The Bank of New York Mellon Corporation (BK) 8-K Bny Mellon Reports Third Quarter 2018 Earnings of

The Bank of New York Mellon Corporation

Financial Supplement

Third Quarter 2018

Table of Contents
Consolidated Results		Page
Consolidated Financial Highlights		3
Condensed Consolidated Income Statement		4
Condensed Consolidated Balance Sheet		5
Fee and Other Revenue		6
Average Balances and Interest Rates		7
Noninterest Expense		8
Capital and Liquidity		9
Key Market Metrics		10
Business Segment Results
Investment Services Business		11
Investment Management Business		13
AUM by Product, AUM Flows and Wealth Management Client Assets		14
Other Segment		15
Other
Investment Securities Portfolio		16
Allowance for Credit Losses and Nonperforming Assets		17
Supplemental Information – Explanation of GAAP and Non-GAAP Financial Measures		18

THE BANK OF NEW YORK MELLON CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in millions, except per common share amounts, or unless otherwise noted)																3Q18 vs.										YTD18 vs.
	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18		3Q17		YTD18			YTD17			YTD17
Selected income statement data
Fee revenue	$	3,168		$	3,209		$	3,319		$	2,886		$	3,148		(1	)%	1	%	$	9,696		$	9,276		5	%
Net securities gains (losses)	—			1			(49		)	(26		)	19			N/M		N/M		(48		)	29			N/M
Fee and other revenue	3,168			3,210			3,270			2,860			3,167			(1	)	—		9,648			9,305			4
Income (loss) from consolidated investment management funds	10			12			(11		)	17			10			N/M		N/M		11			53			N/M
Net interest revenue	891			916			919			851			839			(3	)	6		2,726			2,457			11
Total revenue	4,069			4,138			4,178			3,728			4,016			(2	)	1		12,385			11,815			5
Provision for credit losses	(3		)	(3		)	(5		)	(6		)	(6		)	N/M		N/M		(11		)	(18		)	N/M
Noninterest expense	2,738			2,747			2,739			3,006			2,654			—		3		8,224			7,951			3
Income before income taxes	1,334			1,394			1,444			728			1,368			(4	)	(2	)	4,172			3,882			7
Provision (benefit) for income taxes	220			286			282			(453		)	348			(23	)	(37	)	788			949			(17	)
Net income	$	1,114		$	1,108		$	1,162		$	1,181		$	1,020		1	%	9	%	$	3,384		$	2,933		15	%
Net income applicable to common shareholders of The Bank of New York Mellon Corporation	$	1,075		$	1,055		$	1,135		$	1,126		$	983		2	%	9	%	$	3,265		$	2,789		17	%
Diluted earnings per common share	$	1.06		$	1.03		$	1.10		$	1.08		$	0.94		3	%	13	%	$	3.20		$	2.64		21	%
Average common shares and equivalents outstanding - diluted (in thousands)	1,003,665			1,014,357			1,021,731			1,030,404			1,041,138			(1	)%	(4	)%	1,013,242			1,043,585			(3	)%
Financial ratios
Pre-tax operating margin	33		%	34		%	35		%	20		%	34		%					34		%	33		%
Return on common equity (annualized)(a)	11.2		%	11.2		%	12.2		%	12.1		%	10.6		%					11.6		%	10.4		%
Return on tangible common equity (annualized) – Non-GAAP (a)	23.1		%	23.5		%	25.9		%	25.9		%	21.9		%					24.1		%	22.0		%
Percent of non-U.S. total revenue	37		%	37		%	37		%	39		%	36		%					37		%	35		%
Period end
Assets under custody and/or administration (“AUC/A”) (in trillions) (b)	$	34.5		$	33.6		$	33.5		$	33.3		$	32.2		3	%	7	%
Assets under management (“AUM”) (in trillions)	$	1.83		$	1.81		$	1.87		$	1.89		$	1.82		1	%	—	%
Book value per common share (a)	$	38.45		$	37.97		$	37.78		$	37.21		$	36.11
Tangible book value per common share – Non-GAAP (a)	$	19.35		$	19.00		$	18.78		$	18.24		$	18.19
Cash dividends per common share	$	0.28		$	0.24		$	0.24		$	0.24		$	0.24
Common dividend payout ratio	26		%	23		%	22		%	22		%	26		%
Closing stock price per common share	$	50.99		$	53.93		$	51.53		$	53.86		$	53.02
Market capitalization	$	50,418		$	53,927		$	52,080		$	54,584		$	54,294
Common shares outstanding (in thousands)	988,777			999,945			1,010,676			1,013,442			1,024,022
Capital ratios at period end(c)
Common Equity Tier 1 ("CET1") ratio	11.2		%	11.0		%	10.7		%	10.3		%	10.7		%
Tier 1 capital ratio	13.4		%	13.1		%	12.7		%	12.3		%	12.8		%
Total capital ratio	14.1		%	13.8		%	13.4		%	13.0		%	13.6		%
Supplementary leverage ratio ("SLR")	6.4		%	6.1		%	5.9		%	5.9		%	6.1		%
(a)    Non-GAAP information, for all periods presented, excludes goodwill and intangible assets, net of deferred tax liabilities. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of Non-GAAP measures.
(b)    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, 2018 and June 30, 2018 and $1.3 trillion at March 31, 2018, Dec. 31, 2017 and Sept. 30, 2017.
(c)    Regulatory capital ratios for Sept. 30, 2018 are preliminary. All risk-based capital ratios are presented using Advanced Approaches risk-weightings. The capital ratios for the 2017 periods are presented on a fully phased-in basis. See "Capital and Liquidity" for the transitional capital ratios.
N/M - Not meaningful.

