Delaware | 13-2614959 |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) |
incorporation or organization) |
Large accelerated filer [ X ] | Accelerated filer [ ] |
Non-accelerated filer [ ] (Do not check if a smaller reporting company) | Smaller reporting company [ ] |
Class | Outstanding as of | |||
March 31, 2013 | ||||
Common Stock, $0.01 par value | 1,160,646,709 |
Page | |
Part I - Financial Information | |
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosure About Market Risk: | |
Item 1. Financial Statements: | |
Page | |
Notes to Consolidated Financial Statements: | |
Part II - Other Information | |
Quarter ended | |||||||||||
(dollar amounts in millions, except per share amounts and unless otherwise noted) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
Results applicable to common shareholders of The Bank of New York Mellon Corporation: | |||||||||||
Net income (loss) | $ | (266 | ) | $ | 622 | $ | 619 | ||||
Basic EPS | (0.23 | ) | 0.53 | 0.52 | |||||||
Diluted EPS (a) | (0.23 | ) | 0.53 | 0.52 | |||||||
Fee and other revenue | $ | 2,844 | $ | 2,850 | $ | 2,838 | |||||
Income from consolidated investment management funds | 50 | 42 | 43 | ||||||||
Net interest revenue | 719 | 725 | 765 | ||||||||
Total revenue | $ | 3,613 | $ | 3,617 | $ | 3,646 | |||||
Return on common equity (annualized) (b) | N/M | 7.1 | % | 7.4 | % | ||||||
Non-GAAP (b) | 7.8 | % | 8.2 | % | 8.9 | % | |||||
Return on tangible common equity (annualized) – Non-GAAP (b) | N/M | 18.8 | % | 21.0 | % | ||||||
Non-GAAP adjusted (b) | 18.5 | % | 19.7 | % | 23.0 | % | |||||
Return on average assets (annualized) | N/M | 0.74 | % | 0.83 | % | ||||||
Fee revenue as a percentage of total revenue excluding net securities gains | 78 | % | 78 | % | 78 | % | |||||
Annualized fee revenue per employee (based on average headcount) (in thousands) | $ | 229 | $ | 227 | $ | 233 | |||||
Percentage of non-U.S. total revenue (c) | 35 | % | 36 | % | 37 | % | |||||
Pre-tax operating margin (b) | 22 | % | 24 | % | 24 | % | |||||
Non-GAAP adjusted (b) | 26 | % | 27 | % | 30 | % | |||||
Net interest margin (FTE) | 1.11 | % | 1.09 | % | 1.32 | % | |||||
Assets under management at period end (in billions) (d) | $ | 1,429 | $ | 1,386 | $ | 1,308 | |||||
Assets under custody and/or administration at period end (in trillions) (e)(f) | $ | 26.3 | $ | 26.3 | $ | 25.7 | |||||
Market value of securities on loan at period end (in billions) (f)(g) | $ | 244 | $ | 237 | $ | 256 | |||||
Average common shares and equivalents outstanding (in thousands): | |||||||||||
Basic | 1,158,819 | 1,161,212 | 1,193,931 | ||||||||
Diluted (a) | 1,158,819 | 1,163,753 | 1,195,558 | ||||||||
Capital ratios: | |||||||||||
Estimated Basel III Tier 1 common equity ratio – Non-GAAP (b)(h) | 9.4 | % | 9.8 | % | N/A | ||||||
Basel I Tier 1 common equity to risk-weighted assets ratio – Non-GAAP (b) | 12.2 | % | (i) | 13.5 | % | 13.9 | % | ||||
Basel I Tier 1 capital ratio | 13.6 | % | (i) | 15.0 | % | 15.6 | % | ||||
Basel I Total (Tier 1 plus Tier 2) capital ratio | 14.7 | % | (i) | 16.3 | % | 17.5 | % | ||||
Basel I leverage capital ratio | 5.2 | % | 5.3 | % | 5.6 | % | |||||
BNY Mellon shareholders’ equity to total assets ratio (b) | 10.0 | % | 10.1 | % | 11.3 | % | |||||
BNY Mellon common shareholders’ equity to total assets ratio (b) | 9.7 | % | 9.9 | % | 11.3 | % | |||||
BNY Mellon tangible common shareholders’ equity to tangible assets of operations ratio – Non-GAAP (b) | 5.9 | % | 6.4 | % | 6.5 | % |
Quarter ended | |||||||||||
(dollar amounts in millions, except per share amounts and unless otherwise noted) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
Selected average balances: | |||||||||||
Interest-earning assets | $ | 265,754 | $ | 270,215 | $ | 236,331 | |||||
Assets of operations | $ | 322,161 | $ | 324,601 | $ | 289,900 | |||||
Total assets | $ | 333,664 | $ | 335,995 | $ | 301,344 | |||||
Interest-bearing deposits | $ | 147,728 | $ | 142,719 | $ | 125,438 | |||||
Noninterest-bearing deposits | $ | 70,337 | $ | 79,987 | $ | 66,613 | |||||
Preferred stock | $ | 1,068 | $ | 1,066 | $ | — | |||||
