Bank of New York Mellon Corp (BNY) FY 2024 MD&A

Overview

BNY is a global financial services company that helps make money work for the world – managing it, moving it and keeping it safe. For more than 240 years BNY has partnered alongside clients, putting its expertise and platforms to work to help them achieve their ambitions. Today BNY helps over 90% of Fortune 100 companies and nearly all the top 100 banks globally to access the money they need. BNY supports governments in funding local projects and works with over 90% of the top 100 pension plans to safeguard investments for millions of individuals, and so much more. As of Dec. 31, 2024, BNY oversees $52.1 trillion in assets under custody and/or administration and $2.0 trillion in assets under management.

BNY is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Headquartered in New York City, BNY employs over 50,000 people globally and has been named among Fortune’s World’s Most Admired Companies and

Fast Company’s Best Workplaces for Innovators. Additional information is available on www.bny.com. Follow on LinkedIn or visit the BNY Newsroom for the latest company news.

BNY has three business segments, Securities Services, Market and Wealth Services and Investment and Wealth Management, which offer a comprehensive set of capabilities and deep expertise across the investment life cycle, enabling the Company to provide solutions to buy-side and sell-side market participants, as well as leading institutional and wealth management clients globally.

The diagram below presents our three business segments and lines of business, with the remaining operations in the Other segment.

For additional information on our business segments, see “Review of business segments” and Note 24 of the Notes to Consolidated Financial Statements.

Summary of financial highlights

We reported net income applicable to common shareholders of $4.3 billion, or $5.80 per diluted common share, in 2024, including the negative impact of notable items. Notable items in 2024 include severance expense, litigation reserves and the net impact of adjustments for the Federal Deposit Insurance Corporation (“FDIC”) special assessment. Excluding notable items, net income applicable to common shareholders was $4.5 billion (Non-GAAP), or $6.03 (Non-GAAP) per diluted common share, in 2024. In 2023, net income applicable to common shareholders was $3.1 billion, or $3.89 per diluted

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Results of Operations (continued)

common share, including the negative impact of notable items. Notable items in 2023 include the initial estimate for the FDIC special assessment, severance expense, the reduction in the fair value of a contingent consideration receivable, litigation reserves and net losses on disposals. Excluding notable items, net income applicable to common shareholders was $4.0 billion (Non-GAAP), or $5.07 (Non-GAAP) per diluted common share, in 2023.

The highlights below are based on 2024 compared with 2023, unless otherwise noted.

•Total revenue increased 5%, primarily reflecting:

•Fee revenue increased 6%, primarily reflecting higher market values, net new business, higher client activity and foreign exchange revenue, partially offset by the mix of AUM flows. (See “Fee and other revenue” beginning on page 5.)

•Investment and other revenue increased primarily reflecting the reduction in the fair value of a contingent consideration receivable in 2023 and higher client activity in our fixed income and equity trading business. (See “Fee and other revenue” beginning on page 5.)

•Net interest income decreased 1%, primarily reflecting changes in deposit mix, partially offset by higher investment securities portfolio yields and balance sheet growth. (See “Net interest income” beginning on page 8.)

•The provision for credit losses was $70 million, primarily driven by reserve increases related to commercial real estate exposure and changes in the macroeconomic forecast. (See “Consolidated balance sheet review – Allowance for credit losses” beginning on page 33.)

•Noninterest expense decreased 4%, primarily reflecting the net impact of adjustments for the FDIC special assessment and efficiency savings, partially offset by higher investments, employee merit increases and revenue-related expenses. Excluding notable items, noninterest expense increased 1% (Non-GAAP). (See “Noninterest expense” on page 11.)

•Effective tax rate of 22.3% in 2024. (See “Income taxes” on page 11.)

•Return on common equity (“ROE”) was 11.9% for 2024. Excluding notable items, the adjusted ROE was 12.4% (Non-GAAP) for 2024.

•Return on tangible common equity (“ROTCE”) was 22.8% (Non-GAAP) for 2024. Excluding notable items, the adjusted ROTCE was 23.8% (Non-GAAP) for 2024.

See “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 115 for reconciliations of the Non-GAAP measures.

Metrics

•AUC/A totaled $52.1 trillion at Dec. 31, 2024 compared with $47.8 trillion at Dec. 31, 2023. The 9% increase primarily reflects higher market values, client inflows and net new business, partially offset by the unfavorable impact of a stronger U.S. dollar. (See “Fee and other revenue” beginning on page 5.)

•AUM totaled $2.03 trillion at Dec. 31, 2024 compared with $1.97 trillion at Dec. 31, 2023. The 3% increase primarily reflects higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar. (See “Review of business segments – Investment and Wealth Management business segment” beginning on page 17.)

Capital and liquidity

•Our CET1 ratio calculated under the Standardized Approach was 11.2% at Dec. 31, 2024 and 11.5% at Dec. 31, 2023 under the Advanced Approaches. The decrease was primarily driven by capital returned through common stock repurchases and dividends and higher risk-weighted assets (“RWAs”), partially offset by capital generated through earnings. (See “Capital” beginning on page 39.)

•Our Tier 1 leverage ratio was 5.7% at Dec. 31, 2024, compared with 6.0% at Dec. 31, 2023. The decrease was driven by higher average assets, partially offset by an increase in capital. (See “Capital” beginning on page 39.)

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Results of Operations (continued)

Fee and other revenue

(a)    Excludes seed capital gains (losses) related to consolidated investment management funds.

(b)    Results for the years ended Dec. 31, 2023 and Dec. 31, 2022 were restated to reflect the retrospective application of adopting new accounting guidance in 2024 related to our investments in renewable energy projects using the proportional amortization method (ASU 2023-02). See Note 2 of the Notes to Consolidated Financial Statements for additional information.

(c)    Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Clearance and Collateral Management, Issuer Services, Pershing and Wealth Management lines of business. Includes the AUC/A of CIBC Mellon of $1.8 trillion at Dec. 31, 2024, $1.7 trillion at Dec. 31, 2023 and $1.5 trillion at Dec. 31, 2022.

(d)    Represents assets managed in the Investment and Wealth Management business segment.

N/M – Not meaningful.

Fee revenue increased 6% compared with 2023, primarily reflecting higher investment services fees, investment management and performance fees and foreign exchange revenue.

Investment and other revenue increased $207 million in 2024 compared with 2023, primarily reflecting the reduction in the fair value of a contingent consideration receivable in 2023 and higher client activity in our fixed income and equity trading business.

Investment services fees

Investment services fees increased 7% compared with 2023, primarily reflecting higher market values, net new business and higher client activity.

AUC/A totaled $52.1 trillion at Dec. 31, 2024, an increase of 9% compared with Dec. 31, 2023, primarily reflecting higher market values, client inflows and net new business, partially offset by the unfavorable impact of a stronger U.S. dollar. AUC/A consisted of 37% equity securities and 63% fixed-income securities at Dec. 31, 2024 and 35% equity securities and 65% fixed-income securities at Dec. 31, 2023.

See “Securities Services business segment” and “Market and Wealth Services business segment” in “Review of business segments” for additional details.

Investment management and performance fees

Investment management and performance fees increased 3% compared with 2023, primarily reflecting higher market values, partially offset by the mix of AUM flows and lower performance fees. Performance fees were $51 million in 2024 and $81 million in 2023. On a constant currency basis (Non-GAAP), investment management and performance fees increased 2% compared with 2023. See “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 115 for the reconciliation of Non-GAAP measures.

AUM was $2.0 trillion at Dec. 31, 2024, an increase of 3% compared with Dec. 31, 2023, primarily reflecting higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar.

See “Investment and Wealth Management business segment” in “Review of business segments” for additional details regarding the drivers of investment management and performance fees, AUM and AUM flows.

