October 20, 2009

BNY Mellon Reports Third Quarter Continuing EPS Loss of $2.04. Impacted By $2.54 Investment Securities Portfolio Restructuring Charge, $0.03 M&I Expenses


CONTINUING EPS OF $0.54 (excluding investment securities portfolio restructuring and M&I expenses)

BALANCE SHEET RISK SIGNIFICANTLY REDUCED

  • Fixed income price rally improved portfolio valuation by $1.8 billion in the third quarter of 2009, consequently:
    • Sold $3.6 billion of the lowest quality securities
    • Restructuring $8.5 billion of securities, with an opportunity to recover a portion of the loss over time
  • Actions and market price recovery reduced the unrealized loss in the securities portfolio over 80%

CAPITAL REMAINS STRONG; 90% OF RESTRUCTURING CHARGE PREVIOUSLY REFLECTED IN TANGIBLE CAPITAL

  • TCE of 5.2%, Tier 1 of 11.3%, Tier 1 Common 9.8%

REVENUE INCREASE AND EXPENSE DISCIPLINE RESULTED IN POSITIVE OPERATING LEVERAGE (excluding investment securities portfolio restructuring)

NEW YORK, October 20, 2009 — The Bank of New York Mellon Corporation (NYSE: BK) today reported a third quarter loss from continuing operations applicable to common shareholders of $2.439 billion, or $2.04 per common share, compared with income of $303 million, or $0.26 per common share, in the third quarter of 2008 and $267 million, or $0.23 per common share, in the second quarter of 2009.

"Consistent with our ongoing strategy to reduce balance sheet risk, we took advantage of the recent strength in the fixed income markets by selling or recognizing losses on a significant portion of our investment securities portfolio. This restructuring does not materially impact capital, is expected to benefit net interest revenue by $125-$175 million in 2010, and significantly reduces the risk of future securities losses," said Robert P. Kelly, chairman and chief executive officer of BNY Mellon.

"During the quarter, we remained focused on organic growth, continuing to provide exceptional client service and reducing expenses which resulted in positive operating leverage," added Kelly.

Net loss applicable to common shareholders, including discontinued operations, totaled $2.458 billion, or $2.05 per common share, in the third quarter of 2009, compared with net income of $303 million, or $0.26 per common share, in the third quarter of 2008 and $176 million, or $0.15 per common share, in the second quarter of 2009.

Third Quarter Results - Unless otherwise noted, all comments begin with the results of the third quarter of 2009 and are compared to the third quarter of 2008, all information is reported on a continuing operations basis and sequential growth rates are unannualized (unless otherwise stated). Please refer to the Quarterly Earnings Review for detailed business segment information.

Total revenue

    -----------------------------------------------------------------------
    Reconciliation of total revenue                            3Q09 vs.
    (dollar amounts                                         ---------------
    in millions)              3Q09      2Q09      3Q08      3Q08      2Q09
    -----------------------------------------------------------------------
    Fee and other
     revenue - GAAP        $(2,216)   $2,257    $2,926       N/M       N/M
    Investment securities
     losses                  4,833       256       162       N/M       N/M
    -----------------------------------------------------------------------
      Total fee
       revenue - GAAP        2,617     2,513     3,088       (15)%       4%
    Net interest
     revenue - GAAP            716       700       681         5         2
    SILO/LILO charges            -         -       112       N/M       N/M
    -----------------------------------------------------------------------
      Total revenue
       excluding investment
       securities losses
       and SILO/LILO
       charges - Non-GAAP   $3,333    $3,213    $3,881       (14)%       4%
    -----------------------------------------------------------------------
    N/M - Not meaningful.
  • Assets under custody and administration amounted to $22.1 trillion at Sept. 30, 2009, a decrease of 1% compared with the prior year and an increase of 7% sequentially. The year-over-year decrease reflects continued new business wins, which were offset by lower market values, while the sequential increase primarily reflects higher market values and new business. Assets under management, excluding securities lending assets, amounted to $966 billion at Sept. 30, 2009. This represents a decrease of 9% compared with the prior year, and a 4% sequential increase. Net asset outflows in the third quarter totaled $16 billion, primarily reflecting $14 billion of money market outflows. Securities lending assets were $299 billion at Sept. 30, 2009, a decrease of 36% compared with the prior year and an increase of 3% sequentially.
     
  • Securities servicing fees totaled $1.238 billion, a decrease of 20% year-over-year and 4% sequentially. The comparisons to both prior quarters reflect continued new business wins offset by lower securities lending revenue and money market related distribution fees. Also, the year-over-year decrease was impacted by lower market values, while the sequential decrease was partially offset by higher market values. Securities lending fee revenue totaled $43 million in the third quarter of 2009 compared with $155 million in the prior year period and $97 million sequentially.
     
  • Asset and wealth management fees, excluding performance fees, totaled $649 million, a decline of 18% compared with the prior year and an increase of 6% sequentially. The year-over-year decrease reflects global weakness in market values, partially offset by new business. The sequential increase reflects improved market values and new business.
     
  • Foreign exchange and other trading activities totaled $246 million, a decrease of 36% compared with $385 million in the prior year and an increase of 4% compared with $237 million in the second quarter of 2009. The decrease year-over-year reflects lower foreign exchange revenue, driven by lower volumes and volatility, as well as a lower valuation of the credit derivatives used to hedge the loan portfolio. The sequential increase reflects higher fixed income derivatives revenue and an improved valuation of credit derivatives, partially offset by lower foreign exchange revenue resulting from lower volatility and seasonality.
     
  • Investment income and other revenue totaled $205 million, increasing $121 million year-over-year and $152 million sequentially, primarily as a result of leasing gains and a gain on the sale of VISA shares.
     
  • Net interest revenue (FTE) totaled $721 million with a net interest margin of 1.85% compared with $704 million and 1.80% sequentially.
     
  • Investment securities pre-tax net losses totaled $4.8 billion ($3.0 billion after-tax). This compares with pre-tax net losses of $162 million in the third quarter of 2008 and pre-tax net losses of $256 million in the second quarter of 2009. See page 9 for further information regarding the restructuring of the investment securities portfolio.
     

The provision for credit losses was $147 million in the third quarter of 2009 compared with $61 million in the second quarter of 2009. The increase primarily relates to downgrades in the insurance and media portfolios. The provision is expected to decline in the fourth quarter of 2009. During the third quarter of 2009, the total allowance for credit losses increased $70 million and net charge-offs totaled $77 million.

