the net interest margin was
2.21% for the full year of 2008.
(d) Prior periods calculated on a continuing operations basis, even
though the balance sheet, in accordance with GAAP, is not restated
for discontinued operations.
(e) Excludes the impact of discontinued operations.
(f) Diluted earnings per share for the three months ended Sept. 30,
2009 and year ended Dec. 31, 2009 was calculated using average
basic shares. Adding back the dilutive shares would result in
anti-dilution.
(g) Represents the securities on loan, both cash and non-cash,
managed by the Asset Servicing segment.
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement
--------------------------------------------------------------------------
Quarter ended Year ended
(in millions, except ----------------------------- ------------------
per common share Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
amounts) 2009 2009 2008 2009 2008
--------------------------------------------------------------------------
Fee and other
revenue
Securities
servicing fees:
Asset servicing $650 $643 $786 (a) $2,573 $3,370 (a)
Issuer services 368 359 388 1,463 1,685
Clearing services 223 236 279 962 1,065
--------------------------------------------------------------------------
Total securities
servicing fees 1,241 1,238 1,453 4,998 6,120
Asset and wealth
management fees 736 650 701 2,639 3,218
Foreign exchange
and other trading
activities 246 246 510 1,036 1,462
Treasury services 134 128 132 519 514
Distribution and
servicing 85 94 106 397 421
Financing-related
fees 57 56 44 215 186
Investment income 78 121 45 226 207
Other 3 84 67 111 214
--------------------------------------------------------------------------
Total fee revenue 2,580 2,617 3,058 10,141 12,342
Net securities gains
(losses) 15 (4,833) (1,241) (5,369) (1,628)
--------------------------------------------------------------------------
Total fee and other
revenue 2,595 (2,216) 1,817 4,772 10,714
Net interest revenue
Interest revenue 854 829 1,525 3,507 5,524
Interest expense 130 113 478 592 2,665
--------------------------------------------------------------------------
Net interest
revenue 724 716 1,047 2,915 2,859
Provision for credit
losses 65 147 54 332 104
--------------------------------------------------------------------------
Net interest
revenue after
provision for
credit losses 659 569 993 2,583 2,755
Noninterest expense
Staff 1,221 1,157 1,180 (a) 4,700 5,189 (a)
Professional, legal
and other purchased
services 278 265 273 (a) 1,017 1,021 (a)
Net occupancy 141 142 141 564 570
Distribution and
servicing 109 104 123 426 517
Software 98 95 86 367 331
Sub-custodian and
clearing 83 80 84 (a) 320 335 (a)
Furniture and
equipment 80 76 86 309 323
Business development 76 45 76 214 278
Other 198 201 419 837 1,822
--------------------------------------------------------------------------
Subtotal 2,284 2,165 2,468 8,754 10,386
Amortization of
intangible assets 107 104 113 426 473
Restructuring charges 139 (5) 181 150 181
Merger and integration
expenses:
The Bank of New York
Mellon Corporation 52 54 97 233 471
Acquired Corporate
Trust Business - - - - 12
--------------------------------------------------------------------------
Total noninterest
expense 2,582 2,318 2,859 9,563 11,523
--------------------------------------------------------------------------
Income
Income (loss) from
continuing operations
before income
taxes 672 (3,965) (49) (2,208) 1,946
Provision (benefit)
for income taxes (41) (1,527) (137) (1,395) 491
--------------------------------------------------------------------------
Income (loss) from
continuing
operations 713 (2,438) 88 (813) 1,455
Discontinued
operations:
Income (loss) from
discontinued
operations (183) (29) 7 (421) 28
Provision (benefit)
for income
taxes (64) (10) 3 (151) 14
--------------------------------------------------------------------------
Income (loss) from
discontinued
operations,
net of tax (119) (19) 4 (270) 14
Extraordinary (loss)
on consolidation
of commercial paper
conduits, net of
tax - - (26) - (26)
--------------------------------------------------------------------------
Net income
(loss) 594 (2,457) 66 (1,083) 1,443
Net (income) loss
attributable to
noncontrolling
interests, net of
tax (1) (1) (5) (1) (24)
Redemption charge
and preferred
dividends - - (33) (283) (33)
--------------------------------------------------------------------------
Net income (loss)
applicable to
common
shareholders
of The Bank of
New York Mellon
Corporation $593 $(2,458) $28 $(1,367) $1,386
--------------------------------------------------------------------------
(a) See page 10 for an explanation of prior period income statement
adjustments.
