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Bank Of New York Mellon: Bny Mellon 1Q16 Earnings Release News Release Contacts: MEDIA: ANALYSTS: Kevin Heine Valerie Haertel

The following excerpt is from the company's SEC filing.

(212) 635-1590

(212) 635-8529

kevin.heine@bnymellon.com

valerie.haertel@bnymellon.com

BNY MELLON REPORTS

QUARTER EARNINGS OF

MILLION OR

PER COMMON SHARE

Earnings per common share up

year-over-year

GENERATED APPROXIMATELY

BASIS POINTS OF POSITIVE OPERATING LEVERAGE YEAR-OVER-YEAR ON AN ADJUSTED BASIS

Net interest revenue increased

and fee and other revenue decreased

Total noninterest expense decreased

on a reported and adjusted basis

EXECUTING ON CAPITAL PLAN AND RETURN OF VALUE TO COMMON SHAREHOLDERS

Repurchased

16.2 million

common shares for

$577 million

Adjusted return on tangible common equity of

Estimated SLR on a fully phased-in basis exceeded 5%

NEW YORK,

April 21, 2016

The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE: BK) today reported

first quarter

net income applicable to common shareholders of

$804 million

per diluted common share, compared with net income applicable to common shareholders of

$766 million

per diluted common share in the

first quarter of 2015

. In the

fourth quarter of

, net income applicable to common shareholders was

$637 million

per diluted common share, or $755 million, or $0.68 per diluted common share, adjusted for the impairment charge related to a prior court decision, litigation and restructuring charges.

“In challenging market conditions, we generated solid earnings growth as we executed on our strategic priorities. First quarter earnings per share grew by 9 percent year over year and we generated approximately 250 basis points of positive operating leverage while improving our operating margin to 31 percent,” Gerald L. Hassell, chairman and chief executive officer, said.

“We are intently focused on enhancing the client experience and driving further efficiencies. Our business improvement process has enabled funding for important strategic investments for regulatory compliance and risk management excellence, technology and servicing platform improvements, and the delivery of new solutions for our clients,” Mr. Hassell added.

“We are confident that we are on the right track to achieve our Investor Day targets, delivering value to our clients and our shareholders,” Mr. Hassell concluded.

_________________________________________________________________________________

See the “Financial Summary” on page 4 for the Non-GAAP adjustments and additional information related to operating leverage. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page

for the tangible common equity ratio reconciliation. See “Capital and Liquidity” beginning on page 13 for the reconciliation of the estimated SLR on a fully phased-in basis.

Page -

BNY Mellon 1Q16 Earnings Release

CONFERENCE CALL INFORMATION

Gerald L. Hassell, chairman and chief executive officer, and Thomas P. Gibbons, vice chairman and chief financial officer, along with other members of executive management from BNY Mellon, will host a conference call and simultaneous live audio webcast at 8:00 a.m. EDT on

. This conference call and audio webcast will include forward-looking statements and may include other material information.

Investors and analysts wishing to access the conference call and audio webcast may do so by dialing (888) 898-7224 (U.S.) or 913-312-9027 (International), and using the passcode: 619690, or by logging on to www.bnymellon.com. Earnings materials will be available at www.bnymellon.com beginning at approximately 6:30 a.m. EDT on

. Replays of the conference call and audio webcast will be available beginning

at approximately 2 p.m. EDT through May 21, 2016 by dialing (888) 203-1112 (U.S.) or (719) 457-0820 (International), and using the passcode: 2620345. The archived version of the conference call and audio webcast will also be available at www.bnymellon.com for the same time period.

FINANCIAL HIGHLIGHTS

(comparisons are

unless otherwise stated)

Earnings per share

Net income applicable to common shareholders of The Bank of New York Mellon Corporation

(in millions, except per share amounts)

GAAP results

Add: Litigation and restructuring charges

Non-GAAP results

Total revenue was $

3.7 billion

, a decrease of

(Non-GAAP)

- Investment services fees increased

reflecting higher money market fees and net new business partially offset by lower market values and lost business in clearing services.

- Investment management and performance fees decreased

on a constant currency basis (Non-GAAP), driven by lower equity market values and net outflows in 2015

- Foreign exchange revenue decreased

lower volumes.

- Financing-related fees increased

$14 million

driven by higher fees related to secured intraday credit.

- Investment and other income increased

$45 million

driven by higher lease-related gains.

- Net interest revenue increased

$38 million

driven by higher yields on interest-earning assets, partially offset by higher rates paid on interest-bearing liabilities and the impact of interest rate hedging activities.

The provision for credit losses was

$10 million

Noninterest expense was

$2.6 billion

, on both a reported and adjusted basis (Non-GAAP)

. The decrease reflects lower expenses in nearly all categories, driven by the favorable impact of a stronger U.S. dollar, lower staff and legal expenses and the benefit of the business improvement process, partially offset by higher distribution and servicing expense.

Generated approximately

basis points of positive operating leverage year-over-year on an adjusted basis (Non-GAAP)

Effective tax rate of

Assets under custody and/or administration (“AUC/A”) and Assets under management (“AUM”)

- AUC/A of

$29.1 trillion

reflecting net new business and the favorable impact of a weaker U.S. dollar (principally versus the Euro), partially offset by lower market values.

-- Estimated new AUC/A wins in Asset Servicing of

$40 billion

- AUM of

$1.64 trillion

net outflows primarily in 2015 and the unfavorable impact of a stronger U.S. dollar (principally versus the British pound).

Net long-term inflows of $1 billion in 1Q16 were driven by continued strength in liability-driven investments offset by outflows of index and equity investments.

-- Net short-term outflows totaled

$9 billion

- Repurchased

- Adjusted return on tangible common equity of

(Non-GAAP) in

- Estimated supplementary leverage ratio (“SLR”), on a fully phased-in basis (Non-GAAP), exceeded 5.0%

for the reconciliation of Non-GAAP measures. Unless otherwise noted, Non-GAAP excludes net (loss) income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets, M&I, litigation and restructuring charges (recoveries) and the impairment charge related to a prior court decision, if applicable.