Total noninterest expense

    ------------------------------------------------------------------------
    Reconciliation of noninterest expense                      3Q09 vs.
    (dollar amounts                                         ----------------
    in millions)              3Q09      2Q09      3Q08      3Q08      2Q09
    ------------------------------------------------------------------------
    Noninterest expense
     - GAAP                 $2,318    $2,383    $3,319       (30)%      (3)%
    Support agreement
     charges                    13       (15)      726       N/M       N/M
    FDIC special
     assessment                  -        61         -       N/M       N/M
    M&I expenses                54        59       111       (51)       (8)
    Intangible amortization    104       108       118       (12)       (4)
    ------------------------------------------------------------------------
      Total noninterest
       expense, excluding
       support agreement
       charges, FDIC special
       assessment, M&I
       expenses and
       intangible
       amortization -
       Non-GAAP             $2,147    $2,170    $2,364        (9)%      (1)%
    ------------------------------------------------------------------------
    N/M - Not meaningful.
  • Total noninterest expense (excluding support agreement charges, FDIC special assessment, M&I expenses and intangible amortization) decreased 9% compared with the prior year and 1% sequentially. Revenue growth combined with expense discipline resulted in 500 basis points of positive operating leverage (excluding investment securities losses) in the third quarter of 2009.
     

Results for the third quarter of 2009 include an income tax benefit of $1.527 billion. Excluding the impact of the investment securities losses and M&I expenses, the effective tax rate was 31.8% (Non-GAAP) in the third quarter of 2009.

The unrealized net of tax loss on our securities portfolio was $1.0 billion at Sept. 30, 2009 compared with a net of tax unrealized loss of $4.8 billion at June 30, 2009. The improvement reflects $3.0 billion related to the restructuring of the securities portfolio and $0.8 billion resulting from the improvement in the fixed income markets. Subsequent to Sept. 30, 2009, approximately $2.1 billion (pre-restructuring amortized cost of $3.6 billion) of the lowest quality securities were sold at fair value. See page 9 for further information on the investment securities portfolio.

    -------------------------------------------------------------------------
    Capital ratios - preliminary (a)         Sept. 30,   June 30,   Sept. 30,
                                                2009       2009        2008
    -------------------------------------------------------------------------
    Tier 1 capital ratio                        11.3%      12.5%        9.3%
    Tier 1 common equity to risk-weighted
     assets ratio (b)                            9.8       11.1         8.0
    Total (Tier 1 plus Tier 2) capital
     ratio                                      15.2       16.0        12.8
    Leverage capital ratio                       6.5        7.6         6.5
    Common shareholders' equity to assets
     ratio (b)                                  13.3       13.4        10.3
    Tangible common shareholders' equity
     to tangible assets ratio - Non-GAAP (b)     5.2        4.8         3.9
    -------------------------------------------------------------------------
    (a) Includes discontinued operations.
    (b) See the Supplemental information section beginning on page 11 for
        a calculation of these ratios.

Nonperforming assets totaled $560 million, an increase of $182 million compared with June 30, 2009, primarily reflecting downgrades in the insurance portfolio.

Declaration of quarterly dividend - On Oct. 20, 2009, The Bank of New York Mellon Corporation declared a quarterly common stock dividend of 9 cents per common share. This cash dividend is payable on Nov. 10, 2009 to shareholders of record as of the close of business on Oct. 30, 2009.

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $22.1 trillion in assets under custody and administration and $966 billion in assets under management, services $11.9 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day. Additional information is available at www.bnymellon.com.

Supplemental Financial Information

The Quarterly Earnings Review and supplemental financial trends for The Bank of New York Mellon Corporation have been updated through Sept. 30, 2009 and are available at www.bnymellon.com (Investor Relations - Financial Reports).

Conference Call Data

Robert P. Kelly, chairman and chief executive officer; Gerald L. Hassell, president; and Thomas P. Gibbons, chief financial officer, along with other members of executive management from BNY Mellon, will host a conference call and simultaneous live audio webcast at 8:00 a.m. EDT on Oct. 20, 2009. This conference call and audio webcast will include forward-looking statements and may include other material information. Persons wishing to access the conference call and audio webcast may do so by dialing (888) 677-5383 (U.S.) and (210) 838-9221 (International) Passcode: Earnings, or by logging on to www.bnymellon.com. The Earnings Release, together with the Quarterly Earnings Review and supplemental financial trends, will be available at www.bnymellon.com beginning at approximately 6:30 a.m. EDT on Oct. 20, 2009. Replays of the conference call and audio webcast will be available beginning Oct. 20, 2009 at approximately 2:00 p.m. EDT through Nov. 3, 2009 by dialing (866) 442-1776 (U.S.) or (203) 369-1076 (International). The archived version of the conference call and audio webcast will also be available at www.bnymellon.com for the same time period.

                      THE BANK OF NEW YORK MELLON CORPORATION
                                Financial Highlights

    -------------------------------------------------------------------------
    (dollar amounts
    in millions, except
    per common share
    amounts and unless            Quarter ended           Nine months ended
    otherwise noted;     ------------------------------  --------------------
    common shares in     Sept. 30,  June 30,  Sept. 30,  Sept. 30,  Sept. 30,
    thousands)              2009      2009       2008       2009       2008
    -------------------------------------------------------------------------
    Continuing operations
    Return on common
     equity (annualized)      N/M       4.0%      4.3%      N/M       6.3%
      Non-GAAP
       adjusted (a)          10.1%      6.4%     14.2%      9.0%     13.4%

    Return on tangible
     common equity
     (annualized) -
     Non-GAAP (a)             N/M      18.4%     18.9%      N/M      24.8%
      Non-GAAP
       adjusted (a)          32.0%     23.3%     50.2%     32.3%     45.5%

    Fee and other
     revenue as a
     percent of total
     revenue                  N/M        76%       81%       50%       83%
      Non-GAAP
       adjusted (a)            79%       78%       80%       78%       80%

    Annualized fee
     revenue per
     employee (based on
     average headcount)
     (in thousands)          $248      $241      $287      $241      $292

    Percent of non-U.S.
     fee and net interest
     revenue                   31%       31%       33%(b)    30%       34%(b)

    Pre-tax operating
     margin                   N/M        17%        7%      N/M        19%
      Non-GAAP
       adjusted (a)            32%       31%       39%       32%       38%

    Net interest
     margin (FTE) (c)        1.85%     1.80%     1.92%(b)  1.84%     1.71%(b)

    Selected average
     balances
      Interest-earning
       assets (d)        $155,159  $157,265  $142,062  $159,916  $142,318
      Total assets       $205,786  $208,533  $198,827  $211,427  $198,539
      Interest-bearing
       deposits (d)       $93,632   $98,896   $86,016   $98,140   $90,634
      Noninterest-
       bearing
       deposits (d)       $34,920   $32,852   $32,953   $36,915   $27,679
      Total
       shareholders'
       equity             $28,144   $28,934   $27,996   $28,352   $28,682