THE BANK OF NEW YORK MELLON CORPORATION
Condensed Consolidated Income Statement - continued
----------------------------------------------------------------------
Earnings per share
applicable to the common
shareholders of The
Bank of New York
Mellon Corporation Quarter ended Year ended
(in millions, except ----------------------------- ------------------
per common share Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
amounts) 2009 2009 2008 2009 2008
----------------------------------------------------------------------
Basic:
Income (loss)
from continuing
operations $0.59 $(2.04) $0.04 $(0.93) $1.21
Income (loss)
from discontinued
operations, net
of tax (0.10) (0.02) - (0.23) 0.01
Extraordinary
(loss), net of
tax - - (0.02) - (0.02)
----------------------------------------------------------------------
Net income
(loss)
applicable to
common stock $0.49 $(2.05)(a) $ 0.02 $(1.16) $1.20
----------------------------------------------------------------------
Diluted: (b)
Income (loss)
from continuing
operations $0.59 $(2.04) $0.04 $(0.93) $1.21
Income (loss)
from discontinued
operations, net
of tax (0.10) (0.02) - (0.23) 0.01
Extraordinary
(loss), net
of tax - - (0.02) - (0.02)
----------------------------------------------------------------------
Net income (loss)
applicable to
common stock $0.49 $(2.05)(a) $0.02 $(1.16) $1.20
----------------------------------------------------------------------
(a) Does not foot due to rounding.
(b) Diluted earnings per share for the three months ended Sept. 30,
2009 and the full-year ended Dec. 31, 2009, was calculated using
average basic shares. Adding back the dilutive shares would result
in anti-dilution.
--------------------------------------------------------------------------
Reconciliation of net income
(loss) from continuing
operations applicable to
the common shareholders Quarter ended Year ended
of The Bank of New York ----------------------------- ------------------
Mellon Corporation Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
(in millions) 2009 2009 2008 2009 2008
--------------------------------------------------------------------------
Income (loss) from
continuing operations $713 $(2,438) $88 $(813) $1,455
Net (income) loss
attributable to
noncontrolling
interests, net of tax (1) (1) (5) (1) (24)
Redemption charge and
preferred dividends - - (33) (283) (33)
--------------------------------------------------------------------------
Income (loss) from
continuing operations
applicable to common
shareholders of The
Bank of New York Mellon
Corporation, net of tax 712 (2,439) 50 (1,097) 1,398
Income (loss) from
discontinued operations,
net of tax (119) (19) 4 (270) 14
Extraordinary (loss),
net of tax - - (26) - (26)
--------------------------------------------------------------------------
Net income (loss)
applicable to the
common shareholders
of The Bank of New
York Mellon
Corporation $593 $(2,458) $28 $(1,367) $1,386
--------------------------------------------------------------------------
THE BANK OF NEW YORK MELLON CORPORATION
Consolidated Balance Sheet
-----------------------------------------------------------------------
(dollar amounts in millions, except Dec. 31, Dec. 31,
per share amounts) 2009 2008
-----------------------------------------------------------------------
Assets
Cash and due from:
Banks $3,671 $4,881
Federal Reserve and other central banks
(includes $7,362 and $53,270 of
interest-bearing deposits) 7,423 53,278
Other short-term investments - U.S.