Note: Throughout this document, sequential growth rates are unannualized.

FINANCIAL SUMMARY

(dollars in millions, except per share amounts; common shares in thousands)

1Q16 vs.

Revenue:

Fee and other revenue

(Loss) income from consolidated investment management funds

Total revenue – GAAP

Less: Net (loss) income attributable to noncontrolling interests related to consolidated investment management funds

Total revenue – Non-GAAP

Provision for credit losses

Expense:

Noninterest expense – GAAP

Less: Amortization of intangible assets

Total noninterest expense – Non-GAAP

Income:

Income before income taxes

Provision for income taxes

Net loss (income) attributable to noncontrolling interests

Net income applicable to shareholders of The Bank of New York Mellon Corporation

Preferred stock dividends

Operating leverage – Non-GAAP

Key Metrics:

Pre-tax operating margin

Return on common equity

(annualized)

Return on tangible common equity

– Non-GAAP

Non-GAAP adjusted

Fee revenue as a percentage of total revenue excluding net securities gains

Percentage of non-U.S. total revenue

Average common shares and equivalents outstanding:

1,079,641

1,088,880

1,098,003

1,113,790

1,118,602

Diluted

1,085,284

1,096,385

1,105,645

1,122,135

1,126,306

Period end:

Full-time employees

52,100

51,200

51,300

50,700

50,500

Book value per common share – GAAP

Tangible book value per common share – Non-GAAP

Cash dividends per common share

Common dividend payout ratio

Closing stock price per common share

Market capitalization

39,669

44,738

42,789

46,441

45,130

Common shares outstanding

1,077,083

1,085,343

1,092,953

1,106,518

1,121,512

(a) Primarily attributable to noncontrolling interests related to consolidated investment management funds.

Pre-tax operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. The year-over-year pre-tax operating leverage (Non-GAAP) was based on a decrease in total revenue, as adjusted (Non-GAAP), of 64 basis points, and a decrease in total noninterest expense, as adjusted (Non-GAAP), of 311 basis points. The sequential operating leverage (Non-GAAP) was based on an increase in total revenue, as adjusted (Non-GAAP), of 43 basis points, and a decrease in total noninterest expense, as adjusted (Non-GAAP), of 211 basis points.

Non-GAAP excludes the net income (loss) attributable to noncontrolling interests related to consolidated investment management funds, amortization of intangible assets, M&I, litigation and restructuring charges (recoveries) and the impairment charge related to a prior court decision, if applicable. See “Supplemental information – Explanation of GAAP and Non-GAAP financial measures” beginning on page

Includes fee revenue, net interest revenue and (loss) income from consolidated investment management funds, net of net loss (income) attributable to noncontrolling interests.

bps – basis points.

CONSOLIDATED BUSINESS METRICS

Consolidated business metrics

Changes in AUM

(in billions)

Beginning balance of AUM

Net inflows (outflows):

Long-term:

Equity

Fixed income

Liability-driven investments

Alternative investments

Total long-term active inflows (outflows)

Total long-term inflows (outflows)

Short term:

Total net inflows (outflows)

Net market/currency impact/acquisition

Ending balance of AUM

AUM at period end, by product type:

Equity

Fixed income

Index

Alternative investments

Total AUM

Investment Management:

Average loans

(in millions)

14,275

13,447

12,779

12,298

11,634

Average deposits

15,971

15,497

15,282

14,638

15,217

Investment Services:

45,004

45,844

46,222

45,822

45,071

215,707

229,241

232,250

238,404

235,524

AUC/A at period end

(in trillions) (d)

Market value of securities on loan at period end

(in billions) (e)

Asset servicing:

Estimated new business wins (AUC/A)

Depositary Receipts:

Number of sponsored programs

Clearing services:

Average active clearing accounts (U.S. platform)

(in thousands)

Average long-term mutual fund assets (U.S. platform)

415,025

437,260

447,287

466,195

456,954

Average investor margin loans (U.S. platform)

11,063

11,575

11,806

11,890

11,232

Broker-Dealer:

Average tri-party repo balances

Excludes securities lending cash management assets and assets managed in the Investment Services business.

Includes currency overlay assets under management.

Preliminary.

Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of

$1.1 trillion

March 31, 2016

$1.0 trillion

Dec. 31, 2015

Sept. 30, 2015

June 30, 2015

March 31, 2015

Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totaled

$56 billion

$55 billion

$61 billion

$68 billion

$69 billion

The following table presents key market metrics at period end and on an average basis.

Key market metrics

S&P 500 Index

S&P 500 Index – daily average

FTSE 100 Index

FTSE 100 Index – daily average

MSCI World Index

MSCI World Index – daily average

Barclays Capital Global Aggregate Bond

Index

(a)(b)

NYSE and NASDAQ share volume

JPMorgan G7 Volatility Index – daily average

Average Fed Funds effective rate

20 bps

25 bps

Foreign exchange rates vs. U.S. dollar:

British pound

British pound - average rate

Euro - average rate

Period end.

Unhedged in U.S. dollar terms.

The JPMorgan G7 Volatility Index is based on the implied volatility in 3-month currency options.

FEE AND OTHER REVENUE

(dollars in millions)

Investment services fees:

Asset servicing

Issuer services

Treasury services

Total investment services fees

Foreign exchange and other trading revenue

Distribution and servicing

Total fee revenue excluding investment and other income

Net securities gains

Total fee and other revenue

Asset servicing fees include securities lending revenue of

$50 million

$46 million

$49 million

$43 million

Not meaningful.

KEY POINTS

Asset servicing fees were

$1.0 billion

, flat year-over-year and an increase of

sequentially.

Both comparisons primarily reflect net new business and higher securities lending revenue, offset by lower market values. The year-over-year comparison also reflects the unfavorable impact of a stronger U.S. dollar.