Total The Bank of New York Mellon Corporation common shareholders’ equity | $ | 34,898 | $ | 34,962 | $ | 33,718 | |||||
Other information at period end: | |||||||||||
Cash dividends per common share | $ | 0.13 | $ | 0.13 | $ | 0.13 | |||||
Common dividend payout ratio | N/M | 25 | % | 25 | % | ||||||
Common dividend yield (annualized) | 1.9 | % | 2.0 | % | 2.2 | % | |||||
Closing common stock price per common share | $ | 27.99 | $ | 25.70 | $ | 24.13 | |||||
Market capitalization | $ | 32,487 | $ | 29,902 | $ | 28,780 | |||||
Book value per common share – GAAP (b) | $ | 29.83 | $ | 30.39 | $ | 28.51 | |||||
Tangible book value per common share – Non-GAAP (b) | $ | 12.47 | $ | 12.82 | $ | 11.17 | |||||
Full-time employees | 49,700 | 49,500 | 47,800 | ||||||||
Common share outstanding (in thousands) | 1,160,647 | 1,163,490 | 1,192,716 |
(a) | Diluted earnings per share for the three months ended March 31, 2013 was calculated using average basic shares. Adding back the dilutive shares would result in anti-dilution. |
(b) | See “Supplemental information – Explanation of Non-GAAP financial measures” beginning on page 48 for a calculation of these ratios. |
(c) | Includes fee revenue, net interest revenue and income of consolidated investment management funds, net of net income attributable to noncontrolling interests. |
(d) | Excludes securities lending cash management assets and assets managed in the Investment Services business. |
(e) | Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.2 trillion at March 31, 2013, $1.1 trillion at Dec. 31, 2012 and $1.2 trillion at March 31, 2012. |
(f) | Reflects revisions, which were not material, for prior periods as a result of our previously disclosed reviews of our AUC/A and our process for reporting information. See pages 4-5 of our 2012 Annual Report. |
(g) | Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities on loan at CIBC Mellon. |
(h) | The Federal Reserve’s Notices of Proposed Rulemaking (“NPRs”) require the Tier 1 common equity ratio to be the lower of the ratio as calculated under the Standardized Approach or Advanced Approach. At March 31, 2013, this ratio was 9.4% under the Standardized Approach compared with 9.7% under the Advanced Approach. At Dec. 31, 2012, this ratio was higher under the Standardized Approach, and therefore was presented under the Advanced Approach. The estimated Basel III Tier 1 common equity ratio of 7.6% at March 31, 2012 was based on prior Basel III guidance and the proposed market risk rule. |
(i) | In the first quarter of 2013, BNY Mellon was required to implement the Basel II.5 – final market risk rule. Implementation of these rules resulted in an approximately 35-40 basis points decrease to the Basel I Tier I common equity to risk-weighted assets ratio, the Basel I Tier I capital ratio and the Basel I Total capital ratio. Prior period ratios were not impacted by the implementation. |
Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations; Quantitative and Qualitative Disclosures about Market Risk |
• | Assets under custody and/or administration (“AUC/A”) totaled $26.3 trillion at March 31, 2013 compared with $25.7 trillion at March 31, 2012 and $26.3 trillion at Dec. 31, 2012. The increase of 2% year-over-year primarily reflects net new business and improved market values. (See the “Investment Services business” beginning on page 19.) |
• | Assets under management (“AUM”) totaled a record $1.43 trillion at March 31, 2013 compared with $1.31 trillion at March 31, 2012 and $1.39 trillion at Dec. 31, 2012. This represents an increase of 9% year-over-year and 3% sequentially. Both increases primarily resulted from net new business and higher market values. (See the “Investment Management business” beginning on page 16). |
• | Investment services fees totaled $1.7 billion in the first quarter of 2013 compared with $1.6 billion in the first quarter of 2012. The increase was driven by improved asset servicing, treasury and clearing services revenue, partially offset by lower issuer services and securities lending revenue. (See the “Investment Services business” beginning on page 19). |
