Delaware | 13-2614959 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common Stock, $0.01 par value | BK | New York Stock Exchange |
Depositary Shares, each representing 1/4,000th of a share of Series C Noncumulative Perpetual Preferred Stock | BK PrC | New York Stock Exchange |
6.244% Fixed-to-Floating Rate Normal Preferred Capital Securities of Mellon Capital IV | BK/P | New York Stock Exchange |
(fully and unconditionally guaranteed by The Bank of New York Mellon Corporation) |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Page | |
Part I - Financial Information | |
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk: | |
Item 1. Financial Statements: | |
Page | |
Notes to Consolidated Financial Statements: | |
Note 3—Acquisitions and dispositions | |
Part II - Other Information | |
Index to Exhibits | |
Signature |
Quarter ended | Year-to-date | Quarter ended | Year-to-date | |||||||||||||||||||||||||||||
(dollars in millions, except per share amounts and unless otherwise noted) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | ||||||||||||||||||||||
Results applicable to common shareholders of The Bank of New York Mellon Corporation: | ||||||||||||||||||||||||||||||||
Net income | $ | 969 | $ | 910 | $ | 1,055 | $ | 1,879 | $ | 2,190 | $ | 1,002 | $ | 969 | $ | 1,075 | $ | 2,881 | $ | 3,265 | ||||||||||||
Basic earnings per share | $ | 1.01 | $ | 0.94 | $ | 1.04 | $ | 1.95 | $ | 2.15 | $ | 1.07 | $ | 1.01 | $ | 1.07 | $ | 3.02 | $ | 3.21 | ||||||||||||
Diluted earnings per share | $ | 1.01 | $ | 0.94 | $ | 1.03 | $ | 1.95 | $ | 2.14 | $ | 1.07 | $ | 1.01 | $ | 1.06 | $ | 3.01 | $ | 3.20 | ||||||||||||
Fee and other revenue | $ | 3,112 | $ | 3,032 | $ | 3,210 | $ | 6,144 | $ | 6,480 | $ | 3,128 | $ | 3,112 | $ | 3,168 | $ | 9,272 | $ | 9,648 | ||||||||||||
Income from consolidated investment management funds | 10 | 26 | 12 | 36 | 1 | 3 | 10 | 10 | 39 | 11 | ||||||||||||||||||||||
Net interest revenue | 802 | 841 | 916 | 1,643 | 1,835 | 730 | 802 | 891 | 2,373 | 2,726 | ||||||||||||||||||||||
Total revenue | $ | 3,924 | $ | 3,899 | $ | 4,138 | $ | 7,823 | $ | 8,316 | $ | 3,861 | $ | 3,924 | $ | 4,069 | $ | 11,684 | $ | 12,385 | ||||||||||||
Return on common equity (annualized) | 10.4 | % | 10.0 | % | 11.2 | % | 10.2 | % | 11.7 | % | 10.6 | % | 10.4 | % | 11.2 | % | 10.3 | % | 11.6 | % | ||||||||||||
Return on tangible common equity (annualized) – Non-GAAP (a) | 21.2 | % | 20.7 | % | 23.5 | % | 20.9 | % | 24.6 | % | 21.4 | % | 21.2 | % | 23.1 | % | 21.1 | % | 24.1 | % | ||||||||||||
Return on average assets (annualized) | 1.13 | % | 1.10 | % | 1.22 | % | 1.12 | % | 1.25 | % | 1.13 | % | 1.13 | % | 1.28 | % | 1.12 | % | 1.26 | % | ||||||||||||
Fee revenue as a percentage of total revenue | 79 | % | 78 | % | 78 | % | 78 | % | 78 | % | 81 | % | 79 | % | 78 | % | 79 | % | 78 | % | ||||||||||||
Percentage of non-U.S. total revenue | 36 | % | 36 | % | 37 | % | 36 | % | 37 | % | ||||||||||||||||||||||
Non-U.S. revenue as a percentage of total revenue | 37 | % | 36 | % | 37 | % | 36 | % | 37 | % | ||||||||||||||||||||||
Pre-tax operating margin | 33 | % | 31 | % | 34 | % | 32 | % | 34 | % | 33 | % | 33 | % | 33 | % | 32 | % | 34 | % | ||||||||||||
Net interest margin | 1.12 | % | 1.20 | % | 1.26 | % | 1.16 | % | 1.24 | % | 0.99 | % | 1.12 | % | 1.27 | % | 1.10 | % | 1.25 | % | ||||||||||||
Net interest margin on a fully taxable equivalent (“FTE”) basis – Non-GAAP (b) | 1.12 | % | 1.20 | % | 1.26 | % | 1.16 | % | 1.25 | % | 1.00 | % | 1.12 | % | 1.28 | % | 1.11 | % | 1.26 | % | ||||||||||||
Assets under custody and/or administration (“AUC/A”) at period end (in trillions) (c) | $ | 35.5 | $ | 34.5 | $ | 33.6 | $ | 35.5 | $ | 33.6 | $ | 35.8 | $ | 35.5 | $ | 34.5 | $ | 35.8 | $ | 34.5 | ||||||||||||
Assets under management (“AUM”) at period end (in billions) (d) | $ | 1,843 | $ | 1,841 | $ | 1,805 | $ | 1,843 | $ | 1,805 | $ | 1,881 | $ | 1,843 | $ | 1,828 | $ | 1,881 | $ | 1,828 | ||||||||||||
Market value of securities on loan at period end (in billions) (e) | $ | 369 | $ | 377 | $ | 432 | $ | 369 | $ | 432 | $ | 362 | $ | 369 | $ | 415 | $ | 362 | $ | 415 | ||||||||||||
Average common shares and equivalents outstanding (in thousands): | ||||||||||||||||||||||||||||||||
Basic | 951,281 | 962,397 | 1,010,179 | 956,887 | 1,013,507 | 933,264 | 951,281 | 999,808 | 949,035 | 1,008,967 | ||||||||||||||||||||||
Diluted | 953,928 | 965,960 | 1,014,357 | 959,957 | 1,018,020 | 935,677 | 953,928 | 1,003,665 | 951,876 | 1,013,242 | ||||||||||||||||||||||
Selected average balances: | ||||||||||||||||||||||||||||||||
Interest-earning assets | $ | 287,417 | $ | 282,185 | $ | 292,086 | $ | 284,816 | $ | 297,050 | $ | 294,154 | $ | 287,417 | $ | 279,218 | $ | 287,964 | $ | 291,040 | ||||||||||||
Total assets | $ | 342,384 | $ | 336,165 | $ | 346,328 | $ | 339,292 | $ | 352,219 | $ | 350,679 | $ | 342,384 | $ | 332,341 | $ | 343,129 | $ | 345,520 | ||||||||||||
Interest-bearing deposits | $ | 167,545 | $ | 159,879 | $ | 152,799 | $ | 163,734 | $ | 154,244 | $ | 177,401 | $ | 167,545 | $ | 148,636 | $ | 168,339 | $ | 152,354 | ||||||||||||
Noninterest-bearing deposits | $ | 52,956 | $ | 54,583 | $ | 64,768 | $ | 53,765 | $ | 67,869 | $ | 49,027 | $ | 52,956 | $ | 60,677 | $ | 52,168 | $ | 65,446 | ||||||||||||
Long-term debt | $ | 27,681 | $ | 28,254 | $ | 28,349 | $ | 27,966 | $ | 28,378 | $ | 28,386 | $ | 27,681 | $ | 28,074 | $ | 28,108 | $ | 28,275 | ||||||||||||
Preferred stock | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | ||||||||||||
Total The Bank of New York Mellon Corporation common shareholders’ equity | $ | 37,487 | $ | 37,086 | $ | 37,750 | $ | 37,287 | $ | 37,672 | $ | 37,597 | $ | 37,487 | $ | 38,036 | $ | 37,392 | $ | 37,795 | ||||||||||||
Other information at period end: | ||||||||||||||||||||||||||||||||
Cash dividends per common share | $ | 0.28 | $ | 0.28 | $ | 0.24 | $ | 0.56 | $ | 0.48 | $ | 0.31 | $ | 0.28 | $ | 0.28 | $ | 0.87 | $ | 0.76 | ||||||||||||
Common dividend payout ratio | 28 | % | 30 | % | 23 | % | 29 | % | 22 | % | 29 | % | 28 | % | 26 | % | 29 | % | 24 | % | ||||||||||||
Common dividend yield (annualized) | 2.5 | % | 2.3 | % | 1.8 | % | 2.6 | % | 1.8 | % | 2.7 | % | 2.5 | % | 2.2 | % | 2.6 | % | 2.0 | % | ||||||||||||
Closing stock price per common share | $ | 44.15 | $ | 50.43 | $ | 53.93 | $ | 44.15 | $ | 53.93 | $ | 45.21 | $ | 44.15 | $ | 50.99 | $ | 45.21 | $ | 50.99 | ||||||||||||
Market capitalization | $ | 41,619 | $ | 48,288 | $ | 53,927 | $ | 41,619 | $ | 53,927 | $ | 41,693 | $ | 41,619 | $ | 50,418 | $ | 41,693 | $ | 50,418 | ||||||||||||
Book value per common share | $ | 40.30 | $ | 39.36 | $ | 37.97 | $ | 40.30 | $ | 37.97 | $ | 40.75 | $ | 40.30 | $ | 38.45 | $ | 40.75 | $ | 38.45 | ||||||||||||
Tangible book value per common share – Non-GAAP (a) | $ | 20.45 | $ | 19.74 | $ | 19.00 | $ | 20.45 | $ | 19.00 | $ | 20.59 | $ | 20.45 | $ | 19.35 | $ | 20.59 | $ | 19.35 | ||||||||||||
Full-time employees | 49,100 | 49,800 | 52,000 | 49,100 | 52,000 | 48,700 | 49,100 | 52,000 | 48,700 | 52,000 | ||||||||||||||||||||||
Common shares outstanding (in thousands) | 942,662 | 957,517 | 999,945 | 942,662 | 999,945 | 922,199 | 942,662 | 988,777 | 922,199 | 988,777 |
Regulatory capital and other ratios | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | June 30, 2019 | Dec. 31, 2018 | ||||||
Average liquidity coverage ratio (“LCR”) | 117 | % | 118 | % | 118 | % | 117 | % | 117 | % | 118 | % |
Regulatory capital ratios: (f) | ||||||||||||
Advanced: | ||||||||||||
Common Equity Tier 1 (“CET1”) ratio | 11.1 | % | 11.1 | % | 10.7 | % | 11.1 | % | 11.1 | % | 10.7 | % |
Tier 1 capital ratio | 13.2 | 13.2 | 12.8 | 13.2 | 13.2 | 12.8 | ||||||
Total capital ratio | 14.0 | 14.0 | 13.6 | 14.0 | 14.0 | 13.6 | ||||||
Standardized: | ||||||||||||
CET1 ratio | 12.4 | % | 12.0 | % | 11.7 | % | 12.3 | % | 12.4 | % | 11.7 | % |
Tier 1 capital ratio | 14.8 | 14.3 | 14.1 | 14.6 | 14.8 | 14.1 | ||||||
Total capital ratio | 15.7 | 15.3 | 15.1 | 15.6 | 15.7 | 15.1 | ||||||
Tier 1 leverage ratio | 6.8 | % | 6.8 | % | 6.6 | % | 6.5 | % | 6.8 | % | 6.6 | % |
Supplementary leverage ratio (“SLR”) | 6.3 | 6.3 | 6.0 | 6.0 | 6.3 | 6.0 | ||||||
BNY Mellon shareholders’ equity to total assets ratio | 10.9 | % | 11.9 | % | 11.2 | % | 11.0 | % | 10.9 | % | 11.2 | % |
BNY Mellon common shareholders’ equity to total assets ratio | 10.0 | 10.9 | 10.2 | 10.1 | 10.0 | 10.2 |
(a) | Return on tangible common equity and tangible book value per common share, Non-GAAP measures, exclude goodwill and intangible assets, net of deferred tax liabilities. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 40 for the reconciliation of Non-GAAP measures. |
(b) | See “Average balances and interest rates” beginning on page |
(c) | Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.4 trillion at Sept. 30, 2019, June 30, 2019 |
(d) | Excludes securities lending cash management assets and assets managed in the Investment Services business. |
(e) | Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled $66 billion at Sept. 30, 2019, $64 billion at June 30, 2019 |
(f) | For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches. For additional information on our capital ratios, see “Capital” beginning on page 33. |
Part I - Financial Information |
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk |
Fee and other revenue | YTD19 | YTD19 | ||||||||||||||||||||||||||||||||||||||||||
2Q19 vs. | vs. | 3Q19 vs. | vs. | |||||||||||||||||||||||||||||||||||||||||
(dollars in millions, unless otherwise noted) | 2Q19 | 1Q19 | 2Q18 | 1Q19 | 2Q18 | YTD19 | YTD18 | YTD18 | 3Q19 | 2Q19 | 3Q18 | 2Q19 | 3Q18 | YTD19 | YTD18 | YTD18 | ||||||||||||||||||||||||||||
Investment services fees: | ||||||||||||||||||||||||||||||||||||||||||||
Asset servicing fees (a) | $ | 1,141 | $ | 1,122 | $ | 1,157 | 2 | % | (1 | )% | $ | 2,263 | $ | 2,325 | (3 | )% | $ | 1,152 | $ | 1,141 | $ | 1,157 | 1 | % | — | % | $ | 3,415 | $ | 3,482 | (2 | )% | ||||||||||||
Clearing services fees (b) | 410 | 398 | 401 | 3 | 2 | 808 | 825 | (2 | ) | 419 | 410 | 393 | 2 | 7 | 1,227 | 1,218 | 1 | |||||||||||||||||||||||||||
Issuer services fees | 291 | 251 | 266 | 16 | 9 | 542 | 526 | 3 | 324 | 291 | 287 | 11 | 13 | 866 | 813 | 7 | ||||||||||||||||||||||||||||
Treasury services fees | 140 | 132 | 140 | 6 | — | 272 | 278 | (2 | ) | 140 | 140 | 137 | — | 2 | 412 | 415 | (1 | ) | ||||||||||||||||||||||||||
Total investment services fees (b) | 1,982 | 1,903 | 1,964 | 4 | 1 | 3,885 | 3,954 | (2 | ) | 2,035 | 1,982 | 1,974 | 3 | 3 | 5,920 | 5,928 | — | |||||||||||||||||||||||||||
Investment management and performance fees (b) | 833 | 841 | 901 | (1 | ) | (8 | ) | 1,674 | 1,851 | (10 | ) | 832 | 833 | 912 | — | (9 | ) | 2,506 | 2,763 | (9 | ) | |||||||||||||||||||||||
Foreign exchange and other trading revenue | 166 | 170 | 187 | (2 | ) | (11 | ) | 336 | 396 | (15 | ) | 150 | 166 | 155 | (10 | ) | (3 | ) | 486 | 551 | (12 | ) | ||||||||||||||||||||||
Financing-related fees | 50 | 51 | 53 | (2 | ) | (6 | ) | 101 | 105 | (4 | ) | 49 | 50 | 52 | (2 | ) | (6 | ) | 150 | 157 | (4 | ) | ||||||||||||||||||||||
Distribution and servicing | 31 | 31 | 34 | — | (9 | ) | 62 | 70 | (11 | ) | 33 | 31 | 34 | 6 | (3 | ) | 95 | 104 | (9 | ) | ||||||||||||||||||||||||
Investment and other income | 43 | 35 | 70 | N/M | 78 | 152 | N/M | 30 | 43 | 41 | N/M | 108 | 193 | N/M | ||||||||||||||||||||||||||||||
Total fee revenue | 3,105 | 3,031 | 3,209 | 2 | (3 | ) | 6,136 | 6,528 | (6) | 3,129 | 3,105 | 3,168 | 1 | (1 | ) | 9,265 | 9,696 | (4 | ) | |||||||||||||||||||||||||
Net securities gains (losses) | 7 | 1 | 1 | N/M | 8 | (48 | ) | N/M | ||||||||||||||||||||||||||||||||||||
Net securities (losses) gains | (1 | ) | 7 | — | N/M | 7 | (48 | ) | N/M | |||||||||||||||||||||||||||||||||||
Total fee and other revenue | $ | 3,112 | $ | 3,032 | $ | 3,210 | 3 | % | (3 | )% | $ | 6,144 | $ | 6,480 | (5 | )% | $ | 3,128 | $ | 3,112 | $ | 3,168 | 1 | % | (1 | )% | $ | 9,272 | $ | 9,648 | (4 | )% | ||||||||||||
Fee revenue as a percentage of total revenue | 79 | % | 78 | % | 78 | % | 78 | % | 78 | % | 81 | % | 79 | % | 78 | % | 79 | % | 78 | % | ||||||||||||||||||||||||
AUC/A at period end (in trillions) (c) | $ | 35.5 | $ | 34.5 | $ | 33.6 | 3 | % | 6 | % | $ | 35.5 | $ | 33.6 | 6 | % | $ | 35.8 | $ | 35.5 | $ | 34.5 | 1 | % | 4 | % | $ | 35.8 | $ | 34.5 | 4 | % | ||||||||||||
AUM at period end (in billions) (d) | $ | 1,843 | $ | 1,841 | $ | 1,805 | — | % | 2 | % | $ | 1,843 | $ | 1,805 | 2 | % | $ | 1,881 | $ | 1,843 | $ | 1,828 | 2 | % | 3 | % | $ | 1,881 | $ | 1,828 | 3 | % |
(a) | Asset servicing fees include securities lending revenue of $43 million in the third quarter of 2019, $44 million in the second quarter of 2019, |
(b) | In the first quarter of 2019, we reclassified certain platform-related fees to clearing services fees from investment management and performance fees. Prior periods have been reclassified. |
(c) | Includes the AUC/A of CIBC Mellon of $1.4 trillion at Sept. 30, 2019, June 30, 2019 |
(d) | Excludes securities lending cash management assets and assets managed in the Investment Services business. |
Foreign exchange and other trading revenue | ||||||||||||||||||||||||||||||
(in millions) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||
Foreign exchange | $ | 150 | $ | 160 | $ | 171 | $ | 310 | $ | 354 | $ | 129 | $ | 150 | $ | 150 | $ | 439 | $ | 504 | ||||||||||
Other trading revenue | 16 | 10 | 16 | 26 | 42 | 21 | 16 | 5 | 47 | 47 | ||||||||||||||||||||
Total foreign exchange and other trading revenue | $ | 166 | $ | 170 | $ | 187 | $ | 336 | $ | 396 | $ | 150 | $ | 166 | $ | 155 | $ | 486 | $ | 551 |
Investment and other income | ||||||||||||||||||||||||||||||
(in millions) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||
Corporate/bank-owned life insurance | $ | 32 | $ | 30 | $ | 31 | $ | 62 | $ | 67 | $ | 33 | $ | 32 | $ | 36 | $ | 95 | $ | 103 | ||||||||||
Expense reimbursements from joint venture | 19 | 19 | 19 | 38 | 35 | 21 | 19 | 17 | 59 | 52 | ||||||||||||||||||||
Seed capital gains | 8 | 2 | 3 | 10 | 3 | — | 8 | 8 | 10 | 11 | ||||||||||||||||||||
Asset-related gains | 1 | 1 | 15 | 2 | 61 | 2 | 1 | 7 | 4 | 68 | ||||||||||||||||||||
Other (loss) income (b) | (17 | ) | (17 | ) | 2 | (34 | ) | (14 | ) | |||||||||||||||||||||
Other (loss) | (26 | ) | (17 | ) | (27 | ) | (60 | ) | (41 | ) | ||||||||||||||||||||
Total investment and other income | $ | 43 | $ | 35 | $ | 70 | $ | 78 | $ | 152 | $ | 30 | $ | 43 | $ | 41 | $ | 108 | $ | 193 |
(a) | Excludes seed capital gains related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds. |
Net interest revenue | YTD19 | YTD19 | ||||||||||||||||||||||||||||||||||||||||||
2Q19 vs. | vs. | 3Q19 vs. | vs. | |||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | 2Q19 | 1Q19 | 2Q18 | 1Q19 | 2Q18 | YTD19 | YTD18 | YTD18 | 3Q19 | 2Q19 | 3Q18 | 2Q19 | 3Q18 | YTD19 | YTD18 | YTD18 | ||||||||||||||||||||||||||||
Net interest revenue | $ | 802 | $ | 841 | $ | 916 | (5 | )% | (12 | )% | $ | 1,643 | $ | 1,835 | (10 | )% | $ | 730 | $ | 802 | $ | 891 | (9 | )% | (18 | )% | $ | 2,373 | $ | 2,726 | (13 | )% | ||||||||||||
Add: Tax equivalent adjustment | 4 | 4 | 5 | N/M | 8 | 11 | N/M | 3 | 4 | 5 | N/M | 11 | 16 | N/M | ||||||||||||||||||||||||||||||
Net interest revenue on a fully taxable equivalent basis (“FTE”) – Non-GAAP (a) | $ | 806 | $ | 845 | $ | 921 | (5 | )% | (12 | )% | $ | 1,651 | $ | 1,846 | (11 | )% | ||||||||||||||||||||||||||||
Net interest revenue (FTE) – Non-GAAP (a) | $ | 733 | $ | 806 | $ | 896 | (9 | )% | (18 | )% | $ | 2,384 | $ | 2,742 | (13 | )% | ||||||||||||||||||||||||||||
Average interest-earning assets | $ | 287,417 | $ | 282,185 | $ | 292,086 | 2 | % | (2 | )% | $ | 284,816 | $ | 297,050 | (4 | )% | $ | 294,154 | $ | 287,417 | $ | 279,218 | 2 | % | 5 | % | $ | 287,964 | $ | 291,040 | (1 | )% | ||||||||||||
Net interest margin | 1.12 | % | 1.20 | % | 1.26 | % | (8 | ) bps | (14 | ) bps | 1.16 | % | 1.24 | % | (8 | ) bps | 0.99 | % | 1.12 | % | 1.27 | % | (13 | ) bps | (28 | ) bps | 1.10 | % | 1.25 | % | (15 | ) bps | ||||||||||||
Net interest margin (FTE) – Non-GAAP (a) | 1.12 | % | 1.20 | % | 1.26 | % | (8 | ) bps | (14 | ) bps | 1.16 | % | 1.25 | % | (9 | ) bps | 1.00 | % | 1.12 | % | 1.28 | % | (12 | ) bps | (28 | ) bps | 1.11 | % | 1.26 | % | (15 | ) bps |
(a) | Net interest revenue (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income which allows for comparisons 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. |
Average balances and interest rates | Quarter ended | Quarter ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | Average balance | Interest | Average rates | Average balance | Interest | Average rates | Average balance | Interest | Average rates | ||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions; average rates annualized) | Average balance | Interest | Average rates | Average balance | Interest | Average rates | Average balance | Interest | Average rates | ||||||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | 61,756 | $ | 113 | 0.72 | % | $ | 63,583 | $ | 139 | 0.87 | % | $ | 69,676 | $ | 136 | 0.77 | % | $ | 60,030 | $ | 102 | 0.67 | % | $ | 61,756 | $ | 113 | 0.72 | % | $ | 61,216 | $ | 125 | 0.80 | % | |||||||||||||||||
Interest-bearing deposits with banks (primarily foreign banks) | 13,666 | 64 | 1.87 | 13,857 | 63 | 1.85 | 15,748 | 56 | 1.41 | 15,324 | 73 | 1.89 | 13,666 | 64 | 1.87 | 14,691 | 59 | 1.58 | |||||||||||||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements (a) | 38,038 | 568 | 5.99 | 28,968 | 474 | 6.63 | 28,051 | 230 | 3.29 | 40,816 | 660 | 6.42 | 38,038 | 568 | 5.99 | 26,738 | 281 | 4.18 | |||||||||||||||||||||||||||||||||||
Margin loans | 10,920 | 119 | 4.36 | 12,670 | 135 | 4.34 | 14,838 | 128 | 3.46 | 10,303 | 104 | 4.02 | 10,920 | 119 | 4.36 | 13,738 | 129 | 3.74 | |||||||||||||||||||||||||||||||||||
Non-margin loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Domestic offices | 29,492 | 284 | 3.86 | 28,177 | 269 | 3.85 | 29,970 | 257 | 3.44 | 29,285 | 202 | 2.75 | (b) | 29,492 | 284 | 3.86 | 28,628 | 258 | 3.59 | ||||||||||||||||||||||||||||||||||
Foreign offices | 9,961 | 81 | 3.29 | 10,511 | 86 | 3.32 | 12,258 | 88 | 2.87 | 11,247 | 85 | 2.97 | 9,961 | 81 | 3.29 | 11,441 | 86 | 2.98 | |||||||||||||||||||||||||||||||||||
Total non-margin loans | 39,453 | 365 | 3.71 | 38,688 | 355 | 3.70 | 42,228 | 345 | 3.27 | 40,532 | 287 | 2.81 | (b) | 39,453 | 365 | 3.71 | 40,069 | 344 | 3.42 | ||||||||||||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government obligations | 18,870 | 103 | 2.19 | 23,597 | 129 | 2.22 | 23,199 | 116 | 2.02 | 19,315 | 103 | 2.11 | 18,870 | 103 | 2.19 | 24,423 | 129 | 2.09 | |||||||||||||||||||||||||||||||||||
U.S. government agency obligations | 66,445 | 428 | 2.58 | 64,867 | 427 | 2.63 | 63,022 | 374 | 2.37 | 67,235 | 418 | 2.49 | 66,445 | 428 | 2.58 | 64,612 | 384 | 2.40 | |||||||||||||||||||||||||||||||||||
State and political subdivisions | 1,735 | 13 | 2.89 | 2,206 | 15 | 2.71 | 2,677 | 18 | 2.75 | 1,217 | 9 | 3.05 | 1,735 | 13 | 2.89 | 2,453 | 18 | 2.77 | |||||||||||||||||||||||||||||||||||
Other securities | 30,770 | 157 | 2.04 | 28,647 | 151 | 2.13 | 28,863 | 126 | 1.75 | 33,729 | 148 | 1.75 | 30,770 | 157 | 2.04 | 27,017 | 138 | 1.98 | |||||||||||||||||||||||||||||||||||
Trading securities | 5,764 | 39 | 2.72 | 5,102 | 36 | 2.91 | 3,784 | 29 | 3.10 | 5,653 | 41 | 2.80 | 5,764 | 39 | 2.72 | 4,261 | 32 | 3.05 | |||||||||||||||||||||||||||||||||||
Total securities | 123,584 | 740 | 2.40 | 124,419 | 758 | 2.45 | 121,545 | 663 | 2.19 | 127,149 | 719 | 2.25 | 123,584 | 740 | 2.40 | 122,766 | 701 | 2.28 | |||||||||||||||||||||||||||||||||||
Total interest-earning assets | $ | 287,417 | $ | 1,969 | 2.74 | % | $ | 282,185 | $ | 1,924 | 2.75 | % | $ | 292,086 | $ | 1,558 | 2.14 | % | $ | 294,154 | $ | 1,945 | 2.63 | % | (b) | $ | 287,417 | $ | 1,969 | 2.74 | % | $ | 279,218 | $ | 1,639 | 2.33 | % | ||||||||||||||||
Noninterest-earnings assets | 54,967 | 53,980 | 54,242 | 56,525 | 54,967 | 53,123 | |||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 342,384 | $ | 336,165 | $ | 346,328 | $ | 350,679 | $ | 342,384 | $ | 332,341 | |||||||||||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Domestic offices | $ | 74,180 | $ | 251 | 1.36 | % | $ | 70,562 | $ | 224 | 1.29 | % | $ | 54,200 | $ | 105 | 0.78 | % | $ | 82,663 | $ | 267 | 1.28 | % | $ | 74,180 | $ | 251 | 1.36 | % | $ | 57,942 | $ | 142 | 0.97 | % | |||||||||||||||||
Foreign offices | 93,365 | 181 | 0.78 | 89,317 | 167 | 0.76 | 98,599 | 68 | 0.28 | 94,738 | 170 | 0.71 | 93,365 | 181 | 0.78 | 90,694 | 95 | 0.42 | |||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 167,545 | 432 | 1.04 | 159,879 | 391 | 0.99 | 152,799 | 173 | 0.45 | 177,401 | 437 | 0.98 | 167,545 | 432 | 1.04 | 148,636 | 237 | 0.63 | |||||||||||||||||||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements (a) | 11,809 | 372 | 12.64 | 11,922 | 331 | 11.26 | 18,146 | 158 | 3.48 | 13,432 | 443 | 13.08 | 11,809 | 372 | 12.64 | 14,199 | 190 | 5.33 | |||||||||||||||||||||||||||||||||||
Trading liabilities | 1,735 | 11 | 2.47 | 1,305 | 7 | 2.25 | 1,198 | 7 | 2.43 | 1,371 | 8 | 2.33 | 1,735 | 11 | 2.47 | 1,150 | 7 | 2.32 | |||||||||||||||||||||||||||||||||||
Other borrowed funds | 2,455 | 20 | 3.36 | 3,305 | 24 | 2.87 | 2,399 | 14 | 2.40 | 1,148 | 10 | 3.24 | 2,455 | 20 | 3.36 | 2,747 | 16 | 2.33 | |||||||||||||||||||||||||||||||||||
Commercial paper | 2,957 | 18 | 2.43 | 1,377 | 8 | 2.44 | 3,869 | 21 | 2.13 | 3,796 | 22 | 2.26 | 2,957 | 18 | 2.43 | 3,102 | 16 | 2.10 | |||||||||||||||||||||||||||||||||||
Payables to customers and broker-dealers | 15,666 | 69 | 1.76 | 16,108 | 70 | 1.76 | 16,349 | 45 | 1.10 | 15,440 | 59 | 1.52 | 15,666 | 69 | 1.76 | 16,252 | 51 | 1.23 | |||||||||||||||||||||||||||||||||||
Long-term debt | 27,681 | 241 | 3.45 | 28,254 | 248 | 3.52 | 28,349 | 219 | 3.06 | 28,386 | 233 | 3.24 | 27,681 | 241 | 3.45 | 28,074 | 226 | 3.17 | |||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 229,848 | $ | 1,163 | 2.03 | % | $ | 222,150 | $ | 1,079 | 1.96 | % | $ | 223,109 | $ | 637 | 1.14 | % | $ | 240,974 | $ | 1,212 | 1.99 | % | $ | 229,848 | $ | 1,163 | 2.03 | % | $ | 214,160 | $ | 743 | 1.37 | % | |||||||||||||||||
Total noninterest-bearing deposits | 52,956 | 54,583 | 64,768 | 49,027 | 52,956 | 60,677 | |||||||||||||||||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 18,362 | 18,628 | 16,857 | 19,280 | 18,362 | 15,660 | |||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 301,166 | 295,361 | 304,734 | 309,281 | 301,166 | 290,497 | |||||||||||||||||||||||||||||||||||||||||||||||
Temporary equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable noncontrolling interests | 53 | 70 | 184 | 64 | 53 | 193 | |||||||||||||||||||||||||||||||||||||||||||||||
Permanent equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity | 41,029 | 40,628 | 41,292 | 41,139 | 41,029 | 41,578 | |||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests | 136 | 106 | 118 | 195 | 136 | 73 | |||||||||||||||||||||||||||||||||||||||||||||||
Total permanent equity | 41,165 | 40,734 | 41,410 | 41,334 | 41,165 | 41,651 | |||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities, temporary equity and permanent equity | $ | 342,384 | $ | 336,165 | $ | 346,328 | $ | 350,679 | $ | 342,384 | $ | 332,341 | |||||||||||||||||||||||||||||||||||||||||
Net interest revenue (FTE) – Non-GAAP | $ | 806 | $ | 845 | $ | 921 | $ | 733 | $ | 806 | $ | 896 | |||||||||||||||||||||||||||||||||||||||||
Net interest margin (FTE) – Non-GAAP | 1.12 | % | 1.20 | % | 1.26 | % | 1.00 | % | (b) | 1.12 | % | 1.28 | % | ||||||||||||||||||||||||||||||||||||||||
Less: Tax equivalent adjustment | 4 | 4 | 5 | 3 | 4 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest revenue – GAAP | $ | 802 | $ | 841 | $ | 916 | $ | 730 | $ | 802 | $ | 891 | |||||||||||||||||||||||||||||||||||||||||
Net interest margin – GAAP | 1.12 | % | 1.20 | % | 1.26 | % | 0.99 | % | (b) | 1.12 | % | 1.27 | % |
(a) | Includes the average impact of offsetting under enforceable netting agreements of approximately $68 billion for the third quarter of 2019, $51 billion for the second quarter of 2019 |
(b) | Includes the impact of the lease-related impairment of $70 million. On a Non-GAAP basis, excluding the lease-related impairment, the yield on non-margin loans in domestic offices would have been 3.70%, the yield on total non-margin loans would have been 3.50%, the yield on total interest-earning assets would have been 2.72% and the net interest margin and the net interest margin (FTE) – Non-GAAP would have been 1.09%. We believe providing the rates excluding the lease-related impairment is useful to investors as it is more reflective of the actual rates earned. |
(c) | Average rates were calculated on an FTE basis, at tax rates of approximately 21% |
Average balances and interest rates | Year-to-date | Year-to-date | |||||||||||||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | ||||||||||||||||||||||||||||||||
(dollars in millions) | Average balance | Interest | Average rates | Average balance | Interest | Average rates | |||||||||||||||||||||||||||||
(dollars in millions; average rates annualized) | Average balance | Interest | Average rates | Average balance | Interest | Average rates | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | 62,665 | $ | 252 | 0.80 | % | $ | 74,346 | $ | 262 | 0.70 | % | $ | 61,777 | $ | 354 | 0.75 | % | $ | 69,921 | $ | 387 | 0.73 | % | |||||||||||
Interest-bearing deposits with banks (primarily foreign banks) | 13,761 | 127 | 1.86 | 14,804 | 98 | 1.33 | 14,288 | 200 | 1.87 | 14,766 | 157 | 1.42 | |||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements (a) | 33,528 | 1,042 | 6.26 | 27,978 | 400 | 2.88 | 35,984 | 1,702 | 6.32 | 27,560 | 681 | 3.31 | |||||||||||||||||||||||
Margin loans | 11,790 | 254 | 4.35 | 15,254 | 243 | 3.21 | 11,289 | 358 | 4.25 | 14,743 | 372 | 3.38 | |||||||||||||||||||||||
Non-margin loans: | |||||||||||||||||||||||||||||||||||
Domestic offices | 28,838 | 553 | 3.85 | 30,191 | 485 | 3.23 | 28,989 | 755 | 3.48 | (b) | 29,664 | 743 | 3.35 | ||||||||||||||||||||||
Foreign offices | 10,235 | 167 | 3.30 | 12,387 | 165 | 2.68 | 10,576 | 252 | 3.18 | 12,068 | 251 | 2.78 | |||||||||||||||||||||||
Total non-margin loans | 39,073 | 720 | 3.71 | 42,578 | 650 | 3.07 | 39,565 | 1,007 | 3.40 | (b) | 41,732 | 994 | 3.18 | ||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||||||||
U.S. government obligations | 21,220 | 232 | 2.21 | 23,329 | 225 | 1.95 | 20,578 | 335 | 2.17 | 23,698 | 354 | 2.00 | |||||||||||||||||||||||
U.S. government agency obligations | 65,660 | 855 | 2.60 | 62,998 | 724 | 2.30 | 66,191 | 1,273 | 2.56 | 63,702 | 1,108 | 2.32 | |||||||||||||||||||||||
State and political subdivisions (b) | 1,969 | 28 | 2.80 | 2,776 | 37 | 2.68 | |||||||||||||||||||||||||||||
State and political subdivisions (c) | 1,716 | 37 | 2.86 | 2,667 | 55 | 2.71 | |||||||||||||||||||||||||||||
Other securities | 29,715 | 308 | 2.08 | 29,005 | 249 | 1.72 | 31,068 | 456 | 1.96 | 28,175 | 387 | 1.83 | |||||||||||||||||||||||
Trading securities | 5,435 | 75 | 2.81 | 3,982 | 57 | 2.85 | 5,508 | 116 | 2.80 | 4,076 | 89 | 2.92 | |||||||||||||||||||||||
Total securities | 123,999 | 1,498 | 2.42 | 122,090 | 1,292 | 2.12 | 125,061 | 2,217 | 2.37 | 122,318 | 1,993 | 2.17 | |||||||||||||||||||||||
Total interest-earning assets | $ | 284,816 | $ | 3,893 | 2.75 | % | $ | 297,050 | $ | 2,945 | 1.99 | % | $ | 287,964 | $ | 5,838 | 2.71 | % | (b) | $ | 291,040 | $ | 4,584 | 2.10 | % | ||||||||||
Noninterest-earnings assets | 54,476 | 55,169 | 55,165 | 54,480 | |||||||||||||||||||||||||||||||
Total assets | $ | 339,292 | $ | 352,219 | $ | 343,129 | $ | 345,520 | |||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||
Domestic offices | $ | 72,381 | $ | 475 | 1.32 | % | $ | 52,914 | $ | 176 | 0.67 | % | $ | 75,846 | $ | 742 | 1.31 | % | $ | 54,608 | $ | 318 | 0.78 | % | |||||||||||
Foreign offices | 91,353 | 348 | 0.77 | 101,330 | 114 | 0.23 | 92,493 | 518 | 0.75 | 97,746 | 209 | 0.29 | |||||||||||||||||||||||
Total interest-bearing deposits | 163,734 | 823 | 1.01 | 154,244 | 290 | 0.38 | 168,339 | 1,260 | 1.00 | 152,354 | 527 | 0.46 | |||||||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements (a) | 11,865 | 703 | 11.95 | 18,552 | 265 | 2.88 | 12,393 | 1,146 | 12.36 | 17,085 | 455 | 3.56 | |||||||||||||||||||||||
Trading liabilities | 1,521 | 18 | 2.37 | 1,382 | 16 | 2.33 | 1,470 | 26 | 2.36 | 1,304 | 23 | 2.33 | |||||||||||||||||||||||
Other borrowed funds | 2,878 | 44 | 3.08 | 2,260 | 23 | 2.06 | 2,295 | 54 | 3.11 | 2,424 | 39 | 2.16 | |||||||||||||||||||||||
Commercial paper | 2,171 | 26 | 2.43 | 3,502 | 33 | 1.89 | 2,718 | 48 | 2.35 | 3,367 | 49 | 1.96 | |||||||||||||||||||||||
Payables to customers and broker-dealers | 15,887 | 139 | 1.76 | 16,723 | 76 | 0.92 | 15,736 | 198 | 1.68 | 16,564 | 127 | 1.02 | |||||||||||||||||||||||
Long-term debt | 27,966 | 489 | 3.48 | 28,378 | 396 | 2.78 | 28,108 | 722 | 3.40 | 28,275 | 622 | 2.90 | |||||||||||||||||||||||
Total interest-bearing liabilities | $ | 226,022 | $ | 2,242 | 2.00 | % | $ | 225,041 | $ | 1,099 | 0.98 | % | $ | 231,059 | $ | 3,454 | 1.99 | % | $ | 221,373 | $ | 1,842 | 1.11 | % | |||||||||||
Total noninterest-bearing deposits | 53,765 | 67,869 | 52,168 | 65,446 | |||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 18,494 | 17,710 | 18,760 | 17,019 | |||||||||||||||||||||||||||||||
Total liabilities | 298,281 | 310,620 | 301,987 | 303,838 | |||||||||||||||||||||||||||||||
Temporary equity | |||||||||||||||||||||||||||||||||||
Redeemable noncontrolling interests | 65 | 188 | 65 | 190 | |||||||||||||||||||||||||||||||
Permanent equity | |||||||||||||||||||||||||||||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity | 40,829 | 41,214 | 40,934 | 41,337 | |||||||||||||||||||||||||||||||
Noncontrolling interests | 117 | 197 | 143 | 155 | |||||||||||||||||||||||||||||||
Total permanent equity | 40,946 | 41,411 | 41,077 | 41,492 | |||||||||||||||||||||||||||||||
Total liabilities, temporary equity and permanent equity | $ | 339,292 | $ | 352,219 | $ | 343,129 | $ | 345,520 | |||||||||||||||||||||||||||
Net interest revenue (FTE) – Non-GAAP | $ | 1,651 | $ | 1,846 | $ | 2,384 | $ | 2,742 | |||||||||||||||||||||||||||
Net interest margin (FTE) – Non-GAAP | 1.16 | % | 1.25 | % | 1.11 | % | (b) | 1.26 | % | ||||||||||||||||||||||||||
Less: Tax equivalent adjustment (b) | 8 | 11 | 11 | 16 | |||||||||||||||||||||||||||||||
Net interest revenue – GAAP | $ | 1,643 | $ | 1,835 | $ | 2,373 | $ | 2,726 | |||||||||||||||||||||||||||
Net interest margin – GAAP | 1.16 | % | 1.24 | % | 1.10 | % | (b) | 1.25 | % |
(a) | Includes the average impact of offsetting under enforceable netting agreements of approximately |
(b) | Includes the impact of the lease-related impairment of $70 million. On a Non-GAAP basis, excluding the lease-related impairment, the yield on non-margin loans in domestic offices would have been 3.80%, the yield on total non-margin loans would have been 3.64%, the yield on total interest-earning assets would have been 2.74%, the net interest margin would have been 1.13% and the net interest margin (FTE) – Non-GAAP would have been 1.14%. We believe providing the rates excluding the lease-related impairment is useful to investors as it is more reflective of the actual rates earned. |
(c) | Average rates were calculated on an FTE basis, at tax rates of approximately 21% |
Noninterest expense | YTD19 | YTD19 | ||||||||||||||||||||||||||||||||||||||||||
2Q19 vs. | vs. | 3Q19 vs. | vs. | |||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | 2Q19 | 1Q19 | 2Q18 | 1Q19 | 2Q18 | YTD19 | YTD18 | YTD18 | 3Q19 | 2Q19 | 3Q18 | 2Q19 | 3Q18 | YTD19 | YTD18 | YTD18 | ||||||||||||||||||||||||||||
Staff | $ | 1,421 | $ | 1,524 | $ | 1,489 | (7 | )% | (5 | )% | $ | 2,945 | $ | 3,065 | (4 | )% | $ | 1,479 | $ | 1,421 | $ | 1,478 | 4 | % | — | % | $ | 4,424 | $ | 4,543 | (3 | )% | ||||||||||||
Professional, legal and other purchased services | 337 | 325 | 328 | 4 | 3 | 662 | 619 | 7 | 316 | 337 | 332 | (6 | ) | (5 | ) | 978 | 951 | 3 | ||||||||||||||||||||||||||
Software and equipment | 304 | 283 | 266 | 7 | 14 | 587 | 500 | 17 | 309 | 304 | 262 | 2 | 18 | 896 | 762 | 18 | ||||||||||||||||||||||||||||
Net occupancy | 138 | 137 | 156 | 1 | (12 | ) | 275 | 295 | (7 | ) | 138 | 138 | 139 | — | (1 | ) | 413 | 434 | (5 | ) | ||||||||||||||||||||||||
Sub-custodian and clearing | 115 | 105 | 110 | 10 | 5 | 220 | 229 | (4 | ) | 111 | 115 | 106 | (3 | ) | 5 | 331 | 335 | (1 | ) | |||||||||||||||||||||||||
Distribution and servicing | 94 | 91 | 106 | 3 | (11 | ) | 185 | 212 | (13 | ) | 97 | 94 | 99 | 3 | (2 | ) | 282 | 311 | (9 | ) | ||||||||||||||||||||||||
Business development | 56 | 45 | 62 | 24 | (10 | ) | 101 | 113 | (11 | ) | 47 | 56 | 51 | (16 | ) | (8 | ) | 148 | 164 | (10 | ) | |||||||||||||||||||||||
Bank assessment charges | 31 | 31 | 47 | — | (34 | ) | 62 | 99 | (37 | ) | 31 | 31 | 49 | — | (37 | ) | 93 | 148 | (37 | ) | ||||||||||||||||||||||||
Amortization of intangible assets | 30 | 29 | 48 | 3 | (38 | ) | 59 | 97 | (39 | ) | 30 | 30 | 48 | — | (38 | ) | 89 | 145 | (39 | ) | ||||||||||||||||||||||||
Other | 121 | 129 | 135 | (6 | ) | (10 | ) | 250 | 257 | (3 | ) | 32 | 121 | 174 | (74 | ) | (82 | ) | 282 | 431 | (35 | ) | ||||||||||||||||||||||
Total noninterest expense | $ | 2,647 | $ | 2,699 | $ | 2,747 | (2 | )% | (4 | )% | $ | 5,346 | $ | 5,486 | (3 | )% | $ | 2,590 | $ | 2,647 | $ | 2,738 | (2 | )% | (5 | )% | $ | 7,936 | $ | 8,224 | (4 | )% | ||||||||||||
Full-time employees at period end | 49,100 | 49,800 | 52,000 | (1 | )% | (6 | )% | 48,700 | 49,100 | 52,000 | (1 | )% | (6 | )% |
YTD19 | YTD19 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions unless otherwise noted) | 2Q19 vs. | vs. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q19 | 2Q18 | YTD19 | YTD18 | YTD18 | |||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions, unless otherwise noted) | 3Q19 vs. | vs. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q19 | 3Q18 | YTD19 | YTD18 | YTD18 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment services fees: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset servicing fees (a) | $ | 1,120 | $ | 1,103 | $ | 1,106 | $ | 1,136 | $ | 1,135 | 2 | % | (1 | )% | $ | 2,223 | $ | 2,278 | (2 | )% | $ | 1,132 | $ | 1,120 | $ | 1,103 | $ | 1,106 | $ | 1,136 | 1 | % | — | % | $ | 3,355 | $ | 3,414 | (2 | )% | ||||||||||||||||
Clearing services fees (b) | 411 | 398 | 398 | 393 | 400 | 3 | 3 | 809 | 824 | (2 | ) | 419 | 411 | 398 | 398 | 393 | 2 | 7 | 1,228 | 1,217 | 1 | |||||||||||||||||||||||||||||||||||
Issuer services fees | 291 | 251 | 286 | 288 | 265 | 16 | 10 | 542 | 525 | 3 | 324 | 291 | 251 | 286 | 288 | 11 | 13 | 866 | 813 | 7 | ||||||||||||||||||||||||||||||||||||
Treasury services fees | 140 | 132 | 139 | 136 | 140 | 6 | — | 272 | 278 | (2 | ) | 139 | 140 | 132 | 139 | 136 | (1 | ) | 2 | 411 | 414 | (1 | ) | |||||||||||||||||||||||||||||||||
Total investment services fees (b) | 1,962 | 1,884 | 1,929 | 1,953 | 1,940 | 4 | 1 | 3,846 | 3,905 | (2 | ) | 2,014 | 1,962 | 1,884 | 1,929 | 1,953 | 3 | 3 | 5,860 | 5,858 | — | |||||||||||||||||||||||||||||||||||
Foreign exchange and other trading revenue | 153 | 157 | 163 | 161 | 172 | (3 | ) | (11 | ) | 310 | 341 | (9 | ) | 160 | 153 | 157 | 163 | 161 | 5 | (1 | ) | 470 | 502 | (6 | ) | |||||||||||||||||||||||||||||||