Clearing services fees were

$350 million

, an increase of

Both increases primarily reflect higher money market fees, partially offset by the impact of lost business. The sequential increase also reflects higher volumes.

Issuer services fees were

$244 million

Both the year-over-year and sequential increases primarily reflect higher money market fees in Corporate Trust and higher dividend fees in Depositary Receipts.

Treasury services fees were

$131 million

both year-over-year and sequentially.

Both decreases primarily reflect higher compensating balance credits provided to clients, which shifts revenue from fees to net interest revenue.

Investment management and performance fees were

$812 million

year-over-year, or

on a constant currency basis (Non-GAAP). Both the year-over-year decrease on a constant currency basis (Non-GAAP) and the sequential decrease of

primarily reflect lower equity market values and net outflows in 2015, partially offset by higher money market fees. The sequential decrease also reflects seasonally lower performance fees.

Other trading revenue (loss)

Total foreign exchange and other trading revenue

Foreign exchange and other trading revenue totaled

$175 million

$229 million

$173 million

, foreign exchange revenue totaled

$171 million

sequentially. The year-over-year decrease primarily reflects

The sequential increase primarily reflects higher volatility

, partially offset by the impact of foreign currency hedging activity. Excluding the impact of hedging activity, foreign exchange revenue increased 12% sequentially.

Other trading revenue was

$4 million

$12 million

$8 million

. Both decreases primarily reflect losses on hedging activities in the Investment Management businesses, partially offset by the positive impact of interest rate hedging (which is offset in net interest revenue) and higher fixed income trading revenue.

Financing-related fees were

$54 million

$40 million

$51 million

. The year-over-year increase primarily reflects higher fees related to secured intraday credit. The sequential increase primarily reflects higher underwriting fees.

Distribution and servicing fees were

$39 million

$41 million

in both

. Distribution and servicing fees were favorably impacted by higher money market fees, but were more than offset by certain fees paid to introducing brokers.

Lease-related gains (losses)

Corporate/bank-owned life insurance

Expense reimbursements from joint venture

Seed capital gains

Private equity gains (losses)

Asset-related gains (losses)

Equity investment (losses)

Other income

Total investment and other income

Excludes the gain (loss) on seed capital investments in consolidated investment management funds which are reflected in operations of consolidated investment management funds, net of noncontrolling interests. The gain (loss) on seed capital investments in consolidated investment management funds was

$1 million

$11 million

$(17) million

$3 million

$21 million

Investment and other income was

$105 million

$60 million

$93 million

. Both increases primarily reflect higher lease-related gains. The sequential increase was partially offset by lower other income reflecting the termination fees in our clearing business recorded in 4Q15 and lower income from corporate/bank-owned life insurance.

NET INTEREST REVENUE

Net interest revenue (non-FTE)

Net interest revenue (FTE) – Non-GAAP

Net interest margin (FTE)

Selected average balances:

Cash/interbank investments

127,624

128,328

130,090

125,626

123,647

Trading account securities

118,538

119,532

121,188

128,641

123,476

61,196

61,964

61,657

61,076

57,935

Interest-earning assets

310,678

312,610

315,672

318,596

308,104

Interest-bearing deposits

162,017

160,334

169,753

170,716

159,520

Noninterest-bearing deposits

82,944

85,878

85,046

84,890

89,592

Selected average yields/rates:

Average cash/interbank investments as a percentage of average interest-earning assets

Average noninterest-bearing deposits as a percentage of average interest-earning assets

FTE – fully taxable equivalent.

Net interest revenue totaled

$6 million

sequentially. Both increases primarily reflect higher yields on interest-earning assets, partially offset by higher rates paid on interest-bearing liabilities and the unfavorable impact of interest rate hedging activities (which are primarily offset in foreign exchange and other trading revenue).

NONINTEREST EXPENSE

Professional, legal and other purchased services

Software and equipment

Net occupancy

Sub-custodian

Business development

Total noninterest expense – GAAP

Total staff expense as a percentage of total revenue

Total noninterest expense excluding amortization of intangible assets and M&I, litigation and restructuring charges (recoveries) – Non-GAAP

Total noninterest expense excluding amortization of intangible assets and M&I, litigation and restructuring charges (recoveries) (Non-GAAP) decreased

The year-over-year decrease reflects lower expenses in nearly all categories, primarily driven by the favorable impact of a stronger U.S. dollar, lower staff and legal expenses and the benefit of the business improvement process, partially offset by higher distribution and servicing expense. The savings generated by the business improvement process primarily reflects the benefits of our technology insourcing strategy and the implementation of our global real estate strategy.

Staff expense decreased year-over-year primarily reflecting lower estimated 2016 incentives and a higher adjustment for the finalization of the annual incentive awards, partially offset by the curtailment gain related to the U.S. pension plan recorded in 1Q15 and higher severance expense in ongoing support of our business improvement process.

The sequential decrease reflects lower expenses in all categories, except other and distribution and servicing expenses. The decrease in staff expense primarily reflects lower compensation and employee benefits expenses, partially offset by higher incentives, primarily due to the impact of vesting of long-term stock awards for retirement eligible employees. The increase in other expense primarily reflects the adjustments to bank assessment charges recorded in 4Q15. The increase in distribution and servicing expense is due to lower money market fee waivers.

INVESTMENT SECURITIES PORTFOLIO

, the fair value of our investment securities portfolio totaled

$117.8 billion

. The net unrealized pre-tax gain on our total securities portfolio was

$1.2 billion

$357 million

. The increase in the net unrealized pre-tax gain was primarily driven by a decline in market interest rates. At

, the fair value of the held-to-maturity securities totaled

$42.2 billion

and represented

of the fair value of the total investment securities portfolio.

The following table shows the distribution of our investment securities portfolio.