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Results of Operations (continued)

Foreign exchange revenue

Foreign exchange revenue is primarily driven by the volume of client transactions and the spread realized on these transactions, both of which are impacted by market volatility, the impact of foreign currency hedging activities and foreign currency remeasurement gain (loss). In 2024, foreign exchange revenue increased 9% compared with 2023, primarily reflecting higher volumes. Foreign exchange revenue is primarily reported in the Securities Services business segment and, to a lesser extent, the Market and Wealth Services and Investment and Wealth Management business segments and the Other segment.

Financing-related fees

Financing-related fees, which are primarily reported in the Market and Wealth Services and Securities Services business segments, include capital market fees, loan commitment fees and credit-related fees. Financing-related fees increased 13% in 2024 compared with 2023, primarily reflecting higher underwriting fees.

Distribution and servicing fees

Distribution and servicing fees earned from mutual funds are primarily based on average assets in the funds and the sales of funds that we manage or administer, and are primarily reported in the Investment Management line of business. These fees, which include 12b-1 fees, fluctuate with the overall level of net sales, the relative mix of sales between share classes, the funds’ market values and money market fee waivers.

Distribution and servicing fees were $158 million in 2024 compared with $148 million in 2023, driven by

higher money market balances. The impact of distribution and servicing fees on income in any one period is partially offset by distribution and servicing expense paid to other financial intermediaries to cover their costs for distribution and servicing of mutual funds. Distribution and servicing expense is recorded as noninterest expense on the income statement.

Investment and other revenue

Investment and other revenue includes income or loss from consolidated investment management funds, seed capital gains or losses, other trading revenue or loss, renewable energy investments gains or losses, income from corporate and bank-owned life insurance contracts, other investment gains or losses, gains or losses from disposals, expense reimbursements from our CIBC Mellon joint venture, other income or loss and net securities gains or losses. The income or loss from consolidated investment management funds should be considered together with the net income or loss attributable to noncontrolling interests, which reflects the portion of the consolidated funds for which we do not have an economic interest and is reflected below net income as a separate line item on the consolidated income statement. Other trading revenue or loss primarily includes the impact of market-risk hedging activity related to our seed capital investments in investment management funds, non-foreign currency derivative and fixed income trading, and other hedging activity. Other investment gains or losses includes fair value changes of non-readily marketable strategic equity, private equity and other investments. Expense reimbursements from our CIBC Mellon joint venture relate to expenses incurred by BNY on behalf of the CIBC Mellon joint venture. Other income includes various miscellaneous revenues.

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Results of Operations (continued)

The following table provides the components of investment and other revenue.

(a)    Includes gains (losses) on investments in BNY funds which hedge deferred incentive awards.

(b)    Results for the years ended Dec. 31, 2023 and Dec. 31, 2022 were restated to reflect the retrospective application of adopting new accounting guidance in 2024 related to our investments in renewable energy projects using the proportional amortization method (ASU 2023-02). See Note 2 of the Notes to Consolidated Financial Statements for additional information.

(c)    Includes strategic equity, private equity and other investments.

(d)    Includes a net loss of $449 million related to the repositioning of the securities portfolio.

Investment and other revenue was $687 million in 2024 compared with $480 million in 2023. The increase primarily reflects the reduction in the fair value of a contingent consideration receivable in 2023 and higher client activity in our fixed income and equity trading business.

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Results of Operations (continued)

Net interest income

(a)    Net interest income (FTE) – Non-GAAP and net interest margin (FTE) – Non-GAAP include the tax equivalent adjustments on tax-exempt income, which allows for comparisons of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.

N/M – Not meaningful.

bps – basis points.

Net interest income decreased 1% compared with 2023, primarily reflecting changes in deposit mix, partially offset by higher investment securities portfolio yields and balance sheet growth.

Net interest margin decreased 3 basis points compared with 2023. The decrease primarily reflects the factors mentioned above.

Average interest-earning assets increased 2% compared with 2023. The increase primarily reflects higher federal funds sold and securities purchased under resale agreements, loan balances and securities, partially offset by lower interest-bearing deposits with the Federal Reserve and other central banks and interest-bearing deposits with banks.

Average non-U.S. dollar deposits comprised approximately 25% of our average total deposits in 2024 and 2023. Approximately 50% of the average non-U.S. dollar deposits in 2024 and 45% in 2023 were euro-denominated.

Net interest income in 2025 will largely depend on the level and mix of client deposits and investment securities portfolio reinvestment yields. Based on market implied forward interest rates as of Dec. 31, 2024, we expect net interest income for 2025 to increase when compared with 2024.

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Results of Operations (continued)

(a)    Includes the average impact of offsetting under enforceable netting agreements of approximately $176 billion in 2024 and $111 billion in 2023. On a Non-GAAP basis, excluding the impact of offsetting, the yield on federal funds sold and securities purchased under resale agreements would have been 5.28% for 2024 and 5.22% for 2023, and the rate on federal funds purchased and securities sold under repurchase agreements would have been 5.18% for 2024 and 5.10% for 2023. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid.

(b)    Interest income includes fees of $3 million in 2024 and $1 million in 2023. Nonaccrual loans are included in average loans; the associated income, which was recognized on a cash basis, is included in interest income.

(c)    Average rates were calculated on an FTE basis, at tax rates of approximately 21% for both 2024 and 2023.

(d)    See “Net interest income” on page 8 for the reconciliation of this Non-GAAP measure.

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Results of Operations (continued)

(a)    Includes the average impact of offsetting under enforceable netting agreements of approximately $43 billion in 2022. On a Non-GAAP basis, excluding the impact of offsetting, the yield on federal funds sold and securities purchased under resale agreements would have been 1.77%, and the rate on federal funds purchased and securities sold under repurchase agreements would have been 1.67% for 2022. We believe providing the rates excluding the impact of netting is useful to investors as it is more reflective of the actual rates earned and paid.

(b)    Interest income includes fees of $2 million in 2022. Nonaccrual loans are included in average loans; the associated income, which was recognized on a cash basis, is included in interest income.

(c)    Average rates were calculated on an FTE basis, at tax rates of approximately 21% in 2022.

(d)    See “Net interest income” on page 8 for the reconciliation of this Non-GAAP measure.

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Results of Operations (continued)

Noninterest expense

(a)    Beginning in 2024, the number of full-time employees excludes interns.

N/M – Not meaningful.

Total noninterest expense decreased 4% compared with 2023, primarily reflecting the net impact of adjustments for the FDIC special assessment and efficiency savings, partially offset by higher investments, employee merit increases and revenue-related expenses. Excluding notable items, noninterest expense increased 1% (Non-GAAP). See “Supervision and Regulation – FDIC Deposit Insurance” beginning on page 67 for information on the FDIC special assessment. See “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 115 for the reconciliation of the Non-GAAP measure.

We expect total noninterest expense for 2025 to increase slightly compared with 2024, primarily reflecting incremental investments and higher revenue-related expenses, partially offset by the benefit of efficiency savings.

Income taxes

BNY recorded an income tax provision of $1.3 billion (22.3% effective tax rate) in 2024. The income tax provision was $979 million (22.9% effective tax rate) in 2023.

On Jan. 1, 2024, we adopted ASU 2023-02,

Investments—Equity Method and Joint Ventures

(Topic 323): Accounting for Investments in Tax

Credit Structures Using the Proportional Amortization Method, on a retrospective basis. See Note 2 of the Notes to Consolidated Financial

Statements for additional information on the new accounting guidance.

For additional information on income taxes, see Note 12 of the Notes to Consolidated Financial Statements.

Review of business segments

We have an internal information system that produces performance data along product and service lines for our three principal business segments: Securities Services, Market and Wealth Services and Investment and Wealth Management, and the Other segment.

Business segment accounting principles

Our business segment data has been determined on an internal management basis of accounting, rather than the generally accepted accounting principles (“GAAP”) used for consolidated financial reporting. These measurement principles are designed so that reported results of the businesses will track their economic performance.

Our business segments are consistent with the structure used by the President and Chief Executive Officer, our Chief Operating Decision Maker (“CODM”), to make key operating decisions and assess performance. Our CODM evaluates the business segments’ operating performance primarily based on fee and other revenue, total revenue, income before income taxes, and pre-tax operating margin. The significant expense information regularly

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Results of Operations (continued)

provided to and reviewed by the CODM is total noninterest expense. The CODM considers this information when evaluating the performance of each business segment and making decisions about allocating capital and other resources to each business segment.