Other (b)(c) | 112 | 113 | 121 | 116 | 121 | (1 | ) | (7 | ) | 225 | 237 | (5 | ) | 117 | 112 | 113 | 121 | 116 | 4 | 1 | 342 | 353 | (3 | ) | ||||||||||||||||||||||||||||||||
Total fee and other revenue | 2,227 | 2,154 | 2,213 | 2,230 | 2,233 | 3 | — | 4,381 | 4,483 | (2 | ) | 2,291 | 2,227 | 2,154 | 2,213 | 2,230 | 3 | 3 | 6,672 | 6,713 | (1 | ) | ||||||||||||||||||||||||||||||||||
Net interest revenue | 775 | 796 | 827 | 827 | 874 | (3 | ) | (11 | ) | 1,571 | 1,718 | (9 | ) | 753 | 775 | 796 | 827 | 827 | (3 | ) | (9 | ) | 2,324 | 2,545 | (9 | ) | ||||||||||||||||||||||||||||||
Total revenue | 3,002 | 2,950 | 3,040 | 3,057 | 3,107 | 2 | (3 | ) | 5,952 | 6,201 | (4 | ) | 3,044 | 3,002 | 2,950 | 3,040 | 3,057 | 1 | — | 8,996 | 9,258 | (3 | ) | |||||||||||||||||||||||||||||||||
Provision for credit losses | (4 | ) | 8 | 6 | 1 | 1 | N/M | 4 | (6 | ) | N/M | (15 | ) | (4 | ) | 8 | 6 | 1 | N/M | (11 | ) | (5 | ) | N/M | ||||||||||||||||||||||||||||||||
Noninterest expense (excluding amortization of intangible assets) | 1,934 | 1,949 | 2,090 | 1,995 | 1,931 | (1 | ) | — | 3,883 | 3,844 | 1 | 1,944 | 1,934 | 1,949 | 2,090 | 1,995 | 1 | (3 | ) | 5,827 | 5,839 | — | ||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 20 | 20 | 22 | 35 | 36 | — | (44 | ) | 40 | 72 | (44 | ) | 21 | 20 | 20 | 22 | 35 | 5 | (40 | ) | 61 | 107 | (43 | ) | ||||||||||||||||||||||||||||||||
Total noninterest expense | 1,954 | 1,969 | 2,112 | 2,030 | 1,967 | (1 | ) | (1 | ) | 3,923 | 3,916 | — | 1,965 | 1,954 | 1,969 | 2,112 | 2,030 | 1 | (3 | ) | 5,888 | 5,946 | (1 | ) | ||||||||||||||||||||||||||||||||
Income before taxes | $ | 1,052 | $ | 973 | $ | 922 | $ | 1,026 | $ | 1,139 | 8 | % | (8 | )% | $ | 2,025 | $ | 2,291 | (12 | )% | ||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 1,094 | $ | 1,052 | $ | 973 | $ | 922 | $ | 1,026 | 4 | % | 7 | % | $ | 3,119 | $ | 3,317 | (6 | )% | ||||||||||||||||||||||||||||||||||||
Pre-tax operating margin | 35 | % | 33 | % | 30 | % | 34 | % | 37 | % | 34 | % | 37 | % | 36 | % | 35 | % | 33 | % | 30 | % | 34 | % | 35 | % | 36 | % | ||||||||||||||||||||||||||||
Securities lending revenue | $ | 40 | $ | 44 | $ | 43 | $ | 52 | $ | 55 | (9 | )% | (27 | )% | $ | 84 | $ | 103 | (18 | )% | $ | 39 | $ | 40 | $ | 44 | $ | 43 | $ | 52 | (3 | )% | (25 | )% | $ | 123 | $ | 155 | (21 | )% | ||||||||||||||||
Total revenue by line of business: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue by line of business: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Servicing | $ | 1,391 | $ | 1,407 | $ | 1,435 | $ | 1,458 | $ | 1,520 | (1 | )% | (8 | )% | $ | 2,798 | $ | 3,039 | (8 | )% | $ | 1,405 | $ | 1,391 | $ | 1,407 | $ | 1,435 | $ | 1,458 | 1 | % | (4 | )% | $ | 4,203 | $ | 4,497 | (7 | )% | ||||||||||||||||
Pershing | 564 | 554 | 558 | 558 | 558 | 2 | 1 | 1,118 | 1,139 | (2 | ) | 568 | 564 | 554 | 558 | 558 | 1 | 2 | 1,686 | 1,697 | (1 | ) | ||||||||||||||||||||||||||||||||||
Issuer Services | 446 | 396 | 441 | 453 | 431 | 13 | 3 | 842 | 849 | (1 | ) | 466 | 446 | 396 | 441 | 453 | 4 | 3 | 1,308 | 1,302 | — | |||||||||||||||||||||||||||||||||||
Treasury Services | 317 | 317 | 328 | 324 | 329 | — | (4 | ) | 634 | 650 | (2 | ) | 312 | 317 | 317 | 328 | 324 | (2 | ) | (4 | ) | 946 | 974 | (3 | ) | |||||||||||||||||||||||||||||||
Clearance and Collateral Management | 284 | 276 | 278 | 264 | 269 | 3 | 6 | 560 | 524 | 7 | 293 | 284 | 276 | 278 | 264 | 3 | 11 | 853 | 788 | 8 | ||||||||||||||||||||||||||||||||||||
Total revenue by line of business | $ | 3,002 | $ | 2,950 | $ | 3,040 | $ | 3,057 | $ | 3,107 | 2 | % | (3 | )% | $ | 5,952 | $ | 6,201 | (4 | )% | $ | 3,044 | $ | 3,002 | $ | 2,950 | $ | 3,040 | $ | 3,057 | 1 | % | — | % | $ | 8,996 | $ | 9,258 | (3 | )% | ||||||||||||||||
Metrics: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Metrics: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average loans | $ | 32,287 | $ | 33,171 | $ | 35,540 | $ | 35,044 | $ | 38,002 | (3 | )% | (15 | )% | $ | 32,726 | $ | 38,598 | (15 | )% | $ | 32,758 | $ | 32,287 | $ | 33,171 | $ | 35,540 | $ | 35,044 | 1 | % | (7 | )% | $ | 32,737 | $ | 37,400 | (12 | )% | ||||||||||||||||
Average deposits | $ | 201,146 | $ | 195,082 | $ | 203,416 | $ | 192,741 | $ | 203,064 | 3 | % | (1 | )% | $ | 198,131 | $ | 208,567 | (5 | )% | $ | 208,044 | $ | 201,146 | $ | 195,082 | $ | 203,416 | $ | 192,741 | 3 | % | 8 | % | $ | 201,472 | $ | 203,233 | (1 | )% | ||||||||||||||||
AUC/A at period end (in trillions) (d) | $ | 35.5 | $ | 34.5 | $ | 33.1 | $ | 34.5 | $ | 33.6 | 3 | % | 6 | % | $ | 35.5 | $ | 33.6 | 6 | % | $ | 35.8 | $ | 35.5 | $ | 34.5 | $ | 33.1 | $ | 34.5 | 1 | % | 4 | % | ||||||||||||||||||||||
Market value of securities on loan at period end (in billions) (e) | $ | 369 | $ | 377 | $ | 373 | $ | 415 | $ | 432 | (2 | )% | (15 | )% | $ | 369 | $ | 432 | (15 | )% | $ | 362 | $ | 369 | $ | 377 | $ | 373 | $ | 415 | (2 | )% | (13 | )% | ||||||||||||||||||||||
Pershing: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pershing: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average active clearing accounts (U.S. platform) (in thousands) | 6,254 | 6,169 | 6,125 | 6,108 | 6,080 | 1 | % | 3 | % | 6,283 | 6,254 | 6,169 | 6,125 | 6,108 | — | % | 3 | % | ||||||||||||||||||||||||||||||||||||||
Average long-term mutual fund assets (U.S. platform) | $ | 532,384 | $ | 507,606 | $ | 489,491 | $ | 527,336 | $ | 512,645 | 5 | % | 4 | % | $ | 547,522 | $ | 532,384 | $ | 507,606 | $ | 489,491 | $ | 527,336 | 3 | % | 4 | % | ||||||||||||||||||||||||||||
Average investor margin loans (U.S. platform) | $ | 9,440 | $ | 10,093 | $ | 10,921 | $ | 10,696 | $ | 10,772 | (6 | )% | (12 | )% | $ | 9,222 | $ | 9,440 | $ | 10,093 | $ | 10,921 | $ | 10,696 | (2 | )% | (14 | )% | ||||||||||||||||||||||||||||
Clearance and Collateral Management: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Clearance and Collateral Management: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average tri-party collateral management balances (in billions) | $ | 3,400 | $ | 3,266 | $ | 3,181 | $ | 2,995 | $ | 2,801 | 4 | % | 21 | % | $ | 3,550 | $ | 3,400 | $ | 3,266 | $ | 3,181 | $ | 2,995 | 4 | % | 19 | % |
(a) | Asset servicing fees include the fees from the Clearance and Collateral Management business. |
(b) | In the first quarter of 2019, we reclassified certain platform-related fees to clearing services fees from investment management and performance fees. Prior periods have been reclassified. |
(c) | Other revenue includes investment management and performance fees, financing-related fees, distribution and servicing revenue and investment and other income. |
(d) | Includes the AUC/A of CIBC Mellon of $1.4 trillion at Sept. 30, 2019 and June 30, 2019, $1.3 trillion at March 31, 2019, $1.2 trillion at Dec. 31, 2018 and $1.4 trillion at Sept. |
(e) | Represents the total amount of securities on loan in our agency securities lending program managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled $ |
• | We are the primary provider of U.S. government securities clearance and a provider of non-U.S. government securities clearance. |
YTD19 | YTD19 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2Q19 vs. | vs. | 3Q19 vs. | vs. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q19 | 2Q18 | YTD19 | YTD18 | YTD18 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q19 | 3Q18 | YTD19 | YTD18 | YTD18 | ||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment management fees (a) | $ | 827 | $ | 806 | $ | 826 | $ | 879 | $ | 885 | 3 | % | (7 | )% | $ | 1,633 | $ | 1,783 | (8 | )% | $ | 826 | $ | 827 | $ | 806 | $ | 826 | $ | 879 | — | % | (6 | )% | $ | 2,459 | $ | 2,662 | (8 | )% | ||||||||||||||||
Performance fees | 2 | 31 | 54 | 30 | 12 | N/M | (83 | ) | 33 | 60 | (45 | ) | 2 | 2 | 31 | 54 | 30 | N/M | (93 | ) | 35 | 90 | (61 | ) | ||||||||||||||||||||||||||||||||
Investment management and performance fees (b) | 829 | 837 | 880 | 909 | 897 | (1 | ) | (8 | ) | 1,666 | 1,843 | (10 | ) | 828 | 829 | 837 | 880 | 909 | — | (9 | ) | 2,494 | 2,752 | (9 | ) | |||||||||||||||||||||||||||||||
Distribution and servicing | 44 | 45 | 45 | 47 | 48 | (2 | ) | (8 | ) | 89 | 98 | (9 | ) | 45 | 44 | 45 | 45 | 47 | 2 | (4 | ) | 134 | 145 | (8 | ) | |||||||||||||||||||||||||||||||
Other (a) | (23 | ) | (18 | ) | (35 | ) | (18 | ) | (4 | ) | N/M | N/M | (41 | ) | 12 | N/M | (40 | ) | (23 | ) | (18 | ) | (35 | ) | (18 | ) | N/M | N/M | (81 | ) | (6 | ) | N/M | |||||||||||||||||||||||
Total fee and other revenue (a) | 850 | 864 | 890 | 938 | 941 | (2 | ) | (10 | ) | 1,714 | 1,953 | (12 | ) | 833 | 850 | 864 | 890 | 938 | (2 | ) | (11 | ) | 2,547 | 2,891 | (12 | ) | ||||||||||||||||||||||||||||||
Net interest revenue | 67 | 75 | 73 | 77 | 77 | (11 | ) | (13 | ) | 142 | 153 | (7 | ) | 57 | 67 | 75 | 73 | 77 | (15 | ) | (26 | ) | 199 | 230 | (13 | ) | ||||||||||||||||||||||||||||||
Total revenue | 917 | 939 | 963 | 1,015 | 1,018 | (2 | ) | (10 | ) | 1,856 | 2,106 | (12 | ) | 890 | 917 | 939 | 963 | 1,015 | (3 | ) | (12 | ) | 2,746 | 3,121 | (12 | ) | ||||||||||||||||||||||||||||||
Provision for credit losses | (2 | ) | 1 | 1 | (2 | ) | 2 | N/M | N/M | (1 | ) | 4 | N/M | — | (2 | ) | 1 | 1 | (2 | ) | N/M | N/M | (1 | ) | 2 | N/M | ||||||||||||||||||||||||||||||
Noninterest expense (excluding amortization of intangible assets) | 645 | 660 | 702 | 688 | 685 | (2 | ) | (6 | ) | 1,305 | 1,377 | (5 | ) | 580 | 645 | 660 | 702 | 688 | (10 | ) | (16 | ) | 1,885 | 2,065 | (9 | ) | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 9 | 9 | 13 | 13 | 12 | — | (25 | ) | 18 | 25 | (28 | ) | 10 | 9 | 9 | 13 | 13 | 11 | (23 | ) | 28 | 38 | (26 | ) | ||||||||||||||||||||||||||||||||
Total noninterest expense | 654 | 669 | 715 | 701 | 697 | (2 | ) | (6 | ) | 1,323 | 1,402 | (6 | ) | 590 | 654 | 669 | 715 | 701 | (10 | ) | (16 | ) | 1,913 | 2,103 | (9 | ) | ||||||||||||||||||||||||||||||
Income before taxes | $ | 265 | $ | 269 | $ | 247 | $ | 316 | $ | 319 | (1 | )% | (17 | )% | $ | 534 | $ | 700 | (24 | )% | ||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 300 | $ | 265 | $ | 269 | $ | 247 | $ | 316 | 13 | % | (5 | )% | $ | 834 | $ | 1,016 | (18 | )% | ||||||||||||||||||||||||||||||||||||
Pre-tax operating margin | 29 | % | 29 | % | 26 | % | 31 | % | 31 | % | 29 | % | 33 | % | 34 | % | 29 | % | 29 | % | 26 | % | 31 | % | 30 | % | 33 | % | ||||||||||||||||||||||||||||
Adjusted pre-tax operating margin – Non-GAAP (c) | 32 | % | 32 | % | 29 | % | 35 | % | 35 | % | 32 | % | 37 | % | 38 | % | 32 | % | 32 | % | 29 | % | 35 | % | 34 | % | 36 | % | ||||||||||||||||||||||||||||
Total revenue by line of business: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue by line of business: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Management | $ | 618 | $ | 637 | $ | 660 | $ | 704 | $ | 702 | (3 | )% | (12 | )% | $ | 1,255 | $ | 1,472 | (15 | )% | $ | 605 | $ | 618 | $ | 637 | $ | 660 | $ | 704 | (2 | )% | (14 | )% | $ | 1,860 | $ | 2,176 | (15 | )% | ||||||||||||||||
Wealth Management | 299 | 302 | 303 | 311 | 316 | (1 | ) | (5 | ) | 601 | 634 | (5 | ) | 285 | 299 | 302 | 303 | 311 | (5 | ) | (8 | ) | 886 | 945 | (6 | ) | ||||||||||||||||||||||||||||||
Total revenue by line of business | $ | 917 | $ | 939 | $ | 963 | $ | 1,015 | $ | 1,018 | (2 | )% | (10 | )% | $ | 1,856 | $ | 2,106 | (12 | )% | $ | 890 | $ | 917 | $ | 939 | $ | 963 | $ | 1,015 | (3 | )% | (12 | )% | $ | 2,746 | $ | 3,121 | (12 | )% | ||||||||||||||||
Average balances: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average balances: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average loans | $ | 16,322 | $ | 16,403 | $ | 16,485 | $ | 16,763 | $ | 16,974 | — | % | (4 | )% | $ | 16,363 | $ | 16,926 | (3 | )% | $ | 16,260 | $ | 16,322 | $ | 16,403 | $ | 16,485 | $ | 16,763 | — | % | (3 | )% | $ | 16,328 | $ | 16,871 | (3 | )% | ||||||||||||||||
Average deposits | $ | 14,615 | $ | 15,815 | $ | 14,893 | $ | 14,634 | $ | 14,252 | (8 | )% | 3 | % | $ | 15,211 | $ | 13,810 | 10 | % | $ | 14,083 | $ | 14,615 | $ | 15,815 | $ | 14,893 | $ | 14,634 | (4 | )% | (4 | )% | $ | 14,831 | $ | 14,088 | 5 | % |
(a) | Total fee and other revenue includes the impact of the consolidated investment management funds, net of noncontrolling interests. Additionally, other revenue includes asset servicing fees, treasury services fees, foreign exchange and other trading revenue and investment and other income. |
(b) | On a constant currency basis, investment management and performance fees decreased |
(c) | Net of distribution and servicing expense. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 40 for the reconciliation of this Non-GAAP measure. |
AUM trends | 2Q19 vs. | 3Q19 vs. | ||||||||||||||||||||||||||||||||||||
(dollars in billions) | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q19 | 2Q18 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q19 | 3Q18 | ||||||||||||||||||||||||
AUM at period end, by product type: (a) | ||||||||||||||||||||||||||||||||||||||
Equity | $ | 152 | $ | 149 | $ | 135 | $ | 167 | $ | 160 | 2 | % | (5 | )% | $ | 147 | $ | 152 | $ | 149 | $ | 135 | $ | 167 | (3 | )% | (12 | )% | ||||||||||
Fixed income | 209 | 208 | 200 | 202 | 197 | — | 6 | 211 | 209 | 208 | 200 | 202 | 1 | 4 | ||||||||||||||||||||||||
Index | 322 | 333 | 301 | 352 | 334 | (3 | ) | (4 | ) | 321 | 322 | 333 | 301 | 352 | — | (9 | ) | |||||||||||||||||||||
Liability-driven investments | 709 | 709 | 659 | 652 | 663 | — | 7 | 742 | 709 | 709 | 659 | 652 | 5 | 14 | ||||||||||||||||||||||||
Multi-asset and alternative investments | 184 | 178 | 167 | 184 | 181 | 3 | 2 | 182 | 184 | 178 | 167 | 184 | (1 | ) | (1 | ) | ||||||||||||||||||||||
Cash | 267 | 264 | 260 | 271 | 270 | 1 | (1 | ) | 278 | 267 | 264 | 260 | 271 | 4 | 3 | |||||||||||||||||||||||
Total AUM by product type | $ | 1,843 | $ | 1,841 | $ | 1,722 | $ | 1,828 | $ | 1,805 | — | % | 2 | % | $ | 1,881 | $ | 1,843 | $ | 1,841 | $ | 1,722 | $ | 1,828 | 2 | % | 3 | % | ||||||||||
Changes in AUM: (a) | ||||||||||||||||||||||||||||||||||||||
Beginning balance of AUM | $ | 1,841 | $ | 1,722 | $ | 1,828 | $ | 1,805 | $ | 1,868 | $ | 1,843 | $ | 1,841 | $ | 1,722 | $ | 1,828 | $ | 1,805 | ||||||||||||||||||
Net (outflows) inflows: | ||||||||||||||||||||||||||||||||||||||
Net inflows (outflows): | ||||||||||||||||||||||||||||||||||||||
Long-term strategies: | ||||||||||||||||||||||||||||||||||||||
Equity | (2 | ) | (4 | ) | (8 | ) | (2 | ) | (3 | ) | (4 | ) | (2 | ) | (4 | ) | (8 | ) | (2 | ) | ||||||||||||||||||
Fixed income | (4 | ) | 3 | (1 | ) | 2 | (4 | ) | 2 | (4 | ) | 3 | (1 | ) | 2 | |||||||||||||||||||||||
Liability-driven investments | 1 | 5 | 14 | 16 | 2 | (4 | ) | 1 | 5 | 14 | 16 | |||||||||||||||||||||||||||
Multi-asset and alternative investments | 1 | (4 | ) | (2 | ) | 2 | (3 | ) | (1 | ) | 1 | (4 | ) | (2 | ) | 2 | ||||||||||||||||||||||
Total long-term active strategies (outflows) inflows | (4 | ) | — | 3 | 18 | (8 | ) | (7 | ) | (4 | ) | — | 3 | 18 | ||||||||||||||||||||||||
Index | (22 | ) | (2 | ) | (11 | ) | (3 | ) | (7 | ) | (3 | ) | (22 | ) | (2 | ) | (11 | ) | (3 | ) | ||||||||||||||||||
Total long-term strategies (outflows) inflows | (26 | ) | (2 | ) | (8 | ) | 15 | (15 | ) | (10 | ) | (26 | ) | (2 | ) | (8 | ) | 15 | ||||||||||||||||||||
Short-term strategies: | ||||||||||||||||||||||||||||||||||||||
Cash | 2 | 2 | (10 | ) | — | (11 | ) | 11 | 2 | 2 | (10 | ) | — | |||||||||||||||||||||||||
Total net (outflows) inflows | (24 | ) | — | (18 | ) | 15 | (26 | ) | ||||||||||||||||||||||||||||||
Total net inflows (outflows) | 1 | (24 | ) | — | (18 | ) | 15 | |||||||||||||||||||||||||||||||
Net market impact | 42 | 103 | (69 | ) | 18 | 17 | 66 | 42 | 103 | (69 | ) | 18 | ||||||||||||||||||||||||||
Net currency impact | (16 | ) | 16 | (19 | ) | (10 | ) | (53 | ) | (29 | ) | (16 | ) | 16 | (19 | ) | (10 | ) | ||||||||||||||||||||
Divestiture/other | — | — | — | — | (1 | ) | ||||||||||||||||||||||||||||||||
Ending balance of AUM | $ | 1,843 | $ | 1,841 | $ | 1,722 | $ | 1,828 | $ | 1,805 | — | % | 2 | % | $ | 1,881 | $ | 1,843 | $ | 1,841 | $ | 1,722 | $ | 1,828 | 2 | % | 3 | % | ||||||||||
Wealth Management client assets (b) | $ | 257 | $ | 253 | $ | 239 | $ | 261 | $ | 254 | 2 | % | 1 | % | $ | 259 | $ | 257 | $ | 253 | $ | 239 | $ | 261 | 1 | % | (1 | )% |
(in millions) | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||||||||||
Fee revenue | $ | 34 | $ | 29 | $ | 29 | $ | 7 | $ | 40 | $ | 63 | $ | 97 | $ | 5 | $ | 34 | $ | 29 | $ | 29 | $ | 7 | $ | 68 | $ | 104 | ||||||||||||||
Net securities gains (losses) | 7 | 1 | — | — | 1 | 8 | (48 | ) | ||||||||||||||||||||||||||||||||||
Net securities (losses) gains | (1 | ) | 7 | 1 | — | — | 7 | (48 | ) | |||||||||||||||||||||||||||||||||
Total fee and other revenue | 41 | 30 | 29 | 7 | 41 | 71 | 49 | 4 | 41 | 30 | 29 | 7 | 75 | 56 | ||||||||||||||||||||||||||||
Net interest (expense) | (40 | ) | (30 | ) | (15 | ) | (13 | ) | (35 | ) | (70 | ) | (36 | ) | (80 | ) | (40 | ) | (30 | ) | (15 | ) | (13 | ) | (150 | ) | (49 | ) | ||||||||||||||
Total revenue (loss) | 1 | — | 14 | (6 | ) | 6 | 1 | 13 | ||||||||||||||||||||||||||||||||||
Total (loss) revenue | (76 | ) | 1 | — | 14 | (6 | ) | (75 | ) | 7 | ||||||||||||||||||||||||||||||||
Provision for credit losses | (2 | ) | (2 | ) | (7 | ) | (2 | ) | (6 | ) | (4 | ) | (6 | ) | (1 | ) | (2 | ) | (2 | ) | (7 | ) | (2 | ) | (5 | ) | (8 | ) | ||||||||||||||
Noninterest expense | 39 | 61 | 160 | 6 | 81 | 100 | 168 | 35 | 39 | 61 | 160 | 6 | 135 | 174 | ||||||||||||||||||||||||||||
(Loss) before taxes | $ | (36 | ) | $ | (59 | ) | $ | (139 | ) | $ | (10 | ) | $ | (69 | ) | $ | (95 | ) | $ | (149 | ) | |||||||||||||||||||||
(Loss) before income taxes | $ | (110 | ) | $ | (36 | ) | $ | (59 | ) | $ | (139 | ) | $ | (10 | ) | $ | (205 | ) | $ | (159 | ) | |||||||||||||||||||||
Average loans and leases | $ | 1,764 | $ | 1,784 | $ | 1,809 | $ | 2,000 | $ | 2,090 | $ | 1,774 | $ | 2,308 | $ | 1,817 | $ | 1,764 | $ | 1,784 | $ | 1,809 | $ | 2,000 | $ | 1,789 | $ | 2,204 |
Critical | Reference |
Allowance for loan losses and allowance for lending-related commitments | 2018 Annual Report, pages 24-25. |
Fair value of financial instruments and derivatives | 2018 Annual Report, pages 25-27. |
Goodwill and other intangibles | 2018 Annual Report, page 27. Also, see the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, page 19. |
Litigation and regulatory contingencies | “Legal proceedings” in Note 19 of the Notes to Consolidated Financial Statements. |
Country risk exposure | Interest-bearing deposits | Investment securities (b) | Total exposure | Interest-bearing deposits | Investment securities (b) | Total exposure | ||||||||||||||||||||||||||||||||||||||||
(in billions) | Central banks | Banks | Lending (a) | Other (c) | Central banks | Banks | Lending (a) | Other (c) | ||||||||||||||||||||||||||||||||||||||
Top 10 country exposure: | ||||||||||||||||||||||||||||||||||||||||||||||
UK | $ | 14.1 | $ | 1.0 | $ | 2.4 | $ | 4.2 | $ | 2.0 | $ | 23.7 | $ | 11.3 | $ | 0.5 | $ | 2.0 | $ | 5.0 | $ | 2.2 | $ | 21.0 | ||||||||||||||||||||||
Germany | 18.0 | 0.5 | 0.7 | 3.0 | 0.2 | 22.4 | 11.9 | 0.5 | 0.6 | 3.3 | 0.2 | 16.5 | ||||||||||||||||||||||||||||||||||
Japan | 14.2 | 0.8 | 0.2 | — | 0.1 | 15.3 | 15.3 | 0.5 | 0.1 | 0.1 | 0.2 | 16.2 | ||||||||||||||||||||||||||||||||||
Belgium | 6.0 | 1.0 | 0.1 | 0.2 | — | 7.3 | 5.7 | 0.8 | 0.1 | 0.1 | — | 6.7 | ||||||||||||||||||||||||||||||||||
Canada | — | 1.6 | 0.2 | 2.6 | 0.8 | 5.2 | — | 2.1 | 0.3 | 2.6 | 0.9 | 5.9 | ||||||||||||||||||||||||||||||||||
China | — | 2.2 | 0.8 | — | 0.3 | 3.3 | — | 2.3 | 1.7 | — | 0.3 | 4.3 | ||||||||||||||||||||||||||||||||||
France | — | 0.2 | — | 2.0 | 0.4 | 2.6 | — | — | — | 2.1 | 0.8 | 2.9 | ||||||||||||||||||||||||||||||||||
Luxembourg | 0.1 | 0.1 | 0.7 | — | 1.9 | 2.8 | ||||||||||||||||||||||||||||||||||||||||
Australia | — | 1.5 | 0.4 | 0.4 | 0.3 | 2.6 | ||||||||||||||||||||||||||||||||||||||||
Netherlands | — | — | 0.3 | 1.8 | 0.1 | 2.2 | — | 0.3 | 0.3 | 1.8 | 0.1 | 2.5 | ||||||||||||||||||||||||||||||||||
Australia | — | 1.1 | 0.3 | 0.5 | 0.3 | 2.2 | ||||||||||||||||||||||||||||||||||||||||
Italy | — | 0.7 | — | 1.3 | — | 2.0 | ||||||||||||||||||||||||||||||||||||||||
Total Top 10 country exposure | $ | 52.3 | $ | 9.1 | $ | 5.0 | $ | 15.6 | $ | 4.2 | $ | 86.2 | (d) | $ | 44.3 | $ | 8.6 | $ | 6.2 | $ | 15.4 | $ | 6.9 | $ | 81.4 | (d) | ||||||||||||||||||||
Select country exposure: | ||||||||||||||||||||||||||||||||||||||||||||||
Spain | $ | — | $ | 0.2 | $ | 0.1 | $ | 1.3 | $ | — | $ | 1.6 | ||||||||||||||||||||||||||||||||||
Italy | $ | 0.1 | $ | 0.4 | $ | — | $ | 1.4 | $ | — | $ | 1.9 | ||||||||||||||||||||||||||||||||||
Brazil | — | — | 1.4 | 0.1 | 0.1 | 1.6 | — | — | 1.5 | 0.1 | 0.1 | 1.7 | ||||||||||||||||||||||||||||||||||
Total select country exposure | $ | — | $ | 0.2 | $ | 1.5 | $ | 1.4 | $ | 0.1 | $ | 3.2 | $ | 0.1 | $ | 0.4 | $ | 1.5 | $ | 1.5 | $ | 0.1 | $ | 3.6 |
(a) | Lending includes loans, acceptances, issued letters of credit, net of participations, and lending-related commitments. |
(b) | Investment securities include both the available-for-sale and held-to-maturity portfolios. |
(c) | Other exposures include over-the-counter (“OTC”) derivative and securities financing transactions, net of collateral. |
(d) | The top 10 country exposures comprise approximately 80% of our total non-U.S. exposure. |
Securities portfolio | March 31, 2019 | 2Q19 change in unrealized gain (loss) | June 30, 2019 | Fair value as a % of amortized cost (a) | Unrealized gain (loss) | Ratings (b) | June 30, 2019 | 3Q19 change in unrealized gain (loss) | Sept. 30, 2019 | Fair value as a % of amortized cost (a) | Unrealized gain (loss) | Ratings (b) | ||||||||||||||||||||||||||||||||||||||||||||||||
BB+ and lower | BB+ and lower | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | Fair value | Amortized cost | Fair value | AAA/ AA- | A+/ A- | BBB+/ BBB- | Not rated | Fair value | Amortized cost | Fair value | AAA/ AA- | A+/ A- | BBB+/ BBB- | Not rated | ||||||||||||||||||||||||||||||||||||||||||||||
Agency RMBS | $ | 50,872 | $ | 503 | $ | 52,816 | $ | 52,860 | 100 | % | $ | 44 | 100 | % | — | % | — | % | — | % | — | % | $ | 52,860 | $ | 199 | $ | 53,011 | $ | 53,254 | 100 | % | $ | 243 | 100 | % | — | % | — | % | — | % | — | % | ||||||||||||||||
U.S. Treasury | 19,545 | 82 | 18,272 | 18,284 | 100 | 12 | 100 | — | — | — | — | 18,284 | 32 | 18,497 | 18,541 | 100 | 44 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Sovereign debt/sovereign guaranteed (c) | 12,811 | 32 | 13,007 | 13,146 | 101 | 139 | 76 | 3 | 20 | 1 | — | 13,146 | 26 | 13,767 | 13,932 | 101 | 165 | 76 | 4 | 19 | 1 | — | ||||||||||||||||||||||||||||||||||||||
Agency commercial mortgage-backed securities (“MBS”) | 10,800 | 56 | 10,678 | 10,689 | 100 | 11 | 100 | — | — | — | — | 10,689 | 86 | 10,501 | 10,598 | 101 | 97 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Supranational | 3,541 | 13 | 3,903 | 3,925 | 101 | 22 | 100 | — | — | — | — | 3,925 | 14 | 4,077 | 4,113 | 101 | 36 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
U.S. government agencies | 3,556 | 8 | 3,861 | 3,866 | 100 | 5 | 100 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
CLOs | 3,373 | 9 | 3,665 | 3,649 | 100 | (16 | ) | 98 | — | — | 1 | 1 | 3,649 | 2 | 3,882 | 3,868 | 100 | (14 | ) | 99 | — | — | 1 | — | ||||||||||||||||||||||||||||||||||||
Foreign covered bonds (d) | 3,053 | 12 | 3,465 | 3,479 | 100 | 14 | 100 | — | — | — | — | 3,479 | 5 | 3,651 | 3,670 | 101 | 19 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
U.S. government agencies | 3,866 | 31 | 3,308 | 3,344 | 101 | 36 | 100 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Other asset-backed securities (“ABS”) | 2,037 | 6 | 2,466 | 2,470 | 100 | 4 | 100 | — | — | — | — | 2,470 | 3 | 2,477 | 2,484 | 100 | 7 | 100 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Non-agency commercial MBS | 1,476 | 30 | 1,968 | 1,993 | 101 | 25 | 98 | 2 | — | — | — | 1,993 | 18 | 2,207 | 2,250 | 102 | 43 | 98 | 2 | — | — | — | ||||||||||||||||||||||||||||||||||||||
Non-agency RMBS (e) | 1,354 | (1 | ) | 1,090 | 1,314 | 121 | 224 | 13 | 12 | 5 | 44 | 26 | ||||||||||||||||||||||||||||||||||||||||||||||||
Foreign government agencies (e) | 1,599 | 8 | 2,175 | 2,183 | 100 | 8 | 95 | 5 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-agency RMBS (f) | 1,314 | (12 | ) | 1,089 | 1,301 | 120 | 212 | 19 | 11 | 5 | 41 | 24 | ||||||||||||||||||||||||||||||||||||||||||||||||
State and political subdivisions | 2,183 | 10 | 1,270 | 1,297 | 102 | 27 | 72 | 27 | — | — | 1 | 1,297 | (2 | ) | 1,175 | 1,200 | 102 | 25 | 70 | 29 | — | — | 1 | |||||||||||||||||||||||||||||||||||||
Corporate bonds | 903 | 13 | 889 | 905 | 102 | 16 | 16 | 69 | 15 | — | — | 905 | 5 | 858 | 879 | 103 | 21 | 16 | 68 | 16 | — | — | ||||||||||||||||||||||||||||||||||||||
Other | 1,476 | 1 | 1,671 | 1,674 | 100 | 3 | 89 | 7 | — | — | 4 | 75 | — | 71 | 74 | 104 | 3 | — | — | — | — | 100 | ||||||||||||||||||||||||||||||||||||||
Total securities | $ | 116,980 | (f) | $ | 774 | $ | 119,021 | $ | 119,551 | (f) | 100 | % | $ | 530 | (f)(g) | 95 | % | 2 | % | 2 | % | 1 | % | — | % | $ | 119,551 | (g) | $ | 415 | $ | 120,746 | $ | 121,691 | (g) | 101 | % | $ | 945 | (g)(h) | 95 | % | 2 | % | 2 | % | 1 | % | — | % |
(a) | Amortized cost reflects historical impairments. |
(b) | Represents ratings by Standard & Poor’s (“S&P”) or the equivalent. |
(c) | Primarily consists of exposure to UK, France, Germany, |
(d) | Primarily consists of exposure to Canada, UK, Australia and Sweden. |
(e) | Primarily consists of exposure to Germany, the Netherlands and Sweden. |
(f) | Includes RMBS that were included in the former Grantor Trust of |
Includes net unrealized losses on derivatives hedging securities available-for-sale of |
Unrealized gains of |
Net premium amortization and discount accretion of securities (a) | ||||||||||||||||||||||||||||||
(dollars in millions) | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | ||||||||||||||||||||
Amortizable purchase premium (net of discount) relating to securities: | ||||||||||||||||||||||||||||||
Balance at period end | $ | 1,315 | $ | 1,388 | $ | 1,429 | $ | 1,536 | $ | 1,642 | $ | 1,308 | $ | 1,315 | $ | 1,388 | $ | 1,429 | $ | 1,536 | ||||||||||
Estimated average life remaining at period end (in years) | 4.5 | 4.8 | 5.0 | 5.2 | 5.3 | 4.2 | 4.5 | 4.8 | 5.0 | 5.2 | ||||||||||||||||||||
Amortization | $ | 91 | $ | 78 | $ | 92 | $ | 108 | $ | 115 | $ | 95 | $ | 91 | $ | 78 | $ | 92 | $ | 108 | ||||||||||
Accretable discount related to the prior restructuring of the securities portfolio: | ||||||||||||||||||||||||||||||
Balance at period end | $ | 181 | $ | 193 | $ | 207 | $ | 224 | $ | 239 | $ | 171 | $ | 181 | $ | 193 | $ | 207 | $ | 224 | ||||||||||
Estimated average life remaining at period end (in years) | 6.3 | 6.3 | 6.3 | 6.3 | 6.3 | 6.3 | 6.3 | 6.3 | 6.3 | 6.3 | ||||||||||||||||||||
Accretion | $ | 13 | $ | 16 | $ | 17 | $ | 20 | $ | 24 | $ | 13 | $ | 13 | $ | 16 | $ | 17 | $ | 20 |
(a) | Amortization of purchase premium decreases net interest revenue while accretion of discount increases net interest revenue. Both were recorded on a level yield basis. |
Total exposure – consolidated | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||
(in billions) | Loans | Unfunded commitments | Total exposure | Loans | Unfunded commitments | Total exposure | Loans | Unfunded commitments | Total exposure | Loans | Unfunded commitments | Total exposure | ||||||||||||||||||||||||||
Non-margin loans: | ||||||||||||||||||||||||||||||||||||||
Financial institutions | $ | 11.5 | $ | 35.6 | $ | 47.1 | $ | 11.6 | $ | 34.0 | $ | 45.6 | $ | 13.4 | $ | 34.9 | $ | 48.3 | $ | 11.6 | $ | 34.0 | $ | 45.6 | ||||||||||||||
Commercial | 1.7 | 13.6 | 15.3 | 2.1 | 15.2 | 17.3 | 1.7 | 13.2 | 14.9 | 2.1 | 15.2 | 17.3 | ||||||||||||||||||||||||||
Subtotal institutional | 13.2 | 49.2 | 62.4 | 13.7 | 49.2 | 62.9 | 15.1 | 48.1 | 63.2 | 13.7 | 49.2 | 62.9 | ||||||||||||||||||||||||||
Wealth management loans and mortgages | 15.7 | 0.8 | 16.5 | 16.0 | 0.8 | 16.8 | 15.9 | 0.8 | 16.7 | 16.0 | 0.8 | 16.8 | ||||||||||||||||||||||||||
Commercial real estate | 5.2 | 3.6 | 8.8 | 4.8 | 3.5 | 8.3 | 5.3 | 3.9 | 9.2 | 4.8 | 3.5 | 8.3 | ||||||||||||||||||||||||||
Lease financings | 1.2 | — | 1.2 | 1.3 | — | 1.3 | 1.1 | — | 1.1 | 1.3 | — | 1.3 | ||||||||||||||||||||||||||
Other residential mortgages | 0.6 | — | 0.6 | 0.6 | — | 0.6 | 0.5 | — | 0.5 | 0.6 | — | 0.6 | ||||||||||||||||||||||||||
Overdrafts | 4.7 | — | 4.7 | 5.5 | — | 5.5 | 5.3 | — | 5.3 | 5.5 | — | 5.5 | ||||||||||||||||||||||||||
Other | 1.2 | — | 1.2 | 1.2 | — | 1.2 | 1.2 | — | 1.2 | 1.2 | — | 1.2 | ||||||||||||||||||||||||||
Subtotal non-margin loans | 41.8 | 53.6 | 95.4 | 43.1 | 53.5 | 96.6 | 44.4 | 52.8 | 97.2 | 43.1 | 53.5 | 96.6 | ||||||||||||||||||||||||||
Margin loans | 10.6 | 0.1 | 10.7 | 13.5 | 0.1 | 13.6 | 10.5 | 0.1 | 10.6 | 13.5 | 0.1 | 13.6 | ||||||||||||||||||||||||||
Total | $ | 52.4 | $ | 53.7 | $ | 106.1 | $ | 56.6 | $ | 53.6 | $ | 110.2 | $ | 54.9 | $ | 52.9 | $ | 107.8 | $ | 56.6 | $ | 53.6 | $ | 110.2 |
Financial institutions portfolio exposure (dollars in billions) | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||
Loans | Unfunded commitments | Total exposure | % Inv. grade | % due <1 yr. | Loans | Unfunded commitments | Total exposure | Loans | Unfunded commitments | Total exposure | % Inv. grade | % due <1 yr. | Loans | Unfunded commitments | Total exposure | |||||||||||||||||||||||||||||||
Securities industry | $ | 2.5 | $ | 24.3 | $ | 26.8 | 99 | % | 92 | % | $ | 3.1 | $ | 22.5 | $ | 25.6 | $ | 3.2 | $ | 23.4 | $ | 26.6 | 100 | % | 94 | % | $ | 3.1 | $ | 22.5 | $ | 25.6 | ||||||||||||||
Banks | 7.9 | 1.2 | 9.1 | 80 | 97 | 6.3 | 1.6 | 7.9 | ||||||||||||||||||||||||||||||||||||||
Asset managers | 1.4 | 6.7 | 8.1 | 98 | 81 | 1.3 | 6.1 | 7.4 | 1.3 | 6.7 | 8.0 | 98 | 81 | 1.3 | 6.1 | 7.4 | ||||||||||||||||||||||||||||||
Banks | 6.5 | 1.0 | 7.5 | 76 | 98 | 6.3 | 1.6 | 7.9 | ||||||||||||||||||||||||||||||||||||||
Insurance | 0.1 | 2.4 | 2.5 | 100 | 10 | 0.1 | 2.5 | 2.6 | 0.1 | 2.5 | 2.6 | 100 | 14 | 0.1 | 2.5 | 2.6 | ||||||||||||||||||||||||||||||
Government | 0.1 | 0.3 | 0.4 | 100 | 16 | 0.1 | 0.5 | 0.6 | 0.1 | 0.3 | 0.4 | 100 | 16 | 0.1 | 0.5 | 0.6 | ||||||||||||||||||||||||||||||
Other | 0.9 | 0.9 | 1.8 | 86 | 56 | 0.7 | 0.8 | 1.5 | 0.8 | 0.8 | 1.6 | 96 | 60 | 0.7 | 0.8 | 1.5 | ||||||||||||||||||||||||||||||
Total | $ | 11.5 | $ | 35.6 | $ | 47.1 | 95 | % | 85 | % | $ | 11.6 | $ | 34.0 | $ | 45.6 | $ | 13.4 | $ | 34.9 | $ | 48.3 | 95 | % | 86 | % | $ | 11.6 | $ | 34.0 | $ | 45.6 |
Commercial portfolio exposure | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||
(dollars in billions) | Loans | Unfunded commitments | Total exposure | % Inv. grade | % due <1 yr. | Loans | Unfunded commitments | Total exposure | Loans | Unfunded commitments | Total exposure | % Inv. grade | % due <1 yr. | Loans | Unfunded commitments | Total exposure | ||||||||||||||||||||||||||||||
Manufacturing | $ | 0.7 | $ | 4.7 | $ | 5.4 | 94 | % | 7 | % | $ | 0.8 | $ | 5.1 | $ | 5.9 | $ | 0.8 | $ | 4.7 | $ | 5.5 | 92 | % | 12 | % | $ | 0.8 | $ | 5.1 | $ | 5.9 | ||||||||||||||
Services and other | 0.7 | 3.9 | 4.6 | 96 | 16 | 0.7 | 4.8 | 5.5 | 0.7 | 3.7 | 4.4 | 97 | 17 | 0.7 | 4.8 | 5.5 | ||||||||||||||||||||||||||||||
Energy and utilities | 0.3 | 3.8 | 4.1 | 95 | 7 | 0.5 | 4.1 | 4.6 | 0.2 | 3.8 | 4.0 | 98 | 4 | 0.5 | 4.1 | 4.6 | ||||||||||||||||||||||||||||||
Media and telecom | — | 1.2 | 1.2 | 93 | 8 | 0.1 | 1.2 | 1.3 | — | 1.0 | 1.0 | 92 | — | 0.1 | 1.2 | 1.3 | ||||||||||||||||||||||||||||||
Total | $ | 1.7 | $ | 13.6 | $ | 15.3 | 95 | % | 10 | % | $ | 2.1 | $ | 15.2 | $ | 17.3 | $ | 1.7 | $ | 13.2 | $ | 14.9 | 95 | % | 11 | % | $ | 2.1 | $ | 15.2 | $ | 17.3 |
Percentage of the portfolios that are investment grade | Percentage of the portfolios that are investment grade | Percentage of the portfolios that are investment grade | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||
June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | |||||||||||
Financial institutions | 95 | % | 94 | % | 95 | % | 94 | % | 94 | % | 95 | % | 95 | % | 94 | % | 95 | % | 94 | % |
Commercial | 95 | % | 95 | % | 95 | % | 95 | % | 96 | % | 95 | % | 95 | % | 95 | % | 95 | % | 95 | % |
Allowance for credit losses activity | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | ||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||
Non-margin loans | $ | 41,794 | $ | 41,176 | $ | 43,080 | $ | 42,719 | $ | 44,417 | $ | 41,794 | $ | 43,080 | $ | 40,519 | ||||||||
Margin loans | 10,602 | 12,311 | 13,484 | 15,057 | 10,464 | 10,602 | 13,484 | 13,468 | ||||||||||||||||
Total loans | $ | 52,396 | $ | 53,487 | $ | 56,564 | $ | 57,776 | $ | 54,881 | $ | 52,396 | $ | 56,564 | $ | 53,987 | ||||||||
Beginning balance of allowance for credit losses | $ | 248 | $ | 252 | $ | 251 | $ | 256 | $ | 241 | $ | 248 | $ | 251 | $ | 254 | ||||||||
Provision for credit losses | (8 | ) | 7 | — | (3 | ) | (16 | ) | (8 | ) | — | (3 | ) | |||||||||||
Net recoveries (charge-offs): | ||||||||||||||||||||||||
Net (charge-offs) recoveries: | ||||||||||||||||||||||||
Commercial | (1 | ) | — | — | — | |||||||||||||||||||
Wealth management loans and mortgages | — | (1 | ) | — | — | |||||||||||||||||||
Other residential mortgages | 2 | — | — | 1 | — | 2 | — | — | ||||||||||||||||
Wealth management loans and mortgages | (1 | ) | — | — | — | |||||||||||||||||||
Commercial | — | (11 | ) | — | — | |||||||||||||||||||
Foreign | — | — | 1 | — | — | — | 1 | — | ||||||||||||||||
Net recoveries (charge-offs) | 1 | (11 | ) | 1 | 1 | |||||||||||||||||||
Net (charge-offs) recoveries | (1 | ) | 1 | 1 | — | |||||||||||||||||||
Ending balance of allowance for credit losses | $ | 241 | $ | 248 | $ | 252 | $ | 254 | $ | 224 | $ | 241 | $ | 252 | $ | 251 | ||||||||
Allowance for loan losses | $ | 146 | $ | 146 | $ | 146 | $ | 145 | $ | 127 | $ | 146 | $ | 146 | $ | 140 | ||||||||
Allowance for lending-related commitments | 95 | 102 | 106 | 109 | 97 | 95 | 106 | 111 | ||||||||||||||||
Allowance for loan losses as a percentage of total loans | 0.28 | % | 0.27 | % | 0.26 | % | 0.25 | % | 0.23 | % | 0.28 | % | 0.26 | % | 0.26 | % | ||||||||
Allowance for loan losses as a percentage of non-margin loans | 0.35 | 0.35 | 0.34 | 0.34 | 0.29 | 0.35 | 0.34 | 0.35 | ||||||||||||||||
Total allowance for credit losses as a percentage of total loans | 0.46 | 0.46 | 0.45 | 0.44 | 0.41 | 0.46 | 0.45 | 0.46 | ||||||||||||||||
Total allowance for credit losses as a percentage of non-margin loans | 0.58 | 0.60 | 0.58 | 0.59 | 0.50 | 0.58 | 0.58 | 0.62 |
Allocation of allowance | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | June 30, 2018 | |||||
Commercial | 32 | % | 33 | % | 32 | % | 30 | % | |
Commercial real estate | 30 | 30 | 30 | 29 | |||||
Foreign | 13 | 12 | 13 | 13 | |||||
Financial institutions | 9 | 9 | 9 | 10 | |||||
Wealth management (a) | 8 | 8 | 8 | 9 | |||||
Other residential mortgages | 6 | 6 | 6 | 7 | |||||
Lease financing | 2 | 2 | 2 | 2 | |||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Allocation of allowance | Sept. 30, 2019 | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | |||||
Commercial real estate | 35 | % | 30 | % | 30 | % | 29 | % | |
Commercial | 27 | 32 | 32 | 30 | |||||
Foreign | 13 | 13 | 13 | 13 | |||||