Investment securities

change in

Fair value

as a % of amortized

Unrealized

Ratings

Amortized

Agency RMBS

49,464

49,468

49,870

U.S. Treasury

23,920

23,803

23,870

Sovereign debt/sovereign guaranteed

16,708

15,626

15,866

Non-agency RMBS

European floating rate notes

Commercial MBS

State and political subdivisions

Foreign covered bonds

Corporate bonds

U.S. Government agencies

Consumer ABS

Total investment securities

118,779

116,563

117,762

(d)(e)

(a) Amortized cost before impairments.

These RMBS were included in the former Grantor Trust and were marked-to-market in 2009. We believe these RMBS would receive higher credit ratings if these ratings incorporated, as additional credit enhancements, the difference between the written-down amortized cost and the current face amount of each of these securities.

Includes commercial paper with a fair value of

$1.9 billion

$1.7 billion

and money market funds with a fair value of

$886 million

$862 million

, respectively.

Includes net unrealized losses on derivatives hedging securities available-for-sale of

$292 million

$763 million

Unrealized gains of

$685 million

related to available-for-sale securities.

NONPERFORMING ASSETS

Nonperforming assets

March 31, 2016

March 31, 2015

Loans:

Financial institutions

Other residential mortgages

Wealth management loans and mortgages

Commercial real estate

Total nonperforming loans

Other assets owned

Total nonperforming assets

Nonperforming assets ratio

Allowance for loan losses/nonperforming loans

Total allowance for credit losses/nonperforming loans

Nonperforming assets were

, unchanged compared with

ALLOWANCE FOR CREDIT LOSSES, PROVISION AND NET CHARGE-OFFS

Allowance for credit losses, provision and net charge-offs

Allowance for credit losses - beginning of period

Net (charge-offs) recoveries:

Allowance for credit losses - end of period

Allowance for lending-related commitments

The allowance for credit losses was

$287 million

$275 million

. Net recoveries were

$2 million

in 1Q16 reflected in the other residential mortgage portfolio.

CAPITAL AND LIQUIDITY

The common equity Tier 1 (“CET1”), Tier 1 and Total risk-based regulatory capital ratios in the first section of the table below are based on Basel III components of capital, as phased-in (referred to as “Transitional ratios”), and credit risk asset risk-weightings using the U.S. capital rules’ advanced approaches framework (the “Advanced Approach”) as the related risk-weighted assets (“RWA”) were higher when calculated under the Advanced Approach at

. Our risk-based capital adequacy is determined using the higher of RWA determined using the Advanced Approach and the U.S. capital rules’ standardized approach (the “Standardized Approach”). The leverage capital ratios are based on Basel III components of capital, as phased-in and quarterly average total assets. The transitional capital ratios for March 31, 2016 were negatively impacted by the additional phase-in requirements for 2016. Our consolidated capital ratios are shown in the following table.

Capital ratios

Consolidated regulatory capital ratios:

CET1 ratio

Tier 1 capital ratio

Total (Tier 1 plus Tier 2) capital ratio

Leverage capital ratio

BNY Mellon shareholders’ equity to total assets ratio – GAAP

BNY Mellon common shareholders’ equity to total assets ratio – GAAP

BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP

Selected regulatory capital ratios – fully phased-in – Non-GAAP:

Estimated CET1 ratio:

Estimated supplementary leverage ratio (“SLR”)

Regulatory capital ratios for

are preliminary.

the CET1, Tier 1 and Total risk-based consolidated regulatory capital ratios determined under the transitional Basel III Standardized Approach were

respectively,

respectively.

for a reconciliation of these ratios.

The estimated SLR on a fully phased-in basis (Non-GAAP) for our largest bank subsidiary, The Bank of New York Mellon, was

Estimated Basel III CET1 generation presented on a fully phased-in basis – Non-GAAP – preliminary

Estimated fully phased-in Basel III CET1 – Non-GAAP – Beginning of period

16,082

Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP

Goodwill and intangible assets, net of related deferred tax liabilities

Gross Basel III CET1 generated

Capital deployed:

Dividends

Common stock repurchased

Total capital deployed

Other comprehensive income

Additional paid-in capital

Total other deductions

Net Basel III CET1 generated

Estimated fully phased-in Basel III CET1 – Non-GAAP – End of period

16,603

(a) Primarily related to stock awards, the exercise of stock options and stock issued for employee benefit plans.

The table presented below compares the fully phased-in Basel III capital components and ratios to those capital components and ratios determined on a transitional basis.

Basel III capital components and ratios at March 31, 2016 – preliminary

Fully phased-in Basel III - Non-GAAP

Transitional basis

Common shareholders’ equity

35,907

36,229

(18,817

(17,760

Net pension fund assets

Equity method investments

Deferred tax assets

Total CET1

18,066

Other Tier 1 capital:

Trust preferred securities

Disallowed deferred tax assets

Total Tier 1 capital

19,147

20,561

Tier 2 capital:

Subordinated debt

Total Tier 2 capital - Standardized Approach

Excess of expected credit losses

Less: Allowance for credit losses

Total Tier 2 capital - Advanced Approach

Total capital:

19,582

21,168

19,334

20,920

Risk-weighted assets:

151,397

152,682

169,752

171,114

Standardized Approach:

Estimated Basel III CET1 ratio

Advanced Approach:

(a) Reflects transitional adjustments to CET1, Tier 1 capital and Tier 2 capital required in 2016 under the U.S. capital rules.

BNY Mellon has presented its estimated fully phased-in Basel III CET1 and other risk-based capital ratios and SLR based on its interpretation of the U.S. capital rules, which are being gradually phased-in over a multi-year period, and on the application of such rules to BNY Mellon’s businesses as currently conducted. Management views the estimated fully phased-in Basel III CET1 and other risk-based capital ratios and SLR as key measures in monitoring BNY Mellon’s capital position and progress against future regulatory capital standards. Additionally, the presentation of the estimated fully phased-in Basel III CET1 and other risk-based capital ratios and SLR are intended to allow investors to compare these ratios with estimates presented by other companies.