For information on the accounting principles of our business segments, the primary products and services in each line of business, the primary types of revenue by line of business and how our business segments are presented and analyzed, see Note 24 of the Notes to Consolidated Financial Statements.

Business segment results are subject to reclassification when organizational changes are made, or for refinements in revenue and expense allocation methodologies. Refinements are typically reflected on a prospective basis. In 2024, we made certain realignments of similar products and services within our lines of business consistent with the firm’s ongoing transition to a platforms operating model uniting related capabilities and enabling streamlining of internal processes to drive growth, efficiency, resiliency, and enhanced risk management. The largest change was the movement of Institutional Solutions from Pershing to Clearance and Collateral Management, both in the Market and Wealth Services business segment. We made other smaller changes that moved activity from Asset Servicing in the Securities Services business segment to Treasury Services in the Market and Wealth Services business segment, and from Wealth Management in the Investment and Wealth Management business segment and Pershing in the Market and Wealth Services business segment to Investment Management in the Investment and Wealth Management business segment. The Other segment was not impacted by the changes. Business segment results for 2023 and 2022 have been revised to reflect these changes.

The results of our business segments may be influenced by client and other activities that vary by quarter. In the first quarter, staff expense typically increases, reflecting the vesting of long-term stock awards for retirement-eligible employees. The timing of our annual employee merit increases also impacts

staff expense. In 2024, the merit increase was effective in March and in 2023, the merit increase was effective in April, thus partially impacting the full-year staff expense variances. In the third quarter, volume-related fees may decline due to reduced client activity. In the fourth quarter, we typically incur higher business development and marketing expenses. In our Investment and Wealth Management business segment, performance fees are typically higher in the fourth and first quarters, as those quarters represent the end of the measurement period for many of the performance fee-eligible relationships.

The results of our business segments may also be impacted by the translation of financial results denominated in foreign currencies to the U.S. dollar. We are primarily impacted by activities denominated in the British pound and the euro. On a consolidated basis and in our Securities Services and Market and Wealth Services business segments, we typically have more foreign currency-denominated expenses than revenues. However, our Investment and Wealth Management business segment typically has more foreign currency-denominated revenues than expenses. Overall, currency fluctuations impact the year-over-year growth rate in the Investment and Wealth Management business segment more than the Securities Services and Market and Wealth Services business segments. However, currency fluctuations, in isolation, are not expected to significantly impact net income on a consolidated basis.

Fee revenue in the Investment and Wealth Management business segment, and to a lesser extent, the Securities Services and Market and Wealth Services business segments, is impacted by global market fluctuations. At Dec. 31, 2024, we estimated that a 5% change in global equity markets, spread evenly throughout the year, would impact fee revenue by less than 1% and diluted earnings per common share by $0.05 to $0.08.

See Note 24 of the Notes to Consolidated Financial Statements for the consolidating schedules which show the contribution of our business segments to our overall profitability.

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Results of Operations (continued)

Securities Services business segment

(a)    Other fees primarily includes financing-related fees.

(b)    Included in investment services fees reported in the Asset Servicing line of business.

(c)    Consists of AUC/A primarily from the Asset Servicing line of business and, to a lesser extent, the Issuer Services line of business. Includes the AUC/A of CIBC Mellon of $1.8 trillion at Dec. 31, 2024, $1.7 trillion at Dec. 31, 2023 and $1.5 trillion at Dec. 31, 2022.

(d)    Represents the total amount of securities on loan in our agency securities lending program. Excludes securities for which BNY acts as agent on behalf of CIBC Mellon clients, which totaled $60 billion at Dec. 31, 2024, $63 billion at Dec. 31, 2023 and $68 billion at Dec. 31, 2022.

N/M – Not meaningful.

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Results of Operations (continued)

Business segment description

The Securities Services business segment consists of two distinct lines of business, Asset Servicing and Issuer Services, which provide business solutions across the transaction lifecycle to our global asset owner and asset manager clients. We are one of the leading global investment services providers with $37.7 trillion of AUC/A at Dec. 31, 2024. For information on the drivers of the Securities Services fee revenue, see Note 10 of the Notes to Consolidated Financial Statements.

The Asset Servicing business provides a comprehensive suite of solutions. We are one of the largest global custody, fund administrator and front-to-back outsourcing partners. We offer services for the safekeeping of assets in capital markets globally as well as fund accounting services, exchange-traded funds servicing, transfer agency, trust and depository, front-to-back capabilities and data and analytics solutions for our clients. We deliver foreign exchange, and securities lending and financing solutions, on both an agency and principal basis. Our agency securities lending program is one of the largest lenders of U.S. and non-U.S. securities, servicing a lendable asset pool of approximately $5.4 trillion in 34 separate markets. Our market-leading liquidity services portal enables cash investments for institutional clients and includes fund research and analytics.

Our Digital Asset Custody platform offers custody and administration services for Bitcoin and Ether for select U.S. institutional clients. Our Digital Assets Funds Services provides accounting and administration, transfer agency and ETF services to digital asset funds. We continue to develop our digital asset capabilities working closely with clients to address their evolving digital asset needs. As of and for the year ended Dec. 31, 2024, our Digital Asset Custody platform and related initiatives had a de minimis impact on our assets, liabilities, revenues and expenses.

The Issuer Services business includes Corporate Trust and Depositary Receipts. Our Corporate Trust business delivers a full range of issuer and related investor services, including trustee, paying agency, fiduciary, escrow and other financial

services. We are a leading provider to the debt capital markets, providing customized and market-driven solutions to investors, bondholders and lenders. Our Depositary Receipts business drives global investing by providing servicing and value-added solutions that enable, facilitate and enhance cross-border trading, clearing, settlement and ownership. We are one of the largest providers of depositary receipts services in the world, partnering with leading companies from more than 50 countries.

Review of financial results

AUC/A of $37.7 trillion increased 10% compared with Dec. 31, 2023, primarily reflecting higher market values, client inflows and net new business, partially offset by the unfavorable impact of a stronger U.S. dollar.

Total revenue of $8.9 billion increased 4% compared with 2023. The drivers of total revenue by line of business are indicated below.

Asset Servicing revenue of $6.9 billion increased 4% compared with 2023, primarily reflecting higher market values, net new business, higher client activity, including in our fixed income and trading business, and higher foreign exchange revenue, partially offset by lower net interest income.

Issuer Services revenue of $2.0 billion increased 3% compared with 2023, primarily reflecting Corporate Trust fees driven by net new business, partially offset by lower Depositary Receipts revenue.

Market and regulatory trends are driving investable assets toward lower fee asset management products at reduced margins for our clients. These dynamics are also negatively impacting our investment services fees. However, at the same time, these trends are providing additional outsourcing opportunities as clients and other market participants seek to comply with regulations and reduce their operating costs.

Noninterest expense of $6.3 billion decreased 1% compared with 2023, primarily reflecting efficiency savings, partially offset by higher investments and employee merit increases.

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Results of Operations (continued)

Market and Wealth Services business segment

(a)    Other fees primarily include financing-related fees.

(b)    Consists of AUC/A from the Clearance and Collateral Management and Pershing businesses.

(c)    Net new assets represent net flows of assets (e.g., net cash deposits and net securities transfers, including dividends and interest) in customer accounts in Pershing LLC, a U.S. broker-dealer.

N/M – Not meaningful.

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Results of Operations (continued)

Business segment description

The Market and Wealth Services business segment consists of three distinct lines of business, Pershing, Treasury Services and Clearance and Collateral Management, which provide business services and technology solutions to entities including financial institutions, corporations, foundations and endowments, public funds and government agencies. For information on the drivers of the Market and Wealth Services fee revenue, see Note 10 of the Notes to Consolidated Financial Statements.