    Average common
     shares and
     equivalents
     outstanding:
      Basic             1,197,414 1,171,081 1,143,445 1,171,675 1,141,424
      Diluted (e)       1,197,414 1,174,466 1,147,586 1,171,675 1,148,402

    Period-end data
    Assets under
     custody and
     administration
     (in trillions)         $22.1     $20.7     $22.4     $22.1     $22.4
      Cross-border
       assets (in
       trillions)            $8.6      $7.8      $8.9      $8.6      $8.9
    Market value of
     securities on
     loan (in
     billions) (f)           $299      $290      $470      $299      $470
    Assets under
     management (in
     billions)               $966      $926    $1,067      $966    $1,067

    Employees              42,000    41,800    42,900    42,000    42,900

    Book value per
     common share -
     GAAP                  $23.50    $22.68    $23.97    $23.50    $23.97
    Tangible book
     value per common
     share -
     Non-GAAP (a)           $7.54     $6.60     $6.65     $7.54     $6.65
    Dividends per
     common share           $0.09     $0.09     $0.24     $0.42     $0.72
    Closing common
     stock price per
     common share          $28.99    $29.31    $32.58    $28.99    $32.58
    Market
     capitalization       $34,911   $35,255   $37,388   $34,911   $37,388
    -------------------------------------------------------------------------
    (a) See Supplemental information beginning on page 11 for a calculation
        of these ratios.
    (b) Excluding the SILO/LILO charges, the percentage of non-U.S. fee and
        net interest revenue was 32% and 33% for the third quarter and nine
        months ended Sept. 30, 2008, respectively, and the net interest
        margin was 2.24% and 2.17% for the third quarter and nine months
        of 2008, respectively.
    (c) Prior periods calculated on a continuing operations basis, even
        though the balance sheet, in accordance with GAAP, is not restated
        for discontinued operations.
    (d) Excludes the impact of discontinued operations.
    (e) Diluted earnings per share for the three and nine months ended
        Sept. 30, 2009 was calculated using average basic shares.  Adding
        back the dilutive shares would result in anti-dilution.
    (f) Represents the securities on loan, both cash and non-cash, managed
        by the Asset Servicing segment.



                          THE BANK OF NEW YORK MELLON CORPORATION
                          Condensed Consolidated Income Statement

    -------------------------------------------------------------------------
    (in millions,                Quarter ended            Nine months ended
    except per           ------------------------------  --------------------
    common share         Sept. 30,  June 30,  Sept. 30,  Sept. 30,  Sept. 30,
    amounts)                2009      2009       2008       2009       2008
    -------------------------------------------------------------------------
    Fee and other revenue
    Securities servicing
     fees:
      Asset servicing        $643      $671      $808(a)  $1,923    $2,584(a)
      Issuer services         359       372       477      1,095     1,297
      Clearing services       236       250       259        739       786
    -------------------------------------------------------------------------
        Total securities
         servicing fees     1,238     1,293     1,544      3,757     4,667
    Asset and wealth
     management fees          650       637       795      1,903     2,517
    Foreign exchange and
     other trading
     activities               246       237       385        790       952
    Treasury services         128       132       129        385       382
    Distribution and
     servicing                 94       107       107        312       315
    Financing-related
     fees                      56        54        44        158       142
    Investment income         121        44        47        148       162
    Other                      84         9        37        108       147
    -------------------------------------------------------------------------
        Total fee revenue   2,617     2,513     3,088      7,561     9,284
    Net securities losses  (4,833)     (256)     (162)    (5,384)     (387)
    -------------------------------------------------------------------------
        Total fee and
         other revenue     (2,216)    2,257     2,926      2,177     8,897
    Net interest revenue
    Interest revenue          829       845     1,312      2,653     3,999
    Interest expense          113       145       631        462     2,187
    -------------------------------------------------------------------------
        Net interest
         revenue              716       700       681      2,191     1,812
    Provision for credit
     losses                   147        61        23        267        50
    -------------------------------------------------------------------------
        Net interest
         revenue after
         provision for
         credit losses        569       639       658      1,924     1,762
    Noninterest expense
    Staff                   1,157     1,153     1,248(b)   3,479     4,009(b)
    Professional, legal
     and other purchased
     services                 265       237       251(b)     739       748(b)
    Net occupancy             142       142       163        423       429
    Distribution and
     servicing                104       106       133        317       394
    Software                   95        93        78        269       245
    Sub-custodian and
     clearing                  80        91        84(a)     237       251(a)
    Furniture and equipment    76        76        80        229       237
    Business development       45        49        62        138       202
    Other                     201       263       991(c)     639     1,403(c)
    -------------------------------------------------------------------------
        Subtotal            2,165     2,210     3,090      6,470     7,918
    Amortization of
     intangible assets        104       108       118        319       360
    Restructuring charges      (5)        6         -         11         -
    Merger and integration
     expenses:
      The Bank of New York
       Mellon Corporation      54        59       107        181       374
      Acquired Corporate
       Trust Business           -         -         4          -        12
    -------------------------------------------------------------------------
        Total noninterest
         expense            2,318     2,383     3,319      6,981     8,664
    -------------------------------------------------------------------------
    Income
    Income (loss) from
     continuing operations
     before income taxes   (3,965)      513       265     (2,880)    1,995
    Provision (benefit)
     for income taxes      (1,527)       12       (42)    (1,354)      628
    -------------------------------------------------------------------------
        Income (loss) from
         continuing
         operations        (2,438)      501       307     (1,526)    1,367
    Discontinued
     operations:
      Income (loss) from
       discontinued
       operations             (29)     (144)        1       (238)       21
      Provision (benefit)
       for income taxes       (10)      (53)        1        (87)       11
    -------------------------------------------------------------------------
        Income (loss)
         from discontinued
         operations, net
         of tax               (19)      (91)        -       (151)       10
    -------------------------------------------------------------------------
        Net income (loss)  (2,457)      410       307     (1,677)    1,377
    Net (income) loss
     attributable to
     noncontrolling
     interests, net
     of tax                    (1)        2        (4)         -       (19)
    Redemption charge
     and preferred
     dividends                  -      (236)        -       (283)        -
    -------------------------------------------------------------------------
        Net income (loss)
         applicable to
         common
         shareholders of
         The Bank of New
         York Mellon
         Corporation      $(2,458)     $176      $303    $(1,960)   $1,358
    -------------------------------------------------------------------------

    (a) In the second quarter of 2009, global sub-custodian out-of-pocket
        expense related to client reimbursements was reclassified from
        sub-custodian expense to asset servicing revenue.  This
        reclassification totaled $4 million in the third quarter of 2008
        and $18 million in the first nine months of 2008.
    (b) In the second quarter of 2009, certain temporary/consulting expenses
        were reclassified from professional, legal and other purchased
        services to staff expense.  This reclassification totaled $35
        million in the third quarter of 2008 and $67 million in the first
        nine months of 2008.
    (c) Includes support agreement charges of $726 million in the third
        quarter of 2008 and $731 million in the first nine months of 2008.