Our capital and liquidity ratios are necessarily subject to, among other things, BNY Mellon’s further review of applicable rules, anticipated compliance with all necessary enhancements to model calibration, approval by regulators of certain models used as part of RWA calculations, other refinements, further implementation guidance from regulators, market practices and standards and any changes BNY Mellon may make to its businesses. Consequently, our capital and liquidity ratios remain subject to ongoing review and revision and may change based on these factors.

Supplementary Leverage Ratio (“SLR”)

The following table presents the components of our estimated SLR using fully phased-in Basel III components of capital.

Estimated fully phased-in SLR – Non-GAAP

Total estimated fully phased-in Basel III CET1 – Non-GAAP

Additional Tier 1 capital

18,612

Total leverage exposure:

Quarterly average total assets

364,554

368,590

Less: Amounts deducted from Tier 1 capital

19,304

19,403

Total on-balance sheet assets, as adjusted

345,250

349,187

Off-balance sheet exposures:

Potential future exposure for derivatives contracts (plus certain other items)

Repo-style transaction exposures included in SLR

Credit-equivalent amount of other off-balance sheet exposures (less SLR exclusions)

24,950

26,025

Total off-balance sheet exposures

31,191

33,623

376,441

382,810

The estimated fully phased-in SLR (Non-GAAP) is based on our interpretation of the U.S. capital rules. When the SLR is fully phased-in in 2018, we expect to maintain an SLR of over 5%. The minimum required SLR is 3% and there is a 2% buffer, in addition to the minimum, that is applicable to U.S. G-SIBs.

information is preliminary.

, total Tier 1 capital was

$16,167 million

$15,142 million

, respectively, and total leverage exposure was

$312,988 million

$316,270 million

, respectively, for The Bank of New York Mellon.

Liquidity Coverage Ratio (“LCR”)

The U.S. LCR rules became effective Jan. 1, 2015 and currently require BNY Mellon to meet an LCR of 90%, increasing to 100% when fully phased-in on Jan. 1, 2017. Our estimated LCR on a consolidated basis is compliant with the fully phased-in requirements of the U.S. LCR as of

based on our understanding of the U.S. LCR rules. Our consolidated high-quality liquid assets (“HQLA”) before haircuts, totaled $202 billion at March 31, 2016, compared with $218 billion at Dec. 31, 2015.

REVIEW OF BUSINESSES

Segment results are subject to reclassification whenever improvements are made in the measurement principles or when organizational changes are made. In the first quarter of 2016, we reclassified the results of the credit-related activities to the Investment Services segment from the Other segment. This reclassification reflects our strategy to provide credit services to our Investment Services clients and did not impact the consolidated results. Also, concurrent with this reclassification, the provision for credit losses associated with the respective credit portfolios is now reflected in each business segment. All prior periods have been restated.

Beginning in the first quarter of 2016, we revised the net interest revenue for our business to reflect adjustments to our transfer pricing methodology to better reflect the value of certain deposits. Also beginning in the first quarter of 2016, we refined the expense allocation process for indirect expenses to simplify the expenses recorded in the Other segment to include only expenses not directly attributable to the Investment Management and Investment Services operations. These changes did not impact the consolidated results.

INVESTMENT MANAGEMENT

provides investment management services to institutional and retail investors, as well as investment management, wealth and estate planning and private banking solutions to high net worth individuals and families, and foundations and endowments.

(dollars in millions, unless otherwise noted)

Investment management fees:

Mutual funds

Institutional clients

Performance fees

Noninterest expense (ex. amortization of intangible assets)

Income before taxes (ex. provision for credit losses and amortization of intangible assets)

Adjusted pre-tax operating margin

Total net (outflows) inflows

Average balances:

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.

Excludes the net negative impact of money market fee waivers, amortization of intangible assets and provision for credit losses and is net of distribution and servicing expense.

for the reconciliation of this Non-GAAP measure.

Preliminary.

N/M – Not meaningful.

INVESTMENT MANAGEMENT KEY POINTS

Assets under management were

Net short-term outflows were

Income before taxes, excluding provision for credit losses and amortization of intangible assets, totaled

$235 million

$895 million

non-U.S. revenue in

Investment management fees were

$786 million

sequential decrease primarily reflect lower equity market values and net outflows in 2015, partially offset by higher money market fees.

Performance fees were

$15 million

$55 million

. The sequential decrease was driven by seasonality.

. Both increases primarily reflect higher money market fees.

Other losses were

$31 million

compared with other revenue of

and other revenue of

$22 million

. Both decreases primarily reflect lower seed capital gains, losses on hedging activities and increased payments to Investment Services related to higher money market fees.

year-over-year and decreased

sequentially. Both comparisons primarily reflect record average loans and deposits, partially offset by the impact of changes in the internal crediting rates for deposits beginning in 1Q16.

Average loans increased

sequentially; average deposits increased

Total noninterest expense (excluding amortization of intangible assets) decreased

sequentially. Both decreases primarily reflect lower incentive and business development expenses and a lower indirect expense allocation beginning in 1Q16, partially offset by higher distribution and servicing expense driven by lower money market fee waivers. The year-over-year decrease also reflects the favorable impact of a stronger U.S. dollar.

INVESTMENT SERVICES

provides global custody and related services, broker-dealer services, global collateral services, corporate trust, depositary receipt and clearing services as well as global payment/working capital solutions to global financial institutions and credit-related activities. In the first quarter of 2016, we reclassified the results of the credit-related activities to the Investment Services segment from the Other segment. All prior periods have been restated.

Pre-tax operating margin (ex. provision for credit losses and amortization of intangible assets)

Investment services fees as a percentage of noninterest expense

Securities lending revenue

(in trillions) (c)

Average tri-party repo balances (

Other revenue includes investment management fees, financing-related fees, distribution and servicing revenue and investment and other income.

Noninterest expense excludes amortization of intangible assets and litigation expense.