• | Investment management and performance fees totaled $822 million in the first quarter of 2013 compared with $745 million in the first quarter of 2012. The increase was driven by the acquisition of the remaining 50% interest in Meriten Investment Management (“Meriten”), higher market values, net new business and lower money market fee waivers. (See the |
• | Foreign exchange and other trading revenue totaled $161 million in the first quarter of 2013 compared with $191 million in the first quarter of 2012. The decrease was driven by lower other trading revenue partially offset by higher foreign exchange revenue. (See “Fee and other revenue” beginning on page 7). |
• | Investment income and other revenue totaled $72 million in the first quarter of 2013 compared with $139 million in the first quarter of 2012. The decrease primarily resulted from lower leasing gains, foreign currency remeasurement and seed capital gains. (See “Fee and other revenue” beginning on page 7). |
• | Net interest revenue totaled $719 million in the first quarter of 2013 compared with $765 million in the first quarter of 2012. The net interest margin (FTE) was 1.11% in the first quarter of 2013 compared with 1.32% in the first quarter of 2012. Both decreases primarily reflect lower reinvestment yields, lower accretion and the elimination of interest on European Central Bank Deposits. (See “Net interest revenue” beginning on page 10). |
• | The provision for credit losses was a credit of $24 million in the first quarter of 2013 compared with a provision of $5 million in the first quarter of 2012. (See “Asset quality and allowance for credit losses” beginning on page 32). |
• | Noninterest expense was flat year-over-year totaling $2.8 billion in both the first quarter of 2013 and the first quarter of 2012. (See “Noninterest expense” beginning on page 12). |
• | BNY Mellon recorded an income tax provision of $1 billion in the first quarter of 2013, which included the $854 million charge related to the disallowance of certain foreign tax credits. (See “Income taxes” on page 13). |
• | The net unrealized pre-tax gain on our total investment securities portfolio was $2.2 billion at March 31, 2013 compared with $2.4 billion at Dec 31, 2012. The decrease primarily reflects an increase in market interest rates and $48 million of realized security gains in the first quarter of 2013. (See “Investment securities” beginning on page 27). |
• | At March 31, 2013, our estimated Basel III Tier 1 common equity ratio was 9.4% compared with 9.8% at Dec. 31, 2012. (See “Capital” beginning on page 41). |
• | Our Basel I Tier 1 capital ratio was 13.6% at March 31, 2013 and 15.0% at Dec. 31, 2012. (See “Capital” beginning on page 41). |
• | In the first quarter of 2013, we repurchased 7.8 million common shares in the open market, at an average price of $27.21 per share, for a total of $211 million. |
Fee and other revenue | 1Q13 | 4Q12 | 1Q12 | 1Q13 vs. | |||||||||||||
(dollars in millions, unless otherwise noted) | 1Q12 | 4Q12 | |||||||||||||||
Investment services fees: | |||||||||||||||||
Asset servicing (a) | $ | 969 | $ | 945 | $ | 943 | 3 | % | 3 | % | |||||||
Issuer services | 237 | 215 | 251 | (6 | ) | 10 | |||||||||||
Clearing services | 304 | 294 | 303 | — | 3 | ||||||||||||
Treasury services | 141 | 141 | 136 | 4 | — | ||||||||||||
Total investment services fees | 1,651 | 1,595 | 1,633 | 1 | 4 | ||||||||||||
Investment management and performance fees | 822 | 853 | 745 | 10 | (4 | ) | |||||||||||
Foreign exchange and other trading revenue | 161 | 139 | 191 | (16 | ) | 16 | |||||||||||
Distribution and servicing | 49 | 52 | 46 | 7 | (6 | ) | |||||||||||
Financing-related fees | 41 | 45 | 44 | (7 | ) | (9 | ) | ||||||||||
Investment and other income | 72 | 116 | 139 | (48 | ) | (38 | ) | ||||||||||
Total fee revenue | 2,796 | 2,800 | 2,798 | — | — | ||||||||||||
Net securities gains | 48 | 50 | 40 | N/M | N/M | ||||||||||||
Total fee and other revenue - GAAP | $ | 2,844 | $ | 2,850 | $ | 2,838 | — | % | — | % | |||||||
Fee revenue as a percentage of total revenue excluding net securities gains | 78 | % | 78 | % | 78 | % | |||||||||||