                       THE BANK OF NEW YORK MELLON CORPORATION
                 Condensed Consolidated Income Statement - continued

    -------------------------------------------------------------------------
    (in millions,                Quarter ended             Nine months ended
    except per           ------------------------------  --------------------
    common share         Sept. 30,  June 30,  Sept. 30,  Sept. 30,  Sept. 30,
    amounts)                2009      2009       2008       2009       2008
    -------------------------------------------------------------------------
    Earnings per share
     applicable to the
     common shareholders
     of The Bank of New
     York Mellon
     Corporation:
    Basic:
      Income (loss) from
       continuing
       operations         $(2.04)     $0.23     $0.26     $(1.54)     $1.17
      Income (loss) from
       discontinued
       operations, net of
       tax                 (0.02)     (0.08)        -      (0.13)      0.01
    -------------------------------------------------------------------------
        Net income (loss)
         applicable to
         common stock     $(2.05)(a)  $0.15     $0.26     $(1.67)     $1.18
    -------------------------------------------------------------------------
    Diluted:(b)
      Income (loss) from
       continuing
       operations         $(2.04)     $0.23     $0.26     $(1.54)     $1.16
      Income (loss) from
       discontinued
       operations, net of
       tax                 (0.02)     (0.08)        -      (0.13)      0.01
    -------------------------------------------------------------------------
        Net income (loss)
         applicable to
         common stock     $(2.05)(a)  $0.15     $0.26     $(1.67)     $1.17
    -------------------------------------------------------------------------
    (a) Does not foot due to rounding.
    (b) Diluted earnings per share for the three and nine months ended
        Sept. 30, 2009, was calculated using average basic shares.  Adding
        back the dilutive shares would result in anti-dilution.



    --------------------------------------------------------------------------
    Reconciliation of net
     income (loss) from
     continuing operations
     applicable to the
     common shareholders
     of The Bank of New           Quarter ended            Nine months ended
     York Mellon          ------------------------------  --------------------
     Corporation:         Sept. 30,  June 30,  Sept. 30,  Sept. 30,  Sept. 30,
    (in millions)            2009      2009       2008       2009       2008
    --------------------------------------------------------------------------
    Income (loss) from
     continuing
     operations           $(2,438)      $501      $307     $(1,526)    $1,367
    Net (income) loss
     attributable to
     noncontrolling
     interests, net of tax     (1)         2        (4)          -        (19)
    Redemption charge and
     preferred dividends        -       (236)        -        (283)         -
    --------------------------------------------------------------------------
      Income (loss) from
       continuing
       operations
       applicable to
       common
       shareholders of
       The Bank of New
       York Mellon
       Corporation,
       net of tax          (2,439)       267       303      (1,809)     1,348
    Income (loss) from
     discontinued
     operations, net of
     tax                      (19)       (91)        -        (151)        10
    --------------------------------------------------------------------------
      Net income (loss)
       applicable to the
       common
       shareholders of
       The Bank of New
       York Mellon
       Corporation        $(2,458)      $176      $303     $(1,960)    $1,358
    --------------------------------------------------------------------------



                      THE BANK OF NEW YORK MELLON CORPORATION
                             Consolidated Balance Sheet

    -----------------------------------------------------------------------
    (dollar amounts in millions,                Sept. 30,          Dec. 31,
    except per share amounts)                      2009              2008
    -----------------------------------------------------------------------
    Assets
    Cash and due from:
      Banks                                      $3,333            $4,881
      Federal Reserve and other central
       banks (includes $14,981 and $53,270
       of interest-bearing deposits)             15,031            53,278
    Other short-term investments - U.S.
     government-backed commercial paper,
     at fair value                                    -             5,629
    Interest-bearing deposits with banks         49,349            39,126
    Federal funds sold and securities
     purchased under resale agreements            3,908             2,000
    Securities:
      Held-to-maturity (fair value of
       $6,071 and $6,333)                         6,318             7,371
      Available-for-sale                         48,032            32,064
    -----------------------------------------------------------------------
        Total securities                         54,350            39,435
    Trading assets                                7,952            11,102
    Loans                                        36,269            43,394
    Allowance for loan losses                      (456)             (415)
    -----------------------------------------------------------------------
        Net loans                                35,813            42,979
    Premises and equipment                        1,682             1,686
    Accrued interest receivable                     699               619
    Goodwill                                     16,022            15,898
    Intangible assets                             5,574             5,856
    Other assets                                 16,294            15,023
    Assets of discontinued operations             2,000                 -
    -----------------------------------------------------------------------
        Total assets                           $212,007          $237,512
    -----------------------------------------------------------------------

    Liabilities
    Deposits:
      Noninterest-bearing (principally
       domestic offices)                        $30,767           $55,816
      Interest-bearing deposits in
       domestic offices                          29,036            32,386
      Interest-bearing deposits in
       foreign offices                           74,133            71,471
    -----------------------------------------------------------------------
        Total deposits                          133,936           159,673
    Borrowing from Federal Reserve related
     to asset-backed commercial paper, at
     fair value                                       -             5,591
    Federal funds purchased and securities
     sold under repurchase agreements             2,553             1,372
    Trading liabilities                           7,824             8,085
    Payables to customers and broker-dealers     10,458             9,274
    Commercial paper                                163               138
    Other borrowed funds                          1,280               755
    Accrued taxes and other expenses              3,855             4,052
    Other liabilities (including allowance
     for lending related commitments of
     $140 and $114)                               4,572             4,618
    Long-term debt                               17,486            15,865
    Liabilities of discontinued operations        1,564                 -
    -----------------------------------------------------------------------
        Total liabilities                       183,691           209,423
    -----------------------------------------------------------------------
    Equity
    Preferred stock - par value $0.01 per
     share; authorized 100,000,000 shares;
     issued - shares and 3,000,000 shares             -             2,786
    Common stock-par value $0.01 per common
     share; authorized 3,500,000,000
     common shares; issued 1,205,154,635
     and 1,148,507,561 common shares                 12                11
    Additional paid-in capital                   21,794            20,432
    Retained earnings                             8,462            10,250
    Accumulated other comprehensive
     loss, net of tax                            (1,947)           (5,426)
    Less:  Treasury stock of 910,677 and
            40,262 common shares, at cost           (26)               (3)
    -----------------------------------------------------------------------
      Total The Bank of New York Mellon
       Corporation shareholders' equity          28,295            28,050
    Noncontrolling interest                          21                39
    -----------------------------------------------------------------------
      Total equity                               28,316            28,089
    -----------------------------------------------------------------------
      Total liabilities and equity             $212,007          $237,512
    -----------------------------------------------------------------------

Investment Securities Portfolio

The following table provides a trend of the aggregate unrealized pre-tax gain (loss) of the investment securities portfolio.