Financial institutions | 9 | 9 | 9 | 10 | |||||
Wealth management (a) | 9 | 8 | 8 | 9 | |||||
Other residential mortgages | 6 | 6 | 6 | 7 | |||||
Lease financings | 1 | 2 | 2 | 2 | |||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
(a) | Includes the allowance for wealth management mortgages. |
Nonperforming assets | June 30, 2019 | Dec. 31, 2018 | ||||
(dollars in millions) | ||||||
Nonperforming loans: | ||||||
Commercial | $ | 96 | $ | — | ||
Other residential mortgages | 65 | 67 | ||||
Wealth management loans and mortgages | 23 | 9 | ||||
Total nonperforming loans | 184 | 76 | ||||
Other assets owned | 2 | 3 | ||||
Total nonperforming assets (a) | $ | 186 | $ | 79 | ||
Nonperforming assets ratio | 0.35 | % | 0.14 | % | ||
Nonperforming assets ratio, excluding margin loans | 0.45 | 0.18 | ||||
Allowance for loan losses/nonperforming loans | 79.3 | 192.1 | ||||
Allowance for loan losses/nonperforming assets | 78.5 | 184.8 | ||||
Total allowance for credit losses/nonperforming loans | 131.0 | 331.6 | ||||
Total allowance for credit losses/nonperforming assets | 129.6 | 319.0 |
Nonperforming assets | Sept. 30, 2019 | Dec. 31, 2018 | ||||
(dollars in millions) | ||||||
Nonperforming loans: | ||||||
Other residential mortgages | $ | 62 | $ | 67 | ||
Wealth management loans and mortgages | 24 | 9 | ||||
Total nonperforming loans | 86 | 76 | ||||
Other assets owned | 2 | 3 | ||||
Total nonperforming assets | $ | 88 | $ | 79 | ||
Nonperforming assets ratio | 0.16 | % | 0.14 | % | ||
Nonperforming assets ratio, excluding margin loans | 0.20 | 0.18 | ||||
Allowance for loan losses/nonperforming loans | 147.7 | 192.1 | ||||
Allowance for loan losses/nonperforming assets | 144.3 | 184.8 | ||||
Total allowance for credit losses/nonperforming loans | 260.5 | 331.6 | ||||
Total allowance for credit losses/nonperforming assets | 254.5 | 319.0 |
Nonperforming assets activity | June 30, 2019 | Dec. 31, 2018 | ||||
(in millions) | ||||||
Balance at beginning of quarter | $ | 174 | $ | 81 | ||
Additions | 17 | 4 | ||||
Return to accrual status | — | (1 | ) | |||
Charge-offs | 1 | (1 | ) | |||
Paydowns/sales | (6 | ) | (4 | ) | ||
Balance at end of quarter | $ | 186 | $ | 79 |
Federal funds purchased and securities sold under repurchase agreements | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||
(dollars in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | ||||||||||||
Maximum month-end balance during the quarter | $ | 12,127 | $ | 12,113 | $ | 14,138 | $ | 16,967 | $ | 12,127 | $ | 13,020 | ||||||
Average daily balance (a) | $ | 11,809 | $ | 11,922 | $ | 18,146 | $ | 13,432 | $ | 11,809 | $ | 14,199 | ||||||
Weighted-average rate during the quarter (a) | 12.64 | % | 11.26 | % | 3.48 | % | 13.08 | % | 12.64 | % | 5.33 | % | ||||||
Ending balance (b) | $ | 11,757 | $ | 11,761 | $ | 13,200 | $ | 11,796 | $ | 11,757 | $ | 10,158 | ||||||
Weighted-average rate at period end (b) | 14.43 | % | 9.82 | % | 4.24 | % | 11.70 | % | 14.43 | % | 7.33 | % |
(a) | Includes the average impact of offsetting under enforceable netting agreements of $67,519 million for the third quarter of 2019, $50,710 million for the second quarter of 2019 |
(b) | Includes the impact of offsetting under enforceable netting agreements of $60,094 million at Sept. 30, 2019, $78,433 million at June 30, 2019 |
Payables to customers and broker-dealers | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||
(dollars in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | ||||||||||||
Maximum month-end balance during the quarter | $ | 19,149 | $ | 20,343 | $ | 20,349 | $ | 19,103 | $ | 19,149 | $ | 19,232 | ||||||
Average daily balance (a) | $ | 18,679 | $ | 19,291 | $ | 19,402 | $ | 18,619 | $ | 18,679 | $ | 19,073 | ||||||
Weighted-average rate during the quarter (a) | 1.76 | % | 1.76 | % | 1.10 | % | 1.52 | % | 1.76 | % | 1.23 | % | ||||||
Ending balance | $ | 18,946 | $ | 19,310 | $ | 19,123 | $ | 18,364 | $ | 18,946 | $ | 18,683 | ||||||
Weighted-average rate at period end | 1.73 | % | 1.75 | % | 1.08 | % | 1.34 | % | 1.73 | % | 1.30 | % |
(a) | The weighted-average rate is calculated based on, and is applied to, the average interest-bearing payables to customers and broker-dealers, which were $15,440 million in the third quarter of 2019, $15,666 million in the second quarter of 2019 |
Commercial paper | Quarter ended | Quarter ended | ||||||||||||||||
(dollars in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | ||||||||||||
Maximum month-end balance during the quarter | $ | 8,894 | $ | 4,601 | $ | 4,470 | $ | 5,692 | $ | 8,894 | $ | 4,422 | ||||||
Average daily balance | $ | 2,957 | $ | 1,377 | $ | 3,869 | $ | 3,796 | $ | 2,957 | $ | 3,102 | ||||||
Weighted-average rate during the quarter | 2.43 | % | 2.44 | % | 2.13 | % | 2.26 | % | 2.43 | % | 2.10 | % | ||||||
Ending balance | $ | 8,894 | $ | 2,773 | $ | 2,508 | $ | 3,538 | $ | 8,894 | $ | 735 | ||||||
Weighted-average rate at period end | 2.35 | % | 2.40 | % | 2.24 | % | 1.88 | % | 2.35 | % | 2.06 | % |
Other borrowed funds | Quarter ended | Quarter ended | ||||||||||||||||
(dollars in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | ||||||||||||
Maximum month-end balance during the quarter | $ | 2,732 | $ | 3,969 | $ | 3,053 | $ | 1,358 | $ | 2,732 | $ | 3,269 | ||||||
Average daily balance | $ | 2,455 | $ | 3,305 | $ | 2,399 | $ | 1,148 | $ | 2,455 | $ | 2,747 | ||||||
Weighted-average rate during the quarter | 3.36 | % | 2.87 | % | 2.40 | % | 3.24 | % | 3.36 | % | 2.33 | % | ||||||
Ending balance | $ | 1,921 | $ | 3,932 | $ | 3,053 | $ | 820 | $ | 1,921 | $ | 2,934 | ||||||
Weighted-average rate at period end | 3.84 | % | 3.31 | % | 2.53 | % | 3.16 | % | 3.84 | % | 2.48 | % |
Available funds | June 30, 2019 | Dec. 31, 2018 | Average | Sept. 30, 2019 | Dec. 31, 2018 | Average | ||||||||||||||||||||||||
(dollars in millions) | 2Q19 | 1Q19 | 2Q18 | 3Q19 | 2Q19 | 3Q18 | ||||||||||||||||||||||||
Cash and due from banks | $ | 5,556 | $ | 5,864 | $ | 5,083 | $ | 4,853 | $ | 4,916 | $ | 6,718 | $ | 5,864 | $ | 5,250 | $ | 5,083 | $ | 5,000 | ||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | 69,700 | 67,988 | 61,756 | 63,583 | 69,676 | 73,811 | 67,988 | 60,030 | 61,756 | 61,216 | ||||||||||||||||||||
Interest-bearing deposits with banks | 15,491 | 14,148 | 13,666 | 13,857 | 15,748 | 15,417 | 14,148 | 15,324 | 13,666 | 14,691 | ||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 61,201 | 46,795 | 38,038 | 28,968 | 28,051 | 43,723 | 46,795 | 40,816 | 38,038 | 26,738 | ||||||||||||||||||||
Total available funds | $ | 151,948 | $ | 134,795 | $ | 118,543 | $ | 111,261 | $ | 118,391 | $ | 139,669 | $ | 134,795 | $ | 121,420 | $ | 118,543 | $ | 107,645 | ||||||||||
Total available funds as a percentage of total assets | 40 | % | 37 | % | 35 | % | 33 | % | 34 | % | 37 | % | 37 | % | 35 | % | 35 | % | 32 | % |
Credit ratings at | |||||||
Moody’s | S&P | Fitch | DBRS | ||||
Parent: | |||||||
Long-term senior debt | A1 | A | AA- | AA (low) | |||
Subordinated debt | A2 | A- | A+ | A (high) | |||
Preferred stock | Baa1 | BBB | BBB | A (low) | |||
Outlook - Parent | Stable | Stable | Stable | ||||
The Bank of New York Mellon: | |||||||
Long-term senior debt | Aa2 | AA- | AA | AA | |||
Subordinated debt | NR | A | NR | NR | |||
Long-term deposits | Aa1 | AA- | AA+ | AA | |||
Short-term deposits | P1 | A-1+ | F1+ | R-1 (high) | |||
Commercial paper | P1 | A-1+ | F1+ | R-1 (high) | |||
BNY Mellon, N.A.: | |||||||
Long-term senior debt | Aa2 | (a) | AA- | AA | (a) | AA | |
Long-term deposits | Aa1 | AA- | AA+ | AA | |||
Short-term deposits | P1 | A-1+ | F1+ | R-1 (high) | |||
Outlook - Banks | Stable | Stable | Stable |
(a) | Represents senior debt issuer default rating. |
Consolidated HQLA and LCR | June 30, 2019 | Sept. 30, 2019 | ||||
(dollars in billions) | ||||||
Securities (a) | $ | 134 | $ | 119 | ||
Cash (b) | 63 | 67 | ||||
Total consolidated HQLA (c) | $ | 197 | $ | 186 | ||
Total consolidated HQLA - average (c) | $ | 166 | $ | 168 | ||
Average LCR | 117 | % | 117 | % |
(a) | Primarily includes securities of U.S. government-sponsored enterprises, U.S. Treasury, sovereign securities, U.S. agency and investment-grade corporate debt. |
(b) | Primarily includes cash on deposit with central banks. |
(c) | Consolidated HQLA presented before adjustments. After haircuts and the impact of trapped liquidity, consolidated HQLA totaled |
Capital data (dollars in millions, except per share amounts; common shares in thousands) | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | June 30, 2019 | Dec. 31, 2018 | ||||||||||||
Average common equity to average assets | 10.9 | % | 11.0 | % | 11.2 | % | 10.7 | % | 10.9 | % | 11.2 | % | ||||||
At period end: | ||||||||||||||||||
BNY Mellon shareholders’ equity to total assets ratio | 10.9 | % | 11.9 | % | 11.2 | % | 11.0 | % | 10.9 | % | 11.2 | % | ||||||
BNY Mellon common shareholders’ equity to total assets ratio | 10.0 | % | 10.9 | % | 10.2 | % | 10.1 | % | 10.0 | % | 10.2 | % | ||||||
Total BNY Mellon shareholders’ equity | $ | 41,533 | $ | 41,225 | $ | 40,638 | $ | 41,120 | $ | 41,533 | $ | 40,638 | ||||||
Total BNY Mellon common shareholders’ equity (a) | $ | 37,991 | $ | 37,683 | $ | 37,096 | $ | 37,578 | $ | 37,991 | $ | 37,096 | ||||||
BNY Mellon tangible common shareholders’ equity – Non-GAAP (a) | $ | 19,275 | $ | 18,896 | $ | 18,290 | $ | 18,988 | $ | 19,275 | $ | 18,290 | ||||||
Book value per common share (a) | $ | 40.30 | $ | 39.36 | $ | 38.63 | $ | 40.75 | $ | 40.30 | $ | 38.63 | ||||||
Tangible book value per common share – Non-GAAP (a) | $ | 20.45 | $ | 19.74 | $ | 19.04 | $ | 20.59 | $ | 20.45 | $ | 19.04 | ||||||
Closing stock price per common share | $ | 44.15 | $ | 50.43 | $ | 47.07 | $ | 45.21 | $ | 44.15 | $ | 47.07 | ||||||
Market capitalization | $ | 41,619 | $ | 48,288 | $ | 45,207 | $ | 41,693 | $ | 41,619 | $ | 45,207 | ||||||
Common shares outstanding | 942,662 | 957,517 | 960,426 | 922,199 | 942,662 | 960,426 | ||||||||||||
Cash dividends per common share | $ | 0.28 | $ | 0.28 | $ | 0.28 | $ | 0.31 | $ | 0.28 | $ | 0.28 | ||||||
Common dividend payout ratio | 28 | % | 30 | % | 33 | % | 29 | % | 28 | % | 33 | % | ||||||
Common dividend yield (annualized) | 2.5 | % | 2.3 | % | 2.4 | % | 2.7 | % | 2.5 | % | 2.4 | % |
(a) | See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 40 for a reconciliation of GAAP to Non-GAAP. |
Consolidated and largest bank subsidiary regulatory capital ratios | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | June 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||
Well capitalized | Minimum required | Capital ratios | Capital ratios | Capital ratios | Well capitalized | Minimum required | Capital ratios | Capital ratios | Capital ratios | |||||||||||||||||||
(a) | (a) | |||||||||||||||||||||||||||
Consolidated regulatory capital ratios: (b) | ||||||||||||||||||||||||||||
Advanced Approach: | ||||||||||||||||||||||||||||
Advanced Approaches: | ||||||||||||||||||||||||||||
CET1 ratio | N/A | (c) | 8.5 | % | 11.1 | % | 11.1 | % | 10.7 | % | N/A | (c) | 8.5 | % | 11.1 | % | 11.1 | % | 10.7 | % | ||||||||
Tier 1 capital ratio | 6 | % | 10 | 13.2 | 13.2 | 12.8 | 6 | % | 10 | 13.2 | 13.2 | 12.8 | ||||||||||||||||
Total capital ratio | 10 | % | 12 | 14.0 | 14.0 | 13.6 | 10 | % | 12 | 14.0 | 14.0 | 13.6 | ||||||||||||||||
Standardized Approach: | ||||||||||||||||||||||||||||
CET1 ratio | N/A | (c) | 8.5 | % | 12.4 | % | 12.0 | % | 11.7 | % | N/A | (c) | 8.5 | % | 12.3 | % | 12.4 | % | 11.7 | % | ||||||||
Tier 1 capital ratio | 6 | % | 10 | 14.8 | 14.3 | 14.1 | 6 | % | 10 | 14.6 | 14.8 | 14.1 | ||||||||||||||||
Total capital ratio | 10 | % | 12 | 15.7 | 15.3 | 15.1 | 10 | % | 12 | 15.6 | 15.7 | 15.1 | ||||||||||||||||
Tier 1 leverage ratio | N/A | (c) | 4 | 6.8 | 6.8 | 6.6 | N/A | (c) | 4 | 6.5 | 6.8 | 6.6 | ||||||||||||||||
SLR (d) | N/A | (c) | 5 | 6.3 | 6.3 | 6.0 | N/A | (c) | 5 | 6.0 | 6.3 | 6.0 | ||||||||||||||||
The Bank of New York Mellon regulatory capital ratios: (b) | ||||||||||||||||||||||||||||
Advanced Approach: | ||||||||||||||||||||||||||||
Advanced Approaches: | ||||||||||||||||||||||||||||
CET1 ratio | 6.5 | % | 7 | % | 14.2 | % | 14.2 | % | 14.0 | % | 6.5 | % | 7 | % | 14.5 | % | 14.2 | % | 14.0 | % | ||||||||
Tier 1 capital ratio | 8 | 8.5 | 14.2 | 14.4 | 14.3 | 8 | 8.5 | 14.5 | 14.2 | 14.3 | ||||||||||||||||||
Total capital ratio | 10 | 10.5 | 14.2 | 14.9 | 14.7 | 10 | 10.5 | 14.5 | 14.2 | 14.7 | ||||||||||||||||||
Tier 1 leverage ratio | 5 | 4 | 7.3 | 7.6 | 7.6 | 5 | 4 | 7.0 | 7.3 | 7.6 | ||||||||||||||||||
SLR (d) | 6 | 3 | 6.7 | 6.9 | 6.8 | 6 | 3 | 6.4 | 6.7 | 6.8 |
(a) | Minimum requirements for |
(b) | For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches. The Tier 1 leverage ratio is based on Tier 1 capital and quarterly average total assets. The fully phased-in U.S. G-SIB surcharge of 1.5% is subject to change. The countercyclical capital buffer is currently set to 0%. |
(c) | The Federal Reserve’s regulations do not establish well capitalized thresholds for these measures for BHCs. |
(d) | The SLR is based on Tier 1 capital and total leverage exposure, which includes certain off-balance sheet exposures. |
Capital components and risk-weighted assets | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | June 30, 2019 | Dec. 31, 2018 | ||||||||||||
(in millions) | ||||||||||||||||||
CET1: | ||||||||||||||||||
Common shareholders’ equity | $ | 37,991 | $ | 37,683 | $ | 37,096 | $ | 37,578 | $ | 37,991 | $ | 37,096 | ||||||
Adjustments for: | ||||||||||||||||||
Goodwill and intangible assets (a) | (18,716 | ) | (18,787 | ) | (18,806 | ) | (18,590 | ) | (18,716 | ) | (18,806 | ) | ||||||
Net pension fund assets | (331 | ) | (334 | ) | (320 | ) | (326 | ) | (331 | ) | (320 | ) | ||||||
Equity method investments | (358 | ) | (357 | ) | (361 | ) | (361 | ) | (358 | ) | (361 | ) | ||||||
Deferred tax assets | (45 | ) | (43 | ) | (42 | ) | (44 | ) | (45 | ) | (42 | ) | ||||||
Other | (7 | ) | (6 | ) | — | (61 | ) | (7 | ) | — | ||||||||
Total CET1 | 18,534 | 18,156 | 17,567 | 18,196 | 18,534 | 17,567 | ||||||||||||
Other Tier 1 capital: | ||||||||||||||||||
Preferred stock | 3,542 | 3,542 | 3,542 | 3,542 | 3,542 | 3,542 | ||||||||||||
Other | (61 | ) | (59 | ) | (65 | ) | (61 | ) | (61 | ) | (65 | ) | ||||||
Total Tier 1 capital | $ | 22,015 | $ | 21,639 | $ | 21,044 | $ | 21,677 | $ | 22,015 | $ | 21,044 | ||||||
Tier 2 capital: | ||||||||||||||||||
Subordinated debt | $ | 1,250 | $ | 1,250 | $ | 1,250 | $ | 1,250 | $ | 1,250 | $ | 1,250 | ||||||
Allowance for credit losses | 241 | 248 | 252 | 224 | 241 | 252 | ||||||||||||
Other | (6 | ) | (1 | ) | (10 | ) | (6 | ) | (6 | ) | (10 | ) | ||||||
Total Tier 2 capital – Standardized Approach | 1,485 | 1,497 | 1,492 | 1,468 | 1,485 | 1,492 | ||||||||||||
Excess of expected credit losses | 41 | 53 | 65 | — | 41 | 65 | ||||||||||||
Less: Allowance for credit losses | 241 | 248 | 252 | 224 | 241 | 252 | ||||||||||||
Total Tier 2 capital – Advanced Approach | $ | 1,285 | $ | 1,302 | $ | 1,305 | ||||||||||||
Total Tier 2 capital – Advanced Approaches | $ | 1,244 | $ | 1,285 | $ | 1,305 | ||||||||||||
Total capital: | ||||||||||||||||||
Standardized Approach | $ | 23,500 | $ | 23,136 | $ | 22,536 | $ | 23,145 | $ | 23,500 | $ | 22,536 | ||||||
Advanced Approach | $ | 23,300 | $ | 22,941 | $ | 22,349 | ||||||||||||
Advanced Approaches | $ | 22,921 | $ | 23,300 | $ | 22,349 | ||||||||||||
Risk-weighted assets: | ||||||||||||||||||
Standardized Approach | $ | 149,226 | $ | 151,101 | $ | 149,618 | $ | 148,399 | $ | 149,226 | $ | 149,618 | ||||||
Advanced Approach: | ||||||||||||||||||
Advanced Approaches: | ||||||||||||||||||
Credit Risk | $ | 94,304 | $ | 92,798 | $ | 92,917 | $ | 98,553 | $ | 94,304 | $ | 92,917 | ||||||
Market Risk | 3,241 | 3,507 | 3,454 | 3,356 | 3,241 | 3,454 | ||||||||||||
Operational Risk | 69,025 | 67,313 | 68,300 | 62,263 | 69,025 | 68,300 | ||||||||||||
Total Advanced Approach | $ | 166,570 | $ | 163,618 | $ | 164,671 | ||||||||||||
Total Advanced Approaches | $ | 164,172 | $ | 166,570 | $ | 164,671 | ||||||||||||
Average assets for Tier 1 leverage ratio | $ | 322,879 | $ | 316,586 | $ | 319,007 | $ | 331,241 | $ | 322,879 | $ | 319,007 | ||||||
Total leverage exposure for SLR | $ | 350,747 | $ | 344,829 | $ | 347,943 | $ | 359,023 | $ | 350,747 | $ | 347,943 |
(a) | Reduced by deferred tax liabilities associated with intangible assets and tax deductible goodwill. |
CET1 generation | 2Q19 | 3Q19 | ||||
(in millions) | ||||||
CET1 – Beginning of period | $ | 18,156 | $ | 18,534 | ||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | 969 | 1,002 | ||||
Goodwill and intangible assets, net of related deferred tax liabilities | 71 | 126 | ||||
Gross CET1 generated | 1,040 | 1,128 | ||||
Capital deployed: | ||||||
Common stock dividend payments | (270 | ) | (294 | ) | ||
Common stock repurchases | (750 | ) | (981 | ) | ||
Total capital deployed | (1,020 | ) | (1,275 | ) | ||
Other comprehensive income: | ||||||
Foreign currency translation | 10 | (273 | ) | |||
Unrealized gain on assets available-for-sale | 282 | 64 | ||||
Defined benefit plans | 10 | 10 | ||||
Unrealized gain on cash flow hedges | (6 | ) | ||||
Total other comprehensive income | 302 | (205 | ) | |||
Additional paid-in capital (a) | 57 | 65 | ||||
Other additions (deductions): | ||||||
Net pension fund assets | 3 | 5 | ||||
Deferred tax assets | (2 | ) | 1 | |||
Embedded goodwill | (1 | ) | (3 | ) | ||
Other | (1 | ) | (54 | ) | ||
Total other deductions | (1 | ) | (51 | ) | ||
Net CET1 generated | 378 | |||||
Net CET1 deployed | (338 | ) | ||||
CET1 – End of period | $ | 18,534 | $ | 18,196 |
(a) | Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans. |
Sensitivity of consolidated capital ratios at Sept. 30, 2019 | ||||
Increase or decrease of | ||||
(in basis points) | $100 million in common equity | $1 billion in RWA, quarterly average assets or total leverage exposure | ||
CET1: | ||||
Standardized Approach | 7 | bps | 8 | bps |
Advanced Approaches | 6 | 7 | ||
Tier 1 capital: | ||||
Standardized Approach | 7 | 10 | ||
Advanced Approaches | 6 | 8 | ||
Total capital: | ||||
Standardized Approach | 7 | 11 | ||
Advanced Approaches | 6 | 9 | ||
Tier 1 leverage | 3 | 2 | ||
SLR | 3 | 2 |
Sensitivity of consolidated capital ratios at June 30, 2019 | ||||
Increase or decrease of | ||||
(in basis points) | $100 million in common equity | $1 billion in RWA, quarterly average assets or total leverage exposure | ||
CET1: | ||||
Standardized Approach | 7 | bps | 8 | bps |
Advanced Approach | 6 | 7 | ||
Tier 1 capital: | ||||
Standardized Approach | 7 | 10 | ||
Advanced Approach | 6 | 8 | ||
Total capital: | ||||
Standardized Approach | 7 | 11 | ||
Advanced Approach | 6 | 8 | ||
Tier 1 leverage | 3 | 2 | ||
SLR | 3 | 2 |
As a % of RWAs (a) | As a % of total leverage exposure | |
Eligible external TLAC ratios | Regulatory minimum of 18% plus a buffer (b) equal to the sum of 2.5%, the method 1 G-SIB surcharge (currently 1%), and the countercyclical capital buffer, if any | Regulatory minimum of 7.5% plus a buffer (c) equal to 2% |
Eligible external LTD ratios | Regulatory minimum of 6% plus the greater of the method 1 or method 2 G-SIB surcharge (currently 1.5%) | 4.5% |
(c) | Buffer to be met using only Tier 1 capital. |
TLAC and LTD ratios | June 30, 2019 | Sept. 30, 2019 | ||||||||||
Minimum required | Minimum ratios with buffers | Minimum required | Minimum ratios with buffers | |||||||||
Ratios | Ratios | |||||||||||
Eligible external TLAC: | ||||||||||||
As a percentage of RWA | 18.0 | % | 21.5 | % | 26.6 | % | 18.0 | % | 21.5 | % | 26.5 | % |
As a percentage of total leverage exposure | 7.5 | % | 9.5 | % | 12.6 | % | 7.5 | % | 9.5 | % | 12.1 | % |
Eligible external LTD: | ||||||||||||
As a percentage of RWA | 7.5 | % | N/A | 11.9 | % | 7.5 | % | N/A | 11.8 | % | ||
As a percentage of total leverage exposure | 4.5 | % | N/A | 5.6 | % | 4.5 | % | N/A | 5.4 | % |
VaR (a) | 3Q19 | Sept. 30, 2019 | ||||||||||
(in millions) | Average | Minimum | Maximum | |||||||||
Interest rate | $ | 4.7 | $ | 3.7 | $ | 7.3 | $ | 4.3 | ||||
Foreign exchange | 3.0 | 1.8 | 5.1 | 3.3 | ||||||||
Equity | 0.9 | 0.6 | 1.2 | 1.1 | ||||||||
Credit | 1.0 | 0.5 | 2.0 | 1.6 | ||||||||
Diversification | (3.5 | ) | N/M | N/M | (3.6 | ) | ||||||
Overall portfolio | 6.1 | 4.0 | 8.2 | 6.7 |
VaR (a) | 2Q19 | June 30, 2019 | ||||||||||
(in millions) | Average | Minimum | Maximum | |||||||||
Interest rate | $ | 4.2 | $ | 3.3 | $ | 5.2 | $ | 3.8 | ||||
Foreign exchange | 2.7 | 1.9 | 4.2 | 2.3 | ||||||||
Equity | 0.8 | 0.6 | 0.9 | 0.7 | ||||||||
Credit | 0.8 | 0.5 | 1.2 | 0.9 | ||||||||
Diversification | (3.2 | ) | N/M | N/M | (3.2 | ) | ||||||
Overall portfolio | 5.3 | 4.0 | 6.9 | 4.5 |
VaR (a) | 1Q19 | March 31, 2019 | 3Q18 | Sept. 30, 2018 | ||||||||||||||||||||
(in millions) | Average | Minimum | Maximum | Average | Minimum | Maximum | ||||||||||||||||||
Interest rate | $ | 4.0 | $ | 3.2 | $ | 5.3 | $ | 4.2 | $ | 3.6 | $ | 3.0 | $ | 5.0 | $ | 3.7 | ||||||||
Foreign exchange | 3.8 | 2.8 | 6.4 | 3.9 | 3.6 | 2.9 | 5.6 | 5.5 | ||||||||||||||||
Equity | 0.7 | 0.6 | 1.1 | 0.9 | 0.5 | — | 0.8 | 0.1 | ||||||||||||||||
Credit | 0.6 | 0.4 | 1.0 | 0.7 | 0.8 | 0.6 | 1.1 | 0.9 | ||||||||||||||||
Diversification | (2.9 | ) | N/M | N/M | (3.5 | ) | (3.8 | ) | N/M | N/M | (4.6 | ) | ||||||||||||
Overall portfolio | 6.2 | 4.6 | 9.5 | 6.2 | 4.7 | 3.6 | 6.3 | 5.6 |
VaR (a) | 2Q18 | June 30, 2018 | ||||||||||
(in millions) | Average | Minimum | Maximum | |||||||||
Interest rate | $ | 4.0 | $ | 3.3 | $ | 5.2 | $ | 3.5 | ||||
Foreign exchange | 3.7 | 2.9 | 5.7 | 3.5 | ||||||||
Equity | 0.7 | 0.5 | 1.0 | 0.5 | ||||||||
Credit | 0.8 | 0.6 | 1.0 | 1.0 | ||||||||
Diversification | (3.9 | ) | N/M | N/M | (3.9 | ) | ||||||
Overall portfolio | 5.3 | 4.3 | 7.0 | 4.6 |
VaR (a) | YTD19 | YTD19 | ||||||||||||||||
(in millions) | Average | Minimum | Maximum | Average | Minimum | Maximum | ||||||||||||
Interest rate | $ | 4.1 | $ | 3.2 | $ | 5.3 | $ | 4.3 | $ | 3.2 | $ | 7.3 | ||||||
Foreign exchange | 3.3 | 1.9 | 6.4 | 3.2 | 1.8 | 6.4 | ||||||||||||
Equity | 0.7 | 0.6 | 1.1 | 0.8 | 0.6 | 1.2 | ||||||||||||
Credit | 0.7 | 0.4 | 1.2 | 0.8 | 0.4 | 2.0 | ||||||||||||
Diversification | (3.1 | ) | N/M | N/M | (3.3 | ) | N/M | N/M | ||||||||||
Overall portfolio | 5.7 | 4.0 | 9.5 | 5.8 | 4.0 | 9.5 |
VaR (a) | YTD18 | YTD18 | ||||||||||||||||
(in millions) | Average | Minimum | Maximum | Average | Minimum | Maximum | ||||||||||||
Interest rate | $ | 4.2 | $ | 3.3 | $ | 5.5 | $ | 4.0 | $ | 3.0 | $ | 5.5 | ||||||
Foreign exchange | 4.5 | 2.9 | 8.3 | 4.2 | 2.9 | 8.3 | ||||||||||||
Equity | 0.8 | 0.5 | 1.2 | 0.7 | — | 1.2 | ||||||||||||
Credit | 1.1 | 0.6 | 2.6 | 1.0 | 0.6 | 2.6 | ||||||||||||
Diversification | (4.7 | ) | N/M | N/M | (4.4 | ) | N/M | N/M | ||||||||||
Overall portfolio | 5.9 | 4.3 | 10.4 | 5.5 | 3.6 | 10.4 |
(a) | VaR exposure does not include the impact of the Company’s consolidated investment management funds and seed capital investments. |
Distribution of trading revenue (loss) (a) | |||||||||||
Quarter ended | |||||||||||
(dollars in millions) | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | ||||||
Revenue range: | Number of days | ||||||||||
Less than $(2.5) | — | 1 | 1 | — | 1 | ||||||
$(2.5) – $0 | 4 | 5 | 7 | 6 | 3 | ||||||
$0 – $2.5 | 30 | 22 | 17 | 30 | 21 | ||||||
$2.5 – $5.0 | 23 | 23 | 24 | 20 | 30 | ||||||
More than $5.0 | 7 | 10 | 13 | 7 | 9 |
Distribution of trading revenue (loss) (a) | |||||||||||
Quarter ended | |||||||||||
(dollars in millions) | Sept. 30, 2019 | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | ||||||
Revenue range: | Number of days | ||||||||||
Less than $(2.5) | 2 | — | 1 | 1 | — | ||||||
$(2.5) – $0 | 7 | 4 | 5 | 7 | 6 | ||||||
$0 – $2.5 | 26 | 30 | 22 | 17 | 30 | ||||||
$2.5 – $5.0 | 22 | 23 | 23 | 24 | 20 | ||||||
More than $5.0 | 7 | 7 | 10 | 13 | 7 |
(a) | Trading revenue (loss) includes realized and unrealized gains and losses primarily related to spot and forward foreign exchange transactions, derivatives and securities trades for our customers and excludes any associated commissions, underwriting fees and net interest revenue. |
Foreign exchange and other trading counterparty risk rating profile (a) | Foreign exchange and other trading counterparty risk rating profile (a) | Foreign exchange and other trading counterparty risk rating profile (a) | ||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||
June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | |||||||||||
Rating: | ||||||||||||||||||||
AAA to AA- | 54 | % | 49 | % | 50 | % | 48 | % | 37 | % | 55 | % | 54 | % | 49 | % | 50 | % | 48 | % |
A+ to A- | 26 | 28 | 28 | 30 | 41 | 24 | 26 | 28 | 28 | 30 | ||||||||||
BBB+ to BBB- | 17 | 20 | 18 | 19 | 18 | 16 | 17 | 20 | 18 | 19 | ||||||||||
BB+ and lower (b) | 3 | 3 | 4 | 3 | 4 | 5 | 3 | 3 | 4 | 3 | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(a) | Represents credit rating agency equivalent of internal credit ratings. |
(b) | Non-investment grade. |
Estimated changes in net interest revenue (in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | ||||||||||||
Up 200 bps parallel rate ramp vs. baseline (a) | $ | 380 | $ | 410 | $ | 372 | $ | 187 | $ | 380 | $ | 362 | ||||||
Up 100 bps parallel rate ramp vs. baseline (a) | 200 | 208 | 183 | 74 | 200 | 180 | ||||||||||||
Down 100 bps parallel rate ramp vs. baseline (a) | (179 | ) | (91 | ) | (70 | ) | (45 | ) | (179 | ) | (140 | ) | ||||||
Long-term up 50 bps, short-term unchanged (b) | 171 | 149 | 72 | 115 | 171 | 83 | ||||||||||||
Long-term down 50 bps, short-term unchanged (b) | (192 | ) | (178 | ) | (89 | ) | (119 | ) | (192 | ) | (96 | ) |
(a) | In the parallel rate ramp, both short-term and long-term rates move in four equal quarterly increments. |
(b) | Long-term is equal to or greater than one year. |
Return on common equity and tangible common equity reconciliation | ||||||||||||||||||||||||||||||
(dollars in millions) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | 969 | $ | 910 | $ | 1,055 | $ | 1,879 | $ | 2,190 | $ | 1,002 | $ | 969 | $ | 1,075 | $ | 2,881 | $ | 3,265 | ||||||||||
Add: Amortization of intangible assets | 30 | 29 | 48 | 59 | 97 | 30 | 30 | 48 | 89 | 145 | ||||||||||||||||||||
Less: Tax impact of amortization of intangible assets | 7 | 7 | 11 | 14 | 23 | 7 | 7 | 11 | 21 | 34 | ||||||||||||||||||||
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP | $ | 992 | $ | 932 | $ | 1,092 | $ | 1,924 | $ | 2,264 | $ | 1,025 | $ | 992 | $ | 1,112 | $ | 2,949 | $ | 3,376 | ||||||||||
Average common shareholders’ equity | $ | 37,487 | $ | 37,086 | $ | 37,750 | $ | 37,287 | $ | 37,672 | $ | 37,597 | $ | 37,487 | $ | 38,036 | $ | 37,392 | $ | 37,795 | ||||||||||
Less: Average goodwill | 17,343 | 17,376 | 17,505 | 17,360 | 17,543 | 17,267 | 17,343 | 17,391 | 17,328 | 17,492 | ||||||||||||||||||||
Average intangible assets | 3,178 | 3,209 | 3,341 | 3,193 | 3,369 | 3,141 | 3,178 | 3,283 | 3,176 | 3,340 | ||||||||||||||||||||
Add: Deferred tax liability – tax deductible goodwill | 1,094 | 1,083 | 1,054 | 1,094 | 1,054 | 1,103 | 1,094 | 1,066 | 1,103 | 1,066 | ||||||||||||||||||||
Deferred tax liability – intangible assets | 687 | 690 | 709 | 687 | 709 | 679 | 687 | 699 | 679 | 699 | ||||||||||||||||||||
Average tangible common shareholders’ equity – Non-GAAP | $ | 18,747 | $ | 18,274 | $ | 18,667 | $ | 18,515 | $ | 18,523 | $ | 18,971 | $ | 18,747 | $ | 19,127 | $ | 18,670 | $ | 18,728 | ||||||||||
Return on common equity (annualized) – GAAP | 10.4 | % | 10.0 | % | 11.2 | % | 10.2 | % | 11.7 | % | 10.6 | % | 10.4 | % | 11.2 | % | 10.3 | % | 11.6 | % | ||||||||||
Return on tangible common equity (annualized) – Non-GAAP | 21.2 | % | 20.7 | % | 23.5 | % | 20.9 | % | 24.6 | % | 21.4 | % | 21.2 | % | 23.1 | % | 21.1 | % | 24.1 | % |
Book value and tangible book value per common share reconciliation | June 30, 2019 | March 31, 2019 | Dec. 31, 2018 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2018 | ||||||||||||||||
(dollars in millions, except common shares) | ||||||||||||||||||||||||
BNY Mellon shareholders’ equity at period end – GAAP | $ | 41,533 | $ | 41,225 | $ | 40,638 | $ | 41,505 | $ | 41,120 | $ | 41,533 | $ | 40,638 | $ | 41,560 | ||||||||
Less: Preferred stock | 3,542 | 3,542 | 3,542 | 3,542 | 3,542 | 3,542 | 3,542 | 3,542 | ||||||||||||||||
BNY Mellon common shareholders’ equity at period end – GAAP | 37,991 | 37,683 | 37,096 | 37,963 | 37,578 | 37,991 | 37,096 | 38,018 | ||||||||||||||||
Less: Goodwill | 17,337 | 17,367 | 17,350 | 17,418 | 17,248 | 17,337 | 17,350 | 17,390 | ||||||||||||||||
Intangible assets | 3,160 | 3,193 | 3,220 | 3,308 | 3,124 | 3,160 | 3,220 | 3,258 | ||||||||||||||||
Add: Deferred tax liability – tax deductible goodwill | 1,094 | 1,083 | 1,072 | 1,054 | 1,103 | 1,094 | 1,072 | 1,066 | ||||||||||||||||
Deferred tax liability – intangible assets | 687 | 690 | 692 | 709 | 679 | 687 | 692 | 699 | ||||||||||||||||
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP | $ | 19,275 | $ | 18,896 | $ | 18,290 | $ | 19,000 | $ | 18,988 | $ | 19,275 | $ | 18,290 | $ | 19,135 | ||||||||
Period-end common shares outstanding (in thousands) | 942,662 | 957,517 | 960,426 | 999,945 | 922,199 | 942,662 | 960,426 | 988,777 | ||||||||||||||||
Book value per common share – GAAP | $ | 40.30 | $ | 39.36 | $ | 38.63 | $ | 37.97 | $ | 40.75 | $ | 40.30 | $ | 38.63 | $ | 38.45 | ||||||||
Tangible book value per common share – Non-GAAP | $ | 20.45 | $ | 19.74 | $ | 19.04 | $ | 19.00 | $ | 20.59 | $ | 20.45 | $ | 19.04 | $ | 19.35 |
Constant currency reconciliation – Consolidated | 2Q19 vs. | 3Q19 vs. | ||||||||||||||
(dollars in millions) | 2Q19 | 2Q18 | 2Q18 | 3Q19 | 3Q18 | 3Q18 | ||||||||||
Investment management and performance fees (a) | $ | 833 | $ | 901 | (8 | )% | ||||||||||
Investment management and performance fees – GAAP (a) | $ | 832 | $ | 912 | (9 | )% | ||||||||||
Impact of changes in foreign currency exchange rates | — | (16 | ) | — | (14 | ) | ||||||||||
Adjusted investment management and performance fees – Non-GAAP | $ | 833 | $ | 885 | (6 | )% | $ | 832 | $ | 898 | (7 | )% |
(a) | In the first quarter of 2019, we reclassified certain platform-related fees to clearing services fees from investment management and performance fees. Prior periods have been reclassified. |
Constant currency reconciliation – Investment Management business | 2Q19 vs. | 3Q19 vs. | ||||||||||||||
(dollars in millions) | 2Q19 | 2Q18 | 2Q18 | 3Q19 | 3Q18 | 3Q18 | ||||||||||
Investment management and performance fees | $ | 829 | $ | 897 | (8 | )% | ||||||||||
Investment management and performance fees – GAAP | $ | 828 | $ | 909 | (9 | )% | ||||||||||
Impact of changes in foreign currency exchange rates | — | (16 | ) | — | (14 | ) | ||||||||||
Adjusted investment management and performance fees – Non-GAAP | $ | 829 | $ | 881 | (6 | )% | $ | 828 | $ | 895 | (7 | )% |
Pre-tax operating margin reconciliation - Investment Management business | Pre-tax operating margin reconciliation - Investment Management business | Pre-tax operating margin reconciliation - Investment Management business | ||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||||||||||
Income before income taxes – GAAP | $ | 265 | $ | 269 | $ | 247 | $ | 316 | $ | 319 | $ | 534 | $ | 700 | $ | 300 | $ | 265 | $ | 269 | $ | 247 | $ | 316 | $ | 834 | $ | 1,016 | ||||||||||||||
Total revenue – GAAP | $ | 917 | $ | 939 | $ | 963 | $ | 1,015 | $ | 1,018 | $ | 1,856 | $ | 2,106 | $ | 890 | $ | 917 | $ | 939 | $ | 963 | $ | 1,015 | $ | 2,746 | $ | 3,121 | ||||||||||||||
Less: Distribution and servicing expense | 94 | 91 | 95 | 99 | 103 | 185 | 213 | 98 | 94 | 91 | 95 | 99 | 283 | 312 | ||||||||||||||||||||||||||||
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP | $ | 823 | $ | 848 | $ | 868 | $ | 916 | $ | 915 | $ | 1,671 | $ | 1,893 | $ | 792 | $ | 823 | $ | 848 | $ | 868 | $ | 916 | $ | 2,463 | $ | 2,809 | ||||||||||||||
Pre-tax operating margin – GAAP (a) | 29 | % | 29 | % | 26 | % | 31 | % | 31 | % | 29 | % | 33 | % | 34 | % | 29 | % | 29 | % | 26 | % | 31 | % | 30 | % | 33 | % | ||||||||||||||
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a) | 32 | % | 32 | % | 29 | % | 35 | % | 35 | % | 32 | % | 37 | % | 38 | % | 32 | % | 32 | % | 29 | % | 35 | % | 34 | % | 36 | % |
(a) | Income before income taxes divided by total revenue. |
Item 1. Financial Statements |
The Bank of New York Mellon Corporation (and its subsidiaries) |
Quarter ended | Year-to-date | Quarter ended | Year-to-date | |||||||||||||||||||||||||||||
(in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | ||||||||||||||||||||||
Fee and other revenue | ||||||||||||||||||||||||||||||||
Investment services fees: | ||||||||||||||||||||||||||||||||
Asset servicing fees | $ | 1,141 | $ | 1,122 | $ | 1,157 | $ | 2,263 | $ | 2,325 | $ | 1,152 | $ | 1,141 | $ | 1,157 | $ | 3,415 | $ | 3,482 | ||||||||||||
Clearing services fees (a) | 410 | 398 | 401 | 808 | 825 | 419 | 410 | 393 | 1,227 | 1,218 | ||||||||||||||||||||||
Issuer services fees | 291 | 251 | 266 | 542 | 526 | 324 | 291 | 287 | 866 | 813 | ||||||||||||||||||||||
Treasury services fees | 140 | 132 | 140 | 272 | 278 | 140 | 140 | 137 | 412 | 415 | ||||||||||||||||||||||
Total investment services fees (a) | 1,982 | 1,903 | 1,964 | 3,885 | 3,954 | 2,035 | 1,982 | 1,974 | 5,920 | 5,928 | ||||||||||||||||||||||
Investment management and performance fees (a) | 833 | 841 | 901 | 1,674 | 1,851 | 832 | 833 | 912 | 2,506 | 2,763 | ||||||||||||||||||||||
Foreign exchange and other trading revenue | 166 | 170 | 187 | 336 | 396 | 150 | 166 | 155 | 486 | 551 | ||||||||||||||||||||||
Financing-related fees | 50 | 51 | 53 | 101 | 105 | 49 | 50 | 52 | 150 | 157 | ||||||||||||||||||||||
Distribution and servicing | 31 | 31 | 34 | 62 | 70 | 33 | 31 | 34 | 95 | 104 | ||||||||||||||||||||||
Investment and other income | 43 | 35 | 70 | 78 | 152 | 30 | 43 | 41 | 108 | 193 | ||||||||||||||||||||||
Total fee revenue | 3,105 | 3,031 | 3,209 | 6,136 | 6,528 | 3,129 | 3,105 | 3,168 | 9,265 | 9,696 | ||||||||||||||||||||||
Net securities gains (losses) — including other-than-temporary impairment | 8 | 1 | 1 | 9 | (48 | ) | ||||||||||||||||||||||||||
Net securities (losses) gains — including other-than-temporary impairment | (1 | ) | 8 | — | 8 | (48 | ) | |||||||||||||||||||||||||
Noncredit-related portion of other-than-temporary impairment (recognized in other comprehensive income) | 1 | — | — | 1 | — | — | 1 | — | 1 | — | ||||||||||||||||||||||
Net securities gains (losses) | 7 | 1 | 1 | 8 | (48 | ) | ||||||||||||||||||||||||||
Net securities (losses) gains | (1 | ) | 7 | — | 7 | (48 | ) | |||||||||||||||||||||||||
Total fee and other revenue | 3,112 | 3,032 | 3,210 | 6,144 | 6,480 | 3,128 | 3,112 | 3,168 | 9,272 | 9,648 | ||||||||||||||||||||||
Operations of consolidated investment management funds | ||||||||||||||||||||||||||||||||
Investment income | 10 | 26 | 13 | 36 | 2 | 4 | 10 | 10 | 40 | 12 | ||||||||||||||||||||||
Interest of investment management fund note holders | — | — | 1 | — | 1 | 1 | — | — | 1 | 1 | ||||||||||||||||||||||
Income from consolidated investment management funds | 10 | 26 | 12 | 36 | 1 | 3 | 10 | 10 | 39 | 11 | ||||||||||||||||||||||
Net interest revenue | ||||||||||||||||||||||||||||||||
Interest revenue | 1,965 | 1,920 | 1,553 | 3,885 | 2,934 | 1,942 | 1,965 | 1,634 | 5,827 | 4,568 | ||||||||||||||||||||||