AUM at period end (in billions) (b) | $ | 1,429 | $ | 1,386 | $ | 1,308 | 9 | % | 3 | % | |||||||
AUC/A at period end (in trillions) (c) | $ | 26.3 | $ | 26.3 | $ | 25.7 | 2 | % | — | % |
(a) | Asset servicing fees include securities lending revenue of $39 million in 1Q13, $41 million in 4Q12 and $49 million in 1Q12. |
(b) | Excludes securities lending cash management assets, as well as, assets managed in the Investment Services business. |
(c) | Reflects revisions, which were not material, for prior periods as a result of our previously disclosed reviews of our AUC/A and our process for reporting information. See pages 4-5 of our 2012 Annual Report. Includes the AUC/A of CIBC Mellon of $1.2 trillion at March 31, 2013, $1.1 trillion at Dec. 31, 2012 and $1.2 trillion at March 31, 2012. |
• | Asset servicing fees increased 3% year-over-year and 3% (unannualized) sequentially, primarily driven by increased activity with existing clients and improved market values, partially offset by lower securities lending revenue. |
• | Issuer services fees decreased 6% year-over-year and increased 10% (unannualized) sequentially. The year-over-year decrease primarily resulted from lower Depositary Receipts revenue, driven by lower issuance volumes and lower servicing fees. The sequential increase primarily resulted from higher Depositary Receipts revenue driven by an improvement in dividends and higher core volumes, partially offset by lower Corporate Trust revenue reflecting the continued net run-off of structured debt securitizations. We continue to estimate this run-off could reduce the Company’s total annual revenue by approximately one-half to three-quarters of 1% if the structured debt markets do not recover. |
• | Clearing services fees increased slightly year-over-year and 3% (unannualized) sequentially. Both increases primarily resulted from higher mutual fund fees, increases in positions and assets, higher cash management fees and an increase in daily average revenue trades (“DARTS”), partially offset by higher money market fee waivers and fewer trading days. |
• | Treasury services fees increased 4% year-over-year and were unchanged sequentially. The |
Foreign exchange and other trading revenue | |||||||||||
(in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Foreign exchange | $ | 149 | $ | 106 | $ | 136 | |||||
Other trading revenue: | |||||||||||
Fixed income | 8 | 25 | 47 | ||||||||
Equity/other | 4 | 8 | 8 | ||||||||
Total other trading revenue | 12 | 33 | 55 | ||||||||
Total | $ | 161 | $ | 139 | $ | 191 |
Investment and other income (in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||
Corporate/bank-owned life insurance | $ | 34 | $ | 41 | $ | 34 | |||
Equity investment revenue (loss) | 13 | (1 | ) | 6 | |||||
Expense reimbursements from joint ventures | 11 | 9 | 10 | ||||||
Asset-related gains (losses) | 7 | 22 | (2 | ) | |||||
Seed capital gains | 6 | 7 | 24 | ||||||
Transitional services agreements | 5 | 5 | 7 | ||||||
Lease residual gains | 1 | 14 | 34 | ||||||
Private equity gains (losses) | (2 | ) | 4 | 4 | |||||
Other income (loss) | (3 | ) | 15 | 22 | |||||
Total investment and other income | $ | 72 | $ | 116 | $ | 139 |
Net interest revenue | 1Q13 | 4Q12 | 1Q12 | 1Q13 vs. | ||||||||||||||
(dollars in millions) | 1Q12 | 4Q12 | ||||||||||||||||
Net interest revenue (non-FTE) | $ | 719 | $ | 725 | $ | 765 | (6 | ) | % | (1 | ) | % | ||||||
Tax equivalent adjustment | 14 | 15 | 11 | 27 | (7 | ) | ||||||||||||
Net interest revenue (FTE) – Non-GAAP | 733 | 740 | 776 | (6 | ) | % | (1 | ) | % | |||||||||
Average interest-earning assets | $ | 265,754 | $ | 270,215 | $ | 236,331 | 12 | % | (2 | ) | % | |||||||
Net interest margin (FTE) | 1.11 | % | 1.09 | % | 1.32 | % | (21 | ) | bps | 2 | bps |
Average balances and interest rates | Quarter ended | |||||||||||||||||||
March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||||||||||||
(dollar amounts in millions, presented on an FTE basis) | Average balance | Average rates | Average balance | Average rates | Average balance | Average rates | ||||||||||||||