3

THE BANK OF NEW YORK MELLON CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENT
(dollars in millions, except per share amounts; common shares in thousands)																3Q18 vs.										YTD18 vs.
	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18		3Q17		YTD18			YTD17			YTD17
Revenue
Investment services fees:
Asset servicing	$	1,157		$	1,157		$	1,168		$	1,130		$	1,105		—	%	5	%	$	3,482		$	3,253		7	%
Clearing services	383			392			414			400			383			(2	)	—		1,189			1,153			3
Issuer services	287			266			260			197			288			8		—		813			780			4
Treasury services	137			140			138			137			141			(2	)	(3	)	415			420			(1	)
Total investment services fees	1,964			1,955			1,980			1,864			1,917			—		2		5,899			5,606			5
Investment management and performance fees	922			910			960			962			901			1		2		2,792			2,622			6
Foreign exchange and other trading revenue	155			187			209			166			173			(17	)	(10	)	551			502			10
Financing-related fees	52			53			52			54			54			(2	)	(4	)	157			162			(3	)
Distribution and servicing	34			34			36			38			40			—		(15	)	104			122			(15	)
Investment and other income (loss)	41			70			82			(198		)	63			N/M		N/M		193			262			N/M
Total fee revenue	3,168			3,209			3,319			2,886			3,148			(1	)	1		9,696			9,276			5
Net securities gains (losses)	—			1			(49		)	(26		)	19			N/M		N/M		(48		)	29			N/M
Total fee and other revenue	3,168			3,210			3,270			2,860			3,167			(1	)	—		9,648			9,305			4
Income (loss) from consolidated investment management funds	10			12			(11		)	17			10			N/M		N/M		11			53			N/M
Net interest revenue	891			916			919			851			839			(3	)	6		2,726			2,457			11
Total revenue	4,069			4,138			4,178			3,728			4,016			(2	)	1		12,385			11,815			5
Provision for credit losses	(3		)	(3		)	(5		)	(6		)	(6		)	N/M		N/M		(11		)	(18		)	N/M
Noninterest expense
Staff (a)	1,478			1,489			1,576			1,628			1,485			(1	)	—		4,543			4,405			3
Professional, legal and other purchased services	332			328			291			339			305			1		9		951			937			1
Software and equipment	262			266			234			297			233			(2	)	12		762			688			11
Net occupancy	139			156			139			153			141			(11	)	(1	)	434			417			4
Sub-custodian and clearing (b)	106			110			119			102			101			(4	)	5		335			312			7
Distribution and servicing	99			106			106			106			109			(7	)	(9	)	311			313			(1	)
Business development	51			62			51			66			49			(18	)	4		164			163			1
Bank assessment charges	49			47			52			53			51			4		(4	)	148			167			(11	)
Amortization of intangible assets	48			48			49			52			52			—		(8	)	145			157			(8	)
Other (a)(b)(c)	174			135			122			210			128			29		36		431			392			10
Total noninterest expense	2,738			2,747			2,739			3,006			2,654			—		3		8,224			7,951			3
Income before income taxes	1,334			1,394			1,444			728			1,368			(4	)	(2	)	4,172			3,882			7
Provision (benefit) for income taxes	220			286			282			(453		)	348			(23	)	(37	)	788			949			(17	)
Net income	1,114			1,108			1,162			1,181			1,020			1		9		3,384			2,933			15
Net (income) loss attributable to noncontrolling interests	(3		)	(5		)	9			(6		)	(2		)	N/M		N/M		1			(18		)	N/M
Preferred stock dividends	(36		)	(48		)	(36		)	(49		)	(35		)	N/M		N/M		(120		)	(126		)	(5	)
Net income applicable to common shareholders of The Bank of New York Mellon Corporation	$	1,075		$	1,055		$	1,135		$	1,126		$	983		2	%	9	%	$	3,265		$	2,789		17	%
Average common shares and equivalents outstanding: Basic	999,808			1,010,179			1,016,797			1,024,828			1,035,337			(1	)%	(3	)%	1,008,967			1,037,431			(3	)%
Diluted	1,003,665			1,014,357			1,021,731			1,030,404			1,041,138			(1	)%	(4	)%	1,013,242			1,043,585			(3	)%
Earnings per common share: Basic	$	1.07		$	1.04		$	1.11		$	1.09		$	0.94		3	%	14	%	$	3.21		$	2.66		21	%
Diluted	$	1.06		$	1.03		$	1.10		$	1.08		$	0.94		3	%	13	%	$	3.20		$	2.64		21	%
(a)    In 1Q18, we adopted new accounting guidance included in Accounting Standards Update ("ASU") 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which required the reclassification of the components of pension and other postretirement costs, other than the service cost component. As a result, staff expense increased and other expense decreased. Prior periods have been reclassified.
(b)    Beginning in 1Q18, clearing expense, which was previously included in other expense, was included with sub-custodian expense. Prior periods have been reclassified.
(c)    Beginning in 1Q18, merger and integration ("M&I"), litigation and restructuring charges are no longer separately disclosed. Expenses previously reported in this line have been reclassified to existing expense categories, primarily other expense.
N/M - Not meaningful.

4

THE BANK OF NEW YORK MELLON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
	2018									2017
(in millions)	Sept. 30			June 30			March 31			Dec. 31			Sept. 30
Assets
Cash and due from:
Banks	$	5,047		$	5,361		$	4,636		$	5,382		$	5,557
Interest-bearing deposits with the Federal Reserve and other central banks	74,725			75,116			91,431			91,510			75,808
Interest-bearing deposits with banks	14,519			16,134			15,186			11,979			15,256
Federal funds sold and securities purchased under resale agreements	28,722			26,494			28,784			28,135			27,883
Securities	118,641			119,081			118,789			120,370			120,049
Trading assets	7,804			7,035			8,596			6,022			4,666
Loans	53,987			57,776			60,809			61,540			59,068
Allowance for loan losses	(140		)	(145		)	(156		)	(159		)	(161		)
Net loans	53,847			57,631			60,653			61,381			58,907
Premises and equipment	1,832			1,752			1,702			1,634			1,631
Accrued interest receivable	640			663			610			610			547
Goodwill	17,390			17,418			17,596			17,564			17,543
Intangible assets	3,258			3,308			3,370			3,411			3,461
Other assets	22,846			22,507			21,638			23,029			22,287
Subtotal assets of operations	349,271			352,500			372,991			371,027			353,595
Assets of consolidated investment management funds, at fair value	499			428			606			731			802
Total assets	$	349,770		$	352,928		$	373,597		$	371,758		$	354,397
Liabilities
Deposits	$	231,590		$	230,560		$	241,844		$	244,322		$	230,996
Federal funds purchased and securities sold under repurchase agreements	10,158			13,200			21,600			15,163			10,314
Trading liabilities	3,536			3,580			3,365			3,984			3,253
Payables to customers and broker-dealers	18,683			19,123			20,172			20,184			21,176
Commercial paper	735			2,508			3,936			3,075			2,501
Other borrowed funds	2,934			3,053			1,550			3,028			3,353
Accrued taxes and other expenses	5,601			5,452			5,349			6,225			6,070
Other liabilities	6,552			5,443			5,707			6,050			7,195
Long-term debt	28,113			28,260			27,939			27,979			28,408
Subtotal liabilities of operations	307,902			311,179			331,462			330,010			313,266
Liabilities of consolidated investment management funds, at fair value	7			3			11			2			27
Total liabilities	307,909			311,182			331,473			330,012			313,293
Temporary equity
Redeemable noncontrolling interests	211			189			184			179			197
Permanent equity
Preferred stock	3,542			3,542			3,542			3,542			3,542
Common stock	14			14			14			14			14
Additional paid-in capital	27,034			26,981			26,911			26,665			26,588
Retained earnings	28,098			27,306			26,496			25,635			24,757
Accumulated other comprehensive loss, net of tax	(2,983		)	(2,795		)	(2,343		)	(2,357		)	(2,781		)
Less: Treasury stock, at cost	(14,145		)	(13,543		)	(12,892		)	(12,248		)	(11,597		)
Total The Bank of New York Mellon Corporation shareholders’ equity	41,560			41,505			41,728			41,251			40,523
Nonredeemable noncontrolling interests of consolidated investment management funds	90			52			212			316			384
Total permanent equity	41,650			41,557			41,940			41,567			40,907
Total liabilities, temporary equity and permanent equity	$	349,770		$	352,928		$	373,597		$	371,758		$	354,397