    ------------------------------------------------------------------
    Portfolio aggregate unrealized gain/(loss) - pre-tax

                                                              3Q09
    (dollar amounts          Dec. 31,  March 31,  June 30,   market
    in millions)               2008      2009      2009    improvement
    ------------------------------------------------------------------
    Watch list:
    Alt-A RMBS              $(2,764)  $(3,538)  $(3,064)       $58
    European floating rate
     notes                   (1,171)   (1,299)   (1,523)       364
    Prime/Other RMBS         (1,781)   (1,455)   (1,581)       339
    Commercial MBS             (709)     (513)     (561)       333
    Subprime RMBS              (591)     (566)     (621)       (61)
    Credit cards               (223)     (238)      (54)        37
    Home equity lines of
     credit                    (224)     (306)     (284)        32
    Other                      (227)     (326)     (213)        49
    ------------------------------------------------------------------
      Total watch list(a)    (7,690)   (8,241)   (7,901)     1,151
    ------------------------------------------------------------------
    Agency RMBS                  60       242       159        179
    Other                        16        31        20        128
    ------------------------------------------------------------------
      Total with FAS 157-4
       adjustment            (7,614)   (7,968)   (7,722)     1,458
    Less:  FAS 157-4
            adjustment            -     1,173       377       (377)
    ------------------------------------------------------------------
      Total without FAS
       157-4 Adjustment -
       Non-GAAP             $(7,614)  $(9,141)  $(8,099)    $1,835
    ------------------------------------------------------------------


                                            Investment
                              Sept. 30,      securities    Unrealized
                                2009          portfolio    gain (loss)
    (dollar amounts            before      restructuring  at Sept. 30,
    in millions)           restructuring       charge         2009
    ------------------------------------------------------------------
    Watch list:
    Alt-A RMBS                $(3,006)        $(2,857)       $(149)
    European floating
     rate notes                (1,159)           (234)        (925)
    Prime/Other RMBS           (1,242)           (999)        (243)
    Commercial MBS               (228)            (77)        (151)
    Subprime RMBS                (682)           (321)        (361)
    Credit cards                  (17)              -          (17)
    Home equity lines
     of credit                   (252)           (242)         (10)
    Other                        (164)           (103)         (61)
    ------------------------------------------------------------------
      Total watch list (a)     (6,750)         (4,833)      (1,917)
    ------------------------------------------------------------------
    Agency RMBS                   338               -          338
    Other                         148               -          148
    ------------------------------------------------------------------
      Total with FAS 157-4
       adjustment              (6,264)         (4,833)      (1,431)
    Less:  FAS 157-4
            adjustment              -               -            -
    ------------------------------------------------------------------
      Total without FAS
       157-4 Adjustment -
       Non-GAAP               $(6,264)        $(4,833)     $(1,431)
    ------------------------------------------------------------------
  • Pre-tax net unrealized loss on the investment securities portfolio, including the FAS 157-4 adjustment, improved $6.3 billion, or over 80%, from June 30, 2009.
     

The following table provides the pro forma impact of restructuring the investment securities portfolio at Sept. 30, 2009.

    ------------------------------------------------------------------------
    Pro forma securities portfolio reflecting the investment portfolio
    restructuring at Sept. 30, 2009

                                      Investment
                                      securities
                     Amortized cost    portfolio     Amortized
    (dollar amounts    prior to      restructuring   cost post      Fair
    in millions)     restructuring      charge      restructuring   value
    ------------------------------------------------------------------------
    Watch list:
    Alt-A RMBS           $7,476        $(2,857)         $4,619     $4,470
    European floating
     rate notes           7,326           (234)          7,092      6,167
    Prime/Other RMBS      5,323           (999)          4,324      4,081
    Commercial MBS        2,762            (77)          2,685      2,534
    Subprime RMBS         1,479           (321)          1,158        797
    Credit cards            649              -             649        632
    Home equity lines
     of credit              468           (242)            226        216
    Other                   629           (103)            526        465
    ------------------------------------------------------------------------
      Total watch
       list (a)         $26,112        $(4,833)        $21,279    $19,362
    ------------------------------------------------------------------------
    Agency RMBS          16,560              -          16,560     16,898
    Other                17,695              -          17,695     17,843
    ------------------------------------------------------------------------
      Total             $60,367        $(4,833)        $55,534    $54,103(d)
    ------------------------------------------------------------------------

                       Fair value   Securities    Pro Forma 9/30/09
                       as a % of      sales       -----------------
    (dollar amounts    amortized    subsequent    Amortized   Fair
    in millions)        cost(b)    to 9/30/09(c)     cost     value
    ------------------------------------------------------------------------
    Watch list:
    Alt-A RMBS            55%         $(949)        $3,670   $3,521
    European floating
     rate notes           83           (594)         6,498    5,573
    Prime/Other RMBS      76            (64)         4,260    4,017
    Commercial MBS        91           (272)         2,413    2,262
    Subprime RMBS         52           (222)           936      575
    Credit cards          89              -            649      632
    Home equity lines
     of credit            34              -            226      216
    Other                 49              -            526      465
    ------------------------------------------------------------------------
      Total watch
       list (a)          $71%       $(2,101)       $19,178  $17,261
    ------------------------------------------------------------------------
    Agency RMBS          102              -         16,560   16,898
    Other                101              -         17,695   17,843
    ------------------------------------------------------------------------
      Total               88%       $(2,101)       $53,433  $52,002
    ------------------------------------------------------------------------
    (a) The "Watch list" includes those securities we view as having a
        higher risk of impairment charges.
    (b) Amortized cost before life-to-date charges.
    (c) As of Oct. 14, 2009.  Reflects securities with a pre-restructuring
        amortized cost of $3.6 billion.
    (d) Includes the fair value of available for sale securities of
        $48.032 billion and held to maturity securities of $6.071 billion.