Assets | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Interest-bearing deposits with banks (primarily foreign banks) | $ | 40,967 | 0.70 | % | $ | 41,018 | 0.80 | % | $ | 35,095 | 1.30 | % | ||||||||
Interest-bearing deposits held at the Federal Reserve and other central banks | 63,240 | 0.20 | 71,794 | 0.21 | 63,526 | 0.27 | ||||||||||||||
Federal funds sold and securities purchased under resale agreements | 7,478 | 0.54 | 5,984 | 0.56 | 5,174 | 0.73 | ||||||||||||||
Margin loans | 13,346 | 1.17 | 13,085 | 1.26 | 12,901 | 1.29 | ||||||||||||||
Non-margin loans: | ||||||||||||||||||||
Domestic offices | 21,358 | 2.38 | 20,560 | 2.42 | 20,128 | 2.46 | ||||||||||||||
Foreign offices | 11,575 | 1.36 | 9,968 | 1.64 | 10,180 | 1.77 | ||||||||||||||
Total non-margin loans | 32,933 | 2.02 | 30,528 | 2.16 | 30,308 | 2.23 | ||||||||||||||
Securities: | ||||||||||||||||||||
U.S. government obligations | 18,814 | 1.54 | 19,915 | 1.39 | 17,268 | 1.56 | ||||||||||||||
U.S. government agency obligations | 42,397 | 1.85 | 41,361 | 1.94 | 32,347 | 2.44 | ||||||||||||||
State and political subdivisions – tax-exempt | 6,194 | 2.38 | 6,154 | 2.52 | 3,354 | 2.97 | ||||||||||||||
Other securities | 34,507 | 2.03 | 35,082 | 2.04 | 33,839 | 2.84 | ||||||||||||||
Trading securities | 5,878 | 2.40 | 5,294 | 2.54 | 2,519 | 2.78 | ||||||||||||||
Total securities | 107,790 | 1.91 | 107,806 | 1.94 | 89,327 | 2.45 | ||||||||||||||
Total interest-earning assets | $ | 265,754 | 1.26 | % | $ | 270,215 | 1.27 | % | $ | 236,331 | 1.56 | % | ||||||||
Allowance for loan losses | (264 | ) | (337 | ) | (392 | ) | ||||||||||||||
Cash and due from banks | 4,534 | 4,284 | 4,271 | |||||||||||||||||
Other assets | 52,137 | 50,439 | 49,690 | |||||||||||||||||
Assets of consolidated investment management funds | 11,503 | 11,394 | 11,444 | |||||||||||||||||
Total assets | $ | 333,664 | $ | 335,995 | $ | 301,344 | ||||||||||||||
Liabilities | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Money market rate accounts and demand deposit accounts | $ | 8,778 | 0.19 | % | $ | 8,570 | 0.18 | % | $ | 4,446 | 0.28 | % | ||||||||
Savings | 819 | 0.29 | 815 | 0.29 | 704 | 0.10 | ||||||||||||||
Time deposits | 39,091 | 0.05 | 38,085 | 0.06 | 33,618 | 0.08 | ||||||||||||||
Foreign offices | 99,040 | 0.08 | 95,249 | 0.09 | 86,670 | 0.15 | ||||||||||||||
Total interest-bearing deposits | 147,728 | 0.08 | 142,719 | 0.09 | 125,438 | 0.14 | ||||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 9,187 | (0.12 | ) | 10,158 | 0.07 | 8,584 | (0.02 | ) | ||||||||||||
Trading liabilities | 2,552 | 1.35 | 1,943 | 1.41 | 1,153 | 1.55 | ||||||||||||||
Other borrowed funds | 1,152 | 0.90 | 1,064 | 1.45 | 2,512 | 0.79 | ||||||||||||||
Commercial paper | 245 | 0.09 | 805 | 0.12 | 67 | 0.08 | ||||||||||||||
Payables to customers and broker-dealers | 9,019 | 0.09 | 8,532 | 0.09 | 7,555 | 0.11 | ||||||||||||||
Long-term debt | 18,878 | 1.18 | 19,259 | 1.46 | 20,538 | 1.79 | ||||||||||||||
Total interest-bearing liabilities | $ | 188,761 | 0.20 | % | $ | 184,480 | 0.25 | % | $ | 165,847 | 0.34 | % | ||||||||
Total noninterest-bearing deposits | 70,337 | 79,987 | 66,613 | |||||||||||||||||
Other liabilities | 27,416 | 24,458 | 24,248 | |||||||||||||||||
Liabilities and obligations of consolidated investment management funds | 10,186 | 10,114 | 10,159 | |||||||||||||||||
Total liabilities | 296,700 | 299,039 | 266,867 | |||||||||||||||||
Temporary equity | ||||||||||||||||||||
Redeemable noncontrolling interests | 175 | 155 | 72 | |||||||||||||||||
Permanent equity | ||||||||||||||||||||
Total BNY Mellon shareholders’ equity | 35,966 | 36,028 | 33,718 | |||||||||||||||||
Noncontrolling interests | 823 | 773 | 687 | |||||||||||||||||
Total permanent equity | 36,789 | 36,801 | 34,405 | |||||||||||||||||
Total liabilities, temporary equity and permanent equity | $ | 333,664 | $ | 335,995 | $ | 301,344 | ||||||||||||||
Net interest margin (FTE) | 1.11 | % | 1.09 | % | 1.32 | % |
Note: | Interest and average rates were calculated on a taxable equivalent basis, at tax rates approximating 35%, using dollar amounts in thousands and actual number of days in the year. |