Interest expense | 1,163 | 1,079 | 637 | 2,242 | 1,099 | 1,212 | 1,163 | 743 | 3,454 | 1,842 | ||||||||||||||||||||||
Net interest revenue | 802 | 841 | 916 | 1,643 | 1,835 | 730 | 802 | 891 | 2,373 | 2,726 | ||||||||||||||||||||||
Total revenue | 3,924 | 3,899 | 4,138 | 7,823 | 8,316 | 3,861 | 3,924 | 4,069 | 11,684 | 12,385 | ||||||||||||||||||||||
Provision for credit losses | (8 | ) | 7 | (3 | ) | (1 | ) | (8 | ) | (16 | ) | (8 | ) | (3 | ) | (17 | ) | (11 | ) | |||||||||||||
Noninterest expense | ||||||||||||||||||||||||||||||||
Staff | 1,421 | 1,524 | 1,489 | 2,945 | 3,065 | 1,479 | 1,421 | 1,478 | 4,424 | 4,543 | ||||||||||||||||||||||
Professional, legal and other purchased services | 337 | 325 | 328 | 662 | 619 | 316 | 337 | 332 | 978 | 951 | ||||||||||||||||||||||
Software and equipment | 304 | 283 | 266 | 587 | 500 | 309 | 304 | 262 | 896 | 762 | ||||||||||||||||||||||
Net occupancy | 138 | 137 | 156 | 275 | 295 | 138 | 138 | 139 | 413 | 434 | ||||||||||||||||||||||
Sub-custodian and clearing | 115 | 105 | 110 | 220 | 229 | 111 | 115 | 106 | 331 | 335 | ||||||||||||||||||||||
Distribution and servicing | 94 | 91 | 106 | 185 | 212 | 97 | 94 | 99 | 282 | 311 | ||||||||||||||||||||||
Business development | 56 | 45 | 62 | 101 | 113 | 47 | 56 | 51 | 148 | 164 | ||||||||||||||||||||||
Bank assessment charges | 31 | 31 | 47 | 62 | 99 | 31 | 31 | 49 | 93 | 148 | ||||||||||||||||||||||
Amortization of intangible assets | 30 | 29 | 48 | 59 | 97 | 30 | 30 | 48 | 89 | 145 | ||||||||||||||||||||||
Other | 121 | 129 | 135 | 250 | 257 | 32 | 121 | 174 | 282 | 431 | ||||||||||||||||||||||
Total noninterest expense | 2,647 | 2,699 | 2,747 | 5,346 | 5,486 | 2,590 | 2,647 | 2,738 | 7,936 | 8,224 | ||||||||||||||||||||||
Income | ||||||||||||||||||||||||||||||||
Income before income taxes | 1,285 | 1,193 | 1,394 | 2,478 | 2,838 | 1,287 | 1,285 | 1,334 | 3,765 | 4,172 | ||||||||||||||||||||||
Provision for income taxes | 264 | 237 | 286 | 501 | 568 | 246 | 264 | 220 | 747 | 788 | ||||||||||||||||||||||
Net income | 1,021 | 956 | 1,108 | 1,977 | 2,270 | 1,041 | 1,021 | 1,114 | 3,018 | 3,384 | ||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests (includes $(4), $(10), $(7), $(14) and $4 related to consolidated investment management funds, respectively) | (4 | ) | (10 | ) | (5 | ) | (14 | ) | 4 | |||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests (includes $(3), $(4), $(3), $(17) and $1 related to consolidated investment management funds, respectively) | (3 | ) | (4 | ) | (3 | ) | (17 | ) | 1 | |||||||||||||||||||||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation | 1,017 | 946 | 1,103 | 1,963 | 2,274 | 1,038 | 1,017 | 1,111 | 3,001 | 3,385 | ||||||||||||||||||||||
Preferred stock dividends | (48 | ) | (36 | ) | (48 | ) | (84 | ) | (84 | ) | (36 | ) | (48 | ) | (36 | ) | (120 | ) | (120 | ) | ||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 969 | $ | 910 | $ | 1,055 | $ | 1,879 | $ | 2,190 | $ | 1,002 | $ | 969 | $ | 1,075 | $ | 2,881 | $ | 3,265 |
(a) | In the first quarter of 2019, we reclassified certain platform-related fees to clearing services fees from investment management and performance fees. Prior periods have been reclassified. |
The Bank of New York Mellon Corporation (and its subsidiaries) |
Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation | Quarter ended | Year-to-date | Quarter ended | Year-to-date | ||||||||||||||||||||||||||||
(in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | ||||||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation | $ | 969 | $ | 910 | $ | 1,055 | $ | 1,879 | $ | 2,190 | $ | 1,002 | $ | 969 | $ | 1,075 | $ | 2,881 | $ | 3,265 | ||||||||||||
Less: Earnings allocated to participating securities | 4 | 5 | 7 | 9 | 15 | 3 | 4 | 7 | 12 | 22 | ||||||||||||||||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation after required adjustment for the calculation of basic and diluted earnings per common share | $ | 965 | $ | 905 | $ | 1,048 | $ | 1,870 | $ | 2,175 | $ | 999 | $ | 965 | $ | 1,068 | $ | 2,869 | $ | 3,243 |
Average common shares and equivalents outstanding of The Bank of New York Mellon Corporation | Quarter ended | Year-to-date | Quarter ended | Year-to-date | ||||||||||||||||||
(in thousands) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | ||||||||||||
Basic | 951,281 | 962,397 | 1,010,179 | 956,887 | 1,013,507 | 933,264 | 951,281 | 999,808 | 949,035 | 1,008,967 | ||||||||||||
Common stock equivalents | 3,891 | 6,071 | 6,451 | 4,894 | 7,277 | 3,811 | 3,891 | 6,451 | 4,484 | 6,967 | ||||||||||||
Less: Participating securities | (1,244 | ) | (2,508 | ) | (2,273 | ) | (1,824 | ) | (2,764 | ) | (1,398 | ) | (1,244 | ) | (2,594 | ) | (1,643 | ) | (2,692 | ) | ||
Diluted | 953,928 | 965,960 | 1,014,357 | 959,957 | 1,018,020 | 935,677 | 953,928 | 1,003,665 | 951,876 | 1,013,242 | ||||||||||||
Anti-dilutive securities (a) | 3,999 | 5,550 | 7,208 | 4,704 | 7,203 | 3,701 | 3,999 | 6,972 | 4,269 | 7,061 |
(a) | Represents stock options, restricted stock, restricted stock units and participating securities outstanding but not included in the computation of diluted average common shares because their effect would be anti-dilutive. |
Earnings per share applicable to common shareholders of The Bank of New York Mellon Corporation | Quarter ended | Year-to-date | Quarter ended | Year-to-date | ||||||||||||||||||||||||||||
(in dollars) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | ||||||||||||||||||||||
Basic | $ | 1.01 | $ | 0.94 | $ | 1.04 | $ | 1.95 | $ | 2.15 | $ | 1.07 | $ | 1.01 | $ | 1.07 | $ | 3.02 | $ | 3.21 | ||||||||||||
Diluted | $ | 1.01 | $ | 0.94 | $ | 1.03 | $ | 1.95 | $ | 2.14 | $ | 1.07 | $ | 1.01 | $ | 1.06 | $ | 3.01 | $ | 3.20 |
The Bank of New York Mellon Corporation (and its subsidiaries) |
Quarter ended | Year-to-date | Quarter ended | Year-to-date | |||||||||||||||||||||||||||||
(in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | ||||||||||||||||||||||
Net income | $ | 1,021 | $ | 956 | $ | 1,108 | $ | 1,977 | $ | 2,270 | $ | 1,041 | $ | 1,021 | $ | 1,114 | $ | 3,018 | $ | 3,384 | ||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | 10 | 29 | (400 | ) | 39 | (156 | ) | (276 | ) | 10 | (60 | ) | (237 | ) | (216 | ) | ||||||||||||||||
Unrealized gain (loss) on assets available-for-sale: | ||||||||||||||||||||||||||||||||
Unrealized gain (loss) arising during the period | 287 | 239 | (64 | ) | 526 | (339 | ) | 63 | 287 | (144 | ) | 589 | (483 | ) | ||||||||||||||||||
Reclassification adjustment | (5 | ) | (1 | ) | — | (6 | ) | 37 | 1 | (5 | ) | — | (5 | ) | 37 | |||||||||||||||||
Total unrealized gain (loss) on assets available-for-sale | 282 | 238 | (64 | ) | 520 | (302 | ) | 64 | 282 | (144 | ) | 584 | (446 | ) | ||||||||||||||||||
Defined benefit plans: | ||||||||||||||||||||||||||||||||
Net (loss) arising during the period | — | (9 | ) | — | (9 | ) | — | — | — | — | (9 | ) | — | |||||||||||||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost | 10 | 10 | 16 | 20 | 33 | 10 | 10 | 18 | 30 | 51 | ||||||||||||||||||||||
Total defined benefit plans | 10 | 1 | 16 | 11 | 33 | 10 | 10 | 18 | 21 | 51 | ||||||||||||||||||||||
Net unrealized gain (loss) on cash flow hedges | — | 5 | (14 | ) | 5 | (16 | ) | |||||||||||||||||||||||||
Total other comprehensive income (loss), net of tax (a) | 302 | 273 | (462 | ) | 575 | (441 | ) | |||||||||||||||||||||||||
Net unrealized (loss) on cash flow hedges | (6 | ) | — | (4 | ) | (1 | ) | (20 | ) | |||||||||||||||||||||||
Total other comprehensive (loss) income, net of tax (a) | (208 | ) | 302 | (190 | ) | 367 | (631 | ) | ||||||||||||||||||||||||
Total comprehensive income | 1,323 | 1,229 | 646 | 2,552 | 1,829 | 833 | 1,323 | 924 | 3,385 | 2,753 | ||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | (4 | ) | (10 | ) | (5 | ) | (14 | ) | 4 | (3 | ) | (4 | ) | (3 | ) | (17 | ) | 1 | ||||||||||||||
Other comprehensive (income) loss attributable to noncontrolling interests | — | (2 | ) | 10 | (2 | ) | 5 | |||||||||||||||||||||||||
Other comprehensive loss (income) attributable to noncontrolling interests | 3 | — | 2 | 1 | 7 | |||||||||||||||||||||||||||
Comprehensive income applicable to shareholders of The Bank of New York Mellon Corporation | $ | 1,319 | $ | 1,217 | $ | 651 | $ | 2,536 | $ | 1,838 | $ | 833 | $ | 1,319 | $ | 923 | $ | 3,369 | $ | 2,761 |
(a) | Other comprehensive (loss) income |
The Bank of New York Mellon Corporation (and its subsidiaries) |
June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||
(dollars in millions, except per share amounts) | ||||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 5,556 | $ | 5,864 | $ | 6,718 | $ | 5,864 | ||||
Interest-bearing deposits with the Federal Reserve and other central banks | 69,700 | 67,988 | 73,811 | 67,988 | ||||||||
Interest-bearing deposits with banks ($2,036 and $2,394 is restricted) | 15,491 | 14,148 | ||||||||||
Interest-bearing deposits with banks ($2,274 and $2,394 is restricted) | 15,417 | 14,148 | ||||||||||
Federal funds sold and securities purchased under resale agreements | 61,201 | 46,795 | 43,723 | 46,795 | ||||||||
Securities: | ||||||||||||
Held-to-maturity (fair value of $34,695 and $33,302) | 34,549 | 33,982 | ||||||||||
Held-to-maturity (fair value of $34,092 and $33,302) | 33,778 | 33,982 | ||||||||||
Available-for-sale | 85,593 | 85,809 | 88,562 | 85,809 | ||||||||
Total securities | 120,142 | 119,791 | 122,340 | 119,791 | ||||||||
Trading assets | 8,629 | 7,035 | 10,180 | 7,035 | ||||||||
Loans | 52,396 | 56,564 | 54,881 | 56,564 | ||||||||
Allowance for loan losses | (146 | ) | (146 | ) | (127 | ) | (146 | ) | ||||
Net loans | 52,250 | 56,418 | 54,754 | 56,418 | ||||||||
Premises and equipment | 2,970 | 1,832 | 3,149 | 1,832 | ||||||||
Accrued interest receivable | 658 | 671 | 596 | 671 | ||||||||
Goodwill | 17,337 | 17,350 | 17,248 | 17,350 | ||||||||
Intangible assets | 3,160 | 3,220 | 3,124 | 3,220 | ||||||||
Other assets (includes $591 and $742, at fair value) | 23,737 | 21,298 | ||||||||||
Other assets (includes $674 and $742, at fair value) | 21,727 | 21,298 | ||||||||||
Subtotal assets of operations | 380,831 | 362,410 | 372,787 | 362,410 | ||||||||
Assets of consolidated investment management funds, at fair value | 337 | 463 | 381 | 463 | ||||||||
Total assets | $ | 381,168 | $ | 362,873 | $ | 373,168 | $ | 362,873 | ||||
Liabilities | ||||||||||||
Deposits: | ||||||||||||
Noninterest-bearing (principally U.S. offices) | $ | 58,255 | $ | 70,783 | $ | 55,452 | $ | 70,783 | ||||
Interest-bearing deposits in U.S. offices | 88,395 | 74,904 | 90,946 | 74,904 | ||||||||
Interest-bearing deposits in non-U.S. offices | 106,227 | 93,091 | 103,262 | 93,091 | ||||||||
Total deposits | 252,877 | 238,778 | 249,660 | 238,778 | ||||||||
Federal funds purchased and securities sold under repurchase agreements | 11,757 | 14,243 | 11,796 | 14,243 | ||||||||
Trading liabilities | 3,768 | 3,479 | 4,756 | 3,479 | ||||||||
Payables to customers and broker-dealers | 18,946 | 19,731 | 18,364 | 19,731 | ||||||||
Commercial paper | 8,894 | 1,939 | 3,538 | 1,939 | ||||||||
Other borrowed funds | 1,921 | 3,227 | 820 | 3,227 | ||||||||
Accrued taxes and other expenses | 5,045 | 5,669 | 5,081 | 5,669 | ||||||||
Other liabilities (including allowance for lending-related commitments of $95 and $106, also includes $335 and $88, at fair value) | 7,916 | 5,774 | ||||||||||
Long-term debt (includes $383 and $371, at fair value) | 28,203 | 29,163 | ||||||||||
Other liabilities (including allowance for lending-related commitments of $97 and $106, also includes $605 and $88, at fair value) | 9,796 | 5,774 | ||||||||||
Long-term debt (includes $386 and $371, at fair value) | 27,872 | 29,163 | ||||||||||
Subtotal liabilities of operations | 339,327 | 322,003 | 331,683 | 322,003 | ||||||||
Liabilities of consolidated investment management funds, at fair value | 6 | 2 | 15 | 2 | ||||||||
Total liabilities | 339,333 | 322,005 | 331,698 | 322,005 | ||||||||
Temporary equity | ||||||||||||
Redeemable noncontrolling interests | 136 | 129 | 147 | 129 | ||||||||
Permanent equity | ||||||||||||
Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 35,826 and 35,826 shares | 3,542 | 3,542 | 3,542 | 3,542 | ||||||||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,372,971,577 and 1,364,877,915 shares | 14 | 14 | ||||||||||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,373,782,514 and 1,364,877,915 shares | 14 | 14 | ||||||||||
Additional paid-in capital | 27,406 | 27,118 | 27,471 | 27,118 | ||||||||
Retained earnings | 30,081 | 28,652 | 30,789 | 28,652 | ||||||||
Accumulated other comprehensive loss, net of tax | (2,688 | ) | (3,171 | ) | (2,893 | ) | (3,171 | ) | ||||
Less: Treasury stock of 430,309,550 and 404,452,246 common shares, at cost | (16,822 | ) | (15,517 | ) | ||||||||
Less: Treasury stock of 451,583,637 and 404,452,246 common shares, at cost | (17,803 | ) | (15,517 | ) | ||||||||
Total The Bank of New York Mellon Corporation shareholders’ equity | 41,533 | 40,638 | 41,120 | 40,638 | ||||||||
Nonredeemable noncontrolling interests of consolidated investment management funds | 166 | 101 | 203 | 101 | ||||||||
Total permanent equity | 41,699 | 40,739 | 41,323 | 40,739 | ||||||||
Total liabilities, temporary equity and permanent equity | $ | 381,168 | $ | 362,873 | $ | 373,168 | $ | 362,873 |
The Bank of New York Mellon Corporation (and its subsidiaries) |
Six months ended June 30, | Nine months ended Sept. 30, | |||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | ||||||||
Operating activities | ||||||||||||
Net income | $ | 1,977 | $ | 2,270 | $ | 3,018 | $ | 3,384 | ||||
Net (income) loss attributable to noncontrolling interests | (14 | ) | 4 | (17 | ) | 1 | ||||||
Net income applicable to shareholders of The Bank of New York Mellon Corporation | 1,963 | 2,274 | 3,001 | 3,385 | ||||||||
Adjustments to reconcile net income to net cash (used for) provided by operating activities: | ||||||||||||
Provision for credit losses | (1 | ) | (8 | ) | (17 | ) | (11 | ) | ||||
Pension plan contributions | (22 | ) | (19 | ) | (30 | ) | (47 | ) | ||||
Depreciation and amortization | 635 | 677 | 971 | 1,011 | ||||||||
Deferred tax (benefit) | (110 | ) | (230 | ) | (185 | ) | (401 | ) | ||||
Net securities (gains) losses | (8 | ) | 48 | (7 | ) | 48 | ||||||
Change in trading assets and liabilities | (1,306 | ) | (462 | ) | (1,880 | ) | (1,282 | ) | ||||
Change in accruals and other, net | (3,665 | ) | (712 | ) | 714 | 109 | ||||||
Net cash (used for) provided by operating activities | (2,514 | ) | 1,568 | |||||||||
Net cash provided by operating activities | 2,567 | 2,812 | ||||||||||
Investing activities | ||||||||||||
Change in interest-bearing deposits with banks | (1,618 | ) | (4,592 | ) | (1,503 | ) | (3,367 | ) | ||||
Change in interest-bearing deposits with the Federal Reserve and other central banks | (1,714 | ) | 15,583 | (7,171 | ) | 15,570 | ||||||
Purchases of securities held-to-maturity | (3,739 | ) | (2,944 | ) | (5,390 | ) | (4,029 | ) | ||||
Paydowns of securities held-to-maturity | 2,078 | 2,099 | 3,501 | 3,289 | ||||||||
Maturities of securities held-to-maturity | 1,380 | 5,535 | 2,274 | 6,047 | ||||||||
Purchases of securities available-for-sale | (21,503 | ) | (17,550 | ) | (33,929 | ) | (22,898 | ) | ||||
Sales of securities available-for-sale | 6,346 | 4,867 | 7,482 | 5,538 | ||||||||
Paydowns of securities available-for-sale | 3,226 | 3,871 | 5,260 | 5,683 | ||||||||
Maturities of securities available-for-sale | 14,143 | 3,767 | 20,006 | 6,113 | ||||||||
Net change in loans | 4,116 | 3,699 | 1,478 | 7,227 | ||||||||
Sales of loans and other real estate | 52 | 6 | 147 | 257 | ||||||||
Change in federal funds sold and securities purchased under resale agreements | (14,401 | ) | 1,638 | 3,071 | (592 | ) | ||||||
Net change in seed capital investments | 25 | 15 | 68 | 54 | ||||||||
Purchases of premises and equipment/capitalized software | (717 | ) | (505 | ) | (1,112 | ) | (819 | ) | ||||
Proceeds from the sale of premises and equipment | — | 23 | ||||||||||
Dispositions, net of cash | — | 84 | — | 84 | ||||||||
Other, net | 940 | (359 | ) | 588 | (163 | ) | ||||||
Net cash (used for) provided by investing activities | (11,386 | ) | 15,214 | (5,230 | ) | 18,017 | ||||||
Financing activities | ||||||||||||
Change in deposits | 14,255 | (12,270 | ) | 13,207 | (10,680 | ) | ||||||
Change in federal funds purchased and securities sold under repurchase agreements | (2,486 | ) | (1,963 | ) | (2,447 | ) | (5,005 | ) | ||||
Change in payables to customers and broker-dealers | (778 | ) | (1,051 | ) | (1,332 | ) | (1,487 | ) | ||||
Change in other borrowed funds | (1,328 | ) | (5 | ) | (2,422 | ) | (133 | ) | ||||
Change in commercial paper | 6,955 | (567 | ) | 1,599 | (2,340 | ) | ||||||
Net proceeds from the issuance of long-term debt | 1,248 | 2,991 | 2,246 | 4,144 | ||||||||
Repayments of long-term debt | (2,750 | ) | (2,200 | ) | (4,250 | ) | (3,400 | ) | ||||
Proceeds from the exercise of stock options | 35 | 70 | 51 | 74 | ||||||||
Issuance of common stock | 16 | 20 | 19 | 30 | ||||||||
Treasury stock acquired | (1,305 | ) | (1,295 | ) | (2,286 | ) | (1,897 | ) | ||||
Common cash dividends paid | (540 | ) | (491 | ) | (834 | ) | (774 | ) | ||||
Preferred cash dividends paid | (84 | ) | (84 | ) | (120 | ) | (120 | ) | ||||
Other, net | 7 | 10 | 23 | 32 | ||||||||
Net cash provided by (used for) financing activities | 13,245 | (16,835 | ) | 3,454 | (21,556 | ) | ||||||
Effect of exchange rate changes on cash | (11 | ) | (60 | ) | (57 | ) | (57 | ) | ||||
Change in cash and due from banks and restricted cash | ||||||||||||
Change in cash and due from banks and restricted cash | (666 | ) | (113 | ) | 734 | (784 | ) | |||||
Cash and due from banks and restricted cash at beginning of period | 8,258 | 7,133 | 8,258 | 7,133 | ||||||||
Cash and due from banks and restricted cash at end of period | $ | 7,592 | $ | 7,020 | $ | 8,992 | $ | 6,349 | ||||
Cash and due from banks and restricted cash: | ||||||||||||
Cash and due from banks at end of period (unrestricted cash) | $ | 5,556 | $ | 5,361 | $ | 6,718 | $ | 5,047 | ||||
Restricted cash at end of period | 2,036 | 1,659 | 2,274 | 1,302 | ||||||||
Cash and due from banks and restricted cash at end of period | $ | 7,592 | $ | 7,020 | $ | 8,992 | $ | 6,349 | ||||
Supplemental disclosures | ||||||||||||
Interest paid | $ | 2,238 | $ | 1,046 | $ | 3,528 | $ | 1,795 | ||||
Income taxes paid | 461 | 436 | 697 | 699 | ||||||||
Income taxes refunded | 347 | 57 | 445 | 155 |
The Bank of New York Mellon Corporation (and its subsidiaries) |
The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | |||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except per share amount) | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | 3,542 | $ | 14 | $ | 27,349 | $ | 29,382 | $ | (2,990 | ) | $ | (16,072 | ) | $ | 122 | $ | 41,347 | (a) | $ | 122 | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 3,542 | $ | 14 | $ | 27,406 | $ | 30,081 | $ | (2,688 | ) | $ | (16,822 | ) | $ | 166 | $ | 41,699 | (a) | $ | 136 | |||||||||||||||||||||||||||||||||||
Shares issued to shareholders of noncontrolling interests | — | — | — | — | — | — | — | — | 16 | — | — | — | — | — | — | — | — | 16 | ||||||||||||||||||||||||||||||||||||||
Other net changes in noncontrolling interests | — | — | 2 | — | — | — | 40 | 42 | (2 | ) | — | — | 2 | — | — | — | 34 | 36 | (2 | ) | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 1,017 | — | — | 4 | 1,021 | — | — | — | — | 1,038 | — | — | 3 | 1,041 | — | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 302 | — | — | 302 | — | — | — | — | — | (205 | ) | — | — | (205 | ) | (3 | ) | |||||||||||||||||||||||||||||||||||
Dividends: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock at $0.28 per share | — | — | — | (270 | ) | — | — | — | (270 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Common stock at $0.31 per share | — | — | — | (294 | ) | — | — | — | (294 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | (48 | ) | — | — | — | (48 | ) | — | — | — | — | (36 | ) | — | — | — | (36 | ) | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (750 | ) | — | (750 | ) | — | — | — | — | — | — | (981 | ) | — | (981 | ) | — | ||||||||||||||||||||||||||||||||||
Common stock issued under: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee benefit plans | — | — | 6 | — | — | — | — | 6 | — | — | — | 6 | — | — | — | — | 6 | — | ||||||||||||||||||||||||||||||||||||||
Stock awards and options exercised | — | — | 49 | — | — | — | — | 49 | — | — | — | 57 | — | — | — | — | 57 | — | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 3,542 | $ | 14 | $ | 27,406 | $ | 30,081 | $ | (2,688 | ) | $ | (16,822 | ) | $ | 166 | $ | 41,699 | (a) | $ | 136 | |||||||||||||||||||||||||||||||||||
Balance at Sept. 30, 2019 | $ | 3,542 | $ | 14 | $ | 27,471 | $ | 30,789 | $ | (2,893 | ) | $ | (17,803 | ) | $ | 203 | $ | 41,323 | (a) | $ | 147 |
(a) | Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,991 million at June 30, 2019 and $37,578 million at Sept. 30, 2019. |
The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | |||||||||||||||||||||||||
(in millions, except per share amount) | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | ||||||||||||||||||||||
Balance at March 31, 2019 | $ | 3,542 | $ | 14 | $ | 27,349 | $ | 29,382 | $ | (2,990 | ) | $ | (16,072 | ) | $ | 122 | $ | 41,347 | (a) | $ | 122 | |||||||
Shares issued to shareholders of noncontrolling interests | — | — | — | — | — | — | — | — | 16 | |||||||||||||||||||
Other net changes in noncontrolling interests | — | — | 2 | — | — | — | 40 | 42 | (2 | ) | ||||||||||||||||||
Net income | — | — | — | 1,017 | — | — | 4 | 1,021 | — | |||||||||||||||||||
Other comprehensive income | — | — | — | — | 302 | — | — | 302 | — | |||||||||||||||||||
Dividends: | ||||||||||||||||||||||||||||
Common stock at $0.28 per share | — | — | — | (270 | ) | — | — | — | (270 | ) | — | |||||||||||||||||
Preferred stock | — | — | — | (48 | ) | — | — | — | (48 | ) | — | |||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (750 | ) | — | (750 | ) | — | |||||||||||||||||
Common stock issued under: | ||||||||||||||||||||||||||||
Employee benefit plans | — | — | 6 | — | — | — | — | 6 | — | |||||||||||||||||||
Stock awards and options exercised | — | — | 49 | — | — | — | — | 49 | — | |||||||||||||||||||
Balance at June 30, 2019 | $ | 3,542 | $ | 14 | $ | 27,406 | $ | 30,081 | $ | (2,688 | ) | $ | (16,822 | ) | $ | 166 | $ | 41,699 | (a) | $ | 136 |
(a) | Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,683 million at March 31, 2019 and $37,991 million at June 30, |
The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | |||||||||||||||||||||||||
(in millions, except per share amount) | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | ||||||||||||||||||||||
Balance at Dec. 31, 2018 | $ | 3,542 | $ | 14 | $ | 27,118 | $ | 28,652 | $ | (3,171 | ) | $ | (15,517 | ) | $ | 101 | $ | 40,739 | (a) | $ | 129 | |||||||
Reclassification of certain tax effects related to adopting ASU 2018-02 | — | — | — | 90 | (90 | ) | — | — | — | — | ||||||||||||||||||
Adjusted balance at Jan. 1, 2019 | 3,542 | 14 | 27,118 | 28,742 | (3,261 | ) | (15,517 | ) | 101 | 40,739 | 129 | |||||||||||||||||
Shares issued to shareholders of noncontrolling interests | — | — | — | — | — | — | — | — | 20 | |||||||||||||||||||
Redemption of subsidiary shares from noncontrolling interests | — | — | — | — | — | — | — | — | (7 | ) | ||||||||||||||||||
Other net changes in noncontrolling interests | — | — | 19 | — | — | — | 11 | 30 | (22 | ) | ||||||||||||||||||
Net income | — | — | — | 946 | — | — | 10 | 956 | — | |||||||||||||||||||
Other comprehensive income | — | — | — | — | 271 | — | — | 271 | 2 | |||||||||||||||||||
Dividends: | ||||||||||||||||||||||||||||
Common stock at $0.28 per share | — | — | — | (270 | ) | — | — | — | (270 | ) | — | |||||||||||||||||
Preferred stock | — | — | — | (36 | ) | — | — | — | (36 | ) | — | |||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (555 | ) | — | (555 | ) | — | |||||||||||||||||
Common stock issued under: | ||||||||||||||||||||||||||||
Employee benefit plans | — | — | 10 | — | — | — | — | 10 | — | |||||||||||||||||||
Direct stock purchase and dividend reinvestment plan | — | — | 11 | — | — | — | — | 11 | — | |||||||||||||||||||
Stock awards and options exercised | — | — | 191 | — | — | — | — | 191 | — | |||||||||||||||||||
Balance at March 31, 2019 | $ | 3,542 | $ | 14 | $ | 27,349 | $ | 29,382 | $ | (2,990 | ) | $ | (16,072 | ) | $ | 122 | $ | 41,347 | (a) | $ | 122 |
The Bank of New York Mellon Corporation (and its subsidiaries) |
The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | |||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except per share amount) | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2018 | $ | 3,542 | $ | 14 | $ | 26,911 | $ | 26,496 | $ | (2,343 | ) | $ | (12,892 | ) | $ | 212 | $ | 41,940 | (a) | $ | 184 | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | 3,542 | $ | 14 | $ | 26,981 | $ | 27,306 | $ | (2,795 | ) | $ | (13,543 | ) | $ | 52 | $ | 41,557 | (a) | $ | 189 | |||||||||||||||||||||||||||||||||||
Shares issued to shareholders of noncontrolling interests | — | — | — | — | — | — | — | — | 17 | — | — | — | — | — | — | — | — | 22 | ||||||||||||||||||||||||||||||||||||||
Other net changes in noncontrolling interests | — | — | (2 | ) | — | — | — | (167 | ) | (169 | ) | — | — | — | (4 | ) | — | — | — | 35 | 31 | 2 | ||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | 1,103 | — | — | 7 | 1,110 | (2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 1,111 | — | — | 3 | 1,114 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | (452 | ) | — | — | (452 | ) | (10 | ) | — | — | — | — | (188 | ) | — | — | (188 | ) | (2 | ) | ||||||||||||||||||||||||||||||||
Dividends: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock at $0.24 per share | — | — | — | (245 | ) | — | — | — | (245 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Common stock at $0.28 per share | — | — | — | (283 | ) | — | — | — | (283 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | (48 | ) | — | — | — | (48 | ) | — | — | — | — | (36 | ) | — | — | — | (36 | ) | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (651 | ) | — | (651 | ) | — | — | — | — | — | — | (602 | ) | — | (602 | ) | — | ||||||||||||||||||||||||||||||||||
Common stock issued under: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee benefit plans | — | — | 7 | — | — | — | — | 7 | — | — | — | 7 | — | — | — | — | 7 | — | ||||||||||||||||||||||||||||||||||||||
Direct stock purchase and dividend reinvestment plan | — | — | 7 | — | — | — | — | 7 | — | — | — | 7 | — | — | — | — | 7 | — | ||||||||||||||||||||||||||||||||||||||
Stock awards and options exercised | — | — | 58 | — | — | — | — | 58 | — | — | — | 43 | — | — | — | — | 43 | — | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | 3,542 | $ | 14 | $ | 26,981 | $ | 27,306 | $ | (2,795 | ) | $ | (13,543 | ) | $ | 52 | $ | 41,557 | (a) | $ | 189 | |||||||||||||||||||||||||||||||||||
Balance at Sept. 30, 2018 | $ | 3,542 | $ | 14 | $ | 27,034 | $ | 28,098 | $ | (2,983 | ) | $ | (14,145 | ) | $ | 90 | $ | 41,650 | (a) | $ | 211 |
(a) | Includes total The Bank of New York Mellon Corporation common shareholders’ equity of |
The Bank of New York Mellon Corporation shareholders | Non- redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | |||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except per share amount) | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | ||||||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2018 | $ | 3,542 | $ | 14 | $ | 27,118 | $ | 28,652 | $ | (3,171 | ) | $ | (15,517 | ) | $ | 101 | $ | 40,739 | (a) | $ | 129 | $ | 3,542 | $ | 14 | $ | 27,118 | $ | 28,652 | $ | (3,171 | ) | $ | (15,517 | ) | $ | 101 | $ | 40,739 | (a) | $ | 129 | ||||||||||||||
Reclassification of certain tax effects related to adopting ASU 2018-02 | — | — | — | 90 | (90 | ) | — | — | — | — | — | — | — | 90 | (90 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Adjusted balance at Jan. 1, 2019 | 3,542 | 14 | 27,118 | 28,742 | (3,261 | ) | (15,517 | ) | 101 | 40,739 | 129 | 3,542 | 14 | 27,118 | 28,742 | (3,261 | ) | (15,517 | ) | 101 | 40,739 | 129 | ||||||||||||||||||||||||||||||||||
Shares issued to shareholders of noncontrolling interests | — | — | — | — | — | — | — | — | 36 | — | — | — | — | — | — | — | — | 52 | ||||||||||||||||||||||||||||||||||||||
Redemption of subsidiary shares from noncontrolling interests | — | — | — | — | — | — | — | — | (7 | ) | — | — | — | — | — | — | — | — | (7 | ) | ||||||||||||||||||||||||||||||||||||
Other net changes in noncontrolling interests | — | — | 21 | — | — | — | 51 | 72 | (24 | ) | — | — | 23 | — | — | — | 85 | 108 | (26 | ) | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | 1,963 | — | — | 14 | 1,977 | — | — | — | — | 3,001 | — | — | 17 | 3,018 | — | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 573 | — | — | 573 | 2 | — | — | — | — | 368 | — | — | 368 | (1 | ) | |||||||||||||||||||||||||||||||||||||
Dividends: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock at $0.56 per share | — | — | — | (540 | ) | — | — | — | (540 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Common stock at $0.87 per share | — | — | — | (834 | ) | — | — | — | (834 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | (84 | ) | — | — | — | (84 | ) | — | — | — | — | (120 | ) | — | — | — | (120 | ) | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (1,305 | ) | — | (1,305 | ) | — | — | — | — | — | — | (2,286 | ) | — | (2,286 | ) | — | ||||||||||||||||||||||||||||||||||
Common stock issued under: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee benefit plans | — | — | 16 | — | — | — | — | 16 | — | — | — | 22 | — | — | — | — | 22 | — | ||||||||||||||||||||||||||||||||||||||
Direct stock purchase and dividend reinvestment plan | — | — | 11 | — | — | — | — | 11 | — | — | — | 11 | — | — | — | — | 11 | — | ||||||||||||||||||||||||||||||||||||||
Stock awards and options exercised | — | — | 240 | — | — | — | — | 240 | — | — | — | 297 | — | — | — | — | 297 | — | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 3,542 | $ | 14 | $ | 27,406 | $ | 30,081 | $ | (2,688 | ) | $ | (16,822 | ) | $ | 166 | $ | 41,699 | (a) | $ | 136 | |||||||||||||||||||||||||||||||||||
Balance at Sept. 30, 2019 | $ | 3,542 | $ | 14 | $ | 27,471 | $ | 30,789 | $ | (2,893 | ) | $ | (17,803 | ) | $ | 203 | $ | 41,323 | (a) | $ | 147 |
(a) | Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,096 million at Dec. 31, 2018 and |
The Bank of New York Mellon Corporation (and its subsidiaries) |
The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | The Bank of New York Mellon Corporation shareholders | Non-redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | |||||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except per share amount) | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss) income, net of tax | Treasury stock | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | ||||||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2017 | $ | 3,542 | $ | 14 | $ | 26,665 | $ | 25,635 | $ | (2,357 | ) | $ | (12,248 | ) | $ | 316 | $ | 41,567 | (a) | $ | 179 | $ | 3,542 | $ | 14 | $ | 26,665 | $ | 25,635 | $ | (2,357 | ) | $ | (12,248 | ) | $ | 316 | $ | 41,567 | (a) | $ | 179 | ||||||||||||||
Adjustment for the cumulative effect of applying ASU 2014-09 for contract revenue | — | — | — | (55 | ) | — | — | — | (55 | ) | — | — | — | — | (55 | ) | — | — | — | (55 | ) | — | ||||||||||||||||||||||||||||||||||
Adjustment for the cumulative effect of applying ASU 2017-12 for derivatives and hedging | — | — | — | 27 | (2 | ) | — | — | 25 | — | — | — | — | 27 | (2 | ) | — | — | 25 | — | ||||||||||||||||||||||||||||||||||||
Adjusted balance at Jan. 1, 2018 | 3,542 | 14 | 26,665 | 25,607 | (2,359 | ) | (12,248 | ) | 316 | 41,537 | 179 | 3,542 | 14 | 26,665 | 25,607 | (2,359 | ) | (12,248 | ) | 316 | 41,537 | 179 | ||||||||||||||||||||||||||||||||||
Shares issued to shareholders of noncontrolling interests | — | — | — | — | — | — | — | — | 34 | — | — | — | — | — | — | — | — | 56 | ||||||||||||||||||||||||||||||||||||||
Redemption of subsidiary shares from noncontrolling interests | — | — | — | — | — | — | — | — | (32 | ) | — | — | — | — | — | — | — | — | (32 | ) | ||||||||||||||||||||||||||||||||||||
Other net changes in noncontrolling interests | — | — | (13 | ) | — | — | — | (260 | ) | (273 | ) | 13 | — | — | (17 | ) | — | — | — | (225 | ) | (242 | ) | 15 | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | 2,274 | — | — | (4 | ) | 2,270 | — | — | — | — | 3,385 | — | — | (1 | ) | 3,384 | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) | — | — | — | — | (436 | ) | — | — | (436 | ) | (5 | ) | — | — | — | — | (624 | ) | — | — | (624 | ) | (7 | ) | ||||||||||||||||||||||||||||||||
Dividends: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock at $0.48 per share | — | — | — | (491 | ) | — | — | — | (491 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Common stock at $0.76 per share | — | — | — | (774 | ) | — | — | — | (774 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Preferred stock | — | — | — | (84 | ) | — | — | — | (84 | ) | — | — | — | — | (120 | ) | — | — | — | (120 | ) | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (1,295 | ) | — | (1,295 | ) | — | — | — | — | — | — | (1,897 | ) | — | (1,897 | ) | — | ||||||||||||||||||||||||||||||||||
Common stock issued under: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee benefit plans | — | — | 17 | — | — | — | — | 17 | — | — | — | 24 | — | — | — | — | 24 | — | ||||||||||||||||||||||||||||||||||||||
Direct stock purchase and dividend reinvestment plan | — | — | 16 | — | — | — | — | 16 | — | — | — | 23 | — | — | — | — | 23 | — | ||||||||||||||||||||||||||||||||||||||
Stock awards and options exercised | — | — | 296 | — | — | — | — | 296 | — | — | — | 339 | — | — | — | — | 339 | — | ||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | 3,542 | $ | 14 | $ | 26,981 | $ | 27,306 | $ | (2,795 | ) | $ | (13,543 | ) | $ | 52 | $ | 41,557 | (a) | $ | 189 | |||||||||||||||||||||||||||||||||||
Balance at Sept. 30, 2018 | $ | 3,542 | $ | 14 | $ | 27,034 | $ | 28,098 | $ | (2,983 | ) | $ | (14,145 | ) | $ | 90 | $ | 41,650 | (a) | $ | 211 |
(a) | Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $37,709 million at Dec. 31, 2017 and |
Notes to Consolidated Financial Statements |
Notes to Consolidated Financial Statements (continued) |
Securities at June 30, 2019 | Gross unrealized | |||||||||||||||||||||||
Securities at Sept. 30, 2019 | Securities at Sept. 30, 2019 | Gross unrealized | ||||||||||||||||||||||
Amortized cost | Gross unrealized | Fair value | Amortized cost | Fair value | ||||||||||||||||||||
(in millions) | Gains | Losses | ||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||
Agency RMBS | $ | 26,225 | $ | 145 | $ | 166 | $ | 26,204 | $ | 26,359 | $ | 169 | $ | 137 | $ | 26,391 | ||||||||
U.S. Treasury | 13,805 | 424 | 32 | 14,197 | 14,480 | 662 | 16 | 15,126 | ||||||||||||||||
Sovereign debt/sovereign guaranteed | 12,184 | 161 | 3 | 12,342 | 12,980 | 172 | 2 | 13,150 | ||||||||||||||||
Agency commercial MBS | 9,499 | 194 | 15 | 9,678 | 9,304 | 282 | 10 | 9,576 | ||||||||||||||||
Supranational | 3,878 | 38 | 2 | 3,914 | 4,052 | 44 | 3 | 4,093 | ||||||||||||||||