Includes the AUC/A of CIBC Mellon of

N/M - Not meaningful.

INVESTMENT SERVICES KEY POINTS

Income before taxes, excluding the provision for credit losses and amortization of intangible assets, totaled

$939 million

The pre-tax operating margin, excluding the provision for credit losses and amortization of intangible assets, was

and the investment services fees as a percentage of noninterest expense was

, reflecting the continued focus on the business improvement process to drive operating leverage.

Investment services fees were

Asset servicing fees (global custody, broker-dealer services and global collateral services) were

$1.016 billion

$1.017 billion

$1.009 billion

-- Estimated new business wins (AUC/A) in Asset Servicing of

$348 million

$342 million

$337 million

Issuer services fees (Corporate Trust and Depositary Receipts) were

$231 million

$199 million

$129 million

$135 million

Foreign exchange and other trading revenue was

$168 million

$212 million

$150 million

. The year-over-year decrease primarily reflects lower volumes.

Other revenue was

$125 million

$92 million

$127 million

. The year-over-year increase primarily reflects higher financing related fees. The sequential decrease primarily reflects termination fees in clearing service recorded in 4Q15. Both comparisons also reflect increased payment from Investment Management related to higher money market fees, partially offset by certain fees paid to introducing brokers.

Net interest revenue was

$679 million

$629 million

$664 million

. Both increases primarily reflect the impact of changes in the internal crediting rates for deposits beginning in 1Q16, partially offset by lower average loans and deposits.

Noninterest expense (excluding amortization of intangible assets) was

$1.77 billion

$1.82 billion

$1.79 billion

. Both decreases primarily reflect lower staff and professional, legal and other purchased services expenses. The year-over-year decrease was partially offset by higher litigation expense. The sequential decrease was partially offset by an adjustment to bank assessment charges recorded in 4Q15.

OTHER SEGMENT

primarily includes leasing operations, corporate treasury activities, derivatives, global markets and institutional banking services, business exits and other corporate revenue and expense items. In the first quarter of 2016, we reclassified the results of the credit-related activities from the Other segment to the Investment Services segment. All prior periods have been restated.

Noninterest expense (ex. amortization of intangible assets and restructuring (recoveries) charges)

(Loss) income before taxes (ex. amortization of intangible assets and restructuring charges (recoveries))

Restructuring (recoveries) charges

Average loans and leases

$44 million

s primarily reflect lease-related gains. The sequential increase is partially offset by lower income from corporate/bank-owned life insurance.

$20 million

. Both decreases primarily reflect the impact of changes in the internal crediting rates to the businesses for deposits beginning in 1Q16.

The provision for credit losses was a credit of

. The provision for credit losses of

$159 million

reflects the impairment charge recorded in 4Q15 related to a court decision.

Noninterest expense, excluding amortization of intangible assets and restructuring (recoveries) charges,

$33 million

$9 million

. The year-over-year

primarily reflects the curtailment gain related to the U.S. pension plan recorded in

primarily reflects the adjustment to employee benefits expense recorded in

driven by updated information received from an administrator of our health care benefits. Both comparisons also reflect higher severance expense recorded in 1Q16 in ongoing support of our business improvement process.

THE BANK OF NEW YORK MELLON CORPORATION

Condensed Consolidated Income Statement

Quarter ended

Operations of consolidated investment management funds

Investment (loss) income

Interest of investment management fund note holders

Interest revenue

Interest expense

Net interest revenue after provision for credit losses

Provision for income taxes

Net loss (income) attributable to noncontrolling interests (includes $7, $(5) and $(31) related to consolidated investment management funds, respectively)

Condensed Consolidated Income Statement - continued

Net income applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation

Less: Earnings allocated to participating securities

Net income applicable to the common shareholders of The Bank of New York Mellon Corporation after required adjustments for the calculation of basic and diluted earnings per common share

Average common shares and equivalents outstanding of The Bank of New York Mellon Corporation

Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation

(in dollars)

Consolidated Balance Sheet

(dollars in millions, except per share amounts)

Cash and due from:

Interest-bearing deposits with the Federal Reserve and other central banks

96,426

113,203

Interest-bearing deposits with banks

14,662

15,146

Federal funds sold and securities purchased under resale agreements

26,904

24,373

Securities:

Held-to-maturity (fair value of $42,231 and $43,204)

41,717

43,312

Available-for-sale

76,294

75,867

Total securities

118,011

119,179

Trading assets

Loans

61,661

63,703

Net loans

61,499

63,546

Premises and equipment

Accrued interest receivable

17,604

17,618

Intangible assets

20,307

19,626

Subtotal assets of operations

371,570

392,379

Assets of consolidated investment management funds, at fair value:

Subtotal assets of consolidated investment management funds, at fair value

Total assets

372,870

393,780

Liabilities

Deposits:

Noninterest-bearing (principally U.S. offices)

93,005

96,277

Interest-bearing deposits in U.S. offices

52,124

51,704

Interest-bearing deposits in Non-U.S. offices

112,213

131,629

Total deposits

257,342

279,610

Federal funds purchased and securities sold under repurchase agreements

14,803

15,002

Trading liabilities

Payables to customers and broker-dealers

22,008

21,900

Other borrowed funds

Accrued taxes and other expenses

Other liabilities (includes allowance for lending-related commitments of $125 and $118)

Long-term debt

21,686

21,547

Subtotal liabilities of operations

333,331

354,559

Liabilities of consolidated investment management funds, at fair value:

Subtotal liabilities of consolidated investment management funds, at fair value

Total liabilities

333,585

354,805

Temporary equity

Redeemable noncontrolling interests

Permanent equity

Preferred stock – par value $0.01 per share; authorized 100,000,000 shares; issued 25,826 and 25,826 shares

Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,320,883,792 and 1,312,941,113 shares