government-backed commercial paper, at
fair value - 5,629
Interest-bearing deposits with banks 56,302 39,126
Federal funds sold and securities
purchased under resale agreements 3,535 2,000
Securities:
Held-to-maturity (fair value of $4,240
and $6,333) 4,417 7,371
Available-for-sale 51,632 32,064
-----------------------------------------------------------------------
Total securities 56,049 39,435
Trading assets 6,001 11,102
Loans 36,689 43,394
Allowance for loan losses (503) (415)
-----------------------------------------------------------------------
Net loans 36,186 42,979
Premises and equipment 1,602 1,686
Accrued interest receivable 639 619
Goodwill 16,249 15,898
Intangible assets 5,588 5,856
Other assets 16,737 15,023
Assets of discontinued operations 2,242 -
-----------------------------------------------------------------------
Total assets $212,224 $237,512
-----------------------------------------------------------------------
Liabilities
Deposits:
Noninterest-bearing (principally
domestic offices) $33,477 $55,816
Interest-bearing deposits in domestic
offices 32,944 32,386
Interest-bearing deposits in foreign
offices 68,629 71,471
-----------------------------------------------------------------------
Total deposits 135,050 159,673
Borrowing from Federal Reserve related to
asset-backed commercial paper,
at fair value - 5,591
Federal funds purchased and securities
sold under repurchase agreements 3,348 1,372
Trading liabilities 6,396 8,085
Payables to customers and broker-dealers 10,721 9,274
Commercial paper 12 138
Other borrowed funds 477 755
Accrued taxes and other expenses 4,484 4,052
Other liabilities (including allowance for
lending related commitments of $125
and $114) 3,891 4,618
Long-term debt 17,234 15,865
Liabilities of discontinued operations 1,608 -
-----------------------------------------------------------------------
Total liabilities 183,221 209,423
-----------------------------------------------------------------------
Equity
Preferred stock – par value $0.01 per
share; authorized 100,000,000 shares;
issued - shares and 3,000,000 shares - 2,786
Common stock-par value $0.01 per common
share; authorized 3,500,000,000 common
shares; issued 1,208,861,641 and
1,148,507,561 common shares 12 11
Additional paid-in capital 21,917 20,432
Retained earnings 8,912 10,250
Accumulated other comprehensive loss,
net of tax (1,835) (5,426)
Less: Treasury stock of 1,026,927 and
40,262 common shares, at cost (29) (3)
-----------------------------------------------------------------------
Total The Bank of New York Mellon
Corporation shareholders' equity 28,977 28,050
Noncontrolling interest 26 39
-----------------------------------------------------------------------
Total equity 29,003 28,089
-----------------------------------------------------------------------
Total liabilities and equity $212,224 $237,512
-----------------------------------------------------------------------
Investment Securities Portfolio
At Dec. 31, 2009, the fair value of our investment securities portfolio totaled $55.9 billion. The unrealized pre-tax loss on our securities portfolio was $1.2 billion at Dec. 31, 2009 compared with $1.4 billion at Sept. 30, 2009 and $7.6 billion at Dec. 31, 2008.
In the fourth quarter of 2009, we securitized $5.0 billion, fair value, of our investment securities portfolio into a Grantor Trust. The Grantor Trust contains Alt-A, prime and subprime RMBS which were previously written down to fair value as part of the 3Q09 restructuring of the investment securities portfolio. As a result of this transaction, we received $771 million in cash for a Class A senior tranche that was sold to third parties and retained Class B certificates with a fair value of $4.2 billion, which is included in the tables below. The transaction resulted in a $39 million net loss in the fourth quarter of 2009, which was offset by $54 million of net gains on the sale of $3.6 billion of investment securities. The following table presents the fourth quarter 2009 activity related to restructuring and reducing risk in the investment securities portfolio.
-------------------------------------------------------------------------
Investment securities portfolio
rollforward of 4Q09 activity Amortized Paydowns/
(dollar amounts cost at accretion/ 4Q09 Restruct-
in millions) 9/30/09 other purchases uring
-------------------------------------------------------------------------
Watch list:
European floating rate notes $7,092 $(178) $- $-
Commercial MBS 2,685 (14) - -
Prime RMBS 4,324 (240) - (2,069)
Alt-A RMBS 4,619 (158) - (2,603)
Subprime RMBS 1,158 (20) - (128)
Credit cards 649 (3) - -
Home equity lines of credit 226 (13) - -
Other 526 (8) - -
-------------------------------------------------------------------------
Total Watch list (a) 21,279 (634) - (4,800)
Grantor Trust Class B
Certificates - 23 - 4,969
Agency RMBS 16,560 (866) 3,084 -
Sovereign debt/sovereign
guaranteed 6,590 (148) 2,259 -
U.S. Treasury securities 5,052 (161) 1,463 -
FDIC-insured debt 1,962 1 - -
Government agency debt 1,241 (6) - -
Other 2,850 (74) 39 -
-------------------------------------------------------------------------