CLOs | 3,665 | 1 | 17 | 3,649 | 3,882 | 1 | 15 | 3,868 | ||||||||||||||||
Foreign covered bonds | 3,385 | 17 | 4 | 3,398 | 3,575 | 22 | 4 | 3,593 | ||||||||||||||||
Other ABS | 2,477 | 10 | 3 | 2,484 | ||||||||||||||||||||
U.S. government agencies | 2,585 | 65 | — | 2,650 | 2,386 | 91 | — | 2,477 | ||||||||||||||||
Other ABS | 2,466 | 8 | 4 | 2,470 | ||||||||||||||||||||
Non-agency commercial MBS | 1,968 | 38 | 1 | 2,005 | 2,207 | 62 | 1 | 2,268 | ||||||||||||||||
Foreign government agencies | 2,175 | 12 | 1 | 2,186 | ||||||||||||||||||||
Non-agency RMBS (a) | 1,003 | 217 | 7 | 1,213 | ||||||||||||||||||||
State and political subdivisions | 1,253 | 28 | 1 | 1,280 | 1,159 | 27 | 2 | 1,184 | ||||||||||||||||
Non-agency RMBS (a) | 999 | 230 | 8 | 1,221 | ||||||||||||||||||||
Corporate bonds | 889 | 19 | 3 | 905 | 858 | 22 | 1 | 879 | ||||||||||||||||
Other debt securities | 1,671 | 9 | — | 1,680 | 71 | 3 | — | 74 | ||||||||||||||||
Total securities available-for-sale (b) | $ | 84,472 | $ | 1,377 | $ | 256 | $ | 85,593 | $ | 86,968 | $ | 1,796 | $ | 202 | $ | 88,562 | ||||||||
Held-to-maturity: | ||||||||||||||||||||||||
Agency RMBS | $ | 26,591 | $ | 195 | $ | 127 | $ | 26,659 | $ | 26,652 | $ | 270 | $ | 59 | $ | 26,863 | ||||||||
U.S. Treasury | 4,467 | 24 | 9 | 4,482 | 4,017 | 31 | 4 | 4,044 | ||||||||||||||||
Agency commercial MBS | 1,197 | 34 | 1 | 1,230 | ||||||||||||||||||||
U.S. government agencies | 1,276 | 1 | 1 | 1,276 | 922 | 1 | 1 | 922 | ||||||||||||||||
Agency commercial MBS | 1,179 | 22 | 1 | 1,200 | ||||||||||||||||||||
Sovereign debt/sovereign guaranteed | 823 | 39 | — | 862 | 787 | 40 | — | 827 | ||||||||||||||||
Non-agency RMBS | 91 | 4 | 2 | 93 | 86 | 4 | 2 | 88 | ||||||||||||||||
Foreign covered bonds | 80 | 1 | — | 81 | 76 | 1 | — | 77 | ||||||||||||||||
Supranational | 25 | — | — | 25 | 25 | — | — | 25 | ||||||||||||||||
State and political subdivisions | 17 | — | — | 17 | 16 | — | — | 16 | ||||||||||||||||
Total securities held-to-maturity | $ | 34,549 | $ | 286 | $ | 140 | $ | 34,695 | $ | 33,778 | $ | 381 | $ | 67 | $ | 34,092 | ||||||||
Total securities | $ | 119,021 | $ | 1,663 | $ | 396 | $ | 120,288 | $ | 120,746 | $ | 2,177 | $ | 269 | $ | 122,654 |
(a) | Includes |
(b) | Includes gross unrealized gains of |
Notes to Consolidated Financial Statements (continued) |
Securities at Dec. 31, 2018 | Securities at Dec. 31, 2018 | Gross unrealized | Securities at Dec. 31, 2018 | Gross unrealized | ||||||||||||||||||||
Amortized cost | Fair value | Amortized cost | Fair value | |||||||||||||||||||||
(in millions) | Gains | Losses | Gains | Losses | ||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||
Agency RMBS | $ | 25,594 | $ | 83 | $ | 369 | $ | 25,308 | $ | 25,594 | $ | 83 | $ | 369 | $ | 25,308 | ||||||||
U.S. Treasury | 20,190 | 96 | 210 | 20,076 | 20,190 | 96 | 210 | 20,076 | ||||||||||||||||
Sovereign debt/sovereign guaranteed | 10,663 | 108 | 21 | 10,750 | 10,663 | 108 | 21 | 10,750 | ||||||||||||||||
Agency commercial MBS | 9,836 | 16 | 161 | 9,691 | 9,836 | 16 | 161 | 9,691 | ||||||||||||||||
CLOs | 3,410 | — | 46 | 3,364 | 3,410 | — | 46 | 3,364 | ||||||||||||||||
Supranational | 2,985 | 7 | 8 | 2,984 | 2,985 | 7 | 8 | 2,984 | ||||||||||||||||
Foreign covered bonds | 2,890 | 7 | 19 | 2,878 | 2,890 | 7 | 19 | 2,878 | ||||||||||||||||
State and political subdivisions | 2,251 | 18 | 22 | 2,247 | 2,251 | 18 | 22 | 2,247 | ||||||||||||||||
Other ABS | 1,776 | 1 | 4 | 1,773 | 1,776 | 1 | 4 | 1,773 | ||||||||||||||||
U.S. government agencies | 1,676 | 5 | 24 | 1,657 | 1,676 | 5 | 24 | 1,657 | ||||||||||||||||
Non-agency commercial MBS | 1,491 | 1 | 28 | 1,464 | 1,491 | 1 | 28 | 1,464 | ||||||||||||||||
Non-agency RMBS (a) | 1,095 | 241 | 11 | 1,325 | 1,095 | 241 | 11 | 1,325 | ||||||||||||||||
Foreign government agencies | 1,164 | 1 | 4 | 1,161 | ||||||||||||||||||||
Corporate bonds | 1,074 | 6 | 26 | 1,054 | 1,074 | 6 | 26 | 1,054 | ||||||||||||||||
Other debt securities | 1,236 | 6 | 4 | 1,238 | 72 | 5 | — | 77 | ||||||||||||||||
Total securities available-for-sale (b) | $ | 86,167 | $ | 595 | $ | 953 | $ | 85,809 | $ | 86,167 | $ | 595 | $ | 953 | $ | 85,809 | ||||||||
Held-to-maturity: | ||||||||||||||||||||||||
Agency RMBS | $ | 25,507 | $ | 32 | $ | 632 | $ | 24,907 | $ | 25,507 | $ | 32 | $ | 632 | $ | 24,907 | ||||||||
U.S. Treasury | 4,727 | 3 | 77 | 4,653 | 4,727 | 3 | 77 | 4,653 | ||||||||||||||||
U.S. government agencies | 1,497 | — | 10 | 1,487 | 1,497 | — | 10 | 1,487 | ||||||||||||||||
Agency commercial MBS | 1,195 | — | 26 | 1,169 | 1,195 | — | 26 | 1,169 | ||||||||||||||||
Sovereign debt/sovereign guaranteed | 833 | 26 | — | 859 | 833 | 26 | — | 859 | ||||||||||||||||
Non-agency RMBS | 100 | 4 | 2 | 102 | 100 | 4 | 2 | 102 | ||||||||||||||||
Foreign covered bonds | 80 | 1 | — | 81 | 80 | 1 | — | 81 | ||||||||||||||||
Supranational | 26 | 1 | — | 27 | 26 | 1 | — | 27 | ||||||||||||||||
State and political subdivisions | 17 | — | — | 17 | 17 | — | — | 17 | ||||||||||||||||
Total securities held-to-maturity | $ | 33,982 | $ | 67 | $ | 747 | $ | 33,302 | $ | 33,982 | $ | 67 | $ | 747 | $ | 33,302 | ||||||||
Total securities | $ | 120,149 | $ | 662 | $ | 1,700 | $ | 119,111 | $ | 120,149 | $ | 662 | $ | 1,700 | $ | 119,111 |
(a) | Includes $832 million that was included in the former Grantor Trust. |
(b) | Includes gross unrealized gains of $39 million and gross unrealized losses of $87 million recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized gains and losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. |
Net securities gains (losses) | ||||||||||||||||||||||||||||||
Net securities (losses) gains | Net securities (losses) gains | |||||||||||||||||||||||||||||
(in millions) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||
Realized gross gains | $ | 12 | $ | 5 | $ | 2 | $ | 17 | $ | 4 | $ | 1 | $ | 12 | $ | 1 | $ | 18 | $ | 5 | ||||||||||
Realized gross losses | (5 | ) | (4 | ) | (1 | ) | (9 | ) | (52 | ) | (1 | ) | (5 | ) | (1 | ) | (10 | ) | (53 | ) | ||||||||||
Recognized gross impairments | — | — | — | — | — | (1 | ) | — | — | (1 | ) | — | ||||||||||||||||||
Total net securities gains (losses) | $ | 7 | $ | 1 | $ | 1 | $ | 8 | $ | (48 | ) | |||||||||||||||||||
Total net securities (losses) gains | $ | (1 | ) | $ | 7 | $ | — | $ | 7 | $ | (48 | ) |
Net securities gains (losses) | ||||||||||||||||||||||||||||||
Net securities (losses) gains | Net securities (losses) gains | |||||||||||||||||||||||||||||
(in millions) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||
U.S. Treasury | $ | 3 | $ | 1 | $ | — | $ | 4 | $ | (4 | ) | $ | — | $ | 3 | $ | (1 | ) | $ | 4 | $ | (5 | ) | |||||||
Sovereign debt/sovereign guaranteed | 2 | 1 | — | 3 | — | — | 2 | — | 3 | — | ||||||||||||||||||||
State and political subdivisions | 2 | — | 1 | 2 | (1 | ) | — | 2 | — | 2 | (1 | ) | ||||||||||||||||||
Agency RMBS | — | — | — | — | (42 | ) | — | — | — | — | (42 | ) | ||||||||||||||||||
Other | — | (1 | ) | — | (1 | ) | (1 | ) | (1 | ) | — | 1 | (2 | ) | — | |||||||||||||||
Total net securities gains (losses) | $ | 7 | $ | 1 | $ | 1 | $ | 8 | $ | (48 | ) | |||||||||||||||||||
Total net securities (losses) gains | $ | (1 | ) | $ | 7 | $ | — | $ | 7 | $ | (48 | ) |
Notes to Consolidated Financial Statements (continued) |
Temporarily impaired securities at June 30, 2019 | Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||||
Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | |||||||||||||||||||||||||||||||||||
Temporarily impaired securities at Sept. 30, 2019 | Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||||
Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | |||||||||||||||||||||||||||||||||||
(in millions) | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||||||||||
Agency RMBS | $ | 9,070 | $ | 31 | $ | 7,410 | $ | 135 | $ | 16,480 | $ | 166 | $ | 9,513 | $ | 32 | $ | 4,485 | $ | 105 | $ | 13,998 | $ | 137 | ||||||||||||||||
U.S. Treasury | 74 | 1 | 2,961 | 31 | 3,035 | 32 | 2,536 | 11 | 764 | 5 | 3,300 | 16 | ||||||||||||||||||||||||||||
Sovereign debt/sovereign guaranteed | 1,680 | 1 | 738 | 2 | 2,418 | 3 | 2,227 | 2 | 149 | — | 2,376 | 2 | ||||||||||||||||||||||||||||
Agency commercial MBS | 2,353 | 6 | 1,030 | 9 | 3,383 | 15 | 1,691 | 7 | 583 | 3 | 2,274 | 10 | ||||||||||||||||||||||||||||
Supranational | 814 | 1 | 206 | 1 | 1,020 | 2 | 979 | 2 | 204 | 1 | 1,183 | 3 | ||||||||||||||||||||||||||||
CLOs | 1,346 | 4 | 1,134 | 13 | 2,480 | 17 | 1,491 | 4 | 1,098 | 11 | 2,589 | 15 | ||||||||||||||||||||||||||||
Foreign covered bonds | 568 | 1 | 707 | 3 | 1,275 | 4 | 712 | 2 | 440 | 2 | 1,152 | 4 | ||||||||||||||||||||||||||||
Other ABS | 1,053 | 4 | 31 | — | 1,084 | 4 | 1,062 | 3 | 55 | — | 1,117 | 3 | ||||||||||||||||||||||||||||
Non-agency commercial MBS | 414 | 1 | 38 | — | 452 | 1 | 554 | 1 | 55 | — | 609 | 1 | ||||||||||||||||||||||||||||
Foreign government agencies | 860 | 1 | 50 | — | 910 | 1 | ||||||||||||||||||||||||||||||||||
Non-agency RMBS (a) | 26 | 1 | 111 | 6 | 137 | 7 | ||||||||||||||||||||||||||||||||||
State and political subdivisions | — | — | 116 | 1 | 116 | 1 | 101 | 2 | 16 | — | 117 | 2 | ||||||||||||||||||||||||||||
Non-agency RMBS (a) | 26 | — | 121 | 8 | 147 | 8 | ||||||||||||||||||||||||||||||||||
Corporate bonds | 26 | — | 238 | 3 | 264 | 3 | 77 | 1 | 67 | — | 144 | 1 | ||||||||||||||||||||||||||||
Total securities available-for-sale (b) | $ | 17,424 | $ | 50 | $ | 14,730 | $ | 206 | $ | 32,154 | $ | 256 | $ | 21,829 | $ | 69 | $ | 8,077 | $ | 133 | $ | 29,906 | $ | 202 | ||||||||||||||||
Held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||
Agency RMBS | $ | 623 | $ | 1 | $ | 12,922 | $ | 126 | $ | 13,545 | $ | 127 | $ | 3,745 | $ | 12 | $ | 4,952 | $ | 47 | $ | 8,697 | $ | 59 | ||||||||||||||||
U.S. Treasury | — | — | 2,066 | 9 | 2,066 | 9 | 346 | 2 | 1,104 | 2 | 1,450 | 4 | ||||||||||||||||||||||||||||
Agency commercial MBS | 67 | 1 | — | — | 67 | 1 | ||||||||||||||||||||||||||||||||||
U.S. government agencies | 50 | — | 407 | 1 | 457 | 1 | 225 | 1 | 225 | — | 450 | 1 | ||||||||||||||||||||||||||||
Agency commercial MBS | — | — | 57 | 1 | 57 | 1 | ||||||||||||||||||||||||||||||||||
Non-agency RMBS | 7 | — | 42 | 2 | 49 | 2 | 7 | — | 39 | 2 | 46 | 2 | ||||||||||||||||||||||||||||
Total securities held-to-maturity | $ | 680 | $ | 1 | $ | 15,494 | $ | 139 | $ | 16,174 | $ | 140 | $ | 4,390 | $ | 16 | $ | 6,320 | $ | 51 | $ | 10,710 | $ | 67 | ||||||||||||||||
Total temporarily impaired securities | $ | 18,104 | $ | 51 | $ | 30,224 | $ | 345 | $ | 48,328 | $ | 396 | $ | 26,219 | $ | 85 | $ | 14,397 | $ | 184 | $ | 40,616 | $ | 269 |
(a) | Includes |
(b) | Includes gross unrealized losses of |
Notes to Consolidated Financial Statements (continued) |
Temporarily impaired securities at Dec. 31, 2018 | Less than 12 months | 12 months or more | Total | Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
(in millions) | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||||||||||
Agency RMBS | $ | 6,678 | $ | 30 | $ | 9,250 | $ | 339 | $ | 15,928 | $ | 369 | $ | 6,678 | $ | 30 | $ | 9,250 | $ | 339 | $ | 15,928 | $ | 369 | ||||||||||||||||
U.S. Treasury | 6,126 | 23 | 6,880 | 187 | 13,006 | 210 | 6,126 | 23 | 6,880 | 187 | 13,006 | 210 | ||||||||||||||||||||||||||||
Sovereign debt/sovereign guaranteed | 2,185 | 8 | 988 | 13 | 3,173 | 21 | 2,185 | 8 | 988 | 13 | 3,173 | 21 | ||||||||||||||||||||||||||||
Agency commercial MBS | 4,505 | 50 | 3,082 | 111 | 7,587 | 161 | 4,505 | 50 | 3,082 | 111 | 7,587 | 161 | ||||||||||||||||||||||||||||
CLOs | 3,280 | 46 | 2 | — | 3,282 | 46 | 3,280 | 46 | 2 | — | 3,282 | 46 | ||||||||||||||||||||||||||||
Supranational | 974 | 2 | 481 | 6 | 1,455 | 8 | 974 | 2 | 481 | 6 | 1,455 | 8 | ||||||||||||||||||||||||||||
Foreign covered bonds | 1,058 | 7 | 736 | 12 | 1,794 | 19 | 1,058 | 7 | 736 | 12 | 1,794 | 19 | ||||||||||||||||||||||||||||
State and political subdivisions | 316 | 1 | 668 | 21 | 984 | 22 | 316 | 1 | 668 | 21 | 984 | 22 | ||||||||||||||||||||||||||||
Other ABS | 1,289 | 4 | 23 | — | 1,312 | 4 | 1,289 | 4 | 23 | — | 1,312 | 4 | ||||||||||||||||||||||||||||
U.S. government agencies | 513 | 4 | 673 | 20 | 1,186 | 24 | 513 | 4 | 673 | 20 | 1,186 | 24 | ||||||||||||||||||||||||||||
Non-agency commercial MBS | 1,015 | 14 | 362 | 14 | 1,377 | 28 | 1,015 | 14 | 362 | 14 | 1,377 | 28 | ||||||||||||||||||||||||||||
Non-agency RMBS (a) | 94 | 1 | 157 | 10 | 251 | 11 | 94 | 1 | 157 | 10 | 251 | 11 | ||||||||||||||||||||||||||||
Foreign government agencies | 397 | 1 | 256 | 3 | 653 | 4 | ||||||||||||||||||||||||||||||||||
Corporate bonds | 685 | 24 | 50 | 2 | 735 | 26 | 685 | 24 | 50 | 2 | 735 | 26 | ||||||||||||||||||||||||||||
Other debt securities | 397 | 1 | 256 | 3 | 653 | 4 | ||||||||||||||||||||||||||||||||||
Total securities available-for-sale (b) | $ | 29,115 | $ | 215 | $ | 23,608 | $ | 738 | $ | 52,723 | $ | 953 | $ | 29,115 | $ | 215 | $ | 23,608 | $ | 738 | $ | 52,723 | $ | 953 | ||||||||||||||||
Held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||
Agency RMBS | $ | 4,602 | $ | 56 | $ | 17,107 | $ | 576 | $ | 21,709 | $ | 632 | $ | 4,602 | $ | 56 | $ | 17,107 | $ | 576 | $ | 21,709 | $ | 632 | ||||||||||||||||
U.S. Treasury | 157 | 2 | 4,343 | 75 | 4,500 | 77 | 157 | 2 | 4,343 | 75 | 4,500 | 77 | ||||||||||||||||||||||||||||
U.S. government agencies | — | — | 1,111 | 10 | 1,111 | 10 | — | — | 1,111 | 10 | 1,111 | 10 | ||||||||||||||||||||||||||||
Agency commercial MBS | 477 | 7 | 654 | 19 | 1,131 | 26 | 477 | 7 | 654 | 19 | 1,131 | 26 | ||||||||||||||||||||||||||||
Non-agency RMBS | 22 | 1 | 31 | 1 | 53 | 2 | 22 | 1 | 31 | 1 | 53 | 2 | ||||||||||||||||||||||||||||
Total securities held-to-maturity | $ | 5,258 | $ | 66 | $ | 23,246 | $ | 681 | $ | 28,504 | $ | 747 | $ | 5,258 | $ | 66 | $ | 23,246 | $ | 681 | $ | 28,504 | $ | 747 | ||||||||||||||||
Total temporarily impaired securities | $ | 34,373 | $ | 281 | $ | 46,854 | $ | 1,419 | $ | 81,227 | $ | 1,700 | $ | 34,373 | $ | 281 | $ | 46,854 | $ | 1,419 | $ | 81,227 | $ | 1,700 |
(a) | Includes $22 million of securities with an unrealized loss of less than $1 million for less than 12 months and $3 million of securities with an unrealized loss of less than $1 million for 12 months or more that were included in the former Grantor Trust. |
(b) | Includes gross unrealized losses of $87 million for 12 months or more recorded in accumulated other comprehensive income related to securities that were transferred from available-for-sale to held-to-maturity. The unrealized losses are primarily related to Agency RMBS and will be amortized into net interest revenue over the contractual lives of the securities. There were |
Maturity distribution and yields on securities at June 30, 2019 | U.S. Treasury | U.S. government agencies | State and political subdivisions | Other bonds, notes and debentures | Mortgage/ asset-backed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity distribution and yields on securities at Sept. 30, 2019 | U.S. Treasury | U.S. government agencies | State and political subdivisions | Other bonds, notes and debentures | Mortgage/ asset-backed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions) | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Total | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Total | ||||||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
One year or less | $ | 3,152 | 2.59 | % | $ | 80 | 2.28 | % | $ | 189 | 2.97 | % | $ | 7,148 | 1.32 | % | $ | — | — | % | $ | 10,569 | $ | 2,692 | 2.60 | % | $ | 81 | 2.28 | % | $ | 144 | 2.85 | % | $ | 8,129 | 1.20 | % | $ | — | — | % | $ | 11,046 | ||||||||||||||||||||||
Over 1 through 5 years | 5,057 | 1.81 | 991 | 2.68 | 849 | 3.16 | 12,999 | 1.34 | — | — | 19,896 | 5,703 | 1.78 | 804 | 2.54 | 799 | 3.18 | 13,993 | 1.22 | — | — | 21,299 | ||||||||||||||||||||||||||||||||||||||||||||
Over 5 through 10 years | 3,283 | 2.31 | 1,579 | 2.81 | 130 | 3.05 | 1,883 | 0.84 | — | — | 6,875 | 3,851 | 2.23 | 1,592 | 2.76 | 130 | 3.05 | 1,649 | 1.01 | — | — | 7,222 | ||||||||||||||||||||||||||||||||||||||||||||
Over 10 years | 2,705 | 3.11 | — | — | 112 | 2.96 | 209 | 1.78 | — | — | 3,026 | 2,880 | 3.11 | — | — | 111 | 2.72 | 204 | 1.78 | — | — | 3,195 | ||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | — | — | — | — | — | — | — | — | 39,108 | 3.18 | 39,108 | — | — | — | — | — | — | — | — | 39,448 | 3.00 | 39,448 | ||||||||||||||||||||||||||||||||||||||||||||
Asset-backed securities | — | — | — | — | — | — | — | — | 6,119 | 3.33 | 6,119 | — | — | — | — | — | — | — | — | 6,352 | 3.09 | 6,352 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 14,197 | 2.35 | % | $ | 2,650 | 2.74 | % | $ | 1,280 | 3.10 | % | $ | 22,239 | 1.30 | % | $ | 45,227 | 3.20 | % | $ | 85,593 | $ | 15,126 | 2.29 | % | $ | 2,477 | 2.68 | % | $ | 1,184 | 3.08 | % | $ | 23,975 | 1.20 | % | $ | 45,800 | 3.02 | % | $ | 88,562 | ||||||||||||||||||||||
Securities held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
One year or less | $ | 1,556 | 1.48 | % | $ | 333 | 1.31 | % | $ | — | — | % | $ | 82 | 0.64 | % | $ | — | — | % | $ | 1,971 | $ | 1,106 | 1.45 | % | $ | 300 | 1.49 | % | $ | — | — | % | $ | 186 | 0.66 | % | $ | — | — | % | $ | 1,592 | ||||||||||||||||||||||
Over 1 through 5 years | 2,600 | 1.96 | 759 | 2.33 | 3 | 5.68 | 487 | 0.57 | — | — | 3,849 | 2,600 | 1.96 | 478 | 2.29 | 3 | 5.68 | 488 | 0.79 | — | — | 3,569 | ||||||||||||||||||||||||||||||||||||||||||||
Over 5 through 10 years | 311 | 2.18 | 172 | 2.89 | — | — | 359 | 0.81 | — | — | 842 | 311 | 2.18 | 132 | 2.81 | — | — | 214 | 0.43 | — | — | 657 | ||||||||||||||||||||||||||||||||||||||||||||
Over 10 years | — | — | 12 | 3.25 | 14 | 4.76 | — | — | — | — | 26 | — | — | 12 | 3.25 | 13 | 4.76 | — | — | — | — | 25 | ||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | — | — | — | — | — | — | — | — | 27,861 | 2.98 | 27,861 | — | — | — | — | — | — | — | — | 27,935 | 2.96 | 27,935 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,467 | 1.81 | % | $ | 1,276 | 2.15 | % | $ | 17 | 4.93 | % | $ | 928 | 0.67 | % | $ | 27,861 | 2.98 | % | $ | 34,549 | $ | 4,017 | 1.84 | % | $ | 922 | 2.12 | % | $ | 16 | 4.93 | % | $ | 888 | 0.67 | % | $ | 27,935 | 2.96 | % | $ | 33,778 |
(a) | Yields are based upon the amortized cost of securities. |
Notes to Consolidated Financial Statements (continued) |
Debt securities credit loss roll forward | ||||||||||||
(in millions) | 2Q19 | 2Q18 | 3Q19 | 3Q18 | ||||||||
Beginning balance as of March 31 | $ | 77 | $ | 80 | ||||||||
Beginning balance as of June 30 | $ | 77 | $ | 79 | ||||||||
Add: Initial OTTI credit losses | — | — | — | — | ||||||||
Subsequent OTTI credit losses | — | — | 1 | — | ||||||||
Less: Realized losses for securities sold | — | 1 | — | 1 | ||||||||
Ending balance as of June 30 | $ | 77 | $ | 79 | ||||||||
Ending balance as of September 30 | $ | 78 | $ | 78 |
Debt securities credit loss roll forward | ||||||||||||
(in millions) | YTD19 | YTD18 | YTD19 | YTD18 | ||||||||
Beginning balance as of Dec. 31 | $ | 78 | $ | 84 | $ | 78 | $ | 84 | ||||
Add: Initial OTTI credit losses | — | — | — | — | ||||||||
Subsequent OTTI credit losses | — | — | 1 | — | ||||||||
Less: Realized losses for securities sold | 1 | 5 | 1 | 6 | ||||||||
Ending balance as of June 30 | $ | 77 | $ | 79 | ||||||||
Ending balance as of September 30 | $ | 78 | $ | 78 |
Notes to Consolidated Financial Statements (continued) |
Loans | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||
(in millions) | ||||||||||||
Domestic: | ||||||||||||
Commercial | $ | 1,452 | $ | 1,949 | $ | 1,335 | $ | 1,949 | ||||
Commercial real estate | 5,192 | 4,787 | 5,292 | 4,787 | ||||||||
Financial institutions | 4,574 | 5,091 | 4,973 | 5,091 | ||||||||
Lease financings | 662 | 706 | 559 | 706 | ||||||||
Wealth management loans and mortgages | 15,579 | 15,843 | 15,764 | 15,843 | ||||||||
Other residential mortgages | 549 | 594 | 520 | 594 | ||||||||
Overdrafts | 1,575 | 1,550 | 1,247 | 1,550 | ||||||||
Other | 1,122 | 1,181 | 1,143 | 1,181 | ||||||||
Margin loans | 10,152 | 13,343 | 10,177 | 13,343 | ||||||||
Total domestic | 40,857 | 45,044 | 41,010 | 45,044 | ||||||||
Foreign: | ||||||||||||
Commercial | 285 | 183 | 358 | 183 | ||||||||
Commercial real estate | 7 | — | 18 | — | ||||||||
Financial institutions | 6,948 | 6,492 | 8,441 | 6,492 | ||||||||
Lease financings | 563 | 551 | 569 | 551 | ||||||||
Wealth management loans and mortgages | 90 | 122 | 92 | 122 | ||||||||
Other (primarily overdrafts) | 3,196 | 4,031 | 4,106 | 4,031 | ||||||||
Margin loans | 450 | 141 | 287 | 141 | ||||||||
Total foreign | 11,539 | 11,520 | 13,871 | 11,520 | ||||||||
Total loans (a) | $ | 52,396 | $ | 56,564 | $ | 54,881 | $ | 56,564 |
(a) | Net of unearned income of $ |
Notes to Consolidated Financial Statements (continued) |
Allowance for credit losses activity for the quarter ended June 30, 2019 | Wealth management loans and mortgages | Other residential mortgages | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses activity for the quarter ended Sept. 30, 2019 | Allowance for credit losses activity for the quarter ended Sept. 30, 2019 | Wealth management loans and mortgages | Other residential mortgages | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | Commercial | Commercial real estate | Financial institutions | Lease financings | All other | Foreign | Total | ||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 82 | $ | 74 | $ | 23 | $ | 4 | $ | — | $ | 29 | $ | 248 | $ | 77 | $ | 72 | $ | 21 | $ | 4 | $ | 20 | $ | 14 | $ | — | $ | 33 | $ | 241 | ||||||||||||||||||||||||
Charge-offs | — | — | — | — | (1 | ) | — | — | — | (1 | ) | (1 | ) | — | — | — | — | — | — | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Recoveries | — | — | — | — | — | 2 | — | — | 2 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | — | — | — | — | (1 | ) | 2 | — | — | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
Net (charge-offs) | (1 | ) | — | — | — | — | — | — | — | (1 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Provision | (5 | ) | (2 | ) | (2 | ) | — | — | (3 | ) | — | 4 | (8 | ) | (15 | ) | 5 | — | (1 | ) | — | — | — | (5 | ) | (16 | ) | |||||||||||||||||||||||||||||
Ending balance | $ | 77 | $ | 72 | $ | 21 | $ | 4 | $ | 20 | $ | 14 | $ | — | $ | 33 | $ | 241 | $ | 61 | $ | 77 | $ | 21 | $ | 3 | $ | 20 | $ | 14 | $ | — | $ | 28 | $ | 224 | ||||||||||||||||||||
Allowance for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan losses | $ | 23 | $ | 57 | $ | 8 | $ | 4 | $ | 17 | $ | 14 | $ | — | $ | 23 | $ | 146 | $ | 10 | $ | 57 | $ | 7 | $ | 3 | $ | 17 | $ | 14 | $ | — | $ | 19 | $ | 127 | ||||||||||||||||||||
Lending-related commitments | 54 | 15 | 13 | — | 3 | — | — | 10 | 95 | 51 | 20 | 14 | — | 3 | — | — | 9 | 97 | ||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan balance | $ | 96 | $ | — | $ | — | $ | — | $ | 16 | $ | — | $ | — | $ | — | $ | 112 | $ | — | $ | — | $ | — | $ | — | $ | 16 | $ | — | $ | — | $ | — | $ | 16 | ||||||||||||||||||||
Allowance for loan losses | 10 | — | — | — | — | — | — | — | 10 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan balance | $ | 1,356 | $ | 5,192 | $ | 4,574 | $ | 662 | $ | 15,563 | $ | 549 | $ | 12,849 | (a) | $ | 11,539 | $ | 52,284 | $ | 1,335 | $ | 5,292 | $ | 4,973 | $ | 559 | $ | 15,748 | $ | 520 | $ | 12,567 | (a) | $ | 13,871 | $ | 54,865 | ||||||||||||||||||
Allowance for loan losses | 13 | 57 | 8 | 4 | 17 | 14 | — | 23 | 136 | 10 | 57 | 7 | 3 | 17 | 14 | — | 19 | 127 |
(a) | Includes $1,247 million of domestic overdrafts, $10,177 million of margin loans and $1,143 million of other loans at Sept. 30, 2019. |
Allowance for credit losses activity for the quarter ended June 30, 2019 | Wealth management loans and mortgages | Other residential mortgages | ||||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | All other | Foreign | Total | |||||||||||||||||||||
Beginning balance | $ | 82 | $ | 74 | $ | 23 | $ | 4 | $ | 21 | $ | 15 | $ | — | $ | 29 | $ | 248 | ||||||||||
Charge-offs | — | — | — | — | (1 | ) | — | — | — | (1 | ) | |||||||||||||||||
Recoveries | — | — | — | — | — | 2 | — | — | 2 | |||||||||||||||||||
Net (charge-offs) recoveries | — | — | — | — | (1 | ) | 2 | — | — | 1 | ||||||||||||||||||
Provision | (5 | ) | (2 | ) | (2 | ) | — | — | (3 | ) | — | 4 | (8 | ) | ||||||||||||||
Ending balance | $ | 77 | $ | 72 | $ | 21 | $ | 4 | $ | 20 | $ | 14 | $ | — | $ | 33 | $ | 241 | ||||||||||
Allowance for: | ||||||||||||||||||||||||||||
Loan losses | $ | 23 | $ | 57 | $ | 8 | $ | 4 | $ | 17 | $ | 14 | $ | — | $ | 23 | $ | 146 | ||||||||||
Lending-related commitments | 54 | 15 | 13 | — | 3 | — | — | 10 | 95 | |||||||||||||||||||
Individually evaluated for impairment: | ||||||||||||||||||||||||||||
Loan balance | $ | 96 | $ | — | $ | — | $ | — | $ | 16 | $ | — | $ | — | $ | — | $ | 112 | ||||||||||
Allowance for loan losses | 10 | — | — | — | — | — | — | — | 10 | |||||||||||||||||||
Collectively evaluated for impairment: | ||||||||||||||||||||||||||||
Loan balance | $ | 1,356 | $ | 5,192 | $ | 4,574 | $ | 662 | $ | 15,563 | $ | 549 | $ | 12,849 | (a) | $ | 11,539 | $ | 52,284 | |||||||||
Allowance for loan losses | 13 | 57 | 8 | 4 | 17 | 14 | — | 23 | 136 |
(a) | Includes $1,575 million of domestic overdrafts, $10,152 million of margin loans and $1,122 million of other loans at June 30, |
Allowance for credit losses activity for the quarter ended March 31, 2019 | Wealth management loans and mortgages | Other residential mortgages | ||||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | All other | Foreign | Total | |||||||||||||||||||||
Beginning balance | $ | 81 | $ | 75 | $ | 22 | $ | 5 | $ | 21 | $ | 16 | $ | — | $ | 32 | $ | 252 | ||||||||||
Charge-offs | (11 | ) | — | — | — | — | — | — | — | (11 | ) | |||||||||||||||||
Recoveries | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
Net charge-offs | (11 | ) | — | — | — | — | — | — | — | (11 | ) | |||||||||||||||||
Provision | 12 | (1 | ) | 1 | (1 | ) | — | (1 | ) | — | (3 | ) | 7 | |||||||||||||||
Ending balance | $ | 82 | $ | 74 | $ | 23 | $ | 4 | $ | 21 | $ | 15 | $ | — | $ | 29 | $ | 248 | ||||||||||
Allowance for: | ||||||||||||||||||||||||||||
Loan losses | $ | 24 | $ | 56 | $ | 10 | $ | 4 | $ | 18 | $ | 15 | $ | — | $ | 19 | $ | 146 | ||||||||||
Lending-related commitments | 58 | 18 | 13 | — | 3 | — | — | 10 | 102 | |||||||||||||||||||
Individually evaluated for impairment: | ||||||||||||||||||||||||||||
Loan balance | $ | 96 | $ | — | $ | — | $ | — | $ | 4 | $ | — | $ | — | $ | — | $ | 100 | ||||||||||
Allowance for loan losses | 10 | — | — | — | — | — | — | — | 10 | |||||||||||||||||||
Collectively evaluated for impairment: | ||||||||||||||||||||||||||||
Loan balance | $ | 1,626 | $ | 4,921 | $ | 4,652 | $ | 653 | $ | 15,724 | $ | 574 | $ | 13,913 | (a) | $ | 11,324 | $ | 53,387 | |||||||||
Allowance for loan losses | 14 | 56 | 10 | 4 | 18 | 15 | — | 19 | 136 |
Notes to Consolidated Financial Statements (continued) |
Allowance for credit losses activity for the quarter ended June 30, 2018 | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses activity for the quarter ended Sept. 30, 2018 | Allowance for credit losses activity for the quarter ended Sept. 30, 2018 | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | Commercial | Commercial real estate | Financial institutions | Lease financings | |||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 75 | $ | 75 | $ | 22 | $ | 7 | $ | 76 | $ | 74 | $ | 24 | $ | 6 | $ | 23 | $ | 18 | $ | — | $ | 33 | $ | 254 | ||||||||||||||||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (1 | ) | — | — | (1 | ) | ||||||||||||||||||||||||||||||||||||
Recoveries | — | — | — | — | — | 1 | — | — | 1 | — | — | — | — | — | 1 | — | — | 1 | ||||||||||||||||||||||||||||||||||||||
Net recoveries | — | — | — | — | — | 1 | — | — | 1 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Provision | 1 | (1 | ) | 2 | (1 | ) | — | (2 | ) | — | (2 | ) | (3 | ) | — | (1 | ) | 1 | — | (2 | ) | (1 | ) | — | — | (3 | ) | |||||||||||||||||||||||||||||
Ending balance | $ | 76 | $ | 74 | $ | 24 | $ | 6 | $ | 23 | $ | 18 | $ | — | $ | 33 | $ | 254 | $ | 76 | $ | 73 | $ | 25 | $ | 6 | $ | 21 | $ | 17 | $ | — | $ | 33 | $ | 251 | ||||||||||||||||||||
Allowance for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan losses | $ | 17 | $ | 55 | $ | 8 | $ | 6 | $ | 19 | $ | 18 | $ | — | $ | 22 | $ | 145 | $ | 17 | $ | 53 | $ | 9 | $ | 6 | $ | 17 | $ | 17 | $ | — | $ | 21 | $ | 140 | ||||||||||||||||||||
Lending-related commitments | 59 | 19 | 16 | — | 4 | — | — | 11 | 109 | 59 | 20 | 16 | — | 4 | — | — | 12 | 111 | ||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan balance | $ | — | $ | — | $ | — | $ | — | $ | 5 | $ | — | $ | — | $ | — | $ | 5 | $ | — | $ | — | $ | — | $ | — | $ | 4 | $ | — | $ | — | $ | — | $ | 4 | ||||||||||||||||||||
Allowance for loan losses | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan balance | $ | 2,117 | $ | 4,974 | $ | 5,526 | $ | 758 | $ | 16,186 | $ | 653 | $ | 17,173 | (a) | $ | 10,384 | $ | 57,771 | $ | 1,928 | $ | 5,034 | $ | 4,237 | $ | 738 | $ | 15,848 | $ | 623 | $ | 15,306 | (a) | $ | 10,269 | $ | 53,983 | ||||||||||||||||||
Allowance for loan losses | 17 | 55 | 8 | 6 | 19 | 18 | — | 22 | 145 | 17 | 53 | 9 | 6 | 17 | 17 | — | 21 | 140 |
(a) | Includes |
Allowance for credit losses activity for the six months ended June 30, 2019 | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses activity for the nine months ended Sept. 30, 2019 | Allowance for credit losses activity for the nine months ended Sept. 30, 2019 | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | Commercial | Commercial real estate | Financial institutions | Lease financings | |||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 81 | $ | 75 | $ | 22 | $ | 5 | $ | 81 | $ | 75 | $ | 22 | $ | 5 | $ | 21 | $ | 16 | $ | — | $ | 32 | $ | 252 | ||||||||||||||||||||||||||||
Charge-offs | (11 | ) | — | — | — | (1 | ) | — | — | — | (12 | ) | (12 | ) | — | — | — | (1 | ) | — | — | — | (13 | ) | ||||||||||||||||||||||||||||||
Recoveries | — | — | — | — | — | 2 | — | — | 2 | — | — | — | — | — | 2 | — | — | 2 | ||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries | (11 | ) | — | — | — | (1 | ) | 2 | — | — | (10 | ) | (12 | ) | — | — | — | (1 | ) | 2 | — | — | (11 | ) | ||||||||||||||||||||||||||||||
Provision | 7 | (3 | ) | (1 | ) | (1 | ) | — | (4 | ) | — | 1 | (1 | ) | (8 | ) | 2 | (1 | ) | (2 | ) | — | (4 | ) | — | (4 | ) | (17 | ) | |||||||||||||||||||||||||
Ending balance | $ | 77 | $ | 72 | $ | 21 | $ | 4 | $ | 20 | $ | 14 | $ | — | $ | 33 | $ | 241 | $ | 61 | $ | 77 | $ | 21 | $ | 3 | $ | 20 | $ | 14 | $ | — | $ | 28 | $ | 224 |
Allowance for credit losses activity for the six months ended June 30, 2018 | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses activity for the nine months ended Sept. 30, 2018 | Allowance for credit losses activity for the nine months ended Sept. 30, 2018 | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | Wealth management loans and mortgages | Other residential mortgages | All other | Foreign | Total | Commercial | Commercial real estate | Financial institutions | Lease financings | |||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 77 | $ | 76 | $ | 23 | $ | 8 | $ | 77 | $ | 76 | $ | 23 | $ | 8 | $ | 22 | $ | 20 | $ | — | $ | 35 | $ | 261 | ||||||||||||||||||||||||||||
Charge-offs | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (1 | ) | — | — | (1 | ) | ||||||||||||||||||||||||||||||||||
Recoveries | — | — | — | — | — | 1 | — | — | 1 | — | — | — | — | — | 2 | — | — | 2 | ||||||||||||||||||||||||||||||||||||
Net recoveries | — | — | — | — | — | 1 | — | — | 1 | — | — | — | — | — | 1 | — | — | 1 | ||||||||||||||||||||||||||||||||||||
Provision | (1 | ) | (2 | ) | 1 | (2 | ) | 1 | (3 | ) | — | (2 | ) | (8 | ) | (1 | ) | (3 | ) | 2 | (2 | ) | (1 | ) | (4 | ) | — | (2 | ) | (11 | ) | |||||||||||||||||||||||
Ending balance | $ | 76 | $ | 74 | $ | 24 | $ | 6 | $ | 23 | $ | 18 | $ | — | $ | 33 | $ | 254 | $ | 76 | $ | 73 | $ | 25 | $ | 6 | $ | 21 | $ | 17 | $ | — | $ | 33 | $ | 251 |
Notes to Consolidated Financial Statements (continued) |
Nonperforming assets (in millions) | June 30, 2019 | Dec. 31, 2018 | |||||
Nonperforming loans: | |||||||
Commercial | $ | 96 | $ | — | |||
Other residential mortgages | 65 | 67 | |||||
Wealth management loans and mortgages | 23 | 9 | |||||
Total nonperforming loans | 184 | 76 | |||||
Other assets owned | 2 | 3 | |||||
Total nonperforming assets (a) | $ | 186 | $ | 79 |
Nonperforming assets (in millions) | Sept. 30, 2019 | Dec. 31, 2018 | |||||
Nonperforming loans: | |||||||
Other residential mortgages | $ | 62 | $ | 67 | |||
Wealth management loans and mortgages | 24 | 9 | |||||
Total nonperforming loans | 86 | 76 | |||||
Other assets owned | 2 | 3 | |||||
Total nonperforming assets | $ | 88 | $ | 79 |
Impaired loans | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | Average recorded investment | Interest revenue recognized | ||||||||||||||||||||||||||||||||||||||||
Impaired loans with an allowance: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | $ | 96 | $ | — | $ | 48 | $ | — | $ | — | $ | — | $ | 64 | $ | — | $ | — | $ | — | $ | 48 | $ | — | $ | 96 | $ | — | $ | — | $ | — | $ | 48 | $ | — | $ | — | $ | — | ||||||||||||||||||||
Wealth management loans and mortgages | — | — | — | — | 1 | — | — | — | 1 | — | — | — | — | — | — | — | — | — | 1 | — | ||||||||||||||||||||||||||||||||||||||||
Total impaired loans with an allowance | 96 | — | 48 | — | 1 | — | 64 | — | 1 | — | 48 | — | 96 | — | — | — | 48 | — | 1 | — | ||||||||||||||||||||||||||||||||||||||||
Impaired loans without an allowance: (a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wealth management loans and mortgages | 10 | — | 4 | — | 4 | — | 8 | — | 4 | — | 16 | — | 10 | — | 4 | — | 10 | — | 4 | — | ||||||||||||||||||||||||||||||||||||||||
Total impaired loans | $ | 106 | $ | — | $ | 52 | $ | — | $ | 5 | $ | — | $ | 72 | $ | — | $ | 5 | $ | — | $ | 64 | $ | — | $ | 106 | $ | — | $ | 4 | $ | — | $ | 58 | $ | — | $ | 5 | $ | — |
(a) | When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans. |
Impaired loans | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||
(in millions) | Recorded investment | Unpaid principal balance | Related allowance (a) | Recorded investment | Unpaid principal balance | Related allowance (a) | Recorded investment | Unpaid principal balance | Related allowance (a) | Recorded investment | Unpaid principal balance | Related allowance (a) | ||||||||||||||||||||||||||
Impaired loans with an allowance: | ||||||||||||||||||||||||||||||||||||||
Commercial | $ | 96 | $ | 96 | $ | 10 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||
Impaired loans without an allowance: (b) | ||||||||||||||||||||||||||||||||||||||
Wealth management loans and mortgages | 16 | 16 | N/A | 4 | 4 | N/A | 16 | 16 | N/A | 4 | 4 | N/A | ||||||||||||||||||||||||||
Total impaired loans (c) | $ | 112 | $ | 112 | $ | 10 | $ | 4 | $ | 4 | $ | — | $ | 16 | $ | 16 | $ | — | $ | 4 | $ | 4 | $ | — |
(a) | The allowance for impaired loans is included in the allowance for loan losses. |
(b) | When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans. |
(c) | Excludes an aggregate of less than $1 million of impaired loans in amounts individually less than $1 million at both |
Notes to Consolidated Financial Statements(continued) |