Investment securities portfolio restructuring

Consistent with our ongoing strategy to reduce risk from the balance sheet, and reflecting the recent improvement in the fixed income markets, we have sold or are in the process of restructuring the watch list portion of our investment securities portfolio.

The restructuring impacts approximately $12.1 billion (pre-restructuring amortized cost) of investment securities. As a result of investment securities sales and restructuring in the third quarter of 2009, we recognized a charge of $4.8 billion (pre-tax). Subsequent to Sept. 30, 2009, approximately $2.1 billion (pre-restructuring amortized cost of $3.6 billion) of the lowest quality securities were sold at fair value. The majority of the remaining restructured securities are expected to be retained on the balance sheet. Approximately 50% of the charge relates to securities that we plan to retain an interest in and for which we expect to recover a portion of the loss over time. In the fourth quarter of 2009, any declines in the fair value of these securities will be reflected in our net income until the restructuring is complete.

The restructuring charge had a minimal impact on the tangible capital ratio, as 90% of the charge had previously been reflected in tangible capital.

As a result of the restructuring, we expect net interest revenue to be positively impacted by approximately $125-$175 million in 2010.

The fair value of the investment securities portfolio at Sept. 30, 2009 was $54.1 billion. On a pro forma basis, reflecting the subsequent sale of securities, the fair value at Sept. 30, 2009 was $52.0 billion. The unrealized loss on the portfolio was $1.4 billion at Sept. 30, 2009 compared with $7.7 billion at June 30, 2009. The improvement reflects $4.8 billion related to the restructuring and $1.5 billion ($1.8 billion without the FAS 157-4 adjustment) resulting from the improvement in the fixed income markets.

Discontinued operations

In the second quarter of 2009, we adopted discontinued operations accounting for Mellon United National Bank located in Florida. It was determined that this business no longer fits our strategic focus on our asset management and securities servicing businesses. In July 2009, we signed a definitive agreement to sell Mellon United National Bank. Subject to regulatory approval, the transaction is expected to close in the first quarter of 2010. This business was formerly included in the Other segment. In the third quarter of 2009, we recorded an after-tax loss on discontinued operations of $19 million primarily related to additional provision for credit losses resulting from the further deterioration of the South Florida real estate market. The after-tax loss of $151 million in the first nine months of 2009 primarily reflects the impairment and write-down of goodwill and an increase in the provision for credit losses.

Supplemental information - Explanation of Non-GAAP financial measures

BNY Mellon has included in this release certain Non-GAAP financial measures based upon tangible common shareholders' equity. BNY Mellon believes that the ratio of tangible common shareholders' equity to tangible assets is a measure of capital strength that adds additional useful information to investors supplementing the Tier 1 capital ratio which is utilized by regulatory authorities. Unlike the Tier 1 ratio, the tangible common shareholders' equity ratio fully incorporates those changes in investment securities valuations which are reflected in shareholders' equity. In addition, this ratio is expressed as a percentage of the actual book value of assets, as opposed to a percentage of a risk-based reduced value established in accordance with regulatory requirements, although BNY Mellon in its calculation has excluded certain assets which are given a zero percent risk-weighting for regulatory purposes. This ratio is also informative to investors in BNY Mellon's common stock because, unlike the Tier 1 capital ratio, it excludes preferred stock and trust preferred securities issued by BNY Mellon. Further, BNY Mellon believes that the return on tangible common equity measure, which excludes goodwill and intangible assets net of deferred tax liabilities, is a useful additional measure for investors because it presents a measure of BNY Mellon's performance in reference to those assets which are productive in generating income.

BNY Mellon has provided a measure of tangible book value per share, which it believes provides additional useful information as to the level of such assets in relation to shares of common stock outstanding. BNY Mellon has presented revenue and earnings measures which exclude the effect of investment securities losses and SILO/LILO charge; expense measures which exclude an FDIC special assessment, support agreement charges, asset-based taxes, M&I expenses and intangible amortization expenses; and measures which utilize net income excluding tax items such as the benefit of tax settlements. Return on equity measures and operating margin measures which exclude some or all of these items are also presented. We also present the aggregate unrealized securities losses excluding the impact of FAS 157-4 to provide investors with the impact disorderly markets had on the investment securities portfolio and the subsequent conversion to an orderly market. BNY Mellon believes that these measures are useful to investors because they permit a focus on period to period comparisons which relate to the ability of BNY Mellon to enhance revenues and limit expenses in circumstances where such matters are within BNY Mellon's control. The excluded items in general relate to situations where accounting rules require certain ongoing charges as a result of prior transactions, or where valuation or other accounting/regulatory requirements require charges unrelated to operational initiatives. M&I expense relates to our Corporate Trust acquisition in 2006 and to the merger with Mellon Financial Corporation in 2007. M&I expenses generally continue for approximately three years after the transaction, and can vary on a year-to-year basis depending on the stage of the transaction. BNY Mellon believes that the exclusion of M&I expense provides investors with a focus on BNY Mellon's business as it would appear on a consolidated going-forward basis, after such M&I expenses have ceased, typically after approximately three years. Future periods will not reflect such M&I expenses, and thus may be more easily compared to our current results if M&I expenses are excluded. With regards to the exclusion of investment securities losses, BNY Mellon's primary businesses are Asset and Wealth Management and Institutional Services. The management of these sectors is evaluated on the basis of the ability of these businesses to generate fee and net interest revenue and to control expenses, and not on the results of BNY Mellon's investment securities portfolio. Management of the investment securities portfolio is a shared service contained in the Other segment. The primary objective of the investment securities portfolio is to generate net interest revenue from the liquidity generated by BNY Mellon's processing businesses. BNY Mellon does not generally originate or trade the securities in the investment securities portfolio. As a result, BNY Mellon believes that presenting measures that exclude investment securities losses from its results, as a supplement to GAAP information, gives investors a clearer picture of the results of its primary businesses. The SILO/LILO charges relate to a one-time settlement with the IRS of tax structured lease transactions in 2008. In this Earnings Release, certain amounts are presented on an FTE basis. We believe that this presentation provides comparability of amounts arising from both taxable and tax exempt sources, and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income. We also present earnings information excluding the TARP redemption premium and dividend, so as to provide investors with a better understanding of operational results.

Each of these measures as described above is used by management to monitor financial performance, both on a company-wide and on a business segment basis.