5

THE BANK OF NEW YORK MELLON CORPORATION
FEE AND OTHER REVENUE
														3Q18 vs.										YTD18 vs.
(dollars in millions)	3Q18			2Q18		1Q18			4Q17			3Q17		2Q18		3Q17		YTD18			YTD17			YTD17
Investment services fees:
Asset servicing	$	1,099		$	1,097	$	1,113		$	1,079		$	1,058	—	%	4	%	$	3,309		$	3,109		6	%
Securities lending	58			60		55			51			47		(3	)	23		173			144			20
Clearing services	383			392		414			400			383		(2	)	—		1,189			1,153			3
Issuer services	287			266		260			197			288		8		—		813			780			4
Treasury services	137			140		138			137			141		(2	)	(3	)	415			420			(1	)
Total investment services fees	1,964			1,955		1,980			1,864			1,917		—		2		5,899			5,606			5
Investment management and performance fees (a)(b)	922			910		960			962			901		1		2		2,792			2,622			6
Foreign exchange and other trading revenue:
Foreign exchange	150			171		183			175			158		(12	)	(5	)	504			463			9
Other trading revenue (loss)	5			16		26			(9		)	15		N/M		N/M		47			39			N/M
Total foreign exchange and other trading revenue	155			187		209			166			173		(17	)	(10	)	551			502			10
Financing-related fees	52			53		52			54			54		(2	)	(4	)	157			162			(3	)
Distribution and servicing	34			34		36			38			40		—		(15	)	104			122			(15	)
Investment and other income (loss):
Corporate/bank-owned life insurance	36			31		36			43			37		N/M		N/M		103			110			N/M
Asset-related gains (losses)	7			15		46			—			1		N/M		N/M		68			(1		)	N/M
Expense reimbursements from joint venture	17			19		16			15			18		N/M		N/M		52			49			N/M
Seed capital gains (a)	8			3		—			7			6		N/M		N/M		11			25			N/M
Equity investment income	3			2		—			4			—		N/M		N/M		5			33			N/M
Lease-related gains	—			—		—			4			—		N/M		N/M		—			52			N/M
Other (loss) income	(30		)	—		(16		)	(271		)	1		N/M		N/M		(46		)	(6		)	N/M
Total investment and other income (loss) (a)	41			70		82			(198		)	63		N/M		N/M		193			262			N/M
Total fee revenue	3,168			3,209		3,319			2,886			3,148		(1	)	1		9,696			9,276			5
Net securities gains (losses)	—			1		(49		)	(26		)	19		N/M		N/M		(48		)	29			N/M
Total fee and other revenue	$	3,168		$	3,210	$	3,270		$	2,860		$	3,167	(1	)%	—	%	$	9,648		$	9,305		4	%
(a)    Excludes seed capital gains related to consolidated investment management funds, which are reflected in operations of consolidated investment management funds.
(b)    On a constant currency basis (Non-GAAP), investment management and performance fees increased 3% compared with 3Q17. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure.
N/M - Not meaningful.