Past due loans and still accruing interest | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||
Days past due | Total past due | Days past due | Total past due | Days past due | Total past due | Days past due | Total past due | |||||||||||||||||||||||||||||||||||||||||||
(in millions) | 30-59 | 60-89 | ≥90 | 30-59 | 60-89 | ≥90 | 30-59 | 60-89 | ≥90 | 30-59 | 60-89 | ≥90 | ||||||||||||||||||||||||||||||||||||||
Financial institutions | $ | 99 | $ | — | $ | — | $ | 99 | $ | 3 | $ | 3 | $ | — | $ | 6 | ||||||||||||||||||||||||||||||||||
Wealth management loans and mortgages | $ | 19 | $ | 2 | $ | — | $ | 21 | $ | 22 | $ | 1 | $ | 5 | $ | 28 | 46 | — | — | 46 | 22 | 1 | 5 | 28 | ||||||||||||||||||||||||||
Other residential mortgages | 11 | 1 | — | 12 | 12 | 6 | 7 | 25 | 10 | 3 | — | 13 | 12 | 6 | 7 | 25 | ||||||||||||||||||||||||||||||||||
Financial institutions | 10 | — | — | 10 | 3 | 3 | — | 6 | ||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 9 | — | — | 9 | 1 | — | — | 1 | 13 | — | — | 13 | 1 | — | — | 1 | ||||||||||||||||||||||||||||||||||
Total past due loans | $ | 49 | $ | 3 | $ | — | $ | 52 | $ | 38 | $ | 10 | $ | 12 | $ | 60 | $ | 168 | $ | 3 | $ | — | $ | 171 | $ | 38 | $ | 10 | $ | 12 | $ | 60 |
Commercial loan portfolio – Credit risk profile by creditworthiness category | Commercial | Commercial real estate | Financial institutions | Commercial | Commercial real estate | Financial institutions | ||||||||||||||||||||||||||||||||||
June 30, 2019 | Dec. 31, 2018 | June 30, 2019 | Dec. 31, 2018 | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||
Investment grade | $ | 1,555 | $ | 2,036 | $ | 4,577 | $ | 4,184 | $ | 9,338 | $ | 9,586 | $ | 1,652 | $ | 2,036 | $ | 4,753 | $ | 4,184 | $ | 11,346 | $ | 9,586 | ||||||||||||||||
Non-investment grade | 182 | 96 | 622 | 603 | 2,184 | 1,997 | 41 | 96 | 557 | 603 | 2,068 | 1,997 | ||||||||||||||||||||||||||||
Total | $ | 1,737 | $ | 2,132 | $ | 5,199 | $ | 4,787 | $ | 11,522 | $ | 11,583 | $ | 1,693 | $ | 2,132 | $ | 5,310 | $ | 4,787 | $ | 13,414 | $ | 11,583 |
Wealth management loans and mortgages – Credit risk profile by internally assigned grade | Wealth management loans and mortgages – Credit risk profile by internally assigned grade | Wealth management loans and mortgages – Credit risk profile by internally assigned grade | ||||||||||
June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||
(in millions) | ||||||||||||
Wealth management loans: | ||||||||||||
Investment grade | $ | 6,673 | $ | 6,901 | $ | 6,966 | $ | 6,901 | ||||
Non-investment grade | 161 | 106 | 57 | 106 | ||||||||
Wealth management mortgages | 8,835 | 8,958 | 8,833 | 8,958 | ||||||||
Total | $ | 15,669 | $ | 15,965 | $ | 15,856 | $ | 15,965 |
Notes to Consolidated Financial Statements(continued) |
Notes to Consolidated Financial Statements(continued) |
Balance sheet information | June 30, 2019 | Sept. 30, 2019 | ||||||||||||||||
(dollar in millions) | Operating leases | Finance leases | Total | Operating leases | Finance leases | Total | ||||||||||||
Right-of-use assets (a) | $ | 1,160 | $ | 21 | $ | 1,181 | $ | 1,274 | $ | 19 | $ | 1,293 | ||||||
Lease liability (b) | $ | 1,358 | $ | 10 | $ | 1,368 | $ | 1,488 | $ | 6 | $ | 1,494 | ||||||
Weighted average: | ||||||||||||||||||
Remaining lease term | 8.3 years | 3.3 years | 9.9 years | 3.0 years | ||||||||||||||
Discount rate (annualized) | 3.17 | % | 2.78 | % | 2.99 | % | 2.81 | % |
(a) | Included in premises and equipment on the consolidated balance sheet. |
(b) | Operating lease liabilities are included in other liabilities and finance lease liabilities are included in other borrowed funds, both on the consolidated balance sheet. |
Lease expense | Quarter ended | Year-to-date | Quarter ended | Year-to-date | ||||||||||||||
(in millions) | June 30, 2019 | June 30, 2019 | Sept. 30, 2019 | Sept. 30, 2019 | ||||||||||||||
Operating lease expense | $ | 63 | $ | 132 | $ | 66 | $ | 198 | ||||||||||
Variable lease expense | 10 | 19 | 10 | 29 | ||||||||||||||
Sublease income | (8 | ) | (16 | ) | (8 | ) | (24 | ) | ||||||||||
Finance lease expense: | ||||||||||||||||||
Amortization of right-of-use assets | 2 | 4 | 2 | 6 | ||||||||||||||
Interest on lease liabilities | — | — | — | — | ||||||||||||||
Total finance lease expense | $ | 2 | $ | 4 | $ | 2 | $ | 6 | ||||||||||
Total lease expense | $ | 67 | $ | 139 | $ | 70 | $ | 209 |
Cash flow information | Six months ended | Nine months ended | ||||||
(in millions) | June 30, 2019 | Sept. 30, 2019 | ||||||
Cash paid for amounts included in measurement of liabilities: | ||||||||
Operating cash flows from finance leases | Operating cash flows from finance leases | $ | — | Operating cash flows from finance leases | $ | — | ||
Operating cash flows from operating leases | Operating cash flows from operating leases | $ | 134 | Operating cash flows from operating leases | $ | 203 | ||
Financing cash flows from finance leases | Financing cash flows from finance leases | $ | 12 | Financing cash flows from finance leases | $ | 16 |
Maturities of lease liabilities | Operating leases | ||
(in millions) | |||
For the year ended Dec. 31, | |||
2019 | $ | 264 | |
2020 | 244 | ||
2021 | 211 | ||
2022 | 172 | ||
2023 | 136 | ||
2024 and thereafter | 432 | ||
Total | $ | 1,459 |
Notes to Consolidated Financial Statements(continued) |
Maturities of lease liabilities | Operating leases | Finance leases | Operating leases | Finance leases | ||||||||
(in millions) | ||||||||||||
For the year ended Dec. 31, | ||||||||||||
2019 (excluding six months ended June 30, 2019) | $ | 148 | $ | 9 | ||||||||
2019 (excluding nine months ended Sept. 30, 2019) | $ | 80 | $ | 5 | ||||||||
2020 | 271 | 1 | 275 | 1 | ||||||||
2021 | 215 | — | 220 | — | ||||||||
2022 | 175 | — | 181 | — | ||||||||
2023 | 137 | — | 144 | — | ||||||||
2024 and thereafter | 600 | — | 803 | — | ||||||||
Total lease payments | 1,546 | 10 | 1,703 | 6 | ||||||||
Less: Imputed interest | (188 | ) | — | (215 | ) | — | ||||||
Total | $ | 1,358 | $ | 10 | $ | 1,488 | $ | 6 |
Goodwill by business (in millions) | Investment Services | Investment Management | Other | Consolidated | ||||||||
Balance at Dec. 31, 2018 | $ | 8,333 | $ | 8,970 | $ | 47 | $ | 17,350 | ||||
Foreign currency translation | (6 | ) | (7 | ) | — | (13 | ) | |||||
Balance at June 30, 2019 | $ | 8,327 | $ | 8,963 | $ | 47 | $ | 17,337 |
Goodwill by business (in millions) | Investment Services | Investment Management | Other | Consolidated | ||||||||
Balance at Dec. 31, 2018 | $ | 8,333 | $ | 8,970 | $ | 47 | $ | 17,350 | ||||
Foreign currency translation | (45 | ) | (57 | ) | — | (102 | ) | |||||
Balance at Sept. 30, 2019 | $ | 8,288 | $ | 8,913 | $ | 47 | $ | 17,248 |
Goodwill by business (in millions) | Investment Services | Investment Management | Other | Consolidated | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||
Balance at Dec. 31, 2017 | $ | 8,389 | $ | 9,128 | $ | 47 | $ | 17,564 | $ | 8,389 | $ | 9,128 | $ | 47 | $ | 17,564 | ||||||||
Dispositions | — | (65 | ) | — | (65 | ) | — | (65 | ) | — | (65 | ) | ||||||||||||
Foreign currency translation | (31 | ) | (50 | ) | — | (81 | ) | (39 | ) | (70 | ) | — | (109 | ) | ||||||||||
Balance at June 30, 2018 | $ | 8,358 | $ | 9,013 | $ | 47 | $ | 17,418 | ||||||||||||||||
Balance at Sept. 30, 2018 | $ | 8,350 | $ | 8,993 | $ | 47 | $ | 17,390 |
Intangible assets – net carrying amount by business (in millions) | Investment Services | Investment Management | Other | Consolidated | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||
Balance at Dec. 31, 2018 | $ | 758 | $ | 1,613 | $ | 849 | $ | 3,220 | $ | 758 | $ | 1,613 | $ | 849 | $ | 3,220 | ||||||||
Amortization | (41 | ) | (18 | ) | — | (59 | ) | (61 | ) | (28 | ) | — | (89 | ) | ||||||||||
Foreign currency translation | — | (1 | ) | — | (1 | ) | (1 | ) | (6 | ) | — | (7 | ) | |||||||||||
Balance at June 30, 2019 | $ | 717 | $ | 1,594 | $ | 849 | $ | 3,160 | ||||||||||||||||
Balance at Sept. 30, 2019 | $ | 696 | $ | 1,579 | $ | 849 | $ | 3,124 |
Intangible assets – net carrying amount by business (in millions) | Investment Services | Investment Management | Other | Consolidated | ||||||||
Balance at Dec. 31, 2017 | $ | 888 | $ | 1,674 | $ | 849 | $ | 3,411 | ||||
Amortization | (107 | ) | (38 | ) | — | (145 | ) | |||||
Foreign currency translation | (1 | ) | (7 | ) | — | (8 | ) | |||||
Balance at Sept. 30, 2018 | $ | 780 | $ | 1,629 | $ | 849 | $ | 3,258 |
Notes to Consolidated Financial Statements (continued) |
Intangible assets – net carrying amount by business (in millions) | Investment Services | Investment Management | Other | Consolidated | ||||||||
Balance at Dec. 31, 2017 | $ | 888 | $ | 1,674 | $ | 849 | $ | 3,411 | ||||
Amortization | (72 | ) | (25 | ) | — | (97 | ) | |||||
Foreign currency translation | (1 | ) | (5 | ) | — | (6 | ) | |||||
Balance at June 30, 2018 | $ | 815 | $ | 1,644 | $ | 849 | $ | 3,308 |
Intangible assets | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||
(in millions) | Gross carrying amount | Accumulated amortization | Net carrying amount | Remaining weighted- average amortization period | Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | Remaining weighted- average amortization period | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||||||||||
Subject to amortization: (a) | ||||||||||||||||||||||||||||||||||||||||
Customer contracts—Investment Services | $ | 1,573 | $ | (1,227 | ) | $ | 346 | 10 years | $ | 1,572 | $ | (1,186 | ) | $ | 386 | $ | 1,516 | $ | (1,191 | ) | $ | 325 | 10 years | $ | 1,572 | $ | (1,186 | ) | $ | 386 | ||||||||||
Customer relationships—Investment Management | 898 | (714 | ) | 184 | 11 years | 899 | (699 | ) | 200 | 890 | (714 | ) | 176 | 11 years | 899 | (699 | ) | 200 | ||||||||||||||||||||||
Other | 65 | (14 | ) | 51 | 14 years | 26 | (12 | ) | 14 | 64 | (15 | ) | 49 | 14 years | 26 | (12 | ) | 14 | ||||||||||||||||||||||
Total subject to amortization | 2,536 | (1,955 | ) | 581 | 11 years | 2,497 | (1,897 | ) | 600 | 2,470 | (1,920 | ) | 550 | 11 years | 2,497 | (1,897 | ) | 600 | ||||||||||||||||||||||
Not subject to amortization: (b) | ||||||||||||||||||||||||||||||||||||||||
Tradenames | 1,292 | N/A | 1,292 | N/A | 1,332 | N/A | 1,332 | 1,291 | N/A | 1,291 | N/A | 1,332 | N/A | 1,332 | ||||||||||||||||||||||||||
Customer relationships | 1,287 | N/A | 1,287 | N/A | 1,288 | N/A | 1,288 | 1,283 | N/A | 1,283 | N/A | 1,288 | N/A | 1,288 | ||||||||||||||||||||||||||
Total not subject to amortization | 2,579 | N/A | 2,579 | N/A | 2,620 | N/A | 2,620 | 2,574 | N/A | 2,574 | N/A | 2,620 | N/A | 2,620 | ||||||||||||||||||||||||||
Total intangible assets | $ | 5,115 | $ | (1,955 | ) | $ | 3,160 | N/A | $ | 5,117 | $ | (1,897 | ) | $ | 3,220 | $ | 5,044 | $ | (1,920 | ) | $ | 3,124 | N/A | $ | 5,117 | $ | (1,897 | ) | $ | 3,220 |
(a) | Excludes fully amortized intangible assets. |
(b) | Intangible assets not subject to amortization have an indefinite life. |
For the year ended Dec. 31, | Estimated amortization expense (in millions) | |||
2019 | $ | 117 | ||
2020 | 104 | |||
2021 | 81 | |||
2022 | 63 | |||
2023 | 52 |
Other assets | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||
(in millions) | ||||||||||||
Corporate/bank-owned life insurance | $ | 4,970 | $ | 4,937 | $ | 5,179 | $ | 4,937 | ||||
Accounts receivable | 4,322 | 3,692 | 3,319 | 3,692 | ||||||||
Fails to deliver | 4,057 | 2,274 | 3,091 | 2,274 | ||||||||
Software | 1,710 | 1,652 | 1,706 | 1,652 | ||||||||
Prepaid pension assets | 1,444 | 1,357 | 1,479 | 1,357 | ||||||||
Equity in a joint venture and other investments | 1,178 | 1,064 | ||||||||||
Renewable energy investments | 1,201 | 1,264 | 1,174 | 1,264 | ||||||||
Equity in a joint venture and other investments | 1,156 | 1,064 | ||||||||||
Qualified affordable housing project investments | 1,068 | 999 | 1,047 | 999 | ||||||||
Income taxes receivable | 743 | 1,125 | 512 | 1,125 | ||||||||
Federal Reserve Bank stock | 465 | 484 | ||||||||||
Prepaid expense | 539 | 385 | 461 | 385 | ||||||||
Federal Reserve Bank stock | 463 | 484 | ||||||||||
Fair value of hedging derivatives | 287 | 289 | ||||||||||
Seed capital | 217 | 224 | 167 | 224 | ||||||||
Fair value of hedging derivatives | 156 | 289 | ||||||||||
Other (a) | 1,691 | 1,552 | 1,662 | 1,552 | ||||||||
Total other assets | $ | 23,737 | $ | 21,298 | $ | 21,727 | $ | 21,298 |
(a) | At |
Notes to Consolidated Financial Statements(continued) |
Non-readily marketable equity securities | Non-readily marketable equity securities | Life-to-date | Non-readily marketable equity securities | Life-to-date | ||||||||||||||||||||||||||||||||
(in millions) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||||||||
Upward adjustments | $ | 2 | $ | — | $ | 5 | $ | 2 | $ | 25 | $ | 30 | $ | 1 | $ | 2 | $ | 3 | $ | 3 | $ | 28 | $ | 31 | ||||||||||||
Downward adjustments | (1 | ) | — | — | (1 | ) | — | (2 | ) | — | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (2 | ) | ||||||||||||||||
Net adjustments | $ | 1 | $ | — | $ | 5 | $ | 1 | $ | 25 | $ | 28 | $ | 1 | $ | 1 | $ | 2 | $ | 2 | $ | 27 | $ | 29 |
Investments valued using NAV | ||||||||||||||||||||||||||||||||||||||
June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||
(dollars in millions) | Fair value | Unfunded commitments | Redemption frequency | Redemption notice period | Fair value | Unfunded commitments | Redemption frequency | Redemption notice period | Fair value | Unfunded commitments | Redemption frequency | Redemption notice period | Fair value | Unfunded commitments | Redemption frequency | Redemption notice period | ||||||||||||||||||||||
Seed capital | $ | 60 | $ | — | Daily-quarterly | 1-90 days | $ | 54 | $ | — | Daily-quarterly | 1-90 days | $ | 59 | $ | — | Daily-quarterly | 1-90 days | $ | 54 | $ | — | Daily-quarterly | 1-90 days | ||||||||||||||
Private equity investments (SBICs) (a) | 81 | 54 | N/A | 74 | 41 | N/A | 86 | 49 | N/A | 74 | 41 | N/A | ||||||||||||||||||||||||||
Other (b) | 37 | — | Daily-quarterly | 1-95 days | 87 | — | Daily-quarterly | 1-95 days | 32 | — | Daily-quarterly | 1-95 days | 87 | — | Daily-quarterly | 1-95 days | ||||||||||||||||||||||
Total | $ | 178 | $ | 54 | $ | 215 | $ | 41 | $ | 177 | $ | 49 | $ | 215 | $ | 41 |
(a) | Private equity investments include Volcker Rule-compliant investments in SBICs that invest in various sectors of the economy. Private equity investments do not have redemption rights. Distributions from such investments will be received as the underlying investments in the private equity investments, which have a life of 10 years, are liquidated. |
(b) | Primarily relates to investments in funds that relate to deferred compensation arrangements with employees. |
Notes to Consolidated Financial Statements(continued) |
Disaggregation of contract revenue by business segment (a) | Disaggregation of contract revenue by business segment (a) | Disaggregation of contract revenue by business segment (a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarter ended | Quarter ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | IS | IM | Other | Total | IS | IM | Other | Total | IS | IM | Other | Total | IS | IM | Other | Total | IS | IM | Other | Total | IS | IM | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fee revenue - contract revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment services fees: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset servicing fees | $ | 1,089 | $ | 20 | $ | — | $ | 1,109 | $ | 1,073 | $ | 20 | $ | — | $ | 1,093 | $ | 1,098 | $ | 21 | $ | 1 | $ | 1,120 | $ | 1,100 | $ | 20 | $ | 1 | $ | 1,121 | $ | 1,089 | $ | 20 | $ | — | $ | 1,109 | $ | 1,103 | $ | 21 | $ | — | $ | 1,124 | ||||||||||||||||||||||||||||
Clearing services fees (b) | 411 | — | (1 | ) | 410 | 398 | — | — | 398 | 401 | — | — | 401 | 419 | — | — | 419 | 411 | — | (1 | ) | 410 | 393 | — | — | 393 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuer services fees | 291 | — | — | 291 | 251 | — | — | 251 | 265 | — | — | 265 | 324 | — | — | 324 | 291 | — | — | 291 | 288 | — | — | 288 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury services fees | 140 | 1 | — | 141 | 132 | — | — | 132 | 140 | 1 | — | 141 | 140 | — | — | 140 | 140 | 1 | — | 141 | 136 | — | — | 136 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total investment services fees (b) | 1,931 | 21 | (1 | ) | 1,951 | 1,854 | 20 | — | 1,874 | 1,904 | 22 | 1 | 1,927 | 1,983 | 20 | 1 | 2,004 | 1,931 | 21 | (1 | ) | 1,951 | 1,920 | 21 | — | 1,941 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Investment management and performance fees (b) | 4 | 829 | — | 833 | 4 | 837 | — | 841 | 5 | 893 | — | 898 | 4 | 825 | — | 829 | 4 | 829 | — | 833 | 3 | 904 | — | 907 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing-related fees | 16 | — | 1 | 17 | 17 | — | — | 17 | 15 | — | — | 15 | 14 | — | — | 14 | 16 | — | 1 | 17 | 13 | — | 1 | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution and servicing | (13 | ) | 44 | — | 31 | (14 | ) | 45 | — | 31 | (14 | ) | 48 | — | 34 | (12 | ) | 45 | — | 33 | (13 | ) | 44 | — | 31 | (13 | ) | 48 | — | 35 | ||||||||||||||||||||||||||||||||||||||||||||||
Investment and other income | 69 | (48 | ) | — | 21 | 69 | (49 | ) | — | 20 | 69 | (50 | ) | 1 | 20 | 72 | (50 | ) | — | 22 | 69 | (48 | ) | — | 21 | 71 | (51 | ) | (1 | ) | 19 | |||||||||||||||||||||||||||||||||||||||||||||
Total fee revenue - contract revenue | 2,007 | 846 | — | 2,853 | 1,930 | 853 | — | 2,783 | 1,979 | 913 | 2 | 2,894 | 2,061 | 840 | 1 | 2,902 | 2,007 | 846 | — | 2,853 | 1,994 | 922 | — | 2,916 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Fee and other revenue - not in scope of ASC 606 (c)(d) | 220 | 4 | 41 | 265 | 224 | 11 | 30 | 265 | 254 | 28 | 39 | 321 | 230 | (7 | ) | 3 | 226 | 220 | 4 | 41 | 265 | 236 | 16 | 7 | 259 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total fee and other revenue | $ | 2,227 | $ | 850 | $ | 41 | $ | 3,118 | $ | 2,154 | $ | 864 | $ | 30 | $ | 3,048 | $ | 2,233 | $ | 941 | $ | 41 | $ | 3,215 | $ | 2,291 | $ | 833 | $ | 4 | $ | 3,128 | $ | 2,227 | $ | 850 | $ | 41 | $ | 3,118 | $ | 2,230 | $ | 938 | $ | 7 | $ | 3,175 |
(a) | Business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting. |
(b) | In the first quarter of 2019, we reclassified certain platform-related fees to clearing services fees from investment management and performance fees. Prior periods have been reclassified. |
(c) | Primarily includes foreign exchange and other trading revenue, financing-related fees, asset servicing fees, investment and other income and net securities gains (losses), all of which are accounted for using other accounting guidance. |
(d) | The Investment Management business includes income from consolidated investment management funds, net of noncontrolling interests, of $- million in the third quarter of 2019, $6 million in the second quarter of 2019 |
Notes to Consolidated Financial Statements(continued) |
Disaggregation of contract revenue by business segment (a) | Disaggregation of contract revenue by business segment (a) | Disaggregation of contract revenue by business segment (a) | ||||||||||||||||||||||||||||||||||||||||||||||||
Year-to-date | Year-to-date | |||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | IS | IM | Other | Total | IS | IM | Other | Total | IS | IM | Other | Total | IS | IM | Other | Total | ||||||||||||||||||||||||||||||||||
Fee revenue - contract revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Investment services fees: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Asset servicing fees | $ | 2,162 | $ | 40 | $ | — | $ | 2,202 | $ | 2,215 | $ | 46 | $ | 1 | $ | 2,262 | $ | 3,262 | $ | 60 | $ | 1 | $ | 3,323 | $ | 3,318 | $ | 67 | $ | 1 | $ | 3,386 | ||||||||||||||||||
Clearing services fees (b) | 809 | — | (1 | ) | 808 | 824 | — | 1 | 825 | 1,228 | — | (1 | ) | 1,227 | 1,217 | — | 1 | 1,218 | ||||||||||||||||||||||||||||||||
Issuer services fees | 542 | — | — | 542 | 525 | — | — | 525 | 866 | — | — | 866 | 813 | — | — | 813 | ||||||||||||||||||||||||||||||||||
Treasury services fees | 272 | 1 | — | 273 | 278 | 1 | — | 279 | 412 | 1 | — | 413 | 414 | 1 | — | 415 | ||||||||||||||||||||||||||||||||||
Total investment services fees (b) | 3,785 | 41 | (1 | ) | 3,825 | 3,842 | 47 | 2 | 3,891 | 5,768 | 61 | — | 5,829 | 5,762 | 68 | 2 | 5,832 | |||||||||||||||||||||||||||||||||
Investment management and performance fees (b) | 8 | 1,666 | — | 1,674 | 9 | 1,835 | — | 1,844 | 12 | 2,491 | — | 2,503 | 12 | 2,739 | — | 2,751 | ||||||||||||||||||||||||||||||||||
Financing-related fees | 33 | — | 1 | 34 | 32 | — | — | 32 | 47 | — | 1 | 48 | 45 | — | 1 | 46 | ||||||||||||||||||||||||||||||||||
Distribution and servicing | (27 | ) | 89 | — | 62 | (28 | ) | 98 | — | 70 | (39 | ) | 134 | — | 95 | (41 | ) | 146 | — | 105 | ||||||||||||||||||||||||||||||
Investment and other income | 138 | (97 | ) | — | 41 | 138 | (101 | ) | 1 | 38 | 210 | (147 | ) | — | 63 | 209 | (152 | ) | — | 57 | ||||||||||||||||||||||||||||||
Total fee revenue - contract revenue | 3,937 | 1,699 | — | 5,636 | 3,993 | 1,879 | 3 | 5,875 | 5,998 | 2,539 | 1 | 8,538 | 5,987 | 2,801 | 3 | 8,791 | ||||||||||||||||||||||||||||||||||
Fee and other revenue - not in scope of ASC 606 (c)(d) | 444 | 15 | 71 | 530 | 490 | 74 | 46 | 610 | 674 | 8 | 74 | 756 | 726 | 90 | 53 | 869 | ||||||||||||||||||||||||||||||||||
Total fee and other revenue | $ | 4,381 | $ | 1,714 | $ | 71 | $ | 6,166 | $ | 4,483 | $ | 1,953 | $ | 49 | $ | 6,485 | $ | 6,672 | $ | 2,547 | $ | 75 | $ | 9,294 | $ | 6,713 | $ | 2,891 | $ | 56 | $ | 9,660 |
(a) | Business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles used for consolidated financial reporting. |
(b) | In the first quarter of 2019, we reclassified certain platform-related fees to clearing services fees from investment management and performance fees. Prior periods have been reclassified. |
(c) | Primarily includes foreign exchange and other trading revenue, financing-related fees, asset servicing fees, investment and other income and net securities gains (losses), all of which are accounted for using other accounting guidance. |
(d) | The Investment Management business includes income from consolidated investment management funds, net of noncontrolling interests, of $22 million in the first |
Notes to Consolidated Financial Statements(continued) |
Net interest revenue | Quarter ended | Year-to-date | ||||||||||||||||
(in millions) | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | |||||||||||||
Interest revenue | ||||||||||||||||||
Deposits with the Federal Reserve and other central banks | $ | 102 | $ | 113 | $ | 125 | $ | 354 | $ | 387 | ||||||||
Deposits with banks | 73 | 64 | 59 | 200 | 157 | |||||||||||||
Federal funds sold and securities purchased under resale agreements | 660 | 568 | 281 | 1,702 | 681 | |||||||||||||
Margin loans | 104 | 119 | 129 | 358 | 372 | |||||||||||||
Non-margin loans | 287 | (a) | 365 | 344 | 1,007 | (a) | 994 | |||||||||||
Securities: | ||||||||||||||||||
Taxable | 669 | 687 | 650 | 2,062 | 1,846 | |||||||||||||
Exempt from federal income taxes | 7 | 10 | 14 | 29 | 43 | |||||||||||||
Total securities | 676 | 697 | 664 | 2,091 | 1,889 | |||||||||||||
Trading securities | 40 | 39 | 32 | 115 | 88 | |||||||||||||
Total interest revenue | 1,942 | 1,965 | 1,634 | 5,827 | 4,568 | |||||||||||||
Interest expense | ||||||||||||||||||
Deposits | 437 | 432 | 237 | 1,260 | 527 | |||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 443 | 372 | 190 | 1,146 | 455 | |||||||||||||
Trading liabilities | 8 | 11 | 7 | 26 | 23 | |||||||||||||
Other borrowed funds | 10 | 20 | 16 | 54 | 39 | |||||||||||||
Commercial paper | 22 | 18 | 16 | 48 | 49 | |||||||||||||
Customer payables | 59 | 69 | 51 | 198 | 127 | |||||||||||||
Long-term debt | 233 | 241 | 226 | 722 | 622 | |||||||||||||
Total interest expense | 1,212 | 1,163 | 743 | 3,454 | 1,842 | |||||||||||||
Net interest revenue | 730 | 802 | 891 | 2,373 | 2,726 | |||||||||||||
Provision for credit losses | (16 | ) | (8 | ) | (3 | ) | (17 | ) | (11 | ) | ||||||||
Net interest revenue after provision for credit losses | $ | 746 | $ | 810 | $ | 894 | $ | 2,390 | $ | 2,737 |
(a) | Includes the impact of a lease-related impairment of $70 million. |
Notes to Consolidated Financial Statements (continued) |
Net interest revenue | Quarter ended | Year-to-date | ||||||||||||||
(in millions) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||
Interest revenue | ||||||||||||||||
Deposits with the Federal Reserve and other central banks | $ | 113 | $ | 139 | $ | 136 | $ | 252 | $ | 262 | ||||||
Deposits with banks | 64 | 63 | 56 | 127 | 98 | |||||||||||
Federal funds sold and securities purchased under resale agreements | 568 | 474 | 230 | 1,042 | 400 | |||||||||||
Margin loans | 119 | 135 | 128 | 254 | 243 | |||||||||||
Non-margin loans | 365 | 355 | 345 | 720 | 650 | |||||||||||
Securities: | ||||||||||||||||
Taxable | 687 | 706 | 615 | 1,393 | 1,196 | |||||||||||
Exempt from federal income taxes | 10 | 12 | 14 | 22 | 29 | |||||||||||
Total securities | 697 | 718 | 629 | 1,415 | 1,225 | |||||||||||
Trading securities | 39 | 36 | 29 | 75 | 56 | |||||||||||
Total interest revenue | 1,965 | 1,920 | 1,553 | 3,885 | 2,934 | |||||||||||
Interest expense | ||||||||||||||||
Deposits | 432 | 391 | 173 | 823 | 290 | |||||||||||
Federal funds purchased and securities sold under repurchase agreements | 372 | 331 | 158 | 703 | 265 | |||||||||||
Trading liabilities | 11 | 7 | 7 | 18 | 16 | |||||||||||
Other borrowed funds | 20 | 24 | 14 | 44 | 23 | |||||||||||
Commercial paper | 18 | 8 | 21 | 26 | 33 | |||||||||||
Customer payables | 69 | 70 | 45 | 139 | 76 | |||||||||||
Long-term debt | 241 | 248 | 219 | 489 | 396 | |||||||||||
Total interest expense | 1,163 | 1,079 | 637 | 2,242 | 1,099 | |||||||||||
Net interest revenue | 802 | 841 | 916 | 1,643 | 1,835 | |||||||||||
Provision for credit losses | (8 | ) | 7 | (3 | ) | (1 | ) | (8 | ) | |||||||
Net interest revenue after provision for credit losses | $ | 810 | $ | 834 | $ | 919 | $ | 1,644 | $ | 1,843 |
Net periodic benefit (credit) cost | Quarter ended | Quarter ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | ||||||||||||||||||||||||||||||||||||||||
Service cost | $ | — | $ | 3 | $ | — | $ | — | $ | 3 | $ | — | $ | — | $ | 7 | $ | — | $ | — | $ | 3 | $ | — | $ | — | $ | 3 | $ | — | $ | — | $ | 7 | $ | 1 | ||||||||||||||||||||||
Interest cost | 45 | 8 | 1 | 44 | 8 | 2 | 42 | 8 | 2 | 44 | 8 | 2 | 45 | 8 | 1 | 42 | 8 | 1 | ||||||||||||||||||||||||||||||||||||||||
Expected return on assets | (84 | ) | (12 | ) | (2 | ) | (84 | ) | (11 | ) | (2 | ) | (85 | ) | (14 | ) | (2 | ) | (84 | ) | (11 | ) | (1 | ) | (84 | ) | (12 | ) | (2 | ) | (85 | ) | (14 | ) | (2 | ) | ||||||||||||||||||||||
Other | 13 | 1 | — | 13 | — | (1 | ) | 17 | 6 | — | 13 | — | (1 | ) | 13 | 1 | — | 19 | 5 | (1 | ) | |||||||||||||||||||||||||||||||||||||
Net periodic benefit (credit) cost | $ | (26 | ) | $ | — | $ | (1 | ) | $ | (27 | ) | $ | — | $ | (1 | ) | $ | (26 | ) | $ | 7 | $ | — | $ | (27 | ) | $ | — | $ | — | $ | (26 | ) | $ | — | $ | (1 | ) | $ | (24 | ) | $ | 6 | $ | (1 | ) |
Net periodic benefit (credit) cost | Year-to-date | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | |||||||||||||||||||||||||||||||||||
(in millions) | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | ||||||||||||||||||||||||||
Service cost | $ | — | $ | 6 | $ | — | $ | — | $ | 14 | $ | — | $ | — | $ | 9 | $ | — | $ | — | $ | 21 | $ | 1 | ||||||||||||||
Interest cost | 89 | 16 | 3 | 85 | 16 | 4 | 133 | 24 | 5 | 127 | 24 | 5 | ||||||||||||||||||||||||||
Expected return on assets | (168 | ) | (23 | ) | (4 | ) | (170 | ) | (29 | ) | (4 | ) | (252 | ) | (34 | ) | (5 | ) | (255 | ) | (43 | ) | (6 | ) | ||||||||||||||
Other | 26 | 1 | (1 | ) | 34 | 12 | (1 | ) | 39 | 1 | (2 | ) | 53 | 17 | (2 | ) | ||||||||||||||||||||||
Net periodic benefit (credit) cost | $ | (53 | ) | $ | — | $ | (2 | ) | $ | (51 | ) | $ | 13 | $ | (1 | ) | $ | (80 | ) | $ | — | $ | (2 | ) | $ | (75 | ) | $ | 19 | $ | (2 | ) |
Notes to Consolidated Financial Statements(continued) |
Consolidated investments | Consolidated investments | |||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||
(in millions) | Investment Management funds | Securitization | Total consolidated investments | Investment Management funds | Securitization | Total consolidated investments | Investment Management funds | Securitization | Total consolidated investments | Investment Management funds | Securitization | Total consolidated investments | ||||||||||||||||||||||||||||||
Trading assets | $ | 314 | $ | 400 | $ | 714 | $ | 243 | $ | 400 | $ | 643 | $ | 349 | $ | 400 | $ | 749 | $ | 243 | $ | 400 | $ | 643 | ||||||||||||||||||
Other assets | 23 | — | 23 | 220 | — | 220 | 32 | — | 32 | 220 | — | 220 | ||||||||||||||||||||||||||||||
Total assets | $ | 337 | (a) | $ | 400 | $ | 737 | $ | 463 | (b) | $ | 400 | $ | 863 | $ | 381 | (a) | $ | 400 | $ | 781 | $ | 463 | (b) | $ | 400 | $ | 863 | ||||||||||||||
Trading liabilities | $ | 7 | $ | — | $ | 7 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
Other liabilities | $ | 6 | $ | 383 | $ | 389 | $ | 2 | $ | 371 | $ | 373 | 8 | 386 | 394 | 2 | 371 | 373 | ||||||||||||||||||||||||
Total liabilities | $ | 6 | (a) | $ | 383 | $ | 389 | $ | 2 | (b) | $ | 371 | $ | 373 | $ | 15 | (a) | $ | 386 | $ | 401 | $ | 2 | (b) | $ | 371 | $ | 373 | ||||||||||||||
Nonredeemable noncontrolling interests | $ | 166 | (a) | $ | — | $ | 166 | $ | 101 | (b) | $ | — | $ | 101 | $ | 203 | (a) | $ | — | $ | 203 | $ | 101 | (b) | $ | — | $ | 101 |
(a) | Includes voting model entities (“VMEs”) with assets of |
(b) | Includes VMEs with assets of $253 million, liabilities of $2 million and nonredeemable noncontrolling interests of less than $1 million. |
Non-consolidated VIEs | Non-consolidated VIEs | Non-consolidated VIEs | ||||||||||||||||||||||||||||||||||||
June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||
(in millions) | Assets | Liabilities | Maximum loss exposure | Assets | Liabilities | Maximum loss exposure | Assets | Liabilities | Maximum loss exposure | Assets | Liabilities | Maximum loss exposure | ||||||||||||||||||||||||||
Securities - Available-for-sale (a) | $ | 214 | $ | — | $ | 214 | $ | 214 | $ | — | $ | 214 | $ | 206 | $ | — | $ | 206 | $ | 214 | $ | — | $ | 214 | ||||||||||||||
Other | 2,496 | 500 | 2,996 | 2,450 | 479 | 2,929 | 2,436 | 503 | 2,941 | 2,450 | 479 | 2,929 |
(a) | Includes investments in the Company’s sponsored CLOs. |
Notes to Consolidated Financial Statements(continued) |
Preferred stock summary (a) | Preferred stock summary (a) | Total shares issued and outstanding | Carrying value (b) | Preferred stock summary (a) | Total shares issued and outstanding | Carrying value (b) | ||||||||||||||||||
(in millions) | (in millions) | |||||||||||||||||||||||
June 30, 2019 | Dec. 31, 2018 | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||||
Per annum dividend rate | Per annum dividend rate | |||||||||||||||||||||||
Series A | Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000% | 5,001 | 5,001 | $ | 500 | $ | 500 | Greater of (i) three-month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000% | 5,001 | 5,001 | $ | 500 | $ | 500 | ||||||||||
Series C | 5.2% | 5,825 | 5,825 | 568 | 568 | 5.2% | 5,825 | 5,825 | 568 | 568 | ||||||||||||||
Series D | 4.50% to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46% | 5,000 | 5,000 | 494 | 494 | 4.50% to but excluding June 20, 2023, then a floating rate equal to the three-month LIBOR plus 2.46% | 5,000 | 5,000 | 494 | 494 | ||||||||||||||
Series E | 4.95% to and including June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42% | 10,000 | 10,000 | 990 | 990 | 4.95% to and including June 20, 2020, then a floating rate equal to the three-month LIBOR plus 3.42% | 10,000 | 10,000 | 990 | 990 | ||||||||||||||
Series F | 4.625% to and including Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131% | 10,000 | 10,000 | 990 | 990 | 4.625% to and including Sept. 20, 2026, then a floating rate equal to the three-month LIBOR plus 3.131% | 10,000 | 10,000 | 990 | 990 | ||||||||||||||
Total | Total | 35,826 | 35,826 | $ | 3,542 | $ | 3,542 | Total | 35,826 | 35,826 | $ | 3,542 | $ | 3,542 |
(a) | All outstanding preferred stock is noncumulative perpetual preferred stock with a liquidation preference of $100,000 per share. |
(b) | The carrying value of the Series C, Series D, Series E and Series F preferred stock is recorded net of issuance costs. |
Preferred dividends paid | Preferred dividends paid | Preferred dividends paid | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in millions, except per share amounts) | Depositary shares per share | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | Depositary shares per share | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share | Total dividend | Per share | Total dividend | Per share | Total dividend | Per share | Total dividend | Per share | Total dividend | Per share | Total dividend | Per share | Total dividend | Per share | Total dividend | Per share | Total dividend | Per share | Total dividend | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | 100 | (a) | $ | 1,022.22 | $ | 5 | $ | 1,000.00 | $ | 5 | $ | 1,022.22 | $ | 5 | $ | 2,022.22 | $ | 10 | $ | 2,022.22 | $ | 10 | 100 | (a) | $ | 1,022.22 | $ | 5 | $ | 1,022.22 | $ | 5 | $ | 1,022.22 | $ | 5 | $ | 3,044.44 | $ | 15 | $ | 3,044.44 | $ | 15 | ||||||||||||||||||||||||||||||||
Series C | 4,000 | 1,300.00 | 7 | 1,300.00 | 8 | 1,300.00 | 7 | 2,600.00 | 15 | 2,600.00 | 15 | 4,000 | 1,300.00 | 8 | 1,300.00 | 7 | 1,300.00 | 8 | 3,900.00 | 23 | 3,900.00 | 23 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series D | 100 | 2,250.00 | 11 | N/A | — | 2,250.00 | 11 | 2,250.00 | 11 | 2,250.00 | 11 | 100 | N/A | — | 2,250.00 | 11 | N/A | — | 2,250.00 | 11 | 2,250.00 | 11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series E | 100 | 2,475.00 | 25 | N/A | — | 2,475.00 | 25 | 2,475.00 | 25 | 2,475.00 | 25 | 100 | N/A | — | 2,475.00 | 25 | N/A | — | 2,475.00 | 25 | 2,475.00 | 25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series F | 100 | N/A | — | 2,312.50 | 23 | N/A | — | 2,312.50 | 23 | 2,312.50 | 23 | 100 | 2,312.50 | 23 | N/A | — | 2,312.50 | 23 | 4,625.00 | 46 | 4,625.00 | 46 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 48 | $ | 36 | $ | 48 | $ | 84 | $ | 84 | $ | 36 | $ | 48 | $ | 36 | $ | 120 | $ | 120 |
(a) | Represents Normal Preferred Capital Securities. |
Notes to Consolidated Financial Statements(continued) |
Components of other comprehensive income (loss) | Quarter ended | Quarter ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | Sept. 30, 2019 | June 30, 2019 | Sept. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | ||||||||||||||||||||||||||||||||||||||||
Foreign currency translation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments arising during the period (a) | $ | 29 | $ | (19 | ) | $ | 10 | $ | 27 | $ | 2 | $ | 29 | $ | (302 | ) | $ | (98 | ) | $ | (400 | ) | $ | (213 | ) | $ | (63 | ) | $ | (276 | ) | $ | 29 | $ | (19 | ) | $ | 10 | $ | (21 | ) | $ | (39 | ) | $ | (60 | ) | |||||||||||
Total foreign currency translation | 29 | (19 | ) | 10 | 27 | 2 | 29 | (302 | ) | (98 | ) | (400 | ) | (213 | ) | (63 | ) | (276 | ) | 29 | (19 | ) | 10 | (21 | ) | (39 | ) | (60 | ) | |||||||||||||||||||||||||||||