Pershing provides execution, clearing, custody, business and technology solutions, delivering operational support to broker-dealers, wealth managers and registered investment advisors (“RIAs”) globally.

Our Treasury Services business is a leading provider of global payments, liquidity management and trade finance services for financial institutions, corporations and the public sector.

Our Clearance and Collateral Management business clears and settles equity and fixed-income transactions globally and serves as custodian for tri-party repo collateral worldwide. We are the primary provider of U.S. government securities clearance and a provider of non-U.S. government securities clearance. Our collateral services include collateral management, administration and segregation. We offer innovative solutions and industry expertise which help financial institutions and institutional investors with their financing, risk and balance sheet challenges. We are a leading provider of tri-party collateral management services with an average of $5.4 trillion serviced

globally including approximately $4.2 trillion of the U.S. tri-party repo market in 2024.

Review of financial results

AUC/A of $14.1 trillion increased 6% compared with Dec. 31, 2023, primarily reflecting net client inflows in the Clearance and Collateral Management business and higher market values.

Total revenue of $6.3 billion increased 7% compared with 2023. The drivers of total revenue by line of business are indicated below.

Pershing revenue of $2.7 billion increased 3% compared with 2023, primarily reflecting higher market values and client activity, partially offset by lost business in the prior year and lower net interest income. Net new assets of $(6) billion in 2024 reflects the deconversion of business lost in the prior year.

Treasury Services revenue of $1.7 billion increased 6% compared with 2023, primarily reflecting net new business, higher client activity and higher net interest income.

Clearance and Collateral Management revenue of $1.8 billion increased 14% compared with 2023, primarily reflecting higher collateral management fees, clearance volumes and net interest income.

Noninterest expense of $3.4 billion increased 5% compared with 2023, primarily reflecting higher investments, employee merit increases and higher revenue-related expenses, partially offset by efficiency savings.

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Results of Operations (continued)

Investment and Wealth Management business segment

(a)    On a constant currency basis, investment management and performance fees increased 2% (Non-GAAP) compared with 2023. See “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 115 for the reconciliation of this Non-GAAP measure.

(b)    Other fees primarily includes investment services fees.

(c)    Investment and other revenue and total fee and other revenue are net of income (loss) attributable to noncontrolling interests related to consolidated investment management funds.

(d)    Excluding notable items, income before income taxes increased 14% (Non-GAAP) in 2024 compared with 2023 and decreased 28% (Non-GAAP) in 2023 compared with 2022. See “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 115 for the reconciliation of these Non-GAAP measures.

(e)    Net of distribution and servicing expense. See “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 115 for the reconciliation of these Non-GAAP measures.

(f)    Excluding notable items and net of distribution and servicing expense, the adjusted pre-tax operating margin was 19% (Non-GAAP) in 2023 and 23% (Non-GAAP) in 2022. See “Supplemental Information – Explanation of GAAP and Non-GAAP financial measures” beginning on page 115 for the reconciliation of these Non-GAAP measures.

N/M – Not meaningful.

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Results of Operations (continued)

(a)    Represents assets managed in the Investment and Wealth Management business segment.

(b)    Activity in 2024 reflects the realignment of similar products and services within our lines of business. Activity in 2022 reflects the divestiture of BNY Alcentra Group Holdings, Inc.

(c)    Includes AUM and AUC/A in the Wealth Management line of business.

Business segment description

Our Investment and Wealth Management business segment consists of two distinct lines of business, Investment Management and Wealth Management, which have a combined AUM of $2.0 trillion as of Dec. 31, 2024.

Investment Management is a leading global asset manager and consists of seven specialist investment firms and a global distribution platform to deliver a diversified range of investment capabilities to institutional and retail clients globally.

Our Investment Management model provides specialist expertise from seven investment firms offering solutions across major asset classes, backed by the strength, scale and proven stewardship of BNY. Each investment firm has its own individual culture, investment philosophy and proprietary investment process. This approach brings our clients clear, independent thinking from highly experienced investment professionals.

The investment firms offer a broad range of actively managed equity, fixed income, multi-asset and liability-driven investments, along with passive products and cash management. Our six majority-owned investment firms are: ARX, Dreyfus, Insight Investment, Mellon, Newton Investment Management and Walter Scott. BNY owns a noncontrolling interest in Siguler Guff.

Investment Management has multiple global distribution entities, which are responsible for distributing the investment solutions developed and managed by the investment firms, as well as the management and distribution of our U.S. mutual funds, ETFs and certain offshore money market funds.

Wealth Management provides investment management, custody, wealth and estate planning, private banking services, investment servicing and information management. Wealth Management has $327 billion in client assets as of Dec. 31, 2024, and more than 30 offices in the U.S. and internationally.

Wealth Management clients include individuals, families and institutions. Institutions include family offices, charitable gift programs and endowments and foundations. We work with clients to build, manage and sustain wealth across generations and market cycles.

The wealth business differentiates itself with a comprehensive wealth management framework called Active Wealth that seeks to empower clients to build and sustain long-term wealth.

The results of the Investment and Wealth Management business segment are driven by a blend of daily, monthly and quarterly AUM by product type. The overall level of AUM for a given period is determined by:

•the beginning level of AUM;

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Results of Operations (continued)

•the net flows of new assets during the period resulting from new business wins and existing client inflows, reduced by the loss of clients and existing client outflows; and

•the impact of market price appreciation or depreciation, foreign exchange rates and investment firm acquisitions or divestitures.

The mix of AUM is a result of the historical growth rates of equity and fixed income markets and the cumulative net flows of our investment firms as a result of client asset allocation decisions. Actively managed equity, multi-asset and alternative assets typically generate higher percentage fees than fixed-income and liability-driven investments and cash. Also, actively managed assets typically generate higher management fees than indexed or passively managed assets of the same type. Market and regulatory trends have resulted in increased demand for lower fee asset management products and for performance-based fees.

Investment management fees are dependent on the overall level and mix of AUM and the management fees expressed in basis points (one-hundredth of one percent) charged for managing those assets. Management fees are typically subject to fee schedules based on the overall level of assets managed for a single client or by individual asset class and style. This is most common for institutional clients where we typically manage substantial assets for individual accounts.

Performance fees are generally calculated as a percentage of a portfolio’s performance in excess of a benchmark index or a peer group’s performance.

A key driver of growth in investment management and performance fees is the amount of net new AUM flows. Overall market conditions are also key drivers, with a significant long-term economic driver being growth of global financial assets.

Net interest income is determined by loan and deposit volumes and the interest rate spread between

customer rates and internal funds transfer rates on loans and deposits. Expenses in the Investment and Wealth Management business segment are mainly driven by staff and distribution and servicing expenses.

Review of financial results

AUM of $2.0 trillion increased 3% compared with Dec. 31, 2023, primarily reflecting higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar.

Net long-term strategy outflows were $52 billion in 2024, driven by outflows of index, equity and multi-asset and alternative investments, partially offset by inflows of fixed income and liability-driven investments. Short-term strategy inflows were $45 billion in 2024.

Total revenue of $3.4 billion increased 7% compared with 2023. The drivers of total revenue by line of business are indicated below.

Investment Management revenue of $2.3 billion increased 9% compared with 2023, primarily reflecting higher market values and the reduction in the fair value of a contingent consideration receivable in 2023, partially offset by the mix of AUM flows and lower performance fees.

Wealth Management revenue of $1.1 billion increased 5% compared with 2023, primarily reflecting higher market values, partially offset by changes in product mix.

Revenue generated in the Investment and Wealth Management business segment included 30% from non-U.S. sources in 2024, compared with 32% in 2023.

Noninterest expense of $2.8 billion was flat compared with 2023, primarily reflecting employee merit increases and higher investments, offset by efficiency savings.

BNY 19

Results of Operations (continued)

Other segment

Segment description

The Other segment primarily includes:

•the leasing portfolio;

•corporate treasury activities, including our securities portfolio;

•derivatives and other trading activity;

•corporate and bank-owned life insurance;

•tax credit investments and other corporate investments; and

•certain business exits.