Noninterest expense | 1Q13 vs. | ||||||||||||||||
(dollars in millions) | 1Q13 | 4Q12 | 1Q12 | 1Q12 | 4Q12 | ||||||||||||
Staff: | |||||||||||||||||
Compensation | $ | 885 | $ | 911 | $ | 861 | 3 | % | (3 | )% | |||||||
Incentives | 338 | 311 | 352 | (4 | ) | 9 | |||||||||||
Employee benefits | 249 | 235 | 240 | 4 | 6 | ||||||||||||
Total staff | 1,472 | 1,457 | 1,453 | 1 | 1 | ||||||||||||
Professional, legal and other purchased services | 295 | 322 | 299 | (1 | ) | (8 | ) | ||||||||||
Net occupancy | 163 | 156 | 147 | 11 | 4 | ||||||||||||
Software | 140 | 151 | 119 | 18 | (7 | ) | |||||||||||
Distribution and servicing | 106 | 108 | 101 | 5 | (2 | ) | |||||||||||
Furniture and equipment | 88 | 82 | 86 | 2 | 7 | ||||||||||||
Business development | 68 | 88 | 56 | 21 | (23 | ) | |||||||||||
Sub-custodian | 64 | 64 | 70 | (9 | ) | — | |||||||||||
Other | 307 | 255 | 220 | 40 | 20 | ||||||||||||
Amortization of intangible assets | 86 | 96 | 96 | (10 | ) | (10 | ) | ||||||||||
M&I, litigation and restructuring charges | 39 | 46 | 109 | N/M | N/M | ||||||||||||
Total noninterest expense - GAAP | $ | 2,828 | $ | 2,825 | $ | 2,756 | 3 | % | — | % | |||||||
Total staff expense as a percentage of total revenue | 41 | % | 40 | % | 40 | % | |||||||||||
Full-time employees at period end | 49,700 | 49,500 | 47,800 | 4 | % | — | % | ||||||||||
Total noninterest expense excluding amortization of intangible assets and M&I, litigation and restructuring charges - Non-GAAP | $ | 2,703 | $ | 2,683 | $ | 2,551 | 6 | % | 1 | % |
Expense initiatives (pre-tax) | Original annualized | |||||||||||||||||||
Program savings | targeted savings | |||||||||||||||||||
(dollar amounts in millions) | 4Q12 | FY12 | 1Q13 | by the end of 2013 (a) | ||||||||||||||||
Business operations | $ | 75 | $ | 238 | $ | 84 | $ | 310 | - | $ | 320 | |||||||||
Technology | 24 | 82 | 27 | $ | 105 | - | $ | 110 | ||||||||||||
Corporate services | 24 | 77 | 26 | $ | 85 | - | $ | 90 | ||||||||||||
Gross savings (b) | $ | 123 | $ | 397 | $ | 137 | $ | 500 | - | $ | 520 | |||||||||
Incremental program expenses to achieve goals (c) | $ | 37 | $ | 88 | $ | 16 | $ | 70 | - | $ | 90 |
(a) | Original target established at the inception of the program in 2011. |
(b) | Represents the estimated pre-tax run rate expense savings since program inception in 2011. Total Company actual operating expense may increase or decrease due to other factors. |
(c) | Program costs include incremental costs to plan and execute the programs including dedicated program managers, consultants, severance and other costs. These costs will fluctuate by quarter. Program costs may include restructuring expenses, where applicable. |
• | Continued global footprint position migrations. Lowered operating costs as we ramped up the Eastern European Global Delivery Center. |
• | Realized savings from reengineering activities relating to Investment Boutique restructurings and Dreyfus back office operations consolidation. |
• | Achieved further operational synergies related to the BHF Asset Servicing GmbH acquisition. |
• | Realized compensation savings from efficiencies and additional staff moves to Global Delivery Centers in the Technology organization. |
• | Consolidated offices and reduced real estate by an additional 35,000 square feet, primarily in the NY Metro and EMEA regions. |
Market indices | 1Q13 vs. | |||||||||||||||||||
1Q12 | 2Q12 | 3Q12 | 4Q12 | 1Q13 | 1Q12 | 4Q12 | ||||||||||||||
S&P 500 Index (a) | 1408 | 1362 | 1441 | 1426 | 1569 | 11 | % | 10 | % | |||||||||||
S&P 500 Index – daily average | 1347 | 1351 | 1400 | 1419 | 1513 | 12 | 7 | |||||||||||||
FTSE 100 Index (a) | 5768 | 5571 | 5742 | 5898 | 6412 | 11 | 9 | |||||||||||||
FTSE 100 Index – daily average | 5818 | 5555 | 5742 | 5842 | 6294 | 8 | 8 | |||||||||||||
MSCI World Index (a) | 1312 | 1236 | 1312 | 1339 | 1435 | 9 | 7 | |||||||||||||
MSCI World Index – daily average | 1268 | 1235 | 1273 | 1312 | 1404 | 11 | 7 | |||||||||||||
Barclay’s Capital Aggregate Bondsm Index (a) | 351 | 353 | 368 | 366 | 356 | 1 | (3 | ) | ||||||||||||