Unrealized gain (loss) on assets available-for-sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) arising during period | 384 | (97 | ) | 287 | 322 | (83 | ) | 239 | (103 | ) | 39 | (64 | ) | 88 | (25 | ) | 63 | 384 | (97 | ) | 287 | (190 | ) | 46 | (144 | ) | ||||||||||||||||||||||||||||||||
Reclassification adjustment (b) | (7 | ) | 2 | (5 | ) | (1 | ) | — | (1 | ) | (1 | ) | 1 | — | 1 | — | 1 | (7 | ) | 2 | (5 | ) | — | — | — | |||||||||||||||||||||||||||||||||
Net unrealized gain (loss) on assets available-for-sale | 377 | (95 | ) | 282 | 321 | (83 | ) | 238 | (104 | ) | 40 | (64 | ) | 89 | (25 | ) | 64 | 377 | (95 | ) | 282 | (190 | ) | 46 | (144 | ) | ||||||||||||||||||||||||||||||||
Defined benefit plans: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) gain arising during the period | — | — | — | (11 | ) | 2 | (9 | ) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b) | 12 | (2 | ) | 10 | 13 | (3 | ) | 10 | 22 | (6 | ) | 16 | 13 | (3 | ) | 10 | 12 | (2 | ) | 10 | 23 | (5 | ) | 18 | ||||||||||||||||||||||||||||||||||
Total defined benefit plans | 12 | (2 | ) | 10 | 2 | (1 | ) | 1 | 22 | (6 | ) | 16 | 13 | (3 | ) | 10 | 12 | (2 | ) | 10 | 23 | (5 | ) | 18 | ||||||||||||||||||||||||||||||||||
Unrealized gain (loss) on cash flow hedges: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized hedge gain (loss) arising during period | 2 | (2 | ) | — | 6 | (4 | ) | 2 | (17 | ) | 3 | (14 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Unrealized hedge (loss) gain arising during period | (9 | ) | 4 | (5 | ) | 2 | (2 | ) | — | (9 | ) | 2 | (7 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification of net loss (gain) to net income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FX contracts - other revenue | — | — | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts - interest expense | 1 | — | 1 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
FX contracts - staff expense | — | — | — | 1 | 2 | 3 | (2 | ) | 1 | (1 | ) | (2 | ) | — | (2 | ) | — | — | — | 4 | (1 | ) | 3 | |||||||||||||||||||||||||||||||||||
Total reclassifications to net income (b) | — | — | — | 1 | 2 | 3 | (1 | ) | 1 | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Net unrealized gain (loss) on cash flow hedges | 2 | (2 | ) | — | 7 | (2 | ) | 5 | (18 | ) | 4 | (14 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | $ | 420 | $ | (118 | ) | $ | 302 | $ | 357 | $ | (84 | ) | $ | 273 | $ | (402 | ) | $ | (60 | ) | $ | (462 | ) | |||||||||||||||||||||||||||||||||||
Total reclassifications to net income | (1 | ) | — | (1 | ) | — | — | — | 4 | (1 | ) | 3 | ||||||||||||||||||||||||||||||||||||||||||||||
Net unrealized (loss) gain on cash flow hedges | (10 | ) | 4 | (6 | ) | 2 | (2 | ) | — | (5 | ) | 1 | (4 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive (loss) income | $ | (121 | ) | $ | (87 | ) | $ | (208 | ) | $ | 420 | $ | (118 | ) | $ | 302 | $ | (193 | ) | $ | 3 | $ | (190 | ) |
(a) | Includes the impact of hedges of net investments in foreign subsidiaries. See Note 18 for additional information. |
(b) | The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement. |
Notes to Consolidated Financial Statements (continued) |
Components of other comprehensive income (loss) | Year-to-date | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, 2019 | June 30, 2018 | Sept. 30, 2019 | Sept. 30, 2018 | |||||||||||||||||||||||||||||||||||
(in millions) | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | ||||||||||||||||||||||||||
Foreign currency translation: | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments arising during the period (a) | $ | 56 | $ | (17 | ) | $ | 39 | $ | (101 | ) | $ | (55 | ) | $ | (156 | ) | $ | (157 | ) | $ | (80 | ) | $ | (237 | ) | $ | (122 | ) | $ | (94 | ) | $ | (216 | ) | ||||
Total foreign currency translation | 56 | (17 | ) | 39 | (101 | ) | (55 | ) | (156 | ) | (157 | ) | (80 | ) | (237 | ) | (122 | ) | (94 | ) | (216 | ) | ||||||||||||||||
Unrealized gain (loss) on assets available-for-sale: | ||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) arising during period | 706 | (180 | ) | 526 | (445 | ) | 106 | (339 | ) | 794 | (205 | ) | 589 | (635 | ) | 152 | (483 | ) | ||||||||||||||||||||
Reclassification adjustment (b) | (8 | ) | 2 | (6 | ) | 48 | (11 | ) | 37 | (7 | ) | 2 | (5 | ) | 48 | (11 | ) | 37 | ||||||||||||||||||||
Net unrealized gain (loss) on assets available-for-sale | 698 | (178 | ) | 520 | (397 | ) | 95 | (302 | ) | 787 | (203 | ) | 584 | (587 | ) | 141 | (446 | ) | ||||||||||||||||||||
Defined benefit plans: | ||||||||||||||||||||||||||||||||||||||
Net gain (loss) arising during the period | (11 | ) | 2 | (9 | ) | — | — | — | ||||||||||||||||||||||||||||||
Net (loss) gain arising during the period | (11 | ) | 2 | (9 | ) | — | — | — | ||||||||||||||||||||||||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (b) | 25 | (5 | ) | 20 | 44 | (11 | ) | 33 | 38 | (8 | ) | 30 | 67 | (16 | ) | 51 | ||||||||||||||||||||||
Total defined benefit plans | 14 | (3 | ) | 11 | 44 | (11 | ) | 33 | 27 | (6 | ) | 21 | 67 | (16 | ) | 51 | ||||||||||||||||||||||
Unrealized gain (loss) on cash flow hedges: | ||||||||||||||||||||||||||||||||||||||
Unrealized hedge gain (loss) arising during period | 8 | (6 | ) | 2 | (10 | ) | 2 | (8 | ) | |||||||||||||||||||||||||||||
Unrealized (loss) gain on cash flow hedges: | ||||||||||||||||||||||||||||||||||||||
Unrealized hedge (loss) gain arising during period | (1 | ) | (2 | ) | (3 | ) | (19 | ) | 4 | (15 | ) | |||||||||||||||||||||||||||
Reclassification of net loss (gain) to net income: | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts - interest expense | 1 | — | 1 | — | — | — | ||||||||||||||||||||||||||||||||
FX contracts - staff expense | (1 | ) | 2 | 1 | (4 | ) | 1 | (3 | ) | |||||||||||||||||||||||||||||
FX contracts - other revenue | — | — | — | (3 | ) | 1 | (2 | ) | — | — | — | (3 | ) | 1 | (2 | ) | ||||||||||||||||||||||
FX contracts - staff expense | 1 | 2 | 3 | (8 | ) | 2 | (6 | ) | ||||||||||||||||||||||||||||||
Total reclassifications to net income (b) | 1 | 2 | 3 | (11 | ) | 3 | (8 | ) | ||||||||||||||||||||||||||||||
Net unrealized gain (loss) on cash flow hedges | 9 | (4 | ) | 5 | (21 | ) | 5 | (16 | ) | |||||||||||||||||||||||||||||
Total reclassifications to net income | — | 2 | 2 | (7 | ) | 2 | (5 | ) | ||||||||||||||||||||||||||||||
Net unrealized (loss) gain on cash flow hedges | (1 | ) | — | (1 | ) | (26 | ) | 6 | (20 | ) | ||||||||||||||||||||||||||||
Total other comprehensive income (loss) | $ | 777 | $ | (202 | ) | $ | 575 | $ | (475 | ) | $ | 34 | $ | (441 | ) | $ | 656 | $ | (289 | ) | $ | 367 | $ | (668 | ) | $ | 37 | $ | (631 | ) |
(a) | Includes the impact of hedges of net investments in foreign subsidiaries. See Note 18 for additional information. |
(b) | The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the consolidated income statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the consolidated income statement. |
Notes to Consolidated Financial Statements (continued) |
Assets measured at fair value on a recurring basis at June 30, 2019 | Total carrying value | |||||||||||||||||||||||||||||
Assets measured at fair value on a recurring basis at Sept. 30, 2019 | Assets measured at fair value on a recurring basis at Sept. 30, 2019 | Total carrying value | ||||||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | Netting (a) | Total carrying value | Level 1 | Level 2 | Level 3 | Netting (a) | |||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||||
Agency RMBS | $ | — | $ | 26,204 | $ | — | $ | — | $ | 26,204 | $ | — | $ | 26,391 | $ | — | $ | — | $ | 26,391 | ||||||||||
U.S. Treasury | 14,197 | — | — | — | 14,197 | 15,126 | — | — | — | 15,126 | ||||||||||||||||||||
Sovereign debt/sovereign guaranteed | 7,818 | 4,524 | — | — | 12,342 | 8,325 | 4,825 | — | — | 13,150 | ||||||||||||||||||||
Agency commercial MBS | — | 9,678 | — | — | 9,678 | — | 9,576 | — | — | 9,576 | ||||||||||||||||||||
Supranational | — | 3,914 | — | — | 3,914 | — | 4,093 | — | — | 4,093 | ||||||||||||||||||||
CLOs | — | 3,649 | — | — | 3,649 | — | 3,868 | — | — | 3,868 | ||||||||||||||||||||
Foreign covered bonds | — | 3,398 | — | — | 3,398 | — | 3,593 | — | — | 3,593 | ||||||||||||||||||||
Other ABS | — | 2,484 | — | — | 2,484 | |||||||||||||||||||||||||
U.S. government agencies | — | 2,650 | — | — | 2,650 | — | 2,477 | — | — | 2,477 | ||||||||||||||||||||
Other ABS | — | 2,470 | — | — | 2,470 | |||||||||||||||||||||||||
Non-agency commercial MBS | — | 2,005 | — | — | 2,005 | — | 2,268 | — | — | 2,268 | ||||||||||||||||||||
Foreign government agencies | — | 2,186 | — | — | 2,186 | |||||||||||||||||||||||||
Non-agency RMBS (b) | — | 1,213 | — | — | 1,213 | |||||||||||||||||||||||||
State and political subdivisions | — | 1,280 | — | — | 1,280 | — | 1,184 | — | — | 1,184 | ||||||||||||||||||||
Non-agency RMBS (b) | — | 1,221 | — | — | 1,221 | |||||||||||||||||||||||||
Corporate bonds | — | 905 | — | — | 905 | — | 879 | — | — | 879 | ||||||||||||||||||||
Other debt securities | — | 1,680 | — | — | 1,680 | — | 74 | — | — | 74 | ||||||||||||||||||||
Total available-for-sale securities | 22,015 | 63,578 | — | — | 85,593 | 23,451 | 65,111 | — | — | 88,562 | ||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||||
Debt instruments | 1,529 | 2,260 | — | — | 3,789 | 1,217 | 3,658 | — | — | 4,875 | ||||||||||||||||||||
Equity instruments (c) | 2,011 | — | — | — | 2,011 | 2,066 | — | — | — | 2,066 | ||||||||||||||||||||
Derivative assets not designated as hedging: | ||||||||||||||||||||||||||||||
Interest rate | 14 | 4,254 | — | (2,347 | ) | 1,921 | 7 | 4,833 | — | (2,585 | ) | 2,255 | ||||||||||||||||||
Foreign exchange | — | 4,083 | — | (3,213 | ) | 870 | — | 5,066 | — | (4,094 | ) | 972 | ||||||||||||||||||
Equity and other contracts | — | 46 | — | (8 | ) | 38 | — | 14 | — | (2 | ) | 12 | ||||||||||||||||||
Total derivative assets not designated as hedging | 14 | 8,383 | — | (5,568 | ) | 2,829 | 7 | 9,913 | — | (6,681 | ) | 3,239 | ||||||||||||||||||
Total trading assets | 3,554 | 10,643 | — | (5,568 | ) | 8,629 | 3,290 | 13,571 | — | (6,681 | ) | 10,180 | ||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||
Derivative assets designated as hedging: | ||||||||||||||||||||||||||||||
Foreign exchange | — | 156 | — | — | 156 | — | 287 | — | — | 287 | ||||||||||||||||||||
Total derivative assets designated as hedging | — | 156 | — | — | 156 | — | 287 | — | — | 287 | ||||||||||||||||||||
Other assets (d) | 94 | 163 | — | — | 257 | 51 | 159 | — | — | 210 | ||||||||||||||||||||
Assets measured at NAV (d) | 178 | 177 | ||||||||||||||||||||||||||||
Subtotal assets of operations at fair value | 25,663 | 74,540 | — | (5,568 | ) | 94,813 | 26,792 | 79,128 | — | (6,681 | ) | 99,416 | ||||||||||||||||||
Percentage of assets of operations prior to netting | 26 | % | 74 | % | — | % | 25 | % | 75 | % | — | % | ||||||||||||||||||
Assets of consolidated investment management funds | 305 | 32 | — | — | 337 | 359 | 22 | — | — | 381 | ||||||||||||||||||||
Total assets | $ | 25,968 | $ | 74,572 | $ | — | $ | (5,568 | ) | $ | 95,150 | $ | 27,151 | $ | 79,150 | $ | — | $ | (6,681 | ) | $ | 99,797 | ||||||||
Percentage of total assets prior to netting | 26 | % | 74 | % | — | % | 26 | % | 74 | % | — | % |
Notes to Consolidated Financial Statements (continued) |
Liabilities measured at fair value on a recurring basis at June 30, 2019 | Total carrying value | |||||||||||||||||||||||||||||
Liabilities measured at fair value on a recurring basis at Sept. 30, 2019 | Liabilities measured at fair value on a recurring basis at Sept. 30, 2019 | Total carrying value | ||||||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | Netting (a) | Total carrying value | Level 1 | Level 2 | Level 3 | Netting (a) | |||||||||||||||||||||
Trading liabilities: | ||||||||||||||||||||||||||||||
Debt instruments | $ | 1,173 | $ | 212 | $ | — | $ | — | $ | 1,385 | $ | 2,044 | $ | 90 | $ | — | $ | — | $ | 2,134 | ||||||||||
Equity instruments | 96 | — | — | — | 96 | 75 | — | — | — | 75 | ||||||||||||||||||||
Derivative liabilities not designated as hedging: | ||||||||||||||||||||||||||||||
Interest rate | 25 | 3,600 | — | (2,637 | ) | 988 | 11 | 4,070 | — | (2,532 | ) | 1,549 | ||||||||||||||||||
Foreign exchange | — | 3,952 | — | (2,660 | ) | 1,292 | — | 5,012 | — | (4,024 | ) | 988 | ||||||||||||||||||
Equity and other contracts | 3 | 4 | — | — | 7 | 1 | 19 | — | (10 | ) | 10 | |||||||||||||||||||
Total derivative liabilities not designated as hedging | 28 | 7,556 | — | (5,297 | ) | 2,287 | 12 | 9,101 | — | (6,566 | ) | 2,547 | ||||||||||||||||||
Total trading liabilities | 1,297 | 7,768 | — | (5,297 | ) | 3,768 | 2,131 | 9,191 | — | (6,566 | ) | 4,756 | ||||||||||||||||||
Long-term debt (c) | — | 383 | — | — | 383 | — | 386 | — | — | 386 | ||||||||||||||||||||
Other liabilities – derivative liabilities designated as hedging: | ||||||||||||||||||||||||||||||
Interest rate | — | 311 | — | — | 311 | — | 521 | — | — | 521 | ||||||||||||||||||||
Foreign exchange | — | 24 | — | — | 24 | — | 84 | — | — | 84 | ||||||||||||||||||||
Total other liabilities – derivative liabilities designated as hedging | — | 335 | — | — | 335 | — | 605 | — | — | 605 | ||||||||||||||||||||
Subtotal liabilities of operations at fair value | 1,297 | 8,486 | — | (5,297 | ) | 4,486 | 2,131 | 10,182 | — | (6,566 | ) | 5,747 | ||||||||||||||||||
Percentage of liabilities of operations prior to netting | 13 | % | 87 | % | — | % | 17 | % | 83 | % | — | % | ||||||||||||||||||
Liabilities of consolidated investment management funds | 1 | 5 | — | — | 6 | 2 | 13 | — | — | 15 | ||||||||||||||||||||
Total liabilities | $ | 1,298 | $ | 8,491 | $ | — | $ | (5,297 | ) | $ | 4,492 | $ | 2,133 | $ | 10,195 | $ | — | $ | (6,566 | ) | $ | 5,762 | ||||||||
Percentage of total liabilities prior to netting | 13 | % | 87 | % | — | % | 17 | % | 83 | % | — | % |
(a) | ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product. |
(b) | Includes |
(c) | Includes certain interests in securitizations. |
(d) | Includes seed capital, private equity investments and other assets. |
Notes to Consolidated Financial Statements (continued) |
Assets measured at fair value on a recurring basis at Dec. 31, 2018 | Assets measured at fair value on a recurring basis at Dec. 31, 2018 | Total carrying value | Assets measured at fair value on a recurring basis at Dec. 31, 2018 | Total carrying value | ||||||||||||||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | Netting (a) | Level 1 | Level 2 | Level 3 | Netting (a) | ||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||||
Agency RMBS | $ | — | $ | 25,308 | $ | — | $ | — | $ | 25,308 | $ | — | $ | 25,308 | $ | — | $ | — | $ | 25,308 | ||||||||||
U.S. Treasury | 20,076 | — | — | — | 20,076 | 20,076 | — | — | — | 20,076 | ||||||||||||||||||||
Sovereign debt/sovereign guaranteed | 6,613 | 4,137 | — | — | 10,750 | 6,613 | 4,137 | — | — | 10,750 | ||||||||||||||||||||
Agency commercial MBS | — | 9,691 | — | — | 9,691 | — | 9,691 | — | — | 9,691 | ||||||||||||||||||||
CLOs | — | 3,364 | — | — | 3,364 | — | 3,364 | — | — | 3,364 | ||||||||||||||||||||
Supranational | — | 2,984 | — | — | 2,984 | — | 2,984 | — | — | 2,984 | ||||||||||||||||||||
Foreign covered bonds | — | 2,878 | — | — | 2,878 | — | 2,878 | — | — | 2,878 | ||||||||||||||||||||
State and political subdivisions | — | 2,247 | — | — | 2,247 | — | 2,247 | — | — | 2,247 | ||||||||||||||||||||
Other ABS | — | 1,773 | — | — | 1,773 | — | 1,773 | — | — | 1,773 | ||||||||||||||||||||
U.S. government agencies | — | 1,657 | — | — | 1,657 | — | 1,657 | — | — | 1,657 | ||||||||||||||||||||
Non-agency commercial MBS | — | 1,464 | — | — | 1,464 | — | 1,464 | — | — | 1,464 | ||||||||||||||||||||
Non-agency RMBS (b) | — | 1,325 | — | — | 1,325 | — | 1,325 | — | — | 1,325 | ||||||||||||||||||||
Foreign government agencies | — | 1,161 | — | — | 1,161 | |||||||||||||||||||||||||
Corporate bonds | — | 1,054 | — | — | 1,054 | — | 1,054 | — | — | 1,054 | ||||||||||||||||||||
Other debt securities | — | 1,238 | — | — | 1,238 | — | 77 | — | — | 77 | ||||||||||||||||||||
Total available-for-sale securities | 26,689 | 59,120 | — | — | 85,809 | 26,689 | 59,120 | — | — | 85,809 | ||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||||
Debt instruments | 801 | 2,594 | — | — | 3,395 | 801 | 2,594 | — | — | 3,395 | ||||||||||||||||||||
Equity instruments (c) | 1,114 | — | — | — | 1,114 | 1,114 | — | — | — | 1,114 | ||||||||||||||||||||
Derivative assets not designated as hedging: | ||||||||||||||||||||||||||||||
Interest rate | 7 | 3,583 | — | (2,202 | ) | 1,388 | 7 | 3,583 | — | (2,202 | ) | 1,388 | ||||||||||||||||||
Foreign exchange | — | 4,807 | — | (3,724 | ) | 1,083 | — | 4,807 | — | (3,724 | ) | 1,083 | ||||||||||||||||||
Equity and other contracts | 9 | 59 | — | (13 | ) | 55 | 9 | 59 | — | (13 | ) | 55 | ||||||||||||||||||
Total derivative assets not designated as hedging | 16 | 8,449 | — | (5,939 | ) | 2,526 | 16 | 8,449 | — | (5,939 | ) | 2,526 | ||||||||||||||||||
Total trading assets | 1,931 | 11,043 | — | (5,939 | ) | 7,035 | 1,931 | 11,043 | — | (5,939 | ) | 7,035 | ||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||
Derivative assets designated as hedging: | ||||||||||||||||||||||||||||||
Interest rate | — | 23 | — | — | 23 | — | 23 | — | — | 23 | ||||||||||||||||||||
Foreign exchange | — | 266 | — | — | 266 | — | 266 | — | — | 266 | ||||||||||||||||||||
Total derivative assets designated as hedging | — | 289 | — | — | 289 | — | 289 | — | — | 289 | ||||||||||||||||||||
Other assets (d) | 68 | 170 | — | — | 238 | 68 | 170 | — | — | 238 | ||||||||||||||||||||
Assets measured at NAV (d) | 215 | 215 | ||||||||||||||||||||||||||||
Subtotal assets of operations at fair value | 28,688 | 70,622 | — | (5,939 | ) | 93,586 | 28,688 | 70,622 | — | (5,939 | ) | 93,586 | ||||||||||||||||||
Percentage of assets of operations prior to netting | 29 | % | 71 | % | — | % | 29 | % | 71 | % | — | % | ||||||||||||||||||
Assets of consolidated investment management funds | 210 | 253 | — | — | 463 | 210 | 253 | — | — | 463 | ||||||||||||||||||||
Total assets | $ | 28,898 | $ | 70,875 | $ | — | $ | (5,939 | ) | $ | 94,049 | $ | 28,898 | $ | 70,875 | $ | — | $ | (5,939 | ) | $ | 94,049 | ||||||||
Percentage of total assets prior to netting | 29 | % | 71 | % | — | % | 29 | % | 71 | % | — | % |
Notes to Consolidated Financial Statements (continued) |
Liabilities measured at fair value on a recurring basis at Dec. 31, 2018 | Total carrying value | ||||||||||||||
(dollars in millions) | Level 1 | Level 2 | Level 3 | Netting (a) | |||||||||||
Trading liabilities: | |||||||||||||||
Debt instruments | $ | 1,006 | $ | 118 | $ | — | $ | — | $ | 1,124 | |||||
Equity instruments | 75 | — | — | — | 75 | ||||||||||
Derivative liabilities not designated as hedging: | |||||||||||||||
Interest rate | 12 | 3,104 | — | (2,508 | ) | 608 | |||||||||
Foreign exchange | — | 5,215 | — | (3,626 | ) | 1,589 | |||||||||
Equity and other contracts | 1 | 118 | — | (36 | ) | 83 | |||||||||
Total derivative liabilities not designated as hedging | 13 | 8,437 | — | (6,170 | ) | 2,280 | |||||||||
Total trading liabilities | 1,094 | 8,555 | — | (6,170 | ) | 3,479 | |||||||||
Long-term debt (c) | — | 371 | — | — | 371 | ||||||||||
Other liabilities – derivative liabilities designated as hedging: | |||||||||||||||
Interest rate | — | 74 | — | — | 74 | ||||||||||
Foreign exchange | — | 14 | — | — | 14 | ||||||||||
Total other liabilities – derivative liabilities designated as hedging | — | 88 | — | — | 88 | ||||||||||
Subtotal liabilities of operations at fair value | 1,094 | 9,014 | — | (6,170 | ) | 3,938 | |||||||||
Percentage of liabilities of operations prior to netting | 11 | % | 89 | % | — | % | |||||||||
Liabilities of consolidated investment management funds | 2 | — | — | — | 2 | ||||||||||
Total liabilities | $ | 1,096 | $ | 9,014 | $ | — | $ | (6,170 | ) | $ | 3,940 | ||||
Percentage of total liabilities prior to netting | 11 | % | 89 | % | — | % |
(a) | ASC 815, Derivatives and Hedging, permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product. |
(b) | Includes $832 million in Level 2 that was included in the former Grantor Trust. |
(c) | Includes certain interests in securitizations. |
(d) | Includes seed capital, private equity investments and other assets. |
Notes to Consolidated Financial Statements (continued) |
Details of certain available-for-sale securities measured at fair value on a recurring basis | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||
Total carrying value | Ratings (a) | Total carrying value | Ratings (a) | Total carrying value | Ratings (a) | Total carrying value | Ratings (a) | |||||||||||||||||||||||||||||||||||||||||||
AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | |||||||||||||||||||||||||||||||||||
(dollars in millions) | (b) | (b) | ||||||||||||||||||||||||||||||||||||||||||||||||
Non-agency RMBS (c), originated in: | ||||||||||||||||||||||||||||||||||||||||||||||||||
2007-2019 | $ | 311 | 23 | % | 2 | % | 3 | % | 72 | % | $ | 315 | 15 | % | 2 | % | 3 | % | 80 | % | $ | 376 | 41 | % | 1 | % | 3 | % | 55 | % | $ | 315 | 15 | % | 2 | % | 3 | % | 80 | % | ||||||||||
2006 | 330 | — | 19 | 1 | 80 | 363 | — | 19 | — | 81 | 310 | — | 20 | — | 80 | 363 | — | 19 | — | 81 | ||||||||||||||||||||||||||||||
2005 | 356 | 8 | 1 | 8 | 83 | 396 | 9 | 1 | 7 | 83 | 333 | 7 | 1 | 8 | 84 | 396 | 9 | 1 | 7 | 83 | ||||||||||||||||||||||||||||||
2004 and earlier | 224 | 16 | 23 | 11 | 50 | 251 | 16 | 24 | 11 | 49 | 194 | 17 | 21 | 11 | 51 | 251 | 16 | 24 | 11 | 49 | ||||||||||||||||||||||||||||||
Total non-agency RMBS | $ | 1,221 | 11 | % | 10 | % | 5 | % | 74 | % | $ | 1,325 | 9 | % | 11 | % | 5 | % | 75 | % | $ | 1,213 | 17 | % | 9 | % | 5 | % | 69 | % | $ | 1,325 | 9 | % | 11 | % | 5 | % | 75 | % | ||||||||||
Non-agency commercial MBS originated in 2009-2019 | $ | 2,005 | 98 | % | 2 | % | — | % | — | % | $ | 1,464 | 96 | % | 4 | % | — | % | — | % | ||||||||||||||||||||||||||||||
Non-agency commercial MBS originated in: | ||||||||||||||||||||||||||||||||||||||||||||||||||
2009-2019 | $ | 2,268 | 98 | % | 2 | % | — | % | — | % | $ | 1,464 | 96 | % | 4 | % | — | % | — | % | ||||||||||||||||||||||||||||||
Foreign covered bonds: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Canada | $ | 1,639 | 100 | % | — | % | — | % | — | % | $ | 1,524 | 100 | % | — | % | — | % | — | % | $ | 1,656 | 100 | % | — | % | — | % | — | % | $ | 1,524 | 100 | % | — | % | — | % | — | % | ||||||||||
United Kingdom | 798 | 100 | — | — | — | 529 | 100 | — | — | — | 880 | 100 | — | — | — | 529 | 100 | — | — | — | ||||||||||||||||||||||||||||||
Australia | 414 | 100 | — | — | — | 333 | 100 | — | — | — | 412 | 100 | — | — | — | 333 | 100 | — | — | — | ||||||||||||||||||||||||||||||
Sweden | 274 | 100 | — | — | — | 187 | 100 | — | — | — | 269 | 100 | — | — | — | 187 | 100 | — | — | — | ||||||||||||||||||||||||||||||
Other | 273 | 100 | — | — | — | 305 | 100 | — | — | — | 376 | 100 | — | — | — | 305 | 100 | — | — | — | ||||||||||||||||||||||||||||||
Total foreign covered bonds | $ | 3,398 | 100 | % | — | % | — | % | — | % | $ | 2,878 | 100 | % | — | % | — | % | — | % | $ | 3,593 | 100 | % | — | % | — | % | — | % | $ | 2,878 | 100 | % | — | % | — | % | — | % | ||||||||||
Sovereign debt/sovereign guaranteed: | ||||||||||||||||||||||||||||||||||||||||||||||||||
United Kingdom | $ | 3,133 | 100 | % | — | % | — | % | — | % | $ | 2,153 | 100 | % | — | % | — | % | — | % | $ | 3,815 | 100 | % | — | % | — | % | — | % | $ | 2,153 | 100 | % | — | % | — | % | — | % | ||||||||||
Germany | 2,198 | 100 | — | — | — | 1,826 | 100 | — | — | — | 2,120 | 100 | — | — | — | 1,826 | 100 | — | — | — | ||||||||||||||||||||||||||||||
France | 1,424 | 100 | — | — | — | 1,548 | 100 | — | — | — | 1,473 | 100 | — | — | — | 1,548 | 100 | — | — | — | ||||||||||||||||||||||||||||||
Italy | 1,393 | — | — | 100 | — | 939 | — | — | 100 | — | ||||||||||||||||||||||||||||||||||||||||
Spain | 1,309 | — | 2 | 98 | — | 1,365 | — | — | 100 | — | 1,382 | — | 5 | 95 | — | 1,365 | — | — | 100 | — | ||||||||||||||||||||||||||||||
Italy | 1,302 | — | — | 100 | — | 939 | — | — | 100 | — | ||||||||||||||||||||||||||||||||||||||||
Netherlands | 811 | 100 | — | — | — | 875 | 100 | — | — | — | 774 | 100 | — | — | — | 875 | 100 | — | — | — | ||||||||||||||||||||||||||||||
Canada | 478 | 100 | — | — | — | 378 | 100 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Hong Kong | 504 | 100 | — | — | — | 450 | 100 | — | — | — | 465 | 100 | — | — | — | 450 | 100 | — | — | — | ||||||||||||||||||||||||||||||
Canada | 485 | 100 | — | — | — | 378 | 100 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Singapore | 443 | 100 | — | — | — | 165 | 100 | — | — | — | 434 | 100 | — | — | — | 165 | 100 | — | — | — | ||||||||||||||||||||||||||||||
Ireland | 368 | — | 100 | — | — | 625 | — | 100 | — | — | 349 | — | 100 | — | — | 625 | — | 100 | — | — | ||||||||||||||||||||||||||||||
Other (d) | 365 | 68 | 1 | — | 31 | 426 | 75 | — | — | 25 | 467 | 53 | 23 | — | 24 | 426 | 75 | — | — | 25 | ||||||||||||||||||||||||||||||
Total sovereign debt/sovereign guaranteed | $ | 12,342 | 75 | % | 3 | % | 21 | % | 1 | % | $ | 10,750 | 72 | % | 6 | % | 21 | % | 1 | % | $ | 13,150 | 75 | % | 4 | % | 21 | % | — | % | $ | 10,750 | 72 | % | 6 | % | 21 | % | 1 | % | ||||||||||
Foreign government agencies: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Germany | $ | 843 | 100 | % | — | % | — | % | — | % | $ | 401 | 100 | % | — | % | — | % | — | % | ||||||||||||||||||||||||||||||
Netherlands | 684 | 100 | — | — | — | 461 | 100 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Sweden | 205 | 100 | — | — | — | 23 | 100 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other | 454 | 76 | 24 | — | — | 276 | 100 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Total foreign government agencies | $ | 2,186 | 95 | % | 5 | % | — | % | — | % | $ | 1,161 | 100 | % | — | % | — | % | — | % |
(a) | Represents ratings by S&P or the equivalent. |
(b) | At |
(c) | Includes |
(d) | Includes non-investment grade sovereign debt/sovereign guaranteed securities related to Brazil of $113 million at |
Assets measured at fair value on a nonrecurring basis | June 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||
Total carrying value | Total carrying value | ||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Loans (a) | $ | — | $ | 58 | $ | 4 | $ | 62 | $ | — | $ | 64 | $ | 4 | $ | 68 | |||||||||
Other assets (b) | — | 63 | — | 63 | — | 57 | — | 57 | |||||||||||||||||
Total assets at fair value on a nonrecurring basis | $ | — | $ | 121 | $ | 4 | $ | 125 | $ | — | $ | 121 | $ | 4 | $ | 125 |
Notes to Consolidated Financial Statements(continued) |
Assets measured at fair value on a nonrecurring basis | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||
Total carrying value | Total carrying value | ||||||||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
Loans (a) | $ | — | $ | 59 | $ | 4 | $ | 63 | $ | — | $ | 64 | $ | 4 | $ | 68 | |||||||||
Other assets (b) | — | 64 | — | 64 | — | 57 | — | 57 | |||||||||||||||||
Total assets at fair value on a nonrecurring basis | $ | — | $ | 123 | $ | 4 | $ | 127 | $ | — | $ | 121 | $ | 4 | $ | 125 |
(a) | The fair value of these loans decreased $1 million in the quarter ended Sept. 30, 2019 and less than $1 million in the |
(b) | Includes non-readily marketable equity securities carried at cost with upward or downward adjustments and other assets received in satisfaction of debt. |
Summary of financial instruments | June 30, 2019 | ||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying amount | ||||||||||
Assets: | |||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | — | $ | 69,700 | $ | — | $ | 69,700 | $ | 69,700 | |||||
Interest-bearing deposits with banks | — | 15,515 | — | 15,515 | 15,491 | ||||||||||
Federal funds sold and securities purchased under resale agreements | — | 61,201 | — | 61,201 | 61,201 | ||||||||||
Securities held-to-maturity | 5,344 | 29,351 | — | 34,695 | 34,549 | ||||||||||
Loans (a) | — | 51,425 | — | 51,425 | 51,025 | ||||||||||
Other financial assets | 5,556 | 1,316 | — | 6,872 | 6,872 | ||||||||||
Total | $ | 10,900 | $ | 228,508 | $ | — | $ | 239,408 | $ | 238,838 | |||||
Liabilities: | |||||||||||||||
Noninterest-bearing deposits | $ | — | $ | 58,255 | $ | — | $ | 58,255 | $ | 58,255 | |||||
Interest-bearing deposits | — | 193,698 | — | 193,698 | 194,622 | ||||||||||
Federal funds purchased and securities sold under repurchase agreements | — | 11,757 | — | 11,757 | 11,757 | ||||||||||
Payables to customers and broker-dealers | — | 18,946 | — | 18,946 | 18,946 | ||||||||||
Commercial paper | — | 8,894 | — | 8,894 | 8,894 | ||||||||||
Borrowings | — | 2,283 | — | 2,283 | 2,283 | ||||||||||
Long-term debt | — | 28,365 | — | 28,365 | 27,820 | ||||||||||
Total | $ | — | $ | 322,198 | $ | — | $ | 322,198 | $ | 322,577 |
Summary of financial instruments | Dec. 31, 2018 | ||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying amount | ||||||||||
Assets: | |||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | — | $ | 67,988 | $ | — | $ | 67,988 | $ | 67,988 | |||||
Interest-bearing deposits with banks | — | 14,168 | — | 14,168 | 14,148 | ||||||||||
Federal funds sold and securities purchased under resale agreements | — | 46,795 | — | 46,795 | 46,795 | ||||||||||
Securities held-to-maturity | 5,512 | 27,790 | — | 33,302 | 33,982 | ||||||||||
Loans (a) | — | 55,142 | — | 55,142 | 55,161 | ||||||||||
Other financial assets | 5,864 | 1,383 | — | 7,247 | 7,247 | ||||||||||
Total | $ | 11,376 | $ | 213,266 | $ | — | $ | 224,642 | $ | 225,321 | |||||
Liabilities: | |||||||||||||||
Noninterest-bearing deposits | $ | — | $ | 70,783 | $ | — | $ | 70,783 | $ | 70,783 | |||||
Interest-bearing deposits | — | 165,914 | — | 165,914 | 167,995 | ||||||||||
Federal funds purchased and securities sold under repurchase agreements | — | 14,243 | — | 14,243 | 14,243 | ||||||||||
Payables to customers and broker-dealers | — | 19,731 | — | 19,731 | 19,731 | ||||||||||
Commercial paper | — | 1,939 | — | 1,939 | 1,939 | ||||||||||
Borrowings | — | 3,584 | — | 3,584 | 3,584 | ||||||||||
Long-term debt | — | 28,347 | — | 28,347 | 28,792 | ||||||||||
Total | $ | — | $ | 304,541 | $ | — | $ | 304,541 | $ | 307,067 |
Summary of financial instruments | Sept. 30, 2019 | ||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying amount | ||||||||||
Assets: | |||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | — | $ | 73,811 | $ | — | $ | 73,811 | $ | 73,811 | |||||
Interest-bearing deposits with banks | — | 15,434 | — | 15,434 | 15,417 | ||||||||||
Federal funds sold and securities purchased under resale agreements | — | 43,723 | — | 43,723 | 43,723 | ||||||||||
Securities held-to-maturity | 4,871 | 29,221 | — | 34,092 | 33,778 | ||||||||||
Loans (a) | — | 54,186 | — | 54,186 | 53,626 | ||||||||||
Other financial assets | 6,718 | 1,206 | — | 7,924 | 7,924 | ||||||||||
Total | $ | 11,589 | $ | 217,581 | $ | — | $ | 229,170 | $ | 228,279 | |||||
Liabilities: | |||||||||||||||
Noninterest-bearing deposits | $ | — | $ | 55,452 | $ | — | $ | 55,452 | $ | 55,452 | |||||
Interest-bearing deposits | — | 195,449 | — | 195,449 | 194,208 | ||||||||||
Federal funds purchased and securities sold under repurchase agreements | — | 11,796 | — | 11,796 | 11,796 | ||||||||||
Payables to customers and broker-dealers | — | 18,364 | — | 18,364 | 18,364 | ||||||||||
Commercial paper | — | 3,538 | — | 3,538 | 3,538 | ||||||||||
Borrowings | — | 1,103 | — | 1,103 | 1,103 | ||||||||||
Long-term debt | — | 28,209 | — | 28,209 | 27,486 | ||||||||||
Total | $ | — | $ | 313,911 | $ | — | $ | 313,911 | $ | 311,947 |
(a) | Does not include the leasing portfolio. |
Notes to Consolidated Financial Statements (continued) |
Hedged financial instruments | Carrying amount | Notional amount of hedge | ||||||||||
Unrealized (a) | ||||||||||||
(in millions) | Gain | (Loss) | ||||||||||
June 30, 2019 | ||||||||||||
Securities available-for-sale (b) | $ | 18,347 | $ | 18,283 | $ | — | $ | (311 | ) | |||
Long-term debt | 15,344 | 15,050 | — | — | ||||||||
Dec. 31, 2018 | ||||||||||||
Securities available-for-sale (b) | $ | 19,349 | $ | 19,437 | $ | 24 | $ | (74 | ) | |||
Long-term debt | 16,147 | 16,600 | — | — |
Summary of financial instruments | Dec. 31, 2018 | ||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying amount | ||||||||||
Assets: | |||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | — | $ | 67,988 | $ | — | $ | 67,988 | $ | 67,988 | |||||
Interest-bearing deposits with banks | — | 14,168 | — | 14,168 | 14,148 | ||||||||||
Federal funds sold and securities purchased under resale agreements | — | 46,795 | — | 46,795 | 46,795 | ||||||||||
Securities held-to-maturity | 5,512 | 27,790 | — | 33,302 | 33,982 | ||||||||||
Loans (a) | — | 55,142 | — | 55,142 | 55,161 | ||||||||||
Other financial assets | 5,864 | 1,383 | — | 7,247 | 7,247 | ||||||||||
Total | $ | 11,376 | $ | 213,266 | $ | — | $ | 224,642 | $ | 225,321 | |||||
Liabilities: | |||||||||||||||
Noninterest-bearing deposits | $ | — | $ | 70,783 | $ | — | $ | 70,783 | $ | 70,783 | |||||
Interest-bearing deposits | — | 165,914 | — | 165,914 | 167,995 | ||||||||||
Federal funds purchased and securities sold under repurchase agreements | — | 14,243 | — | 14,243 | 14,243 | ||||||||||
Payables to customers and broker-dealers | — | 19,731 | — | 19,731 | 19,731 | ||||||||||
Commercial paper | — | 1,939 | — | 1,939 | 1,939 | ||||||||||
Borrowings | — | 3,584 | — | 3,584 | 3,584 | ||||||||||
Long-term debt | — | 28,347 | — | 28,347 | 28,792 | ||||||||||
Total | $ | — | $ | 304,541 | $ | — | $ | 304,541 | $ | 307,067 |
(a) |
Assets and liabilities of consolidated investment management funds, at fair value | Assets and liabilities of consolidated investment management funds, at fair value | |||||||||||
June 30, 2019 | Dec. 31, 2018 | |||||||||||
Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||
(in millions) | June 30, 2019 | Dec. 31, 2018 | ||||||||||
Assets of consolidated investment management funds: | ||||||||||||
Trading assets | $ | 314 | $ | 243 | $ | 349 | $ | 243 | ||||
Other assets | 23 | 220 | 32 | 220 | ||||||||
Total assets of consolidated investment management funds | $ | 337 | $ | 463 | $ | 381 | $ | 463 | ||||
Liabilities of consolidated investment management funds: | ||||||||||||
Trading liabilities | $ | 7 | $ | — | ||||||||
Other liabilities | $ | 6 | $ | 2 | 8 | 2 | ||||||
Total liabilities of consolidated investment management funds | $ | 6 | $ | 2 | $ | 15 | $ | 2 |
Foreign exchange and other trading revenue (a) | Foreign exchange and other trading revenue (a) | Foreign exchange and other trading revenue (a) | ||||||||||||||||||||||||||||
(in millions) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||
Long-term debt | $ | (7 | ) | $ | (5 | ) | $ | — | $ | (12 | ) | $ | 4 | $ | (3 | ) | $ | (7 | ) | $ | — | $ | (15 | ) | $ | 4 |
(a) | The changes in fair value are approximately offset by an economic hedge included in foreign exchange and other trading revenue. |
Notes to Consolidated Financial Statements(continued) |
Notes to Consolidated Financial Statements (continued) |
Income statement impact of fair value and cash flow hedges | ||||||||||||||||||||||||||||||||
(in millions) | Location of gains (losses) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | Location of gains (losses) | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||