6

THE BANK OF NEW YORK MELLON CORPORATION
AVERAGE BALANCES AND INTEREST RATES
	3Q18				2Q18				1Q18				4Q17				3Q17
	Average balance		Average rate		Average balance		Average rate		Average balance		Average rate		Average balance		Average rate		Average balance		Average rate
(dollars in millions, presented on an FTE basis)
Assets
Interest-earning assets:
Interest-bearing deposits with banks (primarily foreign banks)	$	14,691	1.58	%	$	15,748	1.41	%	$	13,850	1.25	%	$	14,068	1.03	%	$	15,899	0.86	%
Interest-bearing deposits held at the Federal Reserve and other central banks	61,216		0.80		69,676		0.77		79,068		0.64		74,961		0.54		70,430		0.50
Federal funds sold and securities purchased under resale agreements (a)	26,738		4.18		28,051		3.29		27,903		2.47		28,417		2.11		28,120		1.67
Margin loans	13,738		3.74		14,838		3.46		15,674		2.98		14,018		2.67		13,206		2.60
Non-margin loans:
Domestic offices	28,628		3.59		29,970		3.44		30,415		3.02		30,462		2.73		29,950		2.87
Foreign offices	11,441		2.98		12,258		2.87		12,517		2.51		12,292		2.21		12,788		2.09
Total non-margin loans	40,069		3.42		42,228		3.27		42,932		2.87		42,754		2.58		42,738		2.64
Securities:
U.S. Government obligations	24,423		2.09		23,199		2.02		23,460		1.88		25,195		1.71		25,349		1.67
U.S. Government agency obligations	64,612		2.40		63,022		2.37		62,975		2.23		62,889		2.07		61,710		2.00
States and political subdivisions - tax-exempt	2,453		2.77		2,677		2.75		2,875		2.62		3,010		3.10		3,226		3.06
Other securities	27,017		1.98		28,863		1.75		29,149		1.69		29,131		1.34		28,804		1.34
Trading securities	4,261		3.05		3,784		3.10		4,183		2.62		2,723		2.02		2,359		2.26
Total securities	122,766		2.28		121,545		2.19		122,642		2.05		122,948		1.85		121,448		1.81
Total interest-earning assets	$	279,218	2.33	%	$	292,086	2.14	%	$	302,069	1.85	%	$	297,166	1.65	%	$	291,841	1.59	%
Noninterest-earning assets	53,123				54,242				56,106				53,620				53,868
Total assets	$	332,341			$	346,328			$	358,175			$	350,786			$	345,709
Liabilities and total equity
Interest-bearing liabilities:
Interest-bearing deposits:
Domestic offices	$	57,942	0.97	%	$	54,200	0.78	%	$	51,612	0.55	%	$	45,280	0.36	%	$	44,212	0.28	%
Foreign offices	90,694		0.42		98,599		0.28		104,092		0.18		102,483		0.09		98,278		0.10
Total interest-bearing deposits	148,636		0.63		152,799		0.45		155,704		0.30		147,763		0.17		142,490		0.16
Federal funds purchased and securities sold under repurchase agreements (a)	14,199		5.33		18,146		3.48		18,963		2.29		20,211		1.83		21,403		1.30
Trading liabilities	1,150		2.32		1,198		2.43		1,569		2.26		1,406		0.38		1,434		0.54
Other borrowed funds	2,747		2.33		2,399		2.40		2,119		1.67		3,421		1.46		2,197		1.38
Commercial paper	3,102		2.10		3,869		2.13		3,131		1.59		3,391		1.23		2,736		1.15
Payables to customers and broker-dealers	16,252		1.23		16,349		1.10		17,101		0.75		17,868		0.49		18,516		0.42
Long-term debt	28,074		3.17		28,349		3.06		28,407		2.49		28,245		2.29		28,138		2.07
Total interest-bearing liabilities	$	214,160	1.37	%	$	223,109	1.14	%	$	226,994	0.82	%	$	222,305	0.65	%	$	216,914	0.57	%
Total noninterest-bearing deposits	60,677				64,768				71,005				69,111				70,168
Other noninterest-bearing liabilities	15,660				16,857				18,571				18,422				17,763
Total The Bank of New York Mellon Corporation shareholders’ equity	41,578				41,292				41,135				40,494				40,322
Noncontrolling interests	266				302				470				454				542
Total liabilities and shareholders’ equity	$	332,341			$	346,328			$	358,175			$	350,786			$	345,709
Net interest margin			1.27	%			1.26	%			1.22	%			1.14	%			1.15	%
Net interest margin (FTE) – Non-GAAP (b)			1.28	%			1.26	%			1.23	%			1.16	%			1.16	%
(a)    Includes the impact of offsetting under enforceable netting agreements of approximately $26 billion for 3Q18, $18 billion for 2Q18, $14 billion for 1Q18, $14 billion for 4Q17 and $7 billion for 3Q17.
(b)    See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure.
Note: Interest and average rates were calculated on an FTE basis, at tax rates of approximately 21% for quarters in 2018 and approximately 35% for quarters in 2017, using dollar amounts in thousands and the actual number of days in the year.

7

THE BANK OF NEW YORK MELLON CORPORATION
NONINTEREST EXPENSE
											3Q18 vs.								YTD18 vs.
(dollars in millions)	3Q18		2Q18		1Q18		4Q17		3Q17		2Q18		3Q17		YTD18		YTD17		YTD17
Staff (a)	$	1,478	$	1,489	$	1,576	$	1,628	$	1,485	(1	)%	—	%	$	4,543	$	4,405	3	%
Professional, legal and other purchased services	332		328		291		339		305		1		9		951		937		1
Software and equipment	262		266		234		297		233		(2	)	12		762		688		11
Net occupancy	139		156		139		153		141		(11	)	(1	)	434		417		4
Sub-custodian and clearing (b)	106		110		119		102		101		(4	)	5		335		312		7
Distribution and servicing	99		106		106		106		109		(7	)	(9	)	311		313		(1	)
Business development	51		62		51		66		49		(18	)	4		164		163		1
Bank assessment charges	49		47		52		53		51		4		(4	)	148		167		(11	)
Amortization of intangible assets	48		48		49		52		52		—		(8	)	145		157		(8	)
Other (a)(b)(c)	174		135		122		210		128		29		36		431		392		10
Total noninterest expense	$	2,738	$	2,747	$	2,739	$	3,006	$	2,654	—	%	3	%	$	8,224	$	7,951	3	%
Full-time employees at period end	52,000		52,000		52,100		52,500		52,900		—	%	(2	)%
(a)    In 1Q18, we adopted new accounting guidance included in ASU 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which required the reclassification of the components of pension and other postretirement costs, other than the service cost component. As a result, staff expense increased and other expense decreased. Prior periods have been reclassified.
(b)    Beginning in 1Q18, clearing expense, which was previously included in other expense, was included with sub-custodian expense. Prior periods have been reclassified.
(c)    Beginning in 1Q18, M&I, litigation and restructuring charges are no longer separately disclosed. Expenses previously reported in this line have been reclassified to existing expense categories, primarily other expense.

8

THE BANK OF NEW YORK MELLON CORPORATION
CAPITAL AND LIQUIDITY
	2018									2017
(dollars in millions)	Sept. 30			June 30			March 31			Dec. 31			Sept. 30
Consolidated regulatory capital ratios - fully phased-in basis: (a)
Standardized Approach:
CET1 capital	$	18,519		$	18,386		$	18,334		$	17,838		$	18,141
Tier 1 capital	22,004			21,877			21,835			21,339			21,649
Total capital	23,499			23,375			23,340			22,838			23,157
Risk-weighted assets	148,448			154,612			156,472			155,324			152,995
CET1 ratio	12.5		%	11.9		%	11.7		%	11.5		%	11.9		%
Tier 1 capital ratio	14.8			14.1			14.0			13.7			14.2
Total capital ratio	15.8			15.1			14.9			14.7			15.1
Advanced Approaches:
CET1 capital	$	18,519		$	18,386		$	18,334		$	17,838		$	18,141
Tier 1 capital	22,004			21,877			21,835			21,339			21,649
Total capital	23,305			23,174			23,121			22,608			22,941
Risk-weighted assets	164,770			167,580			171,910			173,711			169,293
CET1 ratio	11.2		%	11.0		%	10.7		%	10.3		%	10.7		%
Tier 1 capital ratio	13.4			13.1			12.7			12.3			12.8
Total capital ratio	14.1			13.8			13.4			13.0			13.6
Tier 1 leverage ratio	7.0		%	6.7		%	6.5		%	6.4		%	6.6		%
SLR:
Leverage exposure	$	341,569		$	355,773		$	367,818		$	360,543		$	355,960
SLR	6.4		%	6.1		%	5.9		%	5.9		%	6.1		%
Average liquidity coverage ratio (“LCR”)	121		%	118		%	116		%	118		%	119		%
Consolidated regulatory capital ratios - transitional basis:
Advanced Approaches:
CET1 ratio	N/A			N/A			N/A			10.7		%	11.1		%
Tier 1 capital ratio	N/A			N/A			N/A			12.7			13.2
Total capital ratio	N/A			N/A			N/A			13.4			14.0
Tier 1 leverage ratio	N/A			N/A			N/A			6.6			6.8
SLR	N/A			N/A			N/A			6.1			6.3
(a)    Regulatory capital ratios for Sept. 30, 2018 are preliminary. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under the U.S. capital rules are the lower of the ratios as calculated under the Standardized and Advanced Approaches, which for the periods noted above was the Advanced Approaches.
N/A - Not applicable. Beginning Jan. 1, 2018, regulatory capital ratios are fully phased-in.