Total investment securities $55,534 $(1,865) $6,845 $169
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Investment securities portfolio 4Q09 Sales
rollforward of 4Q09 activity ---------------------- Amortized
(dollar amounts Proceeds Gain/ cost at
in millions) from sales (loss) 12/31/09
-------------------------------------------------------------------------
Watch list:
European floating rate notes $(767) $35 $6,182
Commercial MBS (272) - 2,399
Prime RMBS (86) 3 1,932
Alt-A RMBS (949) (17) 892
Subprime RMBS (222) - 788
Credit cards (22) 2 626
Home equity lines of credit (264) 51 -
Other (27) (15) 476
-------------------------------------------------------------------------
Total Watch list (a) (2,609) 59 13,295
Grantor Trust Class B Certificates (771) (39) 4,182
Agency RMBS - - 18,778
Sovereign debt/sovereign guaranteed - - 8,701
U.S. Treasury securities - - 6,354
FDIC-insured debt - - 1,963
Government agency debt - - 1,235
Other (265) (5) 2,545
-------------------------------------------------------------------------
Total investment securities $(3,645) $15 $57,053
-------------------------------------------------------------------------
--------------------------------------------------------------------------
Investment securities
portfolio
Dec. 31, 2009 Fair value
as a % of
(dollar amounts Amortized Fair amortized Unrealized
in millions) cost value cost (b) gain/(loss)
--------------------------------------------------------------------------
Watch list:
European floating rate notes $6,182 $5,503 88% $(679)
Commercial MBS 2,399 2,302 96 (97)
Prime RMBS 1,932 1,684 86 (248)
Alt-A RMBS 892 779 67 (113)
Subprime RMBS 788 470 60 (318)
Credit cards 626 610 95 (16)
Other 476 465 56 (11)
--------------------------------------------------------------------------
Total Watch list (a) 13,295 11,813 84 (1,482)
Grantor Trust Class B
Certificates 4,182 4,160 60 (22)
Agency RMBS 18,778 19,016 99 238
Sovereign debt/sovereign
guaranteed 8,701 8,709 100 8
U.S. Treasury securities 6,354 6,374 100 20
FDIC-insured debt 1,963 2,003 98 40
Government agency debt 1,235 1,260 98 25
Other 2,545 2,537 100 (8)
--------------------------------------------------------------------------
Total investment securities $57,053 $55,872 92% $(1,181)
--------------------------------------------------------------------------
----------------------------------------------------------------------
Investment securities
portfolio Ratings
Dec. 31, 2009 --------------------------------------------
(dollar amounts AAA/ A+/ BBB+/ BB+ and Not
in millions) AA- A- BBB- lower rated
----------------------------------------------------------------------
Watch list:
European floating
rate notes 97% 3% -% -% -%
Commercial MBS 93 4 3 - -
Prime RMBS 60 23 5 12 -
Alt-A RMBS 27 15 1 57 -
Subprime RMBS 75 14 5 6 -
Credit cards 1 98 1 - -
Other - - 16 76 8
----------------------------------------------------------------------
Total Watch list (a) 77 12 2 9 -
Grantor Trust Class
B Certificates - - - - 100
Agency RMBS 100 - - - -
Sovereign debt/
sovereign guaranteed 100 - - - -
U.S. Treasury
securities 100 - - - -
FDIC-insured debt 100 - - - -
Government agency debt 100 - - - -
Other 69 11 7 1 12
----------------------------------------------------------------------
Total investment
securities 86% 3% 1% 2% 8%
----------------------------------------------------------------------
(a) The "Watch list" includes those securities we view as having a
higher risk of impairment charges.
(b) Amortized cost before impairments.
Restructuring charge
As part of an ongoing effort to improve efficiency and develop a global operating model that provides the highest quality of service to our clients, BNY Mellon continues to execute its global location strategy. This strategy includes migrating positions to our global growth centers and the elimination of certain positions.
In December 2009, we recorded a pre-tax restructuring charge of $139 million, or $0.07 per common share. This charge was comprised of $102 million for severance costs and $37 million for asset write-offs and other costs. The restructuring charge is recorded as a separate line on the income statement.
Discontinued operations
In the second quarter of 2009, we adopted discontinued operations accounting for Mellon United National Bank located in Florida. It was determined that this business no longer fit our strategic focus on our asset management and securities servicing businesses. In July 2009, we signed a definitive agreement to sell Mellon United National Bank. The transaction was completed on Jan. 15, 2010. This business was formerly included in the Other segment. In the fourth quarter of 2009, we recorded an after-tax loss on discontinued operations of $119 million largely related to additional write-downs primarily for retained South Florida real estate loans. The value of these loans, which are carried at the lower of cost or market, was $383 million (face value of $635 million) at Dec. 31, 2009. The after-tax loss of $270 million for the full-year of 2009 primarily reflects the loan write-downs and the elimination of $82 million of goodwill recorded in the second quarter of 2009.