    --------------------------------------------------------------------------
    Reconciliation of net income
    (loss) and EPS - GAAP to           3Q09           2Q09           3Q08
    Non-GAAP                     -------------    -------------  ------------
                                   Net
    (in millions, except         income             Net            Net
    per common share amounts)    (loss)    EPS    income    EPS  income   EPS
    --------------------------------------------------------------------------
    Net income (loss) applicable
     to common shareholders
     of The Bank of New York
     Mellon Corporation - GAAP $(2,458)  $(2.05)    $176   $0.15    $303 $0.26
    Discontinued operations
     income (loss)                 (19)   (0.02)     (91)  (0.08)      -     -
    --------------------------------------------------------------------------
      Continuing
       operations - GAAP        (2,439)   (2.04)(a)  267    0.23     303  0.26
    Investment securities
     losses                      3,047     2.54      161    0.14      97  0.08
    TARP redemption
     premium/dividend                -        -      236    0.20       -     -
    FDIC special assessment          -        -       36    0.03       -     -
    SILO/LILO/tax settlements        -        -        -       -      30  0.03
    Support agreement charges        -        -        -       -     433  0.38
    M&I expenses                    34     0.03       36    0.03      66  0.06
    Benefit of tax settlements       -        -     (134)  (0.11)      -     -
    --------------------------------------------------------------------------
      Net income (loss) from
       continuing operations
       applicable to common
       shareholders excluding
       the investment securities
       losses, TARP redemption
       premium/dividend, FDIC
       special assessment,
       SILO/LILO/tax settlements,
       support agreement charges,
       M&I expenses and benefit
       of tax settlements -
       Non-GAAP                    642     0.54(a)   602    0.51(a)  929  0.81
    Intangible amortization         65     0.05       67    0.06      73  0.06
    --------------------------------------------------------------------------
      Net income (loss) from
       continuing operations
       applicable to common
       shareholders excluding
       the investment securities
       losses, TARP redemption
       premium/dividend, FDIC
       special assessment,
       SILO/LILO/tax settlements,
       support agreement charges,
       M&I expenses, benefit of
       tax settlements and
       intangible amortization -
       Non-GAAP                   $707    $0.59     $669   $0.57  $1,002 $0.87
    --------------------------------------------------------------------------
    (a) Does not foot due to rounding.



    ------------------------------------------------------------------------
    Asset and wealth management fee revenue
    (in millions)                               3Q09        2Q09        3Q08
    ------------------------------------------------------------------------
    Asset and wealth management fee revenue     $650        $637        $795
    Less:  Performance fees                        1          26           3
    ------------------------------------------------------------------------
    Asset and wealth management fee revenue
     excluding performance fees                 $649        $611        $792
    ------------------------------------------------------------------------



    ----------------------------------------------------------------------
    Reconciliation of fee and other revenue as a percent of total revenue
    (dollars in millions)    3Q09      2Q09      3Q08     YTD09     YTD08
    ----------------------------------------------------------------------
    Fee and other
     revenue - GAAP       $(2,216)   $2,257    $2,926    $2,177    $8,897
      Add:  Investment
             securities
             losses         4,833       256       162     5,384       387
    ----------------------------------------------------------------------
    Fee and other
     revenue excluding
     investment securities
     losses- Non-GAAP       2,617     2,513     3,088     7,561     9,284

    Net interest
     revenue - GAAP           716       700       681     2,191     1,812
      Add:  SILO/LILO
             charges            -         -       112         -       489
    ----------------------------------------------------------------------
    Net interest revenue
     excluding SILO/LILO
     charges - Non-GAAP       716       700       793     2,191     2,301
    ----------------------------------------------------------------------
    Total revenue - GAAP  $(1,500)   $2,957    $3,607    $4,368   $10,709
    Total revenue
     excluding investment
     securities losses
     and SILO/LILO
     charges - Non-GAAP    $3,333    $3,213    $3,881    $9,752   $11,585

    Fee and other
     revenue as a
     percentage of total
     revenue                  N/M        76%       81%       50%       83%
    Fee and other
     revenue as a
     percentage of total
     revenue excluding
     investment securities
     losses and SILO/LILO
     charges - Non-GAAP        79%       78%       80%       78%       80%
    ----------------------------------------------------------------------



    ------------------------------------------------------------------------
    Reconciliation of income (loss) from continuing operations before
    income taxes - pre-tax operating margin
    (dollars in millions)         3Q09     2Q09    3Q08     YTD09     YTD08
    ------------------------------------------------------------------------
    Income (loss) from
     continuing operations
     before income
     taxes - GAAP              $(3,965)    $513    $265   $(2,880)   $1,995
      Investment securities
       losses                    4,833      256     162     5,384       387
      SILO/LILO charges              -        -     112         -       489
      Support agreement charges     13      (15)    726       (10)      731
      Asset-based taxes             20        -       -        20         -
      FDIC special assessment        -       61       -        61         -
      M&I expenses                  54       59     111       181       386
      Intangible amortization      104      108     118       319       360
    ------------------------------------------------------------------------
      Income (loss) from
       continuing operations
       before income taxes
       excluding investment
       securities losses,
       SILO/LILO charges,
       support agreement
       charges, asset-based
       taxes, FDIC special
       assessment, M&I
       expenses and intangible
       amortization -
       Non-GAAP                 $1,059     $982  $1,494    $3,075    $4,348

    Fee and other
     revenue - GAAP            $(2,216)  $2,257  $2,926    $2,177    $8,897
    Net interest
     revenue - GAAP                716      700     681     2,191     1,812
    ------------------------------------------------------------------------
      Total revenue -GAAP       (1,500)   2,957   3,607     4,368    10,709
      Add:  Investment
             securities
             losses              4,833      256     162     5,384       387
            SILO/LILO
             charges                 -        -     112         -       489
    ------------------------------------------------------------------------
        Total revenue
         excluding investment
         securities losses
         and SILO/LILO
         charges -
         Non-GAAP               $3,333   $3,213  $3,881    $9,752   $11,585

    Pre-tax operating
     margin (a)                    N/M       17%      7%      N/M        19%
    Pre-tax operating
     margin excluding
     investment securities
     losses, SILO/LILO
     charges, support
     agreement charges,
     asset-based taxes,
     FDIC special
     assessment, M&I
     expenses and
     intangible
     amortization
     - Non-GAAP (a)                 32%      31%     39%       32%       38%
    ------------------------------------------------------------------------
    (a) Income (loss) before taxes divided by total revenue.