9

THE BANK OF NEW YORK MELLON CORPORATION
KEY MARKET METRICS
																3Q18 vs.										YTD18 vs.
	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18		3Q17		YTD18			YTD17			YTD17
Key market metrics:
S&P 500 Index (a)	2914			2718			2641			2674			2519			7	%	16	%	2914			2519			16	%
S&P 500 Index - daily average	2850			2703			2733			2603			2467			5		16		2762			2397			15
FTSE 100 Index (a)	7510			7637			7057			7688			7373			(2	)	2		7510			7373			2
FTSE 100 Index - daily average	7553			7549			7354			7477			7380			—		2		7485			7348			2
MSCI EAFE (a)	1974			1959			2006			2051			1974			1		—		1974			1974			—
MSCI EAFE - daily average	1964			2018			2073			2005			1934			(3	)	2		2018			1847			9
Bloomberg Barclays Global-Aggregate Total Return Index (a)(b)	473			478			491			485			480			(1	)	(1	)	473			480			(1	)
NYSE and NASDAQ share volume (in billions)	190			208			210			188			179			(9	)	6		608			565			8
Average interest on excess reserves paid by the Federal Reserve	1.96		%	1.79		%	1.53		%	1.30		%	1.25		%	17	bps	71	bps	1.76		%	1.03		%	73	bps
Foreign exchange rates vs. U.S. dollar:
British pound (a)	$	1.30		$	1.32		$	1.41		$	1.35		$	1.34		(2	)%	(3	)%	$	1.30		$	1.34		(3	)%
British pound - average rate	1.30			1.36			1.39			1.33			1.31			(4	)	(1	)	1.35			1.28			5
Euro (a)	1.16			1.17			1.23			1.20			1.18			(1	)	(2	)	1.16			1.18			(2	)
Euro - average rate	1.16			1.19			1.23			1.18			1.17			(3	)	(1	)	1.19			1.13			5
(a)    Period end.
(b)    Unhedged in U.S. dollar terms.
bps - basis points.

10

THE BANK OF NEW YORK MELLON CORPORATION
INVESTMENT SERVICES BUSINESS
																3Q18 vs.										YTD18 vs.
(dollars in millions)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18		3Q17		YTD18			YTD17			YTD17
Revenue:
Investment services fees:
Asset servicing (ex. securities lending revenue)	$	1,084		$	1,080		$	1,095		$	1,061		$	1,040		—	%	4	%	$	3,259		$	3,057		7	%
Securities lending revenue	52			55			48			45			41			(5	)	27		155			123			26
Clearing services	383			391			414			400			381			(2	)	1		1,188			1,149			3
Issuer services	288			265			260			196			288			9		—		813			779			4
Treasury services	136			140			138			136			141			(3	)	(4	)	414			419			(1	)
Total investment services fees	1,943			1,931			1,955			1,838			1,891			1		3		5,829			5,527			5
Foreign exchange and other trading revenue	161			172			169			168			154			(6	)	5		502			452			11
Other (a)	126			130			126			135			142			(3	)	(11	)	382			407			(6	)
Total fee and other revenue	2,230			2,233			2,250			2,141			2,187			—		2		6,713			6,386			5
Net interest revenue	827			874			844			813			777			(5	)	6		2,545			2,245			13
Total revenue	3,057			3,107			3,094			2,954			2,964			(2	)	3		9,258			8,631			7
Provision for credit losses	1			1			(7		)	(2		)	(2		)	N/M		N/M		(5		)	(5		)	N/M
Noninterest expense (ex. amortization of intangible assets)	1,995			1,931			1,913			2,060			1,837			3		9		5,839			5,538			5
Amortization of intangible assets	35			36			36			37			37			(3	)	(5	)	107			112			(4	)
Total noninterest expense	2,030			1,967			1,949			2,097			1,874			3		8		5,946			5,650			5
Income before taxes	$	1,026		$	1,139		$	1,152		$	859		$	1,092		(10	)%	(6	)%	$	3,317		$	2,986		11	%
Pre-tax operating margin	34		%	37		%	37		%	29		%	37		%					36		%	35		%
Total revenue by line of business:
Asset Servicing	$	1,458		$	1,520		$	1,519		$	1,459		$	1,420		(4	)%	3	%	$	4,497		$	4,144		9	%
Pershing	558			558			581			569			542			—		3		1,697			1,611			5
Issuer Services	453			431			418			352			442			5		2		1,302			1,236			5
Treasury Services	324			329			321			322			316			(2	)	3		974			929			5
Clearance and Collateral Management	264			269			255			252			244			(2	)	8		788			711			11
Total revenue by line of business	$	3,057		$	3,107		$	3,094		$	2,954		$	2,964		(2	)%	3	%	$	9,258		$	8,631		7	%
(a)    Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue and investment and other income.
N/M - Not meaningful.