Consolidated net income applicable to common shareholders, including discontinued operations
Net income applicable to common shareholders, including discontinued operations, totaled $593 million, or $0.49 per common share, in the fourth quarter of 2009, compared with $28 million, or $0.02 per common share, in the fourth quarter of 2008 and a net loss of $2.458 billion, or $2.05 per common share, in the third quarter of 2009.
Income statement adjustments
The following reclassifications were made to the income statement in the second quarter 2009.
- Global sub-custodian out-of-pocket expense related to client reimbursements was reclassified from sub-custodian expense to asset servicing revenue. This reclassification totaled $4 million in the fourth quarter of 2008 and $22 million in the full-year of 2008.
- Certain temporary/consulting expenses were reclassified from professional, legal and other purchased services to staff expense. This reclassification totaled $33 million in the fourth quarter of 2008 and $100 million in the full-year of 2008.
Supplemental information – Explanation of Non-GAAP financial measures
BNY Mellon has included in this release certain Non-GAAP financial measures based upon tangible common shareholders' equity. BNY Mellon believes that the ratio of tangible common shareholders' equity to tangible assets is a measure of capital strength that adds additional useful information to investors supplementing the Tier 1 capital ratio which is utilized by regulatory authorities. Unlike the Tier 1 ratio, the tangible common shareholders' equity ratio fully incorporates those changes in investment securities valuations which are reflected in shareholders' equity. In addition, this ratio is expressed as a percentage of the actual book value of assets, as opposed to a percentage of a risk-based reduced value established in accordance with regulatory requirements, although BNY Mellon in its calculation has excluded certain assets which are given a zero percent risk-weighting for regulatory purposes. This ratio is also informative to investors in BNY Mellon's common stock because, unlike the Tier 1 capital ratio, it excludes preferred stock and trust preferred securities issued by BNY Mellon. Further, BNY Mellon believes that the return on tangible common equity measure, which excludes goodwill and intangible assets net of deferred tax liabilities, is a useful additional measure for investors because it presents a measure of BNY Mellon's performance in reference to those assets which are productive in generating income.
BNY Mellon has provided a measure of tangible book value per share, which it believes provides additional useful information as to the level of such assets in relation to shares of common stock outstanding. BNY Mellon has presented revenue and earnings measures which exclude the effect of investment securities gains (losses) and SILO/LILO charge; expense measures which exclude restructuring charges, an FDIC special assessment, support agreement charges, asset-based taxes, M&I expenses and intangible amortization expenses; and measures which utilize net income excluding tax items such as the benefit of tax settlements and discrete tax benefits related to a tax loss on mortgages. Return on equity measures and operating margin measures which exclude some or all of these items are also presented. BNY Mellon believes that these measures are useful to investors because they permit a focus on period to period comparisons which relate to the ability of BNY Mellon to enhance revenues and limit expenses in circumstances where such matters are within BNY Mellon's control. The excluded items in general relate to situations where accounting rules require certain ongoing charges as a result of prior transactions, or where valuation or other accounting/regulatory requirements require charges unrelated to operational initiatives. M&I expenses relates to our Corporate Trust acquisition in 2006 and to the merger with Mellon Financial Corporation in 2007. M&I expenses generally continue for approximately three years after the transaction, and can vary on a year-to-year basis depending on the stage of the integration. BNY Mellon believes that the exclusion of M&I expenses provides investors with a focus on BNY Mellon's business as it would appear on a consolidated going-forward basis, after such M&I expenses have ceased, typically after approximately three years. Future periods will not reflect such M&I expenses, and thus may be more easily compared to our current results if M&I expenses are excluded. With regards to the exclusion of investment securities gains (losses), BNY Mellon's primary businesses are Asset and Wealth Management and Institutional Services. The management of these sectors is evaluated on the basis of the ability of these businesses to generate fee and net interest revenue and to control expenses, and not on the results of BNY Mellon's investment securities portfolio. Management of the investment securities portfolio is a shared service contained in the Other segment. The primary objective of the investment securities portfolio is to generate net interest revenue from the liquidity generated by BNY Mellon's processing businesses. BNY Mellon does not generally originate or trade the securities in the investment securities portfolio. As a result, BNY Mellon believes that presenting measures that exclude investment securities gains (losses) from its results, as a supplement to GAAP information, gives investors a clearer picture of the results of its primary businesses. The SILO/LILO charges relate to a one-time settlement with the IRS of tax structured lease transactions in 2008. Restructuring charges relate to migrating positions to global growth centers and the elimination of certain positions. In this Earnings Release, certain amounts are presented on an FTE basis. We believe that this presentation provides comparability 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.