25,432

25,262

Retained earnings

20,593

19,974

Accumulated other comprehensive loss, net of tax

(2,390

(2,600

Less: Treasury stock of 243,801,160 and 227,598,128 common shares, at cost

(7,741

(7,164

Total The Bank of New York Mellon Corporation shareholders’ equity

38,459

38,037

Nonredeemable noncontrolling interests of consolidated investment management funds

Total permanent equity

39,116

38,775

Total liabilities, temporary equity and permanent equity

SUPPLEMENTAL INFORMATION – EXPLANATION OF GAAP AND NON-GAAP FINANCIAL MEASURES

BNY Mellon has included in this Earnings Release certain Non-GAAP financial measures based on fully phased-in Basel III CET1 and other risk-based capital ratios, SLR and tangible common shareholders’ equity. BNY Mellon believes that the Basel III CET1 and other risk-based capital ratios on a fully phased-in basis, the SLR on a fully phased-in basis and the ratio of tangible common shareholders’ equity to tangible assets of operations are measures of capital strength that provide additional useful information to investors, supplementing the capital ratios which are, or were, required by regulatory authorities. The tangible common shareholders’ equity ratio includes changes in investment securities valuations which are reflected in total shareholders’ equity. In addition, this ratio is expressed as a percentage of the actual book value of assets, as opposed to a percentage of a risk-based reduced value established in accordance with regulatory requirements, although BNY Mellon in its reconciliation has excluded certain assets which are given a zero percent risk-weighting for regulatory purposes and the assets of consolidated investment management funds to which BNY Mellon has limited economic exposure. Further, BNY Mellon believes that the return on tangible common equity measure, which excludes goodwill and intangible assets net of deferred tax liabilities, is a useful additional measure for investors because it presents a measure of 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.

BNY Mellon has presented revenue measures which exclude the effect of noncontrolling interests related to consolidated investment management funds, and expense measures which exclude M&I, litigation and restructuring charges (recoveries) and amortization of intangible assets. Earnings per share, return on equity, operating leverage and operating margin measures, which exclude some or all of these items, as well as the impairment charge related to a prior court decision, are also presented. Operating margin measures may also exclude amortization of intangible assets and the net negative impact of money market fee waivers, net of distribution and servicing expense. BNY Mellon believes that these measures are useful to investors because they permit a focus on period-to-period comparisons, which relate to the ability of BNY Mellon to enhance revenues and limit expenses in circumstances where such matters are within BNY Mellon’s control. The excluded items, in general, relate to certain charges as a result of prior transactions. M&I expenses primarily relate to acquisitions and generally continue for approximately three years after the transaction. Litigation charges represent accruals for loss contingencies that are both probable and reasonably estimable, but exclude standard business-related legal fees. Restructuring charges relate to our streamlining actions, Operational Excellence Initiatives and migrating positions to Global Delivery Centers. Excluding these charges mentioned above permits investors to view expenses on a basis consistent with how management views the business.

The presentation of revenue growth 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.

The presentation of income (loss) from consolidated investment management funds, net of net income (loss) attributable to noncontrolling interests related to the consolidation of certain investment management funds permits investors to view revenue on a basis consistent with how management views the business. BNY Mellon believes that these presentations, as a supplement to GAAP information, give investors a clearer picture of the results of its primary businesses.

In this Earnings Release, the net interest margin is presented on an FTE basis. We believe that this presentation provides comparability of amounts arising from both taxable and tax-exempt sources, and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income. Each of these measures as described above is used by management to monitor financial performance, both on a company-wide and on a business-level basis.

The following table presents the reconciliation of diluted earnings per share and the net income applicable to common shareholders of The Bank of New York Mellon Corporation.

Reconciliation of net income and diluted EPS – GAAP to Non-GAAP

Diluted EPS

Net income applicable to common shareholders of The Bank of New York Mellon Corporation - GAAP

Impairment charge related to a prior court decision

The following table presents the reconciliation of the pre-tax operating margin ratio.

Reconciliation of income before income taxes – pre-tax operating margin

Income before income taxes – GAAP

Less: Net (loss) income attributable to noncontrolling interests of consolidated investment management funds

Add: Amortization of intangible assets

Income before income taxes, as adjusted – Non-GAAP

Fee and other revenue – GAAP

(Loss) income from consolidated investment management funds – GAAP

Net interest revenue – GAAP

Total revenue, as adjusted – Non-GAAP

(b)(c)

Pre-tax operating margin – Non-GAAP

(a)(b)(c)

Income before taxes divided by total revenue.

Our GAAP earnings include tax-advantaged investments such as low income housing, renewable energy, bank-owned life insurance and tax-exempt securities. The benefits of these investments are primarily reflected in tax expense. If reported on a tax-equivalent basis these investments would increase revenue and income before taxes by $77 million for 1Q16, $73 million for 4Q15, $53 million for 3Q15, $52 million for 2Q15 and $64 million for 1Q15 and would increase our pre-tax operating margin by approximately 1.4% for 1Q16, 1.5% for 4Q15, 1.0% for 3Q15, 0.9% for 2Q15 and 1.2% for 1Q15.

The following table presents the reconciliation of the pre-tax operating leverage.

Total revenue - GAAP

Total revenue, as adjusted - Non-GAAP

(0.64)%

Total noninterest expense - GAAP

Total noninterest expense, as adjusted - Non-GAAP

(3.11)%

Pre-tax operating leverage, as adjusted - Non-GAAP

(a)(b)

Non-GAAP adjustments include amortization of intangible assets and M&I, litigation and restructuring charges (recoveries), if applicable.

bps - basis points.

The following table presents the reconciliation of the returns on common equity and tangible common equity.