11

THE BANK OF NEW YORK MELLON CORPORATION
INVESTMENT SERVICES BUSINESS
											3Q18 vs.								YTD18 vs.
(dollars in millions unless otherwise noted)	3Q18		2Q18		1Q18		4Q17		3Q17		2Q18		3Q17		YTD18		YTD17		YTD17
Average loans	$	35,044	$	38,002	$	39,200	$	38,845	$	38,038	(8	)%	(8	)%	$	37,400	$	40,578	(8	)%
Average assets	$	246,276	$	264,387	$	278,095	$	260,494	$	252,461	(7	)%	(2	)%	$	262,804	$	252,675	4	%
Average deposits	$	192,741	$	203,064	$	214,130	$	204,680	$	198,299	(5	)%	(3	)%	$	203,233	$	198,796	2	%
AUC/A at period end (in trillions) (a)(b)	$	34.5	$	33.6	$	33.5	$	33.3	$	32.2	3	%	7	%	$	34.5	$	32.2	7	%
Market value of securities on loan at period end (in billions) (c)	$	415	$	432	$	436	$	408	$	382	(4	)%	9	%	$	415	$	382	9	%
Pershing
Average active clearing accounts (U.S. platform) (in thousands)	6,108		6,080		6,075		6,126		6,203		—		(2	)%
Average long-term mutual fund assets (U.S. platform)	$	527,336	$	512,645	$	514,542	$	508,873	$	500,998	3	%	5	%
Average investor margin loans (U.S. platform)	$	10,696	$	10,772	$	10,930	$	9,822	$	8,886	(1	)%	20	%
Clearance and Collateral Management
Average tri-party collateral management balances (in billions)	$	2,995	$	2,801	$	2,698	$	2,606	$	2,534	7	%	18	%
(a)    Sept. 30, 2018 information is preliminary.
(b)    Includes the AUC/A of CIBC Mellon of $1.4 trillion at Sept. 30, 2018 and June 30, 2018 and $1.3 trillion at March 31, 2018, Dec. 31, 2017 and Sept. 30, 2017.
(c)    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 $69 billion at Sept. 30, 2018, $70 billion at June 30, 2018, $73 billion at March 31, 2018, $71 billion at Dec. 31, 2017 and $68 billion at Sept. 30, 2017.

12

THE BANK OF NEW YORK MELLON CORPORATION
INVESTMENT MANAGEMENT BUSINESS
																3Q18 vs.										YTD18 vs.
(dollars in millions)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18		3Q17		YTD18			YTD17			YTD17
Revenue:
Investment management fees (a)	$	879		$	885		$	898		$	898		$	871		(1	)%	1	%	$	2,662		$	2,530		5	%
Performance fees	30			12			48			50			15			N/M		100		90			44			105
Investment management and performance fees (b)	909			897			946			948			886			1		3		2,752			2,574			7
Distribution and servicing	47			48			50			51			51			(2	)	(8	)	145			156			(7	)
Other (a)	(18		)	(4		)	16			(25		)	(19		)	N/M		N/M		(6		)	(36		)	N/M
Total fee and other revenue (a)	938			941			1,012			974			918			—		2		2,891			2,694			7
Net interest revenue	77			77			76			74			82			—		(6	)	230			255			(10	)
Total revenue	1,015			1,018			1,088			1,048			1,000			—		2		3,121			2,949			6
Provision for credit losses	(2		)	2			2			1			(2		)	N/M		N/M		2			1			N/M
Noninterest expense (ex. amortization of intangible assets)	688			685			692			756			687			—		—		2,065			2,038			1
Amortization of intangible assets	13			12			13			15			15			8		(13	)	38			45			(16	)
Total noninterest expense	701			697			705			771			702			1		—		2,103			2,083			1
Income before taxes	$	316		$	319		$	381		$	276		$	300		(1	)%	5	%	$	1,016		$	865		17	%
Pre-tax operating margin	31		%	31		%	35		%	26		%	30		%					33		%	29		%
Adjusted pre-tax operating margin – Non-GAAP (c)	35		%	35		%	39		%	29		%	34		%					36		%	33		%
Total revenue by line of business:
Asset Management	$	704		$	702		$	770		$	738		$	693		—	%	2	%	$	2,176		$	2,037		7	%
Wealth Management	311			316			318			310			307			(2	)	1		945			912			4
Total revenue by line of business	$	1,015		$	1,018		$	1,088		$	1,048		$	1,000		—	%	2	%	$	3,121		$	2,949		6	%
Average loans	$	16,763		$	16,974		$	16,876		$	16,813		$	16,724		(1	)%	—	%	$	16,871		$	16,481		2	%
Average assets	$	31,283		$	31,504		$	31,963		$	31,681		$	31,689		(1	)%	(1	)%	$	31,577		$	31,372		1	%
Average deposits	$	14,634		$	14,252		$	13,363		$	11,633		$	12,374		3	%	18	%	$	14,088		$	14,283		(1	)%
(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, treasury services, foreign exchange and other trading revenue and investment and other income.
(b)    On a constant currency basis, investment management and performance fees increased 3% (Non-GAAP) compared with 3Q17. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure.
(c)    Net of distribution and servicing expense. See "Supplemental Information - Explanation of GAAP and Non-GAAP Financial Measures" beginning on page 18 for the reconciliation of this Non-GAAP measure. In 1Q18, the adjusted pre-tax operating margin – Non-GAAP for prior periods was restated to include amortization of intangible assets and the provision for credit losses.
N/M - Not meaningful.

13

THE BANK OF NEW YORK MELLON CORPORATION
AUM BY PRODUCT, AUM FLOWS AND WEALTH MANAGEMENT CLIENT ASSETS
																3Q18 vs.										YTD18 vs.
(dollars in billions)	3Q18			2Q18			1Q18			4Q17			3Q17			2Q18		3Q17		YTD18			YTD17			YTD17
AUM by product type (a)(b)
Equity	$	167		$	160		$	161		$	161		$	158		4	%	6	%
Fixed income	202			197			206			206			206			3		(2	)
Index	352			334			333			350			333			5		6
Liability-driven investments, including currency overlay	652			663			700			667			622			(2	)	5
Multi-asset and alternative investments	184			181			185			214			207			2		(11	)
Cash	271			270			283			295			298			—		(9	)
Total AUM by product type	$	1,828		$	1,805		$	1,868		$	1,893		$	1,824		1	%	—	%
Changes in AUM(a)(b)
Beginning balance of AUM	$	1,805		$	1,868		$	1,893		$	1,824		$	1,771						$	1,893		$	1,648
Net inflows (outflows):
Long-term strategies:
Equity	(2		)	(3		)	—			(6		)	(2		)					(5		)	(8		)
Fixed income	2			(4		)	7			(2		)	4							5			8
Liability-driven investments, including currency overlay	16			2			13			23			(2		)					31			27
Multi-asset and alternative investments	2			(3		)	(3		)	2			3							(4		)	6
Total long-term active strategies inflows (outflows)	18			(8		)	17			17			3							27			33
Index	(3		)	(7		)	(13		)	(1		)	(3		)					(23		)	(16		)
Total long-term strategies inflows (outflows)	15			(15		)	4			16			—							4			17
Short-term strategies:
Cash	—			(11		)	(14		)	(4		)	10							(25		)	34
Total net inflows (outflows)	15			(26		)	(10		)	12			10							(21		)	51
Net market impact	18			17			(14		)	47			17							21			59
Net currency impact	(10		)	(53		)	29			10			26							(34		)	66
Divestiture/Other (c)	—			(1		)	(30		)	—			—							(31		)	—
Ending balance of AUM	$	1,828		$	1,805		$	1,868		$	1,893		$	1,824		1	%	—	%	$	1,828		$	1,824		—	%
Wealth Management client assets (a)(d)	$	261		$	254		$	246		$	251		$	245		3	%	7	%
(a)    Sept. 30, 2018 information is preliminary.
(b)    Excludes securities lending cash management assets and assets managed in the Investment Services business.
(c)    Primarily reflects a change in methodology beginning in 1Q18 to exclude AUM related to equity method investments as well as the CenterSquare divestiture.
(d)    Includes AUM and AUC/A in the Wealth Management business.