    ----------------------------------------------------------------------
    Return on common equity and tangible common equity -
    continuing operations
    (dollars in millions)    3Q09      2Q09      3Q08    YTD09      YTD08
    ----------------------------------------------------------------------
    Net income (loss)
     applicable to
     common shareholders
     of The Bank of New
     York Mellon
     Corporation - GAAP   $(2,458)     $176      $303  $(1,960)    $1,358
    Discontinued
     operations income
     (loss), net of tax       (19)      (91)        -     (151)        10
    ----------------------------------------------------------------------
      Net income (loss)
       from continuing
       operations
       applicable to
       common
       shareholders of
       The Bank of New
       York Mellon
       Corporation         (2,439)      267       303   (1,809)     1,348
    Intangible
     amortization              65        67        73      198        222
    ----------------------------------------------------------------------
      Net income (loss)
       from continuing
       operations
       applicable to
       common
       shareholders of
       The Bank of New
       York Mellon
       Corporation
       excluding
       intangible
       amortization -
       Non-GAAP            (2,374)      334       376   (1,611)     1,570
    Investment securities
     losses                 3,047       161        97    3,392        232
    SILO/LILO/tax
     settlements                -         -        30        -        410
    Support agreement
     charges                    8        (9)      433       (6)       436
    FDIC special assessment     -        36         -       36          -
    M&I expenses               34        36        66      111        230
    Benefit of tax
     settlements                -      (134)        -     (134)         -
    ----------------------------------------------------------------------
    Net income (loss) from
     continuing operations
     excluding investment
     securities losses,
     SILO/LILO/tax
     settlements, support
     agreement charges,
     FDIC special
     assessment, M&I
     expenses, benefit of
     tax settlements and
     intangible
     amortization -
     Non-GAAP                $715      $424    $1,002   $1,788     $2,878

    Average common
     shareholders'
     equity               $28,144   $26,566   $27,996  $26,644    $28,682
    Less:  Average
            goodwill       16,048    15,989    16,644   15,959     16,661
           Average
            intangible
            assets          5,608     5,673     5,915    5,677      6,061
    Add:   Deferred tax
            liability -
            tax deductible
            goodwill          666       643       577      666        577
           Deferred tax
            liability -
            non-tax
            deductible
            intangible
            assets          1,717     1,743     1,915    1,717      1,915
    ----------------------------------------------------------------------
    Average tangible
     common shareholders'
     equity - Non-GAAP     $8,871    $7,290    $7,929   $7,391     $8,452

    Return on common
     equity- GAAP (a)         N/M       4.0%      4.3%     N/M        6.3%
    Return on common
     equity excluding
     investment
     securities losses,
     SILO/LILO/tax
     settlements, support
     agreement charges,
     FDIC special
     assessment, M&I
     expenses, benefit of
     tax settlements and
     intangible
     amortization -
     Non-GAAP (a)            10.1%      6.4%     14.2%     9.0%      13.4%

    Return on tangible
     common equity -
     Non-GAAP (a)             N/M      18.4%     18.9%     N/M       24.8%
    Return on tangible
     common equity
     excluding investment
     securities losses,
     SILO/LILO/tax
     settlements, support
     agreement charges,
     FDIC special
     assessment, M&I
     expenses and benefit
     of tax settlements -
     Non-GAAP (a)            32.0%     23.3%     50.2%    32.3%      45.5%
    ----------------------------------------------------------------------
    (a) Annualized.



    -------------------------------------------------------------------------
    Equity to assets and book value
    per common share
    (dollars in millions,                   Sept. 30,    June 30,   Sept. 30,
    unless otherwise noted)                     2009        2009        2008
    -------------------------------------------------------------------------
    Common shareholders' equity at
     period end - GAAP                       $28,295     $27,276     $27,513
    Less:  Goodwill                           16,022      16,040      16,335
           Intangible assets                   5,574       5,677       6,043
    Add:   Deferred tax liability -
            tax deductible goodwill              666         643         577
           Deferred tax liability -
            non-tax deductible intangible
            assets                             1,717       1,743       1,915
    -------------------------------------------------------------------------
    Tangible common shareholders' equity
     at period end - Non-GAAP                 $9,082      $7,945      $7,627

    Total assets at period end - GAAP       $212,007    $203,012    $267,510
    Less:  Goodwill                           16,022      16,040      16,335
           Intangible assets                   5,574       5,677       6,043
           Cash on deposit with the
            Federal Reserve and other
            central banks (a)                 15,003      16,458      37,910
           U.S. government-backed
            commercial paper                       -           -      10,865
    -------------------------------------------------------------------------
    Tangible total assets at period
     end - Non-GAAP                         $175,408    $164,837    $196,357
    Common shareholders' equity to
     assets - GAAP                              13.3%       13.4%       10.3%
    Tangible common shareholders' equity
     to tangible assets - Non-GAAP               5.2%        4.8%        3.9%

    Period end common shares outstanding
     (in thousands)                        1,204,244   1,202,828   1,147,567

    Book value per common share               $23.50      $22.68      $23.97
    Tangible book value per common
     share - Non-GAAP                          $7.54       $6.60       $6.65
    -------------------------------------------------------------------------
    (a) Assigned a zero percent risk weighting by the regulators.



    -------------------------------------------------------------------------
    Calculation of the Tier 1 common
    equity to risk-weighted assets
    ratio (a)                               Sept. 30,    June 30,   Sept. 30,
    (dollars in millions)                       2009        2009        2008
    -------------------------------------------------------------------------
    Total Tier 1 capital                     $12,546     $15,044     $11,688
    Less:  Trust preferred securities          1,682       1,691       1,719
    -------------------------------------------------------------------------
    Total Tier 1 common equity               $10,864     $13,353      $9,969

    Total risk-weighted assets              $110,670    $120,566    $125,125

    Tier 1 common equity to
     risk-weighted assets ratio                  9.8%       11.1%        8.0%
    -------------------------------------------------------------------------
    (a) On a regulatory basis.

Cautionary Statement

The information presented in this Earnings Release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be expressed in a variety of ways, including the use of future or present tense language, relate to, among other things, expectations with respect to the restructuring of BNY Mellon's investment securities portfolio, including statements with respect to the impact of the restructuring on future pricing, net interest revenue and risk of future securities losses, retention of the remaining restructured securities; the reflection of declines in the fair value of securities in BNY Mellon's net income; expectations with respect to declines in the provision for credit losses; and expectations with respect to the closing of the sale of Mellon United National Bank. These statements and other forward-looking statements contained in other public disclosures of The Bank of New York Mellon Corporation which make reference to the cautionary factors described in this earnings release, are based upon current beliefs and expectations and are subject to significant risks and uncertainties (some of which are beyond BNY Mellon's control). Factors that could cause BNY Mellon's results to differ materially from those described in the forward-looking statements can be found in the risk factors set forth in BNY Mellon's Annual Report on Form 10-K for the year ended Dec. 31, 2008, the Form 10-Q for the quarter ended March 31, 2009 and BNY Mellon's other filings with the Securities and Exchange Commission. All forward-looking statements in this earnings release speak only as of Oct. 20, 2009 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.