NYSE and NASDAQ share volume (in billions) | 186 | 192 | 173 | 174 | 174 | (6 | ) | — | ||||||||||||
JPMorgan G7 Volatility Index – daily average (b) | 10.39 | 10.30 | 8.70 | 7.56 | 9.02 | (13 | ) | 19 |
(a) | Period end. |
(b) | The JPMorgan G7 Volatility Index is based on the implied volatility in 3-month currency options. |
For the quarter ended March 31, 2013 (dollar amounts in millions) | Investment Management | Investment Services | Other | Consolidated | ||||||||||||
Fee and other revenue | $ | 894 | (a) | $ | 1,860 | $ | 124 | $ | 2,878 | (a) | ||||||
Net interest revenue | 62 | 653 | 4 | 719 | ||||||||||||
Total revenue | 956 | 2,513 | 128 | 3,597 | ||||||||||||
Provision for credit losses | — | — | (24 | ) | (24 | ) | ||||||||||
Noninterest expense | 745 | 1,828 | 255 | 2,828 | ||||||||||||
Income (loss) before taxes | $ | 211 | (a) | $ | 685 | $ | (103 | ) | $ | 793 | (a) | |||||
Pre-tax operating margin (b) | 22 | % | 27 | % | N/M | 22 | % | |||||||||
Average assets | $ | 38,743 | $ | 238,374 | $ | 56,547 | $ | 333,664 | ||||||||
Excluding amortization of intangible assets: | ||||||||||||||||
Noninterest expense | $ | 706 | $ | 1,781 | $ | 255 | $ | 2,742 | ||||||||
Income (loss) before taxes | 250 | (a) | 732 | (103 | ) | 879 | (a) | |||||||||
Pre-tax operating margin (b) | 26 | % | 29 | % | N/M | 24 | % |
(a) | Total fee and other revenue includes income from consolidated investment management funds of $50 million, net of noncontrolling interests of $16 million, for a net impact of $34 million. Income before taxes includes noncontrolling interests of $16 million. |
(b) | Income before taxes divided by total revenue. |
For the quarter ended Dec. 31, 2012 (dollar amounts in millions) | Investment Management | Investment Services | Other | Consolidated | ||||||||||||
Fee and other revenue | $ | 933 | (a) | $ | 1,765 | $ | 183 | $ | 2,881 | (a) | ||||||
Net interest revenue | 55 | 591 | 79 | 725 | ||||||||||||
Total revenue | 988 | 2,356 | 262 | 3,606 | ||||||||||||
Provision for credit losses | — | — | (61 | ) | (61 | ) | ||||||||||
Noninterest expense | 762 | 1,830 | 233 | 2,825 | ||||||||||||
Income before taxes | $ | 226 | (a) | $ | 526 | $ | 90 | $ | 842 | (a) | ||||||
Pre-tax operating margin (b) | 23 | % | 22 | % | N/M | 23 | % | |||||||||
Average assets | $ | 37,750 | $ | 241,653 | $ | 56,592 | $ | 335,995 | ||||||||
Excluding amortization of intangible assets: | ||||||||||||||||
Noninterest expense | $ | 714 | $ | 1,782 | $ | 233 | $ | 2,729 | ||||||||
Income before taxes | 274 | (a) | 574 | 90 | 938 | (a) | ||||||||||
Pre-tax operating margin (b) | 28 | % | 24 | % | N/M | 26 | % |
(a) | Total fee and other revenue includes income from consolidated investment management funds of $42 million, net of noncontrolling interests of $11 million, for a net impact of $31 million. Income before taxes includes noncontrolling interests of $11 million. |
(b) | Income before taxes divided by total revenue. |
For the quarter ended March 31, 2012 (dollar amounts in millions) | Investment Management | Investment Services | Other | Consolidated | ||||||||||||
Fee and other revenue | $ | 852 | (a) | $ | 1,843 | $ | 175 | $ | 2,870 | (a) | ||||||
Net interest revenue | 55 | 648 | 62 | 765 | ||||||||||||
Total revenue | 907 | 2,491 | 237 | 3,635 | ||||||||||||
Provision for credit losses | — | 16 | (11 | ) | 5 | |||||||||||
Noninterest expense | 670 | 1,846 | 240 | 2,756 | ||||||||||||
Income before taxes | $ | 237 | (a) | $ | 629 | $ | 8 | $ | 874 | (a) | ||||||
Pre-tax operating margin (b) | 26 | % | 25 | % | N/M | 24 | % | |||||||||
Average assets | $ | 36,473 | $ | 212,737 | $ | 52,134 | $ | 301,344 | ||||||||
Excluding amortization of intangible assets: | ||||||||||||||||
Noninterest expense | $ | 622 | $ | 1,798 | $ | 240 | $ | 2,660 | ||||||||
Income before taxes | 285 | (a) | 677 | 8 | 970 | (a) | ||||||||||
Pre-tax operating margin (b) | 31 | % | 27 | % | N/M | 27 | % |
(a) | Total fee and other revenue includes income from consolidated investment management funds of $43 million, net of noncontrolling interests of $11 million, for a net impact of $32 million. Income before taxes includes noncontrolling interests of $11 million. |