Return on common equity and tangible common equity

Add: Amortization of intangible assets, net of tax

Net income applicable to common shareholders of The Bank of New York Mellon Corporation excluding amortization of intangible

assets – Non-GAAP

Add: M&I, litigation and restructuring charges (recoveries)

Impairment charge related to a prior court decision

Net income applicable to common shareholders of The Bank of New York Mellon Corporation, as adjusted – Non-GAAP

Average common shareholders’ equity

35,252

35,664

35,588

35,516

35,486

Less: Average goodwill

17,562

17,673

17,742

17,752

17,756

Average intangible assets

Add: Deferred tax liability – tax deductible goodwill

Deferred tax liability – intangible assets

Average tangible common shareholders’ equity – Non-GAAP

16,446

16,653

16,427

16,263

16,204

Return on common equity – GAAP

Return on common equity – Non-GAAP

(a)(c)

Return on tangible common equity – Non-GAAP

Return on tangible common equity – Non-GAAP adjusted

Non-GAAP excludes amortization of intangible assets, net of tax,

Deferred tax liabilities are based on fully phased-in Basel III rules.

Annualized.

The following table presents the reconciliation of the equity to assets ratio and book value per common share.

Equity to assets and book value per common share

BNY Mellon shareholders’ equity at period end – GAAP

38,170

38,270

37,328

Less: Preferred stock

BNY Mellon common shareholders’ equity at period end – GAAP

35,485

35,618

35,718

35,766

Less: Goodwill

17,679

17,807

17,663

BNY Mellon tangible common shareholders’ equity at period end – Non-GAAP

17,090

16,574

16,568

16,441

16,618

Total assets at period end – GAAP

377,371

395,254

392,337

Less: Assets of consolidated investment management funds

Subtotal assets of operations – Non-GAAP

375,074

393,023

390,656

Cash on deposit with the Federal Reserve and other central banks

96,421

116,211

86,426

106,628

93,044

Tangible total assets of operations at period end – Non-GAAP

253,764

254,708

267,055

264,588

275,902

Period-end common shares outstanding

(b) Assigned a zero percent risk-weighting by the regulators.

The following table presents income from consolidated investment management funds, net of noncontrolling interests.

Income (loss) from consolidated investment management funds, net of noncontrolling interests

The following table presents the impact of changes in foreign currency exchange rates on our consolidated investment management and performance fees.

Investment management and performance fees – Consolidated

Investment management and performance fees – GAAP

Impact of changes in foreign currency exchange rates

Investment management and performance fees, as adjusted – Non-GAAP

The following table presents the revenue line items in the Investment Management business impacted by the consolidated investment management funds.

Income (loss) from consolidated investment management funds, net of noncontrolling interests - Investment Management business

Other (Investment income (loss))

The following table presents the impact of changes in foreign currency exchange rates on investment management fees reported in the Investment Management segment.

Investment management fees - Investment Management business

Investment management fees – GAAP

Investment management fees, as adjusted – Non-GAAP

The following table presents the reconciliation of the pre-tax operating margin for the Investment Management business.

Pre-tax operating margin - Investment Management business

Money market fee waivers

Income before income taxes excluding amortization of intangible assets, provision for credit losses and money market fee waivers – Non-GAAP

Less: Distribution and servicing expense

Money market fee waivers benefiting distribution and servicing expense

Add: Money market fee waivers impacting total revenue

Total revenue net of distribution and servicing expense

and excluding money market fee waivers – Non-GAAP

Pre-tax operating margin excluding amortization of intangible assets, provision for credit losses, money market fee waivers and net of distribution and servicing expense – Non-GAAP

DIVIDENDS

, The Bank of New York Mellon Corporation declared a quarterly common stock dividend of $0.17 per common share. This cash dividend is payable on May 13, 2016 to shareholders of record as of the close of business on May 3, 2016.

, The Bank of New York Mellon Corporation also declared the following dividends for the noncumulative perpetual preferred stock, liquidation preference $100,000 per share, for the dividend period ending in June 2016, in each case payable on June 20, 2016 to holders of record as of the close of business on June 5, 2016:

$1,011.11 per share on the Series A Preferred Stock (equivalent to $10.1111 per Normal Preferred Capital Security of Mellon Capital IV, each representing a 1/100th interest in a share of the Series A Preferred Stock);

$1,300.00 per share on the Series C Preferred Stock (equivalent to $0.3250 per depositary share, each representing a 1/4,000th interest in a share of the Series C Preferred Stock);

$2,250.00 per share on the Series D Preferred Stock (equivalent to $22.50 per depositary share, each representing a 1/100th interest in a share of the Series D Preferred Stock); and

$2,475.00 per share on the Series E Preferred Stock (equivalent to $24.75 per depositary share, each representing a 1/100th interest in a share of the Series E Preferred Stock).

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of

, BNY Mellon had

in assets under custody and/or administration, and

$1.6 trillion

in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

CAUTIONARY STATEMENT

A number of statements (i) in this Earnings Release, (ii) in our presentations and (iii) in the responses to questions on our conference call discussing our quarterly results and other public events may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including our estimated capital ratios and expectations relating to those ratios, preliminary business metrics and statements regarding enhancing the client experience, driving efficiencies, strategic priorities, capital plans, investor day goals and our business improvement process. These statements may be expressed in a variety of ways, including the use of future or present tense language. Words such as “estimate”, “forecast”, “project”, “anticipate”, “target”, “expect”, “intend”, “continue”, “seek”, “believe”, “plan”, “goal”, “could”, “should”, “may”, “will”, “strategy”, “opportunities”, “trends” and words of similar meaning signify forward-looking statements. These statements and other forward-looking statements contained in other public disclosures of The Bank of New York Mellon Corporation which make reference to the cautionary factors described in this Earnings Release are based upon current beliefs and expectations and are subject to significant risks and uncertainties (some of which are beyond BNY Mellon’s control). Actual results may differ materially from those expressed or implied as a result of these risks and uncertainties, including, but not limited to, the risk factors and other uncertainties set forth in BNY Mellon’s Annual Report on Form 10-K for the year ended Dec. 31, 2015 and BNY Mellon’s other filings with the Securities and Exchange Commission. All forward-looking statements in this Earnings Release speak only as of

, and BNY Mellon undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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