Each of these measures as described above is used by management to monitor financial performance, both on a company-wide and on a business segment basis.
--------------------------------------------------------------------------
Reconciliation of net income (loss) and EPS –
GAAP to Non-GAAP 4Q09
---------------------
(in millions, except per common share amounts) Net income EPS (a)
--------------------------------------------------------------------------
Net income applicable to common shareholders of
The Bank of New York Mellon Corporation – GAAP $593 N/A
Earnings allocated to participating securities (a) (5) N/A
--------------------------------------------------------------------------
Net income applicable to common shareholders of
The Bank of New York Mellon Corporation – GAAP –
Diluted EPS basis 588 $0.49
Less: Discontinued operations (loss) (119) (0.10)
--------------------------------------------------------------------------
Continuing operations – GAAP – Diluted
EPS basis 707 0.59
Net investment securities (gains) (31) (0.03)
M&I expenses 33 0.03
Restructuring charges 86 0.07
Discrete tax benefits (133) (0.11)
--------------------------------------------------------------------------
Net income from continuing operations applicable
to common shareholders excluding the investment
securities (gains), M&I expenses, restructuring
charges and discrete tax benefits - Non-GAAP 662 0.55
Intangible amortization 66 0.06
--------------------------------------------------------------------------
Net income (loss) from continuing operations
applicable to common shareholders excluding
the investment securities (gains), M&I expenses,
restructuring charges, discrete tax benefits and
intangible amortization – Non-GAAP $728 $0.60(b)
--------------------------------------------------------------------------
(a) Diluted earnings per share under the two-class method was calculated
after deducting earnings allocated to participating securities.
(b) Does not foot due to rounding.
N/A – Not applicable.
-------------------------------------------------------------------------
Securities servicing fees
(in millions) 4Q09 3Q09 4Q08
-------------------------------------------------------------------------
Securities servicing fees $1,241 $1,238 $1,453
Less: Securities lending fee revenue 29 43 187
-------------------------------------------------------------------------
Securities servicing fees excluding
securities lending fee revenue $1,212 $1,195 $1,266
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Asset and wealth management fee revenue 4Q09 vs.
-----------
(dollars in millions) 4Q09 3Q09 4Q08 4Q08 3Q09
-------------------------------------------------------------------------
Asset and wealth management fee
revenue $736 $650 $701 5% 13%
Less: Performance fees 59 1 44 34 N/M
-------------------------------------------------------------------------
Asset and wealth management fee
revenue excluding performance fees $677 $649 $657 3% 4%
-------------------------------------------------------------------------
-----------------------------------------------------------------------
Reconciliation of fee and other revenue as a percent of total revenue
(dollars in millions) 4Q09 3Q09 4Q08 2009 2008
-----------------------------------------------------------------------
Fee and other revenue –
GAAP $2,595 $(2,216) $1,817 $4,772 $10,714
Less: Investment
securities gains
(losses) 15 (4,833) (1,241) (5,369) (1,628)
-----------------------------------------------------------------------
Fee and other revenue
excluding investment
securities gains (losses)–
Non-GAAP 2,580 2,617 3,058 10,141 12,342
Net interest revenue – GAAP 724 716 1,047 2,915 2,859
Less: SILO/LILO charges - - - - (489)
-----------------------------------------------------------------------
Net interest revenue
excluding
SILO/LILO charges –
Non-GAAP 724 716 1,047 2,915 3,348
-----------------------------------------------------------------------
Total revenue – GAAP $3,319 $(1,500) $2,864 $7,687 $13,573
Total revenue excluding
investment securities
gains (losses) and
SILO/LILO
charges – Non-GAAP $3,304 $3,333 $4,105 $13,056 $15,690
Fee and other revenue as a
percentage of total revenue 78% N/M 63% 62% 79%
Fee and other revenue as a
percentage of total revenue
excluding investment
securities gains (losses)
and SILO/LILO charges –
Non-GAAP 78% 79% 74% 78% 79%
-----------------------------------------------------------------------
N/M – Not meaningful.