14

THE BANK OF NEW YORK MELLON CORPORATION
OTHER SEGMENT
(in millions)	3Q18			2Q18			1Q18			4Q17			3Q17			YTD18			YTD17
Fee revenue (loss)	$	7		$	40		$	57		$	(221	)	$	50		$	104		$	225
Net securities gains (losses)	—			1			(49		)	(26		)	19			(48		)	29
Total fee and other revenue (loss)	7			41			8			(247		)	69			56			254
Net interest (expense)	(13		)	(35		)	(1		)	(36		)	(20		)	(49		)	(43		)
Total (loss) revenue	(6		)	6			7			(283		)	49			7			211
Provision for credit losses	(2		)	(6		)	—			(5		)	(2		)	(8		)	(14		)
Noninterest expense	6			81			87			135			77			174			212
(Loss) income before taxes	$	(10	)	$	(69	)	$	(80	)	$	(413	)	$	(26	)	$	(159	)	$	13
Average loans and leases	$	2,000		$	2,090		$	2,530		$	1,114		$	1,182		$	2,204		$	1,275
Average assets	$	54,782		$	50,437		$	48,117		$	58,611		$	61,559		$	51,139		$	57,463

15

THE BANK OF NEW YORK MELLON CORPORATION
INVESTMENT SECURITIES PORTFOLIO
(dollars in millions)	June 30, 2018			3Q18 change in unrealized gain (loss)			Sept. 30, 2018					Fair value as a % of amortized cost (a)		Unrealized gain (loss)				Ratings (b)
							Amortized cost		Fair value									AAA/ AA-		A+/ A-		BBB+/ BBB-		BB+ and lower		Not rated
	Fair value
Agency RMBS	$	49,741		$	(214	)	$	50,934	$	49,555		97	%	$	(1,379	)		100	%	—	%	—	%	—	%	—	%
U.S. Treasury	23,962			(61		)	24,827		24,622			99		(205		)		100		—		—		—		—
Sovereign debt/sovereign guaranteed	13,069			(45		)	12,338		12,386			100		48				74		6		19		1		—
Agency commercial MBS	11,019			(2		)	11,129		11,050			99		(79		)		100		—		—		—		—
CLOs	3,177			(3		)	3,368		3,363			100		(5		)		98		—		—		1		1
U.S. Government agencies	3,269			(1		)	3,143		3,127			99		(16		)		100		—		—		—		—
Foreign covered bonds	2,976			(8		)	3,066		3,054			100		(12		)		100		—		—		—		—
State and political subdivisions	2,646			(13		)	2,372		2,352			99		(20		)		78		18		—		—		4
Non-agency RMBS (c)	1,621			(17		)	1,265		1,529			121		264				7		9		10		64		10
Non-agency commercial MBS	1,391			1			1,484		1,473			99		(11		)		96		4		—		—		—
Corporate bonds	1,146			(1		)	1,140		1,118			98		(22		)		12		72		16		—		—
Other (d)	4,484			(3		)	4,480		4,464			100		(16		)		98		—		—		—		2
Total investment securities	$	118,501	(e)	$	(367	)	$	119,546	$	118,093	(e)	99	%	$	(1,453	)	(e)(f)	94	%	2	%	3	%	1	%	—	%
(a)    Amortized cost reflects historical impairments.
(b)    Represents ratings by S&P, or the equivalent.
(c)    Includes RMBS that were included in the former Grantor Trust of $943 million at June 30, 2018 and $889 million at Sept. 30, 2018.
(d)    Includes commercial paper with a fair value of $699 million at June 30, 2018. There was no commercial paper at Sept. 30, 2018.
(e)    Includes net unrealized gains on derivatives hedging securities available-for-sale of $373 million at June 30, 2018 and $593 million at Sept. 30, 2018.
(f)    Unrealized losses of $311 million at Sept. 30, 2018 related to available-for-sale securities, net of hedges.

16

THE BANK OF NEW YORK MELLON CORPORATION
ALLOWANCE FOR CREDIT LOSSES AND NONPERFORMING ASSETS
	2018									2017
(dollars in millions)	Sept. 30			June 30			March 31			Dec. 31			Sept. 30
Allowance for credit losses - beginning of period:
Allowance for loan losses	$	145		$	156		$	159		$	161		$	165
Allowance for lending-related commitments	109			100			102			104			105
Allowance for credit losses - beginning of period	$	254		$	256		$	261		$	265		$	270
Net recoveries (charge-offs):
Charge-offs	(1		)	—			—			—			—
Recoveries	1			1			—			2			1
Total net recoveries (charge-offs)	—			1			—			2			1
Provision for credit losses	(3		)	(3		)	(5		)	(6		)	(6		)
Allowance for credit losses - end of period	$	251		$	254		$	256		$	261		$	265
Allowance for credit losses - end of period:
Allowance for loan losses	$	140		$	145		$	156		$	159		$	161
Allowance for lending-related commitments	111			109			100			102			104
Allowance for credit losses - end of period	$	251		$	254		$	256		$	261		$	265
Allowance for loan losses as a percentage of total loans	0.26		%	0.25		%	0.26		%	0.26		%	0.27		%
Nonperforming assets	$	81		$	82		$	85		$	90		$	94