Interest rate fair value hedges of available-for-sale securities | ||||||||||||||||||||||||||||||||
Derivative | Interest revenue | $ | (486 | ) | $ | (383 | ) | $ | 136 | $ | (869 | ) | $ | 533 | Interest revenue | $ | (250 | ) | $ | (486 | ) | $ | 214 | $ | (1,119 | ) | $ | 747 | ||||
Hedged item | Interest revenue | 480 | 376 | (133 | ) | 856 | (516 | ) | Interest revenue | 243 | 480 | (209 | ) | 1,099 | (725 | ) | ||||||||||||||||
Interest rate fair value hedges of long-term debt | ||||||||||||||||||||||||||||||||
Derivative | Interest expense | 300 | 185 | (131 | ) | 485 | (509 | ) | Interest expense | 146 | 300 | (101 | ) | 631 | (610 | ) | ||||||||||||||||
Hedged item | Interest expense | (298 | ) | (184 | ) | 129 | (482 | ) | 506 | Interest expense | (145 | ) | (298 | ) | 103 | (627 | ) | 609 | ||||||||||||||
Foreign exchange fair value hedges of available-for-sale securities | ||||||||||||||||||||||||||||||||
Derivative (a) | Other revenue | (5 | ) | 6 | — | 1 | — | Other revenue | 2 | (5 | ) | — | 3 | — | ||||||||||||||||||
Hedged item | Other revenue | 5 | (5 | ) | — | — | — | Other revenue | (2 | ) | 5 | — | (2 | ) | — | |||||||||||||||||
Cash flow hedge of interest rate risk | ||||||||||||||||||||||||||||||||
(Loss) reclassified from OCI into income | Interest expense | (1 | ) | — | — | (1 | ) | — | ||||||||||||||||||||||||
Cash flow hedges of forecasted FX exposures | ||||||||||||||||||||||||||||||||
(Loss) gain reclassified from OCI into income | Other revenue | — | — | (1 | ) | — | 3 | |||||||||||||||||||||||||
(Loss) gain reclassified from OCI into income | Staff expense | — | (1 | ) | 2 | (1 | ) | 8 | ||||||||||||||||||||||||
(Loss) gain recognized in the consolidated income statement due to fair value and cash flow hedging relationships (b) | $ | (4 | ) | $ | (6 | ) | $ | 2 | $ | (10 | ) | $ | 25 | |||||||||||||||||||
Gain reclassified from OCI into income | Other revenue | — | — | — | — | 3 | ||||||||||||||||||||||||||
Gain (loss) reclassified from OCI into income | Staff expense | 2 | — | (4 | ) | 1 | 4 | |||||||||||||||||||||||||
(Loss) gain recognized in the consolidated income statement due to fair value and cash flow hedging relationships | $ | (5 | ) | $ | (4 | ) | $ | 3 | $ | (15 | ) | $ | 28 |
(a) | Includes |
Impact of derivative instruments used in net investment hedging relationships in the income statement | Impact of derivative instruments used in net investment hedging relationships in the income statement | Impact of derivative instruments used in net investment hedging relationships in the income statement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Gain or (loss) recognized in accumulated OCI on derivatives | Gain or (loss) reclassified from accumulated OCI into income | Gain or (loss) recognized in accumulated OCI on derivatives | Gain or (loss) reclassified from accumulated OCI into income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives in net investment hedging relationships | Location of gain or (loss) reclassified from accumulated OCI into income | Location of gain or (loss) reclassified from accumulated OCI into income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | |||||||||||||||||||||||||||||||||||||||||||||
FX contracts | $ | 76 | $ | (6 | ) | $ | 429 | $ | 70 | $ | 271 | Net interest revenue | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 252 | $ | 76 | $ | 83 | $ | 322 | $ | 354 | Net interest revenue | $ | — | $ | — | $ | — | $ | — | $ | — |
Hedged items in fair value hedging relationships | Carrying amount of hedged asset or liability | Hedge accounting basis adjustment increase (decrease) (a) | Carrying amount of hedged asset or liability | Hedge accounting basis adjustment increase (decrease) (a) | ||||||||||||||||||||||
(in millions) | June 30, 2019 | Dec. 31, 2018 | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||||||||||||
Available-for-sale securities (b) | $ | 18,202 | $ | 19,201 | $ | 692 | $ | (125 | ) | $ | 12,684 | $ | 19,201 | $ | 1,090 | $ | (125 | ) | ||||||||
Long-term debt | $ | 14,344 | $ | 16,147 | $ | 72 | $ | (453 | ) | $ | 14,340 | $ | 16,147 | $ | 239 | $ | (453 | ) |
(a) | Includes |
(b) | Excludes hedged items where only foreign currency risk is the designated hedged risk, as the basis adjustments related to foreign currency hedges will not reverse through the consolidated income statement in future periods. The carrying amount excluded for available-for-sale securities was |
Notes to Consolidated Financial Statements (continued) |
Impact of derivative instruments on the balance sheet | Notional value | Asset derivatives fair value | Liability derivatives fair value | Notional value | Asset derivatives fair value | Liability derivatives fair value | ||||||||||||||||||||||||||||||||||
June 30, 2019 | Dec. 31, 2018 | June 30, 2019 | Dec. 31, 2018 | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments: (a)(b) | ||||||||||||||||||||||||||||||||||||||||
Interest rate contracts | $ | 33,188 | $ | 35,890 | $ | — | $ | 23 | $ | 311 | $ | 74 | $ | 27,510 | $ | 35,890 | $ | — | $ | 23 | $ | 521 | $ | 74 | ||||||||||||||||
Foreign exchange contracts | 7,693 | 6,330 | 156 | 266 | 24 | 14 | 7,792 | 6,330 | 287 | 266 | 84 | 14 | ||||||||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | 156 | $ | 289 | $ | 335 | $ | 88 | $ | 287 | $ | 289 | $ | 605 | $ | 88 | ||||||||||||||||||||||||
Derivatives not designated as hedging instruments: (b)(c) | ||||||||||||||||||||||||||||||||||||||||
Interest rate contracts | $ | 302,029 | $ | 248,534 | $ | 4,268 | $ | 3,590 | $ | 3,625 | $ | 3,116 | $ | 320,205 | $ | 248,534 | $ | 4,840 | $ | 3,590 | $ | 4,081 | $ | 3,116 | ||||||||||||||||
Foreign exchange contracts | 850,236 | 831,730 | 4,083 | 4,807 | 3,952 | 5,215 | 823,138 | 831,730 | 5,066 | 4,807 | 5,012 | 5,215 | ||||||||||||||||||||||||||||
Equity contracts | 1,573 | 927 | 46 | 68 | 4 | 118 | 1,559 | 927 | 14 | 68 | 17 | 118 | ||||||||||||||||||||||||||||
Credit contracts | 165 | 150 | — | — | 3 | 1 | 165 | 150 | — | — | 3 | 1 | ||||||||||||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 8,397 | $ | 8,465 | $ | 7,584 | $ | 8,450 | $ | 9,920 | $ | 8,465 | $ | 9,113 | $ | 8,450 | ||||||||||||||||||||||||
Total derivatives fair value (d) | $ | 8,553 | $ | 8,754 | $ | 7,919 | $ | 8,538 | $ | 10,207 | $ | 8,754 | $ | 9,718 | $ | 8,538 | ||||||||||||||||||||||||
Effect of master netting agreements (e) | (5,568 | ) | (5,939 | ) | (5,297 | ) | (6,170 | ) | (6,681 | ) | (5,939 | ) | (6,566 | ) | (6,170 | ) | ||||||||||||||||||||||||
Fair value after effect of master netting agreements | $ | 2,985 | $ | 2,815 | $ | 2,622 | $ | 2,368 | $ | 3,526 | $ | 2,815 | $ | 3,152 | $ | 2,368 |
(a) | The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the consolidated balance sheet. |
(b) | For derivative transactions settled at clearing organizations, cash collateral exchanged is deemed a settlement of the derivative each day. The settlement reduces the gross fair value of derivative assets and liabilities and a corresponding decrease in the effect of master netting agreements, with no impact to the consolidated balance sheet. |
(c) | The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the consolidated balance sheet. |
(d) | Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815, Derivatives and Hedging. |
(e) | Effect of master netting agreements includes cash collateral received and paid of |
Foreign exchange and other trading revenue | Foreign exchange and other trading revenue | Foreign exchange and other trading revenue | ||||||||||||||||||||||||||||
(in millions) | 2Q19 | 1Q19 | 2Q18 | YTD19 | YTD18 | 3Q19 | 2Q19 | 3Q18 | YTD19 | YTD18 | ||||||||||||||||||||
Foreign exchange | $ | 150 | $ | 160 | $ | 171 | $ | 310 | $ | 354 | $ | 129 | $ | 150 | $ | 150 | $ | 439 | $ | 504 | ||||||||||
Other trading revenue | 16 | 10 | 16 | 26 | 42 | 21 | 16 | 5 | 47 | 47 | ||||||||||||||||||||
Total foreign exchange and other trading revenue | $ | 166 | $ | 170 | $ | 187 | $ | 336 | $ | 396 | $ | 150 | $ | 166 | $ | 155 | $ | 486 | $ | 551 |
Notes to Consolidated Financial Statements (continued) |
June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||
(in millions) | ||||||||||||
Aggregate fair value of OTC derivatives in net liability positions (a) | $ | 3,296 | $ | 2,877 | $ | 4,034 | $ | 2,877 | ||||
Collateral posted | $ | 3,443 | $ | 2,801 | $ | 3,820 | $ | 2,801 |
(a) | Before consideration of cash collateral. |
Potential close-out exposures (fair value) (a) | Potential close-out exposures (fair value) (a) | Potential close-out exposures (fair value) (a) | ||||||||||
(in millions) | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||
If The Bank of New York Mellon’s rating changed to: (b) | ||||||||||||
A3/A- | $ | 8 | $ | 15 | $ | 17 | $ | 15 | ||||
Baa2/BBB | $ | 358 | $ | 116 | $ | 472 | $ | 116 | ||||
Ba1/BB+ | $ | 1,493 | $ | 1,041 | $ | 2,131 | $ | 1,041 |
(a) | The amounts represent potential total close-out values if The Bank of New York Mellon’s long-term issuer rating were to immediately drop to the indicated levels, and do not reflect collateral posted. |
(b) | Represents rating by Moody’s/S&P. |
Notes to Consolidated Financial Statements (continued) |
Offsetting of derivative assets and financial assets at June 30, 2019 | ||||||||||||||||||||||||||||||||||||||
Offsetting of derivative assets and financial assets at Sept. 30, 2019 | Offsetting of derivative assets and financial assets at Sept. 30, 2019 | |||||||||||||||||||||||||||||||||||||
Gross assets recognized | Gross amounts offset in the balance sheet | Net assets recognized in the balance sheet | Gross amounts not offset in the balance sheet | Gross assets recognized | Gross amounts offset in the balance sheet | Net assets recognized in the balance sheet | Gross amounts not offset in the balance sheet | |||||||||||||||||||||||||||||||
(in millions) | (a) | Financial instruments | Cash collateral received | Net amount | (a) | Financial instruments | Cash collateral received | Net amount | ||||||||||||||||||||||||||||||
Derivatives subject to netting arrangements: | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts | $ | 2,963 | $ | 2,347 | $ | 616 | $ | 181 | $ | — | $ | 435 | $ | 3,292 | $ | 2,585 | $ | 707 | $ | 203 | $ | — | $ | 504 | ||||||||||||||
Foreign exchange contracts | 3,729 | 3,213 | 516 | 10 | — | 506 | 4,882 | 4,094 | 788 | 1 | — | 787 | ||||||||||||||||||||||||||
Equity and other contracts | 33 | 8 | 25 | — | — | 25 | 2 | 2 | — | — | — | — | ||||||||||||||||||||||||||
Total derivatives subject to netting arrangements | 6,725 | 5,568 | 1,157 | 191 | — | 966 | 8,176 | 6,681 | 1,495 | 204 | — | 1,291 | ||||||||||||||||||||||||||
Total derivatives not subject to netting arrangements | 1,828 | — | 1,828 | — | — | 1,828 | 2,031 | — | 2,031 | — | — | 2,031 | ||||||||||||||||||||||||||
Total derivatives | 8,553 | 5,568 | 2,985 | 191 | — | 2,794 | 10,207 | 6,681 | 3,526 | 204 | — | 3,322 | ||||||||||||||||||||||||||
Reverse repurchase agreements | 127,691 | 78,433 | (b) | 49,258 | 49,245 | — | 13 | 93,236 | 60,094 | (b) | 33,142 | 33,122 | — | 20 | ||||||||||||||||||||||||
Securities borrowing | 11,943 | — | 11,943 | 11,618 | — | 325 | 10,581 | — | 10,581 | 10,266 | — | 315 | ||||||||||||||||||||||||||
Total | $ | 148,187 | $ | 84,001 | $ | 64,186 | $ | 61,054 | $ | — | $ | 3,132 | $ | 114,024 | $ | 66,775 | $ | 47,249 | $ | 43,592 | $ | — | $ | 3,657 |
(a) | Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions. |
(b) | Offsetting of reverse repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system. |
Offsetting of derivative assets and financial assets at Dec. 31, 2018 | |||||||||||||||||||
Gross assets recognized | Gross amounts offset in the balance sheet | Net assets recognized in the balance sheet | Gross amounts not offset in the balance sheet | ||||||||||||||||
(in millions) | (a) | Financial instruments | Cash collateral received | Net amount | |||||||||||||||
Derivatives subject to netting arrangements: | |||||||||||||||||||
Interest rate contracts | $ | 2,654 | $ | 2,202 | $ | 452 | $ | 133 | $ | — | $ | 319 | |||||||
Foreign exchange contracts | 4,409 | 3,724 | 685 | 70 | — | 615 | |||||||||||||
Equity and other contracts | 38 | 13 | 25 | — | — | 25 | |||||||||||||
Total derivatives subject to netting arrangements | 7,101 | 5,939 | 1,162 | 203 | — | 959 | |||||||||||||
Total derivatives not subject to netting arrangements | 1,653 | — | 1,653 | — | — | 1,653 | |||||||||||||
Total derivatives | 8,754 | 5,939 | 2,815 | 203 | — | 2,612 | |||||||||||||
Reverse repurchase agreements | 112,245 | 76,040 | (b) | 36,205 | 36,205 | — | — | ||||||||||||
Securities borrowing | 10,588 | — | 10,588 | 10,286 | — | 302 | |||||||||||||
Total | $ | 131,587 | $ | 81,979 | $ | 49,608 | $ | 46,694 | $ | — | $ | 2,914 |
(a) | Includes the effect of netting agreements and net cash collateral received. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions. |
(b) | Offsetting of reverse repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system. |
Notes to Consolidated Financial Statements (continued) |
Offsetting of derivative liabilities and financial liabilities at June 30, 2019 | Net liabilities recognized in the balance sheet | |||||||||||||||||||||||||||||||||||||
Offsetting of derivative liabilities and financial liabilities at Sept. 30, 2019 | Offsetting of derivative liabilities and financial liabilities at Sept. 30, 2019 | Net liabilities recognized in the balance sheet | ||||||||||||||||||||||||||||||||||||
Gross liabilities recognized | Gross amounts offset in the balance sheet | Gross amounts not offset in the balance sheet | Gross liabilities recognized | Gross amounts offset in the balance sheet | Gross amounts not offset in the balance sheet | |||||||||||||||||||||||||||||||||
(in millions) | (a) | Financial instruments | Cash collateral pledged | Net liabilities recognized in the balance sheet | Net amount | (a) | Cash collateral pledged | Net liabilities recognized in the balance sheet | Net amount | |||||||||||||||||||||||||||||
Derivatives subject to netting arrangements: | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts | $ | 3,885 | $ | 2,637 | $ | 1,248 | $ | 1,187 | $ | 61 | $ | 4,562 | $ | 2,532 | $ | 2,030 | $ | 1,679 | $ | 351 | ||||||||||||||||||
Foreign exchange contracts | 3,475 | 2,660 | 815 | 139 | — | 676 | 4,639 | 4,024 | 615 | 226 | — | 389 | ||||||||||||||||||||||||||
Equity and other contracts | 4 | — | 4 | — | — | 4 | 18 | 10 | 8 | — | — | 8 | ||||||||||||||||||||||||||
Total derivatives subject to netting arrangements | 7,364 | 5,297 | 2,067 | 1,326 | — | 741 | 9,219 | 6,566 | 2,653 | 1,905 | — | 748 | ||||||||||||||||||||||||||
Total derivatives not subject to netting arrangements | 555 | — | 555 | — | — | 555 | 499 | — | 499 | — | — | 499 | ||||||||||||||||||||||||||
Total derivatives | 7,919 | 5,297 | 2,622 | 1,326 | — | 1,296 | 9,718 | 6,566 | 3,152 | 1,905 | — | 1,247 | ||||||||||||||||||||||||||
Repurchase agreements | 87,308 | 78,433 | (b) | 8,875 | 8,875 | — | — | 69,004 | 60,094 | (b) | 8,910 | 8,910 | — | — | ||||||||||||||||||||||||
Securities lending | 871 | — | 871 | 840 | — | 31 | 758 | — | 758 | 724 | — | 34 | ||||||||||||||||||||||||||
Total | $ | 96,098 | $ | 83,730 | $ | 12,368 | $ | 11,041 | $ | — | $ | 1,327 | $ | 79,480 | $ | 66,660 | $ | 12,820 | $ | 11,539 | $ | — | $ | 1,281 |
(a) | Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions. |
(b) | Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system. |
Offsetting of derivative liabilities and financial liabilities at Dec. 31, 2018 | Net liabilities recognized in the balance sheet | ||||||||||||||||||
Gross liabilities recognized | Gross amounts offset in the balance sheet | Gross amounts not offset in the balance sheet | |||||||||||||||||
(in millions) | (a) | Financial instruments | Cash collateral pledged | Net amount | |||||||||||||||
Derivatives subject to netting arrangements: | |||||||||||||||||||
Interest rate contracts | $ | 3,144 | $ | 2,508 | $ | 636 | $ | 547 | $ | — | $ | 89 | |||||||
Foreign exchange contracts | 4,747 | 3,626 | 1,121 | 187 | — | 934 | |||||||||||||
Equity and other contracts | 75 | 36 | 39 | 37 | — | 2 | |||||||||||||
Total derivatives subject to netting arrangements | 7,966 | 6,170 | 1,796 | 771 | — | 1,025 | |||||||||||||
Total derivatives not subject to netting arrangements | 572 | — | 572 | — | — | 572 | |||||||||||||
Total derivatives | 8,538 | 6,170 | 2,368 | 771 | — | 1,597 | |||||||||||||
Repurchase agreements | 84,665 | 76,040 | (b) | 8,625 | 8,625 | — | — | ||||||||||||
Securities lending | 997 | — | 997 | 937 | — | 60 | |||||||||||||
Total | $ | 94,200 | $ | 82,210 | $ | 11,990 | $ | 10,333 | $ | — | $ | 1,657 |
(a) | Includes the effect of netting agreements and net cash collateral paid. The offset related to the OTC derivatives was allocated to the various types of derivatives based on the net positions. |
(b) | Offsetting of repurchase agreements relates to our involvement in the FICC, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system. |
Notes to Consolidated Financial Statements (continued) |
Repurchase agreements and securities lending transactions accounted for as secured borrowings | ||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||
Remaining contractual maturity | Total | Remaining contractual maturity | Total | Remaining contractual maturity | Total | Remaining contractual maturity | Total | |||||||||||||||||||||||||||||||||||||||||||
(in millions) | Overnight and continuous | Up to 30 days | 30 days or more | Overnight and continuous | Up to 30 days | 30 days or more | Overnight and continuous | Up to 30 days | 30 days or more | Overnight and continuous | Up to 30 days | 30 days or more | ||||||||||||||||||||||||||||||||||||||
Repurchase agreements: | ||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury | $ | 80,367 | $ | — | $ | — | $ | 80,367 | $ | 76,822 | $ | — | $ | — | $ | 76,822 | $ | 60,878 | $ | — | $ | — | $ | 60,878 | $ | 76,822 | $ | — | $ | — | $ | 76,822 | ||||||||||||||||||
U.S. government agencies | 826 | — | — | 826 | 759 | — | — | 759 | 930 | — | — | 930 | 759 | — | — | 759 | ||||||||||||||||||||||||||||||||||
Agency RMBS | 2,205 | — | — | 2,205 | 3,184 | — | 4 | 3,188 | 3,383 | — | — | 3,383 | 3,184 | — | 4 | 3,188 | ||||||||||||||||||||||||||||||||||
Corporate bonds | 335 | — | 1,485 | 1,820 | 416 | — | 1,413 | 1,829 | 268 | — | 1,719 | 1,987 | 416 | — | 1,413 | 1,829 | ||||||||||||||||||||||||||||||||||
Other debt securities | 284 | — | 931 | 1,215 | 271 | — | 1,106 | 1,377 | 217 | — | 1,038 | 1,255 | 271 | — | 1,106 | 1,377 | ||||||||||||||||||||||||||||||||||
Equity securities | 241 | — | 634 | 875 | 163 | — | 527 | 690 | 78 | — | 493 | 571 | 163 | — | 527 | 690 | ||||||||||||||||||||||||||||||||||
Total | $ | 84,258 | $ | — | $ | 3,050 | $ | 87,308 | $ | 81,615 | $ | — | $ | 3,050 | $ | 84,665 | $ | 65,754 | $ | — | $ | 3,250 | $ | 69,004 | $ | 81,615 | $ | — | $ | 3,050 | $ | 84,665 | ||||||||||||||||||
Securities lending: | ||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agencies | $ | 30 | $ | — | $ | — | $ | 30 | $ | 7 | $ | — | $ | — | $ | 7 | $ | 9 | $ | — | $ | — | $ | 9 | $ | 7 | $ | — | $ | — | $ | 7 | ||||||||||||||||||
Other debt securities | 200 | — | — | 200 | 294 | — | — | 294 | 228 | — | — | 228 | 294 | — | — | 294 | ||||||||||||||||||||||||||||||||||
Equity securities | 641 | — | — | 641 | 696 | — | — | 696 | 521 | — | — | 521 | 696 | — | — | 696 | ||||||||||||||||||||||||||||||||||
Total | $ | 871 | $ | — | $ | — | $ | 871 | $ | 997 | $ | — | $ | — | $ | 997 | $ | 758 | $ | — | $ | — | $ | 758 | $ | 997 | $ | — | $ | — | $ | 997 | ||||||||||||||||||
Total borrowings | $ | 85,129 | $ | — | $ | 3,050 | $ | 88,179 | $ | 82,612 | $ | — | $ | 3,050 | $ | 85,662 | $ | 66,512 | $ | — | $ | 3,250 | $ | 69,762 | $ | 82,612 | $ | — | $ | 3,050 | $ | 85,662 |
Off-balance sheet credit risks | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||||||
(in millions) | ||||||||||||
Lending commitments | $ | 51,191 | $ | 50,631 | $ | 50,303 | $ | 50,631 | ||||
Standby letters of credit (a) | 2,465 | 2,817 | 2,417 | 2,817 | ||||||||
Commercial letters of credit | 60 | 165 | 156 | 165 | ||||||||
Securities lending indemnifications (b)(c) | 406,180 | 401,504 | 398,226 | 401,504 |
(a) | Net of participations totaling |
(b) | Excludes the indemnification for securities for which BNY Mellon acts as an agent on behalf of CIBC Mellon clients, which totaled |
(c) | Includes cash collateral, invested in indemnified repurchase agreements, held by us as securities lending agent of |
Notes to Consolidated Financial Statements (continued) |
Standby letters of credit | June 30, 2019 | Dec. 31, 2018 | Sept. 30, 2019 | Dec. 31, 2018 | ||||
Investment grade | 90 | % | 89 | % | 90 | % | 89 | % |
Non-investment grade | 10 | % | 11 | % | 10 | % | 11 | % |
Notes to Consolidated Financial Statements (continued) |
Financial institutions portfolio exposure (in billions) | June 30, 2019 | Sept. 30, 2019 | ||||||||||||||||
Loans | Unfunded commitments | Total exposure | Loans | Unfunded commitments | Total exposure | |||||||||||||
Securities industry | $ | 2.5 | $ | 24.3 | $ | 26.8 | $ | 3.2 | $ | 23.4 | $ | 26.6 | ||||||
Banks | 7.9 | 1.2 | 9.1 | |||||||||||||||
Asset managers | 1.4 | 6.7 | 8.1 | 1.3 | 6.7 | 8.0 | ||||||||||||
Banks | 6.5 | 1.0 | 7.5 | |||||||||||||||
Insurance | 0.1 | 2.4 | 2.5 | 0.1 | 2.5 | 2.6 | ||||||||||||
Government | 0.1 | 0.3 | 0.4 | 0.1 | 0.3 | 0.4 | ||||||||||||
Other | 0.9 | 0.9 | 1.8 | 0.8 | 0.8 | 1.6 | ||||||||||||
Total | $ | 11.5 | $ | 35.6 | $ | 47.1 | $ | 13.4 | $ | 34.9 | $ | 48.3 |
Commercial portfolio exposure (in billions) | June 30, 2019 | Sept. 30, 2019 | ||||||||||||||||
Loans | Unfunded commitments | Total exposure | Loans | Unfunded commitments | Total exposure | |||||||||||||
Manufacturing | $ | 0.7 | $ | 4.7 | $ | 5.4 | $ | 0.8 | $ | 4.7 | $ | 5.5 | ||||||
Services and other | 0.7 | 3.9 | 4.6 | 0.7 | 3.7 | 4.4 | ||||||||||||
Energy and utilities | 0.3 | 3.8 | 4.1 | 0.2 | 3.8 | 4.0 | ||||||||||||
Media and telecom | — | 1.2 | 1.2 | — | 1.0 | 1.0 | ||||||||||||
Total | $ | 1.7 | $ | 13.6 | $ | 15.3 | $ | 1.7 | $ | 13.2 | $ | 14.9 |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements(continued) |
Notes to Consolidated Financial Statements(continued) |
For the quarter ended June 30, 2019 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
For the quarter ended Sept. 30, 2019 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
(dollars in millions) | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
Total fee and other revenue | $ | 2,291 | $ | 833 | (a) | $ | 4 | $ | 3,128 | (a) | ||||||||||||||||||||||
Net interest revenue (expense) | 775 | 67 | (40 | ) | 802 | 753 | 57 | (80 | ) | 730 | ||||||||||||||||||||||
Total revenue | 3,002 | 917 | (a) | 1 | 3,920 | (a) | ||||||||||||||||||||||||||
Total revenue (loss) | 3,044 | 890 | (a) | (76 | ) | 3,858 | (a) | |||||||||||||||||||||||||
Provision for credit losses | (4 | ) | (2 | ) | (2 | ) | (8 | ) | (15 | ) | — | (1 | ) | (16 | ) | |||||||||||||||||
Noninterest expense | 1,954 | 654 | 39 | 2,647 | 1,965 | 590 | 35 | 2,590 | ||||||||||||||||||||||||
Income (loss) before taxes | $ | 1,052 | $ | 265 | (a) | $ | (36 | ) | $ | 1,281 | (a) | |||||||||||||||||||||
Income (loss) before income taxes | $ | 1,094 | $ | 300 | (a) | $ | (110 | ) | $ | 1,284 | (a) | |||||||||||||||||||||
Pre-tax operating margin (b) | 35 | % | 29 | % | N/M | 33 | % | 36 | % | 34 | % | N/M | 33 | % | ||||||||||||||||||
Average assets | $ | 264,639 | $ | 30,709 | $ | 47,036 | $ | 342,384 | $ | 269,784 | $ | 30,326 | $ | 50,569 | $ | 350,679 |
(a) |
(b) | Income before income taxes divided by total revenue. |
For the quarter ended June 30, 2019 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||
(dollars in millions) | ||||||||||||||||
Total fee and other revenue | $ | 2,227 | $ | 850 | (a) | $ | 41 | $ | 3,118 | (a) | ||||||
Net interest revenue (expense) | 775 | 67 | (40 | ) | 802 | |||||||||||
Total revenue | 3,002 | 917 | (a) | 1 | 3,920 | (a) | ||||||||||
Provision for credit losses | (4 | ) | (2 | ) | (2 | ) | (8 | ) | ||||||||
Noninterest expense | 1,954 | 654 | 39 | 2,647 | ||||||||||||
Income (loss) before income taxes | $ | 1,052 | $ | 265 | (a) | $ | (36 | ) | $ | 1,281 | (a) | |||||
Pre-tax operating margin (b) | 35 | % | 29 | % | N/M | 33 | % | |||||||||
Average assets | $ | 264,639 | $ | 30,709 | $ | 47,036 | $ | 342,384 |
(a) | Total fee and other revenue |
(b) | Income before income taxes divided by total revenue. |
For the quarter ended March 31, 2019 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
For the quarter ended Sept. 30, 2018 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
(dollars in millions) | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
Total fee and other revenue | $ | 2,230 | $ | 938 | (a) | $ | 7 | $ | 3,175 | (a) | ||||||||||||||||||||||
Net interest revenue (expense) | 796 | 75 | (30 | ) | 841 | 827 | 77 | (13 | ) | 891 | ||||||||||||||||||||||
Total revenue | 2,950 | 939 | (a) | — | 3,889 | (a) | ||||||||||||||||||||||||||
Total revenue (loss) | 3,057 | 1,015 | (a) | (6 | ) | 4,066 | (a) | |||||||||||||||||||||||||
Provision for credit losses | 8 | 1 | (2 | ) | 7 | 1 | (2 | ) | (2 | ) | (3 | ) | ||||||||||||||||||||
Noninterest expense | 1,969 | 669 | 61 | 2,699 | 2,030 | 701 | 6 | 2,737 | (b) | |||||||||||||||||||||||
Income (loss) before taxes | $ | 973 | $ | 269 | (a) | $ | (59 | ) | $ | 1,183 | (a) | |||||||||||||||||||||
Income (loss) before income taxes | $ | 1,026 | $ | 316 | (a) | $ | (10 | ) | $ | 1,332 | (a)(b) | |||||||||||||||||||||
Pre-tax operating margin | 33 | % | 29 | % | N/M | 31 | % | 34 | % | 31 | % | N/M | 33 | % | ||||||||||||||||||
Average assets | $ | 255,891 | $ | 31,857 | $ | 48,417 | $ | 336,165 | $ | 246,276 | $ | 31,283 | $ | 54,782 | $ | 332,341 |
(a) |
(b) | Noninterest expense and income before income taxes include a loss attributable to noncontrolling interests of $1 million related to other consolidated subsidiaries. |
(c) | Income before income taxes divided by total revenue. |
Notes to Consolidated Financial Statements (continued) |
For the quarter ended June 30, 2018 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
For the nine months ended Sept. 30, 2019 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
(dollars in millions) | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
Total fee and other revenue | $ | 6,672 | $ | 2,547 | (a) | $ | 75 | $ | 9,294 | (a) | ||||||||||||||||||||||
Net interest revenue (expense) | 874 | 77 | (35 | ) | 916 | 2,324 | 199 | (150 | ) | 2,373 | ||||||||||||||||||||||
Total revenue | 3,107 | 1,018 | (a) | 6 | 4,131 | (a) | ||||||||||||||||||||||||||
Total revenue (loss) | 8,996 | 2,746 | (a) | (75 | ) | 11,667 | (a) | |||||||||||||||||||||||||
Provision for credit losses | 1 | 2 | (6 | ) | (3 | ) | (11 | ) | (1 | ) | (5 | ) | (17 | ) | ||||||||||||||||||
Noninterest expense | 1,967 | 697 | 81 | 2,745 | (b) | 5,888 | 1,913 | 135 | 7,936 | |||||||||||||||||||||||
Income (loss) before taxes | $ | 1,139 | $ | 319 | (a) | $ | (69 | ) | $ | 1,389 | (a)(b) | |||||||||||||||||||||
Income (loss) before income taxes | $ | 3,119 | $ | 834 | (a) | $ | (205 | ) | $ | 3,748 | (a) | |||||||||||||||||||||
Pre-tax operating margin | 37 | % | 31 | % | N/M | 34 | % | 35 | % | 30 | % | N/M | 32 | % | ||||||||||||||||||
Average assets | $ | 264,387 | $ | 31,504 | $ | 50,437 | $ | 346,328 | $ | 263,489 | $ | 30,724 | $ | 48,916 | $ | 343,129 |
(a) |
(b) |
Income before income taxes divided by total revenue. |
For the six months ended June 30, 2019 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
For the nine months ended Sept. 30, 2018 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
(dollars in millions) | Investment Services | Investment Management | Other | Consolidated | ||||||||||||||||||||||||||||
Total fee and other revenue | $ | 6,713 | $ | 2,891 | (a) | $ | 56 | $ | 9,660 | (a) | ||||||||||||||||||||||
Net interest revenue (expense) | 1,571 | 142 | (70 | ) | 1,643 | 2,545 | 230 | (49 | ) | 2,726 | ||||||||||||||||||||||
Total revenue | 5,952 | 1,856 | (a) | 1 | 7,809 | (a) | 9,258 | 3,121 | (a) | 7 | 12,386 | (a) | ||||||||||||||||||||
Provision for credit losses | 4 | (1 | ) | (4 | ) | (1 | ) | (5 | ) | 2 | (8 | ) | (11 | ) | ||||||||||||||||||
Noninterest expense | 3,923 | 1,323 | 100 | 5,346 | 5,946 | 2,103 | 174 | 8,223 | (b) | |||||||||||||||||||||||
Income (loss) before taxes | $ | 2,025 | $ | 534 | (a) | $ | (95 | ) | $ | 2,464 | (a) | |||||||||||||||||||||
Income (loss) before income taxes | $ | 3,317 | $ | 1,016 | (a) | $ | (159 | ) | $ | 4,174 | (a)(b) | |||||||||||||||||||||
Pre-tax operating margin | 34 | % | 29 | % | N/M | 32 | % | 36 | % | 33 | % | N/M | 34 | % | ||||||||||||||||||
Average assets | $ | 260,290 | $ | 30,926 | $ | 48,076 | $ | 339,292 | $ | 262,804 | $ | 31,577 | $ | 51,139 | $ | 345,520 |
(a) |
(b) | Noninterest expense and income before income taxes include a loss attributable to noncontrolling interests of $1 million related to other consolidated subsidiaries. |
(c) | Income before income taxes divided by total revenue. |
For the six months ended June 30, 2018 | Investment Services | Investment Management | Other | Consolidated | ||||||||||||
(dollars in millions) | ||||||||||||||||
Total fee and other revenue | $ | 4,483 | $ | 1,953 | (a) | $ | 49 | $ | 6,485 | (a) | ||||||
Net interest revenue (expense) | 1,718 | 153 | (36 | ) | 1,835 | |||||||||||
Total revenue | 6,201 | 2,106 | (a) | 13 | 8,320 | (a) | ||||||||||
Provision for credit losses | (6 | ) | 4 | (6 | ) | (8 | ) | |||||||||
Noninterest expense | 3,916 | 1,402 | 168 | 5,486 | ||||||||||||
Income (loss) before taxes | $ | 2,291 | $ | 700 | (a) | $ | (149 | ) | $ | 2,842 | (a) | |||||
Pre-tax operating margin (b) | 37 | % | 33 | % | N/M | 34 | % | |||||||||
Average assets | $ | 271,203 | $ | 31,732 | $ | 49,284 | $ | 352,219 |
Non-cash investing and financing transactions | Six months ended June 30, | Nine months ended Sept. 30, | ||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||
Transfers from loans to other assets for other real estate owned | $ | — | $ | 2 | $ | 1 | $ | 2 | ||||||
Change in assets of consolidated investment management funds | 76 | 303 | 120 | 232 | ||||||||||
Change in liabilities of consolidated investment management funds | 4 | 1 | 13 | 5 | ||||||||||
Change in nonredeemable noncontrolling interests of consolidated investment management funds | 65 | 264 | 102 | 226 | ||||||||||
Securities purchased not settled | 1,113 | 400 | 804 | 885 | ||||||||||
Securities matured not settled | 10 | 25 | ||||||||||||
Securities sold not settled | — | 249 | ||||||||||||
Available-for-sale securities transferred to trading assets | — | 963 | — | 963 | ||||||||||
Held-to-maturity securities transferred to available-for-sale | — | 1,087 | — | 1,087 | ||||||||||
Premises and equipment/capitalized software funded by financing lease obligations | 14 | 15 | ||||||||||||
Premises and equipment/capitalized software funded by finance lease obligations | 14 | 25 | ||||||||||||
Premises and equipment/operating lease obligations | 1,272 | (a) | — | 1,440 | (a) | — |
(a) | Includes $1,244 million related to the adoption of ASU 2016-02, Leases, and |
Item 4. Controls and Procedures |
Forward-looking Statements |
Forward-looking Statements (continued) |
Part II - Other Information |
(c) | The following table discloses repurchases of our common stock made in the |
Share repurchases - second quarter of 2019 | Total shares repurchased as part of a publicly announced plan or program | Maximum approximate dollar value of shares that may yet be purchased under the publicly announced plans or programs at June 30, 2019 | ||||||||||||
(dollars in millions, except per share information; common shares in thousands) | Total shares repurchased | Average price per share | ||||||||||||
April 2019 | 10,531 | $ | 48.69 | 10,531 | $ | 243 | ||||||||
May 2019 | 4,441 | 49.99 | 4,441 | 21 | ||||||||||
June 2019 | 361 | 44.46 | 361 | 5 | ||||||||||
Second quarter of 2019 (a) | 15,333 | $ | 48.97 | 15,333 | $ | 3,940 | (b) |
Share repurchases - third quarter of 2019 | Total shares repurchased as part of a publicly announced plan or program | Maximum approximate dollar value of shares that may yet be purchased under the publicly announced plans or programs at Sept. 30, 2019 | ||||||||||||
(dollars in millions, except per share information; common shares in thousands) | Total shares repurchased | Average price per share | ||||||||||||
July 2019 | 11,276 | $ | 46.67 | 11,276 | $ | 3,414 | ||||||||
August 2019 | 9,765 | 45.49 | 9,765 | 2,969 | ||||||||||
September 2019 | 233 | 44.99 | 233 | 2,959 | ||||||||||
Third quarter of 2019 (a) | 21,274 | $ | 46.11 | 21,274 | 2,959 | (b) |
(a) | Includes |
(b) | Represents the maximum value of the shares authorized to be repurchased through the second quarter of 2020, including employee benefit plan repurchases. |
Index to Exhibits |
Exhibit No. | Description | Method of Filing | ||
3.1 | Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 2, 2007, and incorporated herein by reference. | |||
3.2 | Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 5, 2007, and incorporated herein by reference. | |||
3.3 | Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form 8A12B (File No. 001-35651) as filed with the Commission on Sept. 14, 2012, and incorporated herein by reference. | |||
3.4 | Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on May 16, 2013, and incorporated herein by reference. | |||
3.5 | Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on April 28, 2015, and incorporated herein by reference. | |||
3.6 | Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Aug. 1, 2016, and incorporated herein by reference. | |||
3.7 | Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on April 10, 2019, and incorporated herein by reference. | |||
3.8 | Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-35651) as filed with the Commission on Feb. 13, 2018, and incorporated herein by reference. |
Index to Exhibits (continued) |
Exhibit No. | Description | Method of Filing | ||
4.1 | None of the instruments defining the rights of holders of long-term debt of the Parent or any of its subsidiaries represented long-term debt in excess of 10% of the total assets of the Company as of | N/A | ||
10.1 | * | |||
Filed herewith. | ||||
31.1 | Filed herewith. | |||
31.2 | Filed herewith. | |||
32.1 | Furnished herewith. | |||
32.2 | Furnished herewith. | |||
101.INS | Inline XBRL Instance Document. | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | Filed herewith. | ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | Filed herewith. | ||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | Filed herewith. | ||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | Filed herewith. | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | Filed herewith. | ||
104 | The cover page of the Company’s Quarterly Report on Form 10-Q for the quarter ended | The cover page interactive data file |
THE BANK OF NEW YORK MELLON CORPORATION | |
(Registrant) |
Date: | By: | /s/ Kurtis R. Kurimsky | |
Kurtis R. Kurimsky | |||
Corporate Controller | |||
(Duly Authorized Officer and | |||
Principal Accounting Officer of | |||
the Registrant) |