Revenue primarily reflects:

•net interest income (expense) and lease-related gains (losses) from leasing operations;

•net interest income (expense) and derivatives and other corporate treasury activities;

•other revenue from certain business exits;

•investment and other revenue from corporate and bank-owned life insurance, gains (losses) associated with investment securities and other assets; and

•fee revenue from the elimination of the results of certain services provided between segments, which are also provided to third parties.

Expenses include:

•direct expenses supporting leasing, investing and funding activities; and

•expenses not directly attributable to Securities Services, Market and Wealth Services and Investment and Wealth Management operations.

Review of financial results

Loss before taxes was $226 million in 2024 compared with $867 million in 2023.

Investment and other revenue decreased $44 million compared with 2023, primarily reflecting investment gains recorded in 2023 and higher net securities losses.

Noninterest expense decreased $702 million compared with 2023, primarily driven by adjustments for the FDIC special assessment.

International operations

Our primary international activities consist of asset servicing in our Securities Services business segment, global payment services in our Market and Wealth Services business segment and investment management in our Investment and Wealth Management business segment.

Our clients include central banks and sovereigns, financial institutions, asset managers, insurance companies, corporations, local authorities and high-net-worth individuals and family offices. Through our global network of offices, we have developed a deep understanding of local requirements and cultural needs, and we pride ourselves on providing dedicated service through our multilingual sales, marketing and client service teams.

At Dec. 31, 2024, approximately 60% of our total employees (full-time and part-time employees) were based outside the U.S., with approximately 10,900 employees in EMEA, approximately 18,900 employees in APAC and approximately 800 employees in other global locations, primarily Brazil.

We are a leading global asset manager. Our international operations managed 47% of BNY’s AUM at Dec. 31, 2024 and 51% at Dec. 31, 2023.

20 BNY

Results of Operations (continued)

In Europe, we maintain capabilities to service Undertakings for Collective Investment in Transferable Securities and alternative investment funds. We offer a full range of tailored solutions for investment companies, financial institutions and institutional investors across most European markets.

We are a provider of non-U.S. government securities, fixed income and equities clearance, settling securities transactions directly in European markets, and using a high-quality and established network of local agents in non-European markets.

We have extensive experience providing trade and cash services to financial institutions and central banks outside of the U.S. In addition, we offer a broad range of servicing and fiduciary products to financial institutions, corporations and central banks. In emerging markets, we lead with custody, global payments and issuer services, introducing other products as the markets mature. For more established markets, our focus is on global investment services.

We are also a full-service global provider of foreign exchange services, actively trading in over 100 of the world’s currencies. We serve clients from trading desks located in Europe, Asia and North America.

Our financial results, as well as our levels of AUC/A and AUM, are impacted by translation from foreign currencies to the U.S. dollar. We are primarily impacted by activities denominated in the British pound and the euro. If the U.S. dollar depreciates against these currencies, the translation impact is a higher level of fee revenue, net interest income, noninterest expense and AUC/A and AUM. Conversely, if the U.S. dollar appreciates, the translated levels of fee revenue, net interest income, noninterest expense and AUC/A and AUM will be lower.

International clients accounted for 35% of revenues in 2024 and 36% in 2023. Net income from international operations was $2.3 billion in 2024, compared with $2.0 billion in 2023.

Revenues from EMEA were $4.3 billion in 2024, an increase of 4% compared with 2023. The increase was primarily driven by higher net interest income, collateral management fees and clearance volumes in the Market and Wealth Services business segment.

The Securities Services, Market and Wealth Services and Investment and Wealth Management business segments generated 58%, 24% and 18% of EMEA revenues, respectively. Net income from EMEA was $1.3 billion in 2024, compared with $1.1 billion in 2023.

Revenues from APAC were $1.3 billion in 2024, a decrease of 1% compared with 2023. The decrease primarily reflects lower revenue in the Market and Wealth Services and Investment and Wealth Management business segments, partially offset by higher revenue in the Securities Services business segment.

The Securities Services, Market and Wealth Services and Investment and Wealth Management business segments generated 60%, 30% and 10% of APAC revenues, respectively. Net income from APAC was $542 million in 2024, compared with $547 million in 2023.

For additional information regarding our international operations, including certain key subjective assumptions used in determining the results, see Note 25 of the Notes to Consolidated Financial Statements.

BNY 21

Results of Operations (continued)

Country risk exposure

The following table presents BNY’s top 10 exposures by country (excluding the U.S.) as of Dec. 31, 2024, as well as certain countries with higher-risk profiles. The exposure is presented on an internal risk management basis and has not been reduced by the allowance for credit losses. We monitor our exposure to these and other countries as part of our internal country risk management process.

The country risk exposure below reflects the Company’s risk to an immediate default of the counterparty or obligor based on the country of residence of the entity which incurs the liability. If there is credit risk mitigation, the country of residence of the entity providing the risk mitigation is the country of risk. The country of risk for securities is generally based on the domicile of the issuer of the security.

(a)    Lending includes loans, acceptances, issued letters of credit, net of participations, and lending-related commitments.

(b)    Securities include both the available-for-sale and held-to-maturity portfolios.

(c)    Other exposure includes over-the-counter (“OTC”) derivative and securities financing transactions, net of collateral.

(d)    The top 10 country exposure comprises approximately 65% of our total non-U.S. exposure.

(e)    Represents cash balances with exposure to Russia.

Events in recent years have resulted in increased focus on Brazil. The country risk exposure to Brazil is primarily short-term trade finance loans extended to large financial institutions. We also have operations in Brazil providing investment services and investment management services.

The war in Ukraine has increased our focus on Russia. The country risk exposure to Russia consists of cash balances related to our securities services businesses and may increase in the future to the extent cash is received for the benefit of our clients that is subject to distribution restrictions. BNY has ceased new banking business in Russia and suspended investment management purchases of Russian securities. Russian securities included in our AUC/A and AUM at Dec. 31, 2024, continue to be insignificant as a percentage of the total AUC/A and AUM, respectively. We will continue to work with

multinational clients that depend on our custody and recordkeeping services to manage their exposures.

We are also monitoring our exposure to Israel as part of our internal country risk management process. At Dec. 31, 2024, our total exposure to Israel was $158 million and primarily consisted of investment grade short-term interest-bearing deposits and OTC derivatives maturing within six months.

Critical accounting estimates

Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements. Certain of these policies include critical accounting estimates which require management to make subjective or complex judgments about the effect of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting estimates are those related to the

22 BNY

Results of Operations (continued)

allowance for credit losses, goodwill and other intangibles and litigation and regulatory contingencies. Management has discussed the development and selection of the critical accounting estimates with the Company’s Audit Committee.

Allowance for credit losses

The allowance for credit losses covers financial assets subject to credit losses and measured at amortized cost, including loans and lending-related commitments, held-to-maturity securities, certain securities financing transactions and deposits with banks. The allowance for credit losses is intended to adjust the carrying value of these assets by an estimated amount of credit losses that we expect to incur over the life of the asset. Similarly, the allowance for credit losses on lending-related commitments and other off-balance sheet financial instruments is meant to capture the credit losses that we expect to recognize in these portfolios as of the balance sheet date.

A quantitative methodology and qualitative framework is used to estimate the allowance for credit losses.

The quantitative component of our estimate uses models and methodologies that categorize financial assets based on product type, collateral type, and other credit trends and risk characteristics, including relevant information about past events, current conditions and reasonable and supportable forecasts of future economic conditions that affect the collectability of the recorded amounts. For the quantitative component, we segment portfolios into various major components including commercial loans and lease financing, commercial real estate, financial institutions, residential mortgages, and other. The segmentation of our debt securities portfolios is by major asset class and is influenced by whether the security is structured or non-structured (i.e., direct obligation), as well as the issuer type. The components of the credit loss calculation for each major portfolio or asset class include a probability of default, loss given default and exposure at default, as applicable, and their values depend on the forecast behavior of variables in the macroeconomic environment. We utilize a multi-scenario macroeconomic forecast which includes a weighting of three scenarios: a baseline and upside and downside scenarios and allows us to develop our estimate using a wide span of economic variables.