17

THE BANK OF NEW YORK MELLON CORPORATION
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
BNY Mellon has included in this Financial Supplement certain Non-GAAP financial measures on a tangible basis, as a supplement to GAAP information. Tangible common shareholders’ equity excludes goodwill and intangible assets, net of deferred tax liabilities. BNY Mellon believes that the return on tangible common equity measure is an additional useful measure for investors because it presents a measure of those assets that can generate income. BNY Mellon has provided a measure of tangible book value per common share, which it believes provides additional useful information as to the level of tangible assets in relation to shares of common stock outstanding.
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 the comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.
BNY Mellon has presented the operating margin for the Investment Management business net of distribution and servicing expense that was passed to third parties who distribute or service our managed funds. BNY Mellon believes that this measure is useful when evaluating the performance of the Investment Management business relative to industry competitors.
The presentation of the growth rates of investment management and performance fees on a constant currency basis permits investors to assess the significance of changes in foreign currency exchange rates. Growth rates on a constant currency basis were determined by applying the current period foreign currency exchange rates to the prior period revenue. BNY Mellon believes that this presentation, as a supplement to GAAP information, gives investors a clearer picture of the related revenue results without the variability caused by fluctuations in foreign currency exchange rates.
Notes:
Certain immaterial reclassifications/revisions have been made to prior periods to place them on a basis comparable with the current period's presentation.
In businesses where average deposits are greater than average loans, average assets include an allocation of investment securities equal to the difference.
Quarterly and year-to-date return on common and tangible common equity ratios are annualized.
Return on common equity and tangible common equity reconciliation
(dollars in millions)	3Q18			2Q18			1Q18			4Q17			3Q17			YTD18			YTD17
Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP	$	1,075		$	1,055		$	1,135		$	1,126		$	983		$	3,265		$	2,789
Add: Amortization of intangible assets	48			48			49			52			52			145			157
Less: Tax impact of amortization of intangible assets	11			11			12			18			17			34			54
Adjusted net income applicable to common shareholders of The Bank of New York Mellon Corporation, excluding amortization of intangible assets – Non-GAAP	$	1,112		$	1,092		$	1,172		$	1,160		$	1,018		$	3,376		$	2,892
Average common shareholders’ equity	$	38,036		$	37,750		$	37,593		$	36,952		$	36,780		$	37,795		$	35,876
Less: Average goodwill	17,391			17,505			17,581			17,518			17,497			17,492			17,415
Average intangible assets	3,283			3,341			3,397			3,437			3,487			3,340			3,532
Add: Deferred tax liability – tax deductible goodwill (a)	1,066			1,054			1,042			1,034			1,561			1,066			1,561
Deferred tax liability – intangible assets (a)	699			709			716			718			1,092			699			1,092
Average tangible common shareholders’ equity – Non-GAAP	$	19,127		$	18,667		$	18,373		$	17,749		$	18,449		$	18,728		$	17,582
Return on common equity – GAAP	11.2		%	11.2		%	12.2		%	12.1		%	10.6		%	11.6		%	10.4		%
Return on tangible common equity – Non-GAAP	23.1		%	23.5		%	25.9		%	25.9		%	21.9		%	24.1		%	22.0		%
(a)    Deferred tax liabilities for the periods in 2017 are based on fully phased-in U.S. capital rules.

18

THE BANK OF NEW YORK MELLON CORPORATION
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
Book value and tangible book value per common share reconciliation	2018									2017
(dollars in millions except common shares)	Sept. 30			June 30			March 31			Dec. 31			Sept. 30
BNY Mellon shareholders’ equity at period end – GAAP	$	41,560		$	41,505		$	41,728		$	41,251		$	40,523
Less: Preferred stock	3,542			3,542			3,542			3,542			3,542
BNY Mellon common shareholders’ equity at period end – GAAP	38,018			37,963			38,186			37,709			36,981
Less: Goodwill	17,390			17,418			17,596			17,564			17,543
Intangible assets	3,258			3,308			3,370			3,411			3,461
Add: Deferred tax liability – tax deductible goodwill (a)	1,066			1,054			1,042			1,034			1,561
Deferred tax liability – intangible assets (a)	699			709			716			718			1,092
BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP	$	19,135		$	19,000		$	18,978		$	18,486		$	18,630
Period-end common shares outstanding (in thousands)	988,777			999,945			1,010,676			1,013,442			1,024,022
Book value per common share – GAAP	$	38.45		$	37.97		$	37.78		$	37.21		$	36.11
Tangible book value per common share – Non-GAAP	$	19.35		$	19.00		$	18.78		$	18.24		$	18.19
(a)    Deferred tax liabilities at Dec. 31, 2017 and Sept. 30, 2017 are based on fully phased-in U.S. capital rules.
Net interest margin reconciliation
(dollars in millions)	3Q18			2Q18			1Q18			4Q17			3Q17
Net interest revenue – GAAP	$	891		$	916		$	919		$	851		$	839
Add: Tax equivalent adjustment	5			5			6			11			12
Net interest revenue (FTE) – Non-GAAP	$	896		$	921		$	925		$	862		$	851
Average interest-earning assets	$	279,218		$	292,086		$	302,069		$	297,166		$	291,841
Net interest margin – GAAP (a)	1.27		%	1.26		%	1.22		%	1.14		%	1.15		%
Net interest margin (FTE) – Non-GAAP (a)	1.28		%	1.26		%	1.23		%	1.16		%	1.16		%
(a)    Net interest margin is annualized.

19

THE BANK OF NEW YORK MELLON CORPORATION
SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
Pre-tax operating margin reconciliation - Investment Management business
(dollars in millions)	3Q18			2Q18			1Q18			4Q17			3Q17			YTD18			YTD17
Income before income taxes – GAAP	$	316		$	319		$	381		$	276		$	300		$	1,016		$	865
Total revenue – GAAP	$	1,015		$	1,018		$	1,088		$	1,048		$	1,000		$	3,121		$	2,949
Less: Distribution and servicing expense	99			103			110			107			110			312			315
Adjusted total revenue, net of distribution and servicing expense – Non-GAAP	$	916		$	915		$	978		$	941		$	890		$	2,809		$	2,634
Pre-tax operating margin – GAAP (a)	31		%	31		%	35		%	26		%	30		%	33		%	29		%
Adjusted pre-tax operating margin, net of distribution and servicing expense – Non-GAAP (a)	35		%	35		%	39		%	29		%	34		%	36		%	33		%
(a)    Income before taxes divided by total revenue.
Constant currency reconciliations							3Q18 vs.
(dollars in millions)	3Q18			3Q17			3Q17
Consolidated:
Investment management and performance fees	$	922		$	901		2		%
Impact of changes in foreign currency exchange rates	—			(4		)
Adjusted investment management and performance fees – Non-GAAP	$	922		$	897		3		%
Investment Management business:
Investment management and performance fees	$	909		$	886		3		%
Impact of changes in foreign currency exchange rates	—			(4		)
Adjusted investment management and performance fees – Non-GAAP	$	909		$	882		3		%

20