(b) | Income before taxes divided by total revenue. |
1Q13 vs. | |||||||||||||||||||||||||
(dollar amounts in millions, unless otherwise noted) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 1Q13 | 1Q12 | 4Q12 | ||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Investment management fees: | |||||||||||||||||||||||||
Mutual funds | $ | 260 | $ | 270 | $ | 283 | $ | 293 | $ | 295 | 13 | % | 1 | % | |||||||||||
Institutional clients | 322 | 321 | 334 | 349 | 355 | 10 | 2 | ||||||||||||||||||
Wealth management | 157 | 158 | 158 | 159 | 162 | 3 | 2 | ||||||||||||||||||
Investment management fees | 739 | 749 | 775 | 801 | 812 | 10 | 1 | ||||||||||||||||||
Performance fees | 16 | 54 | 10 | 57 | 15 | (6 | ) | N/M | |||||||||||||||||
Distribution and servicing | 45 | 45 | 47 | 50 | 46 | 2 | (8 | ) | |||||||||||||||||
Other (a) | 52 | 13 | 40 | 25 | 21 | N/M | N/M | ||||||||||||||||||
Total fee and other revenue (a) | 852 | 861 | 872 | 933 | 894 | 5 | (4 | ) | |||||||||||||||||
Net interest revenue | 55 | 52 | 52 | 55 | 62 | 13 | 13 | ||||||||||||||||||
Total revenue | 907 | 913 | 924 | 988 | 956 | 5 | (3 | ) | |||||||||||||||||
Noninterest expense (ex. amortization of intangible assets) | 622 | 644 | 646 | 714 | 706 | 14 | (1 | ) | |||||||||||||||||
Income before taxes (ex. amortization of intangible assets) | 285 | 269 | 278 | 274 | 250 | (12 | ) | (9 | ) | ||||||||||||||||
Amortization of intangible assets | 48 | 48 | 48 | 48 | 39 | (19 | ) | (19 | ) | ||||||||||||||||
Income before taxes | $ | 237 | $ | 221 | $ | 230 | $ | 226 | $ | 211 | (11 | )% | (7 | )% | |||||||||||
Pre-tax operating margin | 26 | % | 24 | % | 25 | % | 23 | % | 22 | % | |||||||||||||||
Pre-tax operating margin (ex. amortization of intangible assets and net of distribution and servicing expense) (b) | 35 | % | 33 | % | 34 | % | 31 | % | 29 | % | |||||||||||||||
Wealth management: | |||||||||||||||||||||||||
Average loans | $ | 7,431 | $ | 7,763 | $ | 8,122 | $ | 8,478 | $ | 8,972 | 21 | % | 6 | % | |||||||||||
Average deposits | $ | 11,491 | $ | 11,259 | $ | 11,372 | $ | 12,609 | $ | 13,646 | 19 | % | 8 | % |
(a) | Total fee and other revenue includes the impact of the consolidated investment management funds. See “Supplemental information - Explanation of Non-GAAP financial measures” beginning on page 48. Additionally, other revenue includes asset servicing and treasury services revenue. |
(b) | Distribution and servicing expense is netted with the distribution and servicing revenue for the purpose of this calculation of pre-tax operating margin. Distribution and servicing expense totaled $100 million, $102 million, $107 million, $106 million and $104 million, respectively. |
AUM trends (a) | 1Q13 vs. | ||||||||||||||||||||||||
(dollar amounts in billions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 1Q13 | 1Q12 | 4Q12 | ||||||||||||||||||
AUM at period end, by product type: | |||||||||||||||||||||||||
Equity securities | $ | 429 | $ | 417 | $ | 446 | $ | 451 | $ | 487 | 14 | % | 8 | % | |||||||||||
Fixed income securities (b) | 451 | 480 | 506 | 532 | 559 | 24 | % | 5 | % | ||||||||||||||||
Money market | 319 | 299 | 307 | 302 | 278 | (13 | )% | (8 | )% | ||||||||||||||||
Alternative investments and overlay | 109 | 103 | 100 | 101 | 105 | (4 | )% | 4 | % | ||||||||||||||||
Total AUM | $ | 1,308 | $ | 1,299 | $ | 1,359 | $ | 1,386 | $ | 1,429 | 9 | % | 3 | % | |||||||||||
AUM at period end, by client type: | |||||||||||||||||||||||||
Institutional | $ | 829 | $ | 835 | $ | 883 | $ | 894 | $ | 939 | 13 | % | 5 | % | |||||||||||
Mutual funds | 404 | 388 | 398 | 411 | 405 | — | % | (1 | )% | ||||||||||||||||
Private client | 75 | 76 | 78 | 81 | 85 | 13 | % | 5 | % | ||||||||||||||||
Total AUM | $ | 1,308 | $ | 1,299 | $ | 1,359 | $ | 1,386 | $ | 1,429 | 9 | % | 3 | % | |||||||||||
Changes in AUM: | |||||||||||||||||||||||||
Beginning balance of AUM | $ | 1,260 | $ | 1,308 | $ | 1,299 | $ | 1,359 | $ | 1,386 | |||||||||||||||
Net inflows (outflows): | |||