Our baseline scenario reflects a view on likely performance of each global region and the other two scenarios are designed relative to the baseline scenario. This approach incorporates a reasonable and supportable forecast period spanning the life of the asset, and includes both an initial estimated economic outlook component as well as a reversion component for each economic input variable. The length of each of the two components depends on the underlying financial instrument, scenario, and underlying economic input variable. In general, the initial economic outlook period for each economic input variable under each scenario ranges between several months and two years. The speed at which the scenario-specific forecasts revert to long-term historical mean is based on observed historical patterns of mean reversion at the economic variable input level that are reflected in our model parameter estimates. Certain macroeconomic variables such as unemployment or home prices take longer to revert after a contraction, though specific recovery times are scenario-specific. Reversion will usually take longer the further away the scenario-specific forecast is from the historical mean. On a quarterly basis, and within a developed governance structure, we update these scenarios for current economic conditions and may adjust the scenario weighting based on our economic outlook. The Company uses judgment to assess these economic conditions and loss data in determining the best estimate of the allowance for credit losses and these estimates are subject to periodic refinement based on changes to underlying external or Company-specific historical data.

In the quantitative component of our estimate, we measure expected credit losses using an individual evaluation method if the risk characteristics of the asset is no longer consistent with the portfolio or class of asset. For these assets, we do not employ the macroeconomic model calculation but consider factors such as payment status, collateral value, the obligor’s financial condition, guarantor support, the probability of collecting scheduled principal and interest payments when due, and recovery expectations if they can be reasonably estimated. For loans, we measure the expected credit loss as the difference between the amortized cost basis of the loan and the present value of the expected future cash flows from the borrower which is generally discounted at the loan’s effective interest rate, or the fair value of the collateral, if the loan is collateral-dependent. We generally individually evaluate

BNY 23

Results of Operations (continued)

nonperforming loans as well as loans that have been modified given the risk characteristics of such loans.

Available-for-sale debt securities are recorded at fair value. When an available-for-sale debt security is in an unrealized loss position, we employ a methodology to identify and estimate the credit loss portion of the unrealized loss position. The measurement of expected credit losses is performed at the security level and is based on our best single estimate of cash flows, on a discounted basis; however, we do not specifically employ the macroeconomic forecasting models and scenarios summarized above.

The qualitative component of our estimate for the allowance for credit losses is intended to capture expected losses that may not have been fully captured in the quantitative component. Through an established governance structure, management determines the qualitative allowance each period based on an evaluation of various internal and environmental factors that include: scenario weighting and sensitivity risk, credit concentration risk, economic conditions and other considerations. We have made and may continue to make adjustments for idiosyncratic risks.

To the extent actual results differ from forecasts or management’s judgment, the allowance for credit losses may be greater or less than future charge-offs and recoveries.

Our allowance for credit losses is sensitive to a number of inputs, most notably the macroeconomic forecast assumptions that are incorporated into our estimate of credit losses through the expected life of the loan portfolio, as well as credit ratings assigned to each borrower. As the macroeconomic environment and related forecasts change, the allowance for credit losses may change materially. The following sensitivity analyses do not represent management’s expectations of the deterioration of our portfolios or the economic environment, but are provided as hypothetical scenarios to assess the sensitivity of the allowance for credit losses to changes in key inputs. If commercial real estate property values were increased 10% and all other credits were rated one grade better, the quantitative allowance would have decreased by $47 million, and if commercial real estate property values were decreased 10% and all other credits were rated one grade worse, the quantitative allowance would have increased by $82

million. Our multi-scenario macroeconomic forecast used in determining the Dec. 31, 2024 allowance for credit losses consisted of three scenarios. The baseline scenario reflects positive but slightly declining GDP growth through the first quarter of 2025 before moderating, stable unemployment and slightly declining commercial real estate prices through the end of 2025. The upside scenario reflects higher GDP growth through the first quarter of 2025 before moderating, declining unemployment through the end of 2025 and increasing commercial real estate prices through the end of 2025 compared with the baseline. The downside scenario contemplates negative GDP growth through the third quarter of 2025 before moderating, rapidly increasing unemployment through the third quarter of 2025 and sharply lower commercial real estate prices through the end of 2025 compared with the baseline. At Dec. 31, 2024, we placed the most weight on our baseline scenario, with the remaining weighting equally placed on the upside and downside scenarios. From a sensitivity perspective, at Dec. 31, 2024, if we had applied 100% weighting to the downside scenario, the quantitative allowance for credit losses would have been approximately $130 million higher.

See Notes 1 and 5 of the Notes to Consolidated Financial Statements for additional information regarding the allowance for credit losses.

Goodwill and other intangibles

We initially record all assets and liabilities acquired in purchase acquisitions, including goodwill, indefinite-lived intangibles and other intangibles, in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. Goodwill, indefinite-lived intangibles and other intangibles are subsequently accounted for in accordance with ASC 350, Intangibles – Goodwill and Other. The initial measurement of goodwill and intangibles requires judgment concerning estimates of the fair value of the acquired assets and liabilities. Goodwill ($16.6 billion at Dec. 31, 2024) and indefinite-lived intangible assets ($2.6 billion at Dec. 31, 2024) are not amortized but are subject to tests for impairment annually or more often if events or circumstances indicate it is more likely than not they may be impaired. Other intangible assets are amortized over their estimated useful lives and are subject to impairment if events or circumstances indicate a possible inability to realize the carrying value.

24 BNY

Results of Operations (continued)

Goodwill

BNY’s business segments include seven reporting units for which goodwill impairment testing is performed on an annual basis. An interim goodwill impairment test is performed when events or circumstances occur that may indicate that it is more likely than not that the fair value of any reporting unit may be less than its carrying value.

The goodwill impairment test compares the estimated fair value of the reporting unit with its carrying amount, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting unit were to exceed its estimated fair value, an impairment loss would be recorded for the difference.

In each quarter of 2024, we completed an interim goodwill impairment test of the Investment Management reporting unit, which had $6.0 billion of allocated goodwill as of Dec. 31, 2024. In all cases, we determined the fair value of the Investment Management reporting unit exceeded its carrying value and no goodwill impairment was recorded.

For the Dec. 31, 2024 test, the fair value of the Investment Management reporting unit exceeded its carrying value by approximately 11%. We determined the fair value of the Investment Management reporting unit using an income approach based on management’s projections as of Dec. 31, 2024. The discount rate applied to these cash flows was 10.5%.

As of Dec. 31, 2024, if the discount rate applied to the estimated cash flows was increased or decreased by 25 basis points, the fair value of the Investment Management reporting unit would decrease or increase by 4%, respectively. Similarly, if the long-term growth rate was increased or decreased by 10 basis points, the fair value of the Investment Management reporting unit would increase or decrease by approximately 1%, respectively.

In the second quarter of 2024, we performed our annual goodwill impairment test on the remaining six reporting units using an income approach to estimate the fair values of each reporting unit. Estimated cash flows used in the income approach were based on

management’s projections as of April 1, 2024. The discount rate applied to these cash flows was 10%.

As a result of the annual goodwill impairment test, no goodwill impairment was recognized. The fair values of the Company’s remaining six reporting units were substantially in excess of the respective reporting units’ carrying value.

Intangible assets

Key judgments in accounting for intangible assets include determining the useful life and classification between goodwill and indefinite-lived intangible assets or other amortizing intangible assets.

Indefinite-lived intangible assets ($2.6 billion at Dec. 31, 2024) are evaluated for impairment at least annually by comparing their fair values, estimated using discounted cash flow analyses, to their carrying values. As a result of the annual evaluation, no impairment was recognized.

Other amortizing intangible assets ($275 million at Dec. 31, 2024) are evaluated for impairment if events and circumstances indicate a possible impairment. Such evaluation of other intangible assets would be initially based on undiscounted cash flow projections.