-----------------------------------------------------------------------
Reconciliation of income (loss) from continuing operations before
income taxes – pre-tax operating margin
(dollars in millions) 4Q09 3Q09 4Q08 2009 2008
-----------------------------------------------------------------------
Income (loss) from continuing
operations before income
taxes – GAAP $672 $(3,965) $(49) $(2,208) $1,946
Investment securities
(gains) losses (15) 4,833 1,241 5,369 1,628
SILO/LILO charges - - - - 489
Support agreement charges (5) 13 163 (15) 894
Asset-based taxes - 20 - 20 -
FDIC special assessment - - - 61 -
M&I expenses 52 54 97 233 483
Restructuring charges 139 (5) 181 150 181
Intangible amortization 107 104 113 426 473
-----------------------------------------------------------------------
Income (loss) from
continuing operations
before income taxes
excluding investment
securities (gains) losses,
SILO/LILO charges,
support agreement charges,
asset-based taxes, FDIC
special assessment, M&I
expenses, restructuring
charges and intangible
amortization – Non-GAAP $950 $1,054 $1,746 $4,036 $6,094
Fee and other revenue –
GAAP $2,595 $(2,216) $1,817 $4,772 $10,714
Net interest revenue – GAAP 724 716 1,047 2,915 2,859
-----------------------------------------------------------------------
Total revenue – GAAP 3,319 (1,500) 2,864 7,687 13,573
Add: Investment
securities
(gains) losses (15) 4,833 1,241 5,369 1,628
SILO/LILO charges - - - - 489
-----------------------------------------------------------------------
Total revenue excluding
investment securities
(gains) losses and
SILO/LILO charges –
Non-GAAP $3,304 $3,333 $4,105 $13,056 $15,690
Pre-tax operating margin (a) 20% N/M (2)% N/M 14%
Pre-tax operating margin
excluding investment
securities (gains) losses,
SILO/LILO charges, support
agreement charges, asset-
based taxes, FDIC special
assessment, M&I expenses,
restructuring charges and
intangible amortization –
Non-GAAP (a) 29% 32% 43% 31% 39%
-----------------------------------------------------------------------
(a) Income (loss) before taxes divided by total revenue.
N/M – Not meaningful.
--------------------------------------------------------------------------
Return on common equity and tangible common equity – continuing operations
(dollars in millions) 4Q09 3Q09 4Q08 2009 2008
--------------------------------------------------------------------------
Net income (loss)
applicable to common
shareholders of
The Bank of New York
Mellon Corporation -
GAAP $593 $(2,458) $28 $(1,367) $1,386
Less: Discontinued
operations income
(loss), net of tax (119) (19) 4 (270) 14
Extraordinary (loss),
net of tax - - (26) - (26)
--------------------------------------------------------------------------
Net income (loss)
from continuing
operations
applicable to
common shareholders
of The Bank of
New York Mellon
Corporation 712 (2,439) 50 (1,097) 1,398
Intangible amortization 66 65 70 265 292
--------------------------------------------------------------------------
Net income (loss)
from continuing
operations
applicable to
common shareholders
of The Bank of New
York Mellon
Corporation
excluding intangible
amortization –
Non-GAAP 778 (2,374) 120 (832) 1,690
Investment securities
(gains) losses (31) 3,047 752 3,374 983
SILO/LILO/tax settlements - - - - 410
Support agreement charges (3) 8 97 (9) 533
FDIC special assessment - - - 36 -
M&I expenses 33 34 58 144 288
Restructuring charges 86 (3) 107 94 107
Discrete tax benefits and
the benefit of tax
settlements (133) - - (267) -
--------------------------------------------------------------------------
Net income (loss) from
continuing operations
excluding investment
securities (gains) losses,
SILO/LILO/tax settlements,
support agreement charges,
FDIC special assessment,
M&I expenses, restructuring
charges, discrete tax
benefits and the benefit
of tax settlements and
intangible amortization –
Non-GAAP $730 $712 $1,134 $2,540 $4,011
Average common
shareholders' equity $28,843 $28,144 $26,812 $27,198 $28,212
Less: Average goodwill 16,291 16,048 16,121 16,042 16,525
Average intangible
assets 5,587 5,608 5,763 5,654 5,896
Add: Deferred tax
liability – tax
deductible goodwill 720 666 599 720 599
Deferred tax
liability – non-tax
deductible
intangible assets 1,680 1,717 1,841 1,680 1,841
--------------------------------------------------------------------------
Average tangible common
shareholders' equity –
Non-GAAP $9,365 $8,871 $7,368 $7,902 $8,231
Return on common equity –
GAAP (a) 9.8% N/M 0.8%(b) N/M 5.0%(b)
Return on common equity
excluding investment
securities (gains)
losses, SILO/LILO/tax
settlements, support
agreement charges,
FDIC special assessment,
M&I expenses,
restructuring charges,
discrete tax benefits
and the benefit of tax
settlements and
intangible amortization –
Non-GAAP (a) 10.1% 10.0% 16.8%(b) 9.3% 14.2%(b)
Return on tangible common
equity – Non-GAAP (a) 33.0% N/M 6.5%(b) N/M 20.5%(b)
Return on tangible common
equity excluding
investment securities
(gains) losses,
SILO/LILO/tax settlements,
support agreement charges,
FDIC special assessment,
M&I expenses,
restructuring charges
and discrete tax benefits
and the benefit of tax
settlements –
Non-GAAP (a) 31.0% 31.8% 61.3%(b) 32.2% 48.7%(b)
--------------------------------------------------------------------------
(a) Annualized.