Determining the fair value of a reporting unit or indefinite-lived intangible assets is subject to uncertainty as it is reliant on estimates of cash flows that extend far into the future, and, by their nature, are difficult to estimate over such an extended time frame. In the future, changes in the assumptions or the discount rate could produce a material non-cash goodwill or intangible asset impairment.

See Notes 1 and 7 of the Notes to Consolidated Financial Statements for additional information regarding goodwill, intangible assets and the annual and interim impairment testing.

Litigation and regulatory contingencies

Significant estimates and judgments are required in establishing an accrued liability for litigation and regulatory contingencies. For additional information on our policy, see “Legal proceedings” in Note 22 of the Notes to Consolidated Financial Statements.

BNY 25

Results of Operations (continued)

Consolidated balance sheet review

One of our key risk management objectives is to maintain a balance sheet that remains strong throughout market cycles to meet the expectations of our major stakeholders, including our shareholders, clients, creditors and regulators.

We also seek to undertake overall liquidity risk, including intraday liquidity risk, that stays within our risk appetite. The objective of our balance sheet management strategy is to maintain a balance sheet that is characterized by strong liquidity and asset quality, ready access to external funding sources at competitive rates and a strong capital structure that supports our risk-taking activities and is adequate to absorb potential losses. In managing the balance sheet, appropriate consideration is given to balancing the competing needs of maintaining sufficient levels of liquidity and complying with applicable regulations and supervisory expectations while optimizing profitability.

At Dec. 31, 2024, total assets were $416 billion, compared with $410 billion at Dec. 31, 2023. The increase in total assets was primarily driven by higher federal funds sold and securities purchased under resale agreements, securities and loans, partially offset by lower interest-bearing deposits with the Federal Reserve and other central banks. Deposits totaled $290 billion at Dec. 31, 2024, compared with $284 billion at Dec. 31, 2023. The increase primarily reflects higher interest-bearing deposits in U.S. offices, partially offset by lower interest-bearing deposits in non-U.S. offices. Total interest-bearing deposit liabilities as a percentage of total interest-earning assets were 65% at Dec. 31, 2024 and 66% at Dec. 31, 2023.

At Dec. 31, 2024, available funds totaled $144 billion and include cash and due from banks, interest-bearing deposits with the Federal Reserve and other central banks, interest-bearing deposits with banks and federal funds sold and securities purchased under resale agreements. This compares with available funds of $158 billion at Dec. 31, 2023. Total available funds as a percentage of total assets were 35% at Dec. 31, 2024 and 38% at Dec. 31, 2023. For additional information on our available funds, see “Liquidity and dividends.”

Securities were $137 billion, or 33% of total assets, at Dec. 31, 2024, compared with $126 billion, or 31% of total assets, at Dec. 31, 2023. The increase primarily reflects higher non-U.S. government and agency residential mortgage-backed securities (“RMBS”), partially offset by lower U.S. Treasury and U.S. government agency securities. For additional information on our securities portfolio, see “Securities” and Note 4 of the Notes to Consolidated Financial Statements.

Loans were $72 billion, or 17% of total assets, at Dec. 31, 2024, compared with $67 billion, or 16% of total assets, at Dec. 31, 2023. The increase was driven by higher loans in the financial institutions and capital call financing portfolios and higher margin loans, partially offset by lower commercial loans. For additional information on our loan portfolio, see “Loans” and Note 5 of the Notes to Consolidated Financial Statements.

Long-term debt totaled $30.9 billion at Dec. 31, 2024 and $31.3 billion at Dec. 31, 2023. The decrease primarily reflects maturities, redemptions and a decrease in the fair value of hedged long-term debt, partially offset by issuances. For additional information on long-term debt, see “Liquidity and dividends” and Note 13 of the Notes to Consolidated Financial Statements.

The Bank of New York Mellon Corporation total shareholders’ equity totaled $41 billion at Dec. 31, 2024 and Dec. 31, 2023. For additional information, see “Capital” and Note 15 of the Notes to Consolidated Financial Statements.

Securities

In the discussion of our securities portfolio, we have included certain credit ratings information because the information can indicate the degree of credit risk to which we are exposed. Significant changes in ratings classifications could indicate increased credit risk for us and could be accompanied by an increase in the allowance for credit losses and/or a reduction in the fair value of our securities portfolio.

26 BNY

Results of Operations (continued)

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

(a)    Amortized cost includes the impact of hedged item basis adjustments, which was a net decrease of $1,650 million, and is net of the allowance for credit losses.

(b)    Includes the impact of hedges.

(c)    Represents ratings by Standard & Poor’s (“S&P”) or the equivalent.

(d)    Includes supranational securities. Primarily consists of exposure to UK, Germany, France and Canada.

(e)    Primarily consists of exposure to Canada, UK, the Netherlands and Germany.

(f)    At Dec. 31, 2024, includes pre-tax net unrealized losses of $1,596 million related to available-for-sale securities, net of hedges, and $4,576 million related to held-to-maturity securities. The after-tax unrealized losses, net of hedges, related to available-for-sale securities was $1,207 million and the after-tax equivalent related to held-to-maturity securities was $3,490 million.

The fair value of our securities portfolio was $132.1 billion at Dec. 31, 2024, compared with $121.5 billion at Dec. 31, 2023. The increase primarily reflects higher non-U.S. government securities and agency RMBS, partially offset by lower U.S. Treasury and U.S. government agencies securities.

At Dec. 31, 2024, the securities portfolio had a net unrealized loss, including the impact of related hedges, of $6.2 billion, compared with $7.0 billion at Dec. 31, 2023. The improvement in the net unrealized loss, including the impact of related hedges, primarily reflects securities moving closer to maturity.

The fair value of the available-for-sale securities totaled $88.0 billion at Dec. 31, 2024 or 67% of the securities portfolio. The fair value of the held-to-maturity securities totaled $44.0 billion at Dec. 31, 2024, or 33% of the securities portfolio.

The unrealized loss (after-tax) on our available-for-sale securities portfolio, net of hedges, included in accumulated other comprehensive income was $1.2 billion at Dec. 31, 2024, compared with $1.6 billion at Dec. 31, 2023. The improvement in the net unrealized loss, including the impact of hedges, was primarily driven by securities moving closer to maturity.

At Dec. 31, 2024, 99% of the securities in our portfolio were rated AAA/AA-, unchanged compared with Dec. 31, 2023.

See Note 4 of the Notes to Consolidated Financial Statements for the pre-tax net securities gains (losses) by security type. See Note 20 of the Notes to Consolidated Financial Statements for securities by level in the fair value hierarchy.

BNY 27

Results of Operations (continued)

The following table presents the net premium (discount) and net amortization (accretion) related to the securities portfolio.

(a)    Amortization of purchase premium decreases net interest income while accretion of discount increases net interest income. Both are recorded on a level yield basis.

(b)    Including the impact of the accretion of discontinued hedges, there was a net accretion of $149 million in 2024, net amortization of $104 million in 2023 and net amortization of $388 million in 2022.

Equity investments

We have several equity investments recorded in other assets. These include tax credit investments, equity method investments, Federal Reserve Bank stock, other investments, seed capital and Federal Home Loan Bank stock. The following table presents the carrying values at Dec. 31, 2024 and Dec. 31, 2023.

(a)    Includes strategic equity, private equity and other investments.

(b)    Includes investments in BNY funds that hedge deferred incentive awards.

For additional information on certain seed capital investments and our private equity investments, see “Investments valued using net asset value (“NAV”) per share” in Note 8 of the Notes to Consolidated Financial Statements.

Tax credit investments

Tax credit investments include affordable housing projects and renewable energy investments. We invest in affordable housing projects primarily to satisfy the Company’s requirements under the Community Reinvestment Act. We invest in renewable energy projects to receive an expected after-tax return, which consists of allocated renewable energy tax credits, tax deductions and cash distributions based on the operations of the project. On Jan. 1, 2024, we adopted ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method for our renewable energy projects that met the eligibility criteria. See Note 2 of the Notes to Consolidated Financial Statements for additional information.

28 BNY

Results of Operations (continued)

Loans

At Dec. 31, 2024, our total lending-related exposure was $125.8 billion, an increase of 9% compared with Dec. 31, 2023, primarily reflecting higher exposure in the financial institutions and capital call financing portfolios and higher margin loans.

Our financial institutions and commercial portfolios comprise our largest concentrated risk. These portfolios comprised 49% of our total exposure at Dec. 31, 2024 and 46% at Dec. 31, 2023. Additionally, most of our overdrafts relate to financial institutions.

Financial institutions

The financial institutions portfolio is shown below.

The financial institutions portfolio exposure was $48.4 billion at Dec. 31, 2024, an increase of 22% compared with Dec. 31, 2023, primarily reflecting higher exposure in the securities industry and banks portfolios.

Financial institution exposures are high-quality, with 96% of the exposures meeting the investment grade equivalent criteria of our internal credit rating classification at Dec. 31, 2024. Each customer is assigned an internal credit rating, which is mapped to an equivalent external rating agency grade based upon a number of dimensions, which are continually evaluated and may change over time. For ratings of

non-U.S. counterparties, our internal credit rating is generally capped at a rating equivalent to the sovereign rating of the country where the counterparty resides, regardless of the internal credit rating assigned to the counterparty or the underlying collateral.

The exposure to financial institutions is generally short-term, with 84% of the exposures expiring within one year. At Dec. 31, 2024, 18% of the exposure to financial institutions had an expiration within 90 days, compared with 19% at Dec. 31, 2023.

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Results of Operations (continued)

In addition, 67% of the financial institutions exposure is secured at Dec. 31, 2024. For example, securities industry clients and asset managers often borrow against marketable securities held in custody.

At Dec. 31, 2024, the secured intraday credit provided to dealers in connection with their tri-party repo activity totaled $13.4 billion and was included in the securities industry portfolio. Dealers secure the outstanding intraday credit with high-quality liquid collateral having a market value in excess of the amount of the outstanding credit. Secured intraday credit facilities represent 28% of the exposure in the financial institutions portfolio and are reviewed and reapproved annually.

The asset managers portfolio exposure is high-quality, with 96% of the exposures meeting our investment grade equivalent ratings criteria as of Dec. 31, 2024. These exposures are generally short-term liquidity facilities, with the majority to regulated mutual funds.

Our banks portfolio exposure primarily relates to our global trade finance. These exposures are short-term in nature, with 95% due in less than one year. The investment grade percentage of our banks exposure was 85% at Dec. 31, 2024, compared with 84% at Dec. 31, 2023. Our non-investment grade exposures are primarily trade finance loans in Brazil.

Commercial

The commercial portfolio is presented below.

The commercial portfolio exposure was $13.3 billion at Dec. 31, 2024, a decrease of 1% from Dec. 31, 2023, primarily driven by lower exposure in the services and other portfolio, partially offset by higher exposure in the energy and utilities portfolio.

Our credit strategy is to focus on investment grade clients that are active users of our non-credit services. The following table summarizes the percentage of the financial institutions and commercial portfolio exposures that are investment grade.

Wealth management loans

Our wealth management loan exposure was $9.4 billion at Dec. 31, 2024, compared with $9.6 billion at Dec. 31, 2023. Wealth management loans primarily consist of loans to high-net-worth

individuals, a majority of which are secured by the customers’ investment management accounts or custody accounts.

Wealth management mortgages

Our wealth management mortgage exposure was $9.1 billion at Dec. 31, 2024, compared with $9.4 billion at Dec. 31, 2023. Wealth management mortgages primarily consist of loans to high-net-worth individuals, which are secured by residential property. Wealth management mortgages are primarily interest-only, adjustable-rate mortgages with a weighted-average loan-to-value ratio of 61% at origination. Less than 1% of the mortgages were past due at Dec. 31, 2024.

At Dec. 31, 2024, the wealth management mortgage portfolio consisted of the following geographic concentrations: California – 21%; New York – 14%; Florida – 11%; Massachusetts – 8%; and other – 46%.

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Results of Operations (continued)

Commercial real estate

The composition of the commercial real estate portfolio by asset class, including percentage secured, is presented below.

(a)    Represents the percentage of secured exposure in each asset class.

Our commercial real estate exposure totaled $9.9 billion at Dec. 31, 2024 and $10.2 billion at Dec. 31, 2023. Our income-producing commercial real estate facilities are focused on experienced owners and are structured with moderate leverage based on existing cash flows. Our commercial real estate lending activities also include construction and renovation facilities. Our client base consists of experienced developers and long-term holders of real estate assets. Loans are approved on the basis of existing or projected cash flows and supported by appraisals and knowledge of local market conditions. Development loans are structured with moderate leverage, and in many instances, involve some level of recourse to the developer.

At Dec. 31, 2024, the unsecured portfolio consisted of real estate investment trusts (“REITs”) and real estate operating companies, which are both primarily investment grade.

At Dec. 31, 2024, our commercial real estate portfolio consisted of the following concentrations: New York metro – 34%; REITs and real estate operating companies – 29%; and other – 37%.

Lease financings

The lease financings portfolio exposure totaled $603 million at Dec. 31, 2024 and $599 million at Dec. 31, 2023. At Dec. 31, 2024, all of leasing exposure was investment grade, or investment grade equivalent, and consisted of exposures backed by well-diversified assets, primarily real estate and large-ticket transportation equipment. Assets are both domestic and foreign-based, with primary concentrations in Germany and the U.S.

Other residential mortgages

The other residential mortgages portfolio primarily consists of 1-4 family residential mortgage loans and totaled $1.1 billion at Dec. 31, 2024 and $1.2 billion at Dec. 31, 2023.

Overdrafts

Overdrafts primarily relate to custody and securities clearance clients and are generally repaid within two business days.

Capital call financing

Capital call financing includes loans to private equity funds that are secured by the fund investors’ capital commitments and the funds’ right to call capital.

Other loans

Other loans primarily include loans to consumers that are fully collateralized with equities, mutual funds and fixed-income securities.

Margin loans

Margin loan exposure of $19.1 billion at Dec. 31, 2024 and $18.0 billion at Dec. 31, 2023 was collateralized with marketable securities. Borrowers are required to maintain a daily collateral margin in excess of 100% of the value of the loan. Margin loans included $8 billion at Dec. 31, 2024 and $7 billion at Dec. 31, 2023 related to a term loan program that offers fully collateralized loans to broker-dealers.

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Results of Operations (continued)

Maturity of loan portfolio

The following table shows the maturity structure of our loan portfolio.

Interest rate characteristic

The following table shows the interest rate characteristic of loans maturing after one year.

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Results of Operations (continued)

Allowance for credit losses

Our credit strategy is to focus on investment grade clients who are active users of our non-credit services. Our primary exposure to the credit risk of a customer consists of funded loans, unfunded contractual commitments to lend, standby letters of credit and overdrafts associated with our custody and securities clearance businesses.

The following table presents the changes in our allowance for credit losses.

(a)    Includes allowance for credit losses on federal funds sold and securities purchased under resale agreements, available-for-sale securities, held-to-maturity securities, accounts receivable, cash and due from banks and interest-bearing deposits with banks.

(b)    Average loans based on month-end balances.

N/A – Not applicable.

The provision for credit losses was $70 million in 2024, primarily driven by reserve increases related to commercial real estate exposure and changes in the macroeconomic forecast.

The allowance for loan losses and allowance for lending-related commitments represent management’s estimate of lifetime expected losses in our credit portfolio. This evaluation process is subject to numerous estimates and judgments. To the extent actual results differ from forecasts or

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Results of Operations (continued)

management’s judgment, the allowance for credit losses may be greater or less than future charge-offs.

Based on an evaluation of the allowance for credit losses as discussed in “Critical accounting estimates” and Note 1 of the Notes to Consolidated Financial Statements, we have allocated our allowance for loans and lending-related commitments as presented below.