(b) Calculated before extraordinary loss.
N/M – Not meaningful.
-----------------------------------------------------------------------
Equity to assets and book value per common share
(dollars in millions, Dec. 31, Sept. 30, Dec. 31,
unless otherwise noted) 2009 2009 2008
-----------------------------------------------------------------------
Common shareholders' equity at period
end - GAAP $28,977 $28,295 $25,264
Less: Goodwill 16,249 16,022 15,898
Intangible assets 5,588 5,574 5,856
Add: Deferred tax liability – tax
deductible goodwill 720 666 599
Deferred tax liability – non-tax
deductible intangible assets 1,680 1,717 1,841
-----------------------------------------------------------------------
Tangible common shareholders' equity
at period end – Non-GAAP $9,540 $9,082 $5,950
Total assets at period end - GAAP $212,224 $212,007 $237,512
Less: Goodwill 16,249 16,022 15,898
Intangible assets 5,588 5,574 5,856
Cash on deposit with the Federal
Reserve and other central
banks (a) 7,375 15,003 53,278
U.S. government-backed commercial
paper - - 5,629
-----------------------------------------------------------------------
Tangible total assets at period end –
Non-GAAP $183,012 $175,408 $156,851
Common shareholders' equity to assets –
GAAP 13.7% 13.3% 10.6%
Tangible common shareholders' equity to
tangible assets – Non-GAAP 5.2% 5.2% 3.8%
Period end common shares outstanding
(in thousands) 1,207,835 1,204,244 1,148,467
Book value per common share $23.99 $23.50 $22.00
Tangible book value per common share –
Non-GAAP $7.90 $7.54 $5.18
-----------------------------------------------------------------------
(a) Assigned a zero percent risk weighting by the regulators.
-----------------------------------------------------------------------
Calculation of Tier 1 common equity
to risk-weighted assets ratio (a) Dec. 31, Sept. 30, Dec. 31,
(dollars in millions) 2009 2009 2008
-----------------------------------------------------------------------
Total Tier 1 capital $12,853 $12,543 $15,402
Less: Trust preferred securities 1,686 1,682 1,654
Series B preferred stock - - 2,786
-----------------------------------------------------------------------
Total Tier 1 common equity $11,167 $10,861 $10,962
Total risk-weighted assets $106,805 $110,135 $116,713
Tier 1 common equity to risk-weighted
assets ratio 10.5% 9.9% 9.4%
-----------------------------------------------------------------------
(a) On a regulatory basis.
Cautionary Statement
The information presented in this Earnings Release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be expressed in a variety of ways, including the use of future or present tense language, relate to, among other things, expectations with respect to BNY Mellon's global location strategy. These statements and other forward-looking statements contained in other public disclosures of The Bank of New York Mellon Corporation 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). Factors that could cause BNY Mellon's results to differ materially from those described in the forward-looking statements can be found in the risk factors set forth in BNY Mellon's Annual Report on Form 10-K for the year ended Dec. 31, 2008, the Form 10-Q for the quarter ended March 31, 2009 and BNY Mellon's other filings with the Securities and Exchange Commission. All forward-looking statements in this earnings release speak only as of Jan. 20, 2010 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.
SOURCE The Bank of New York Mellon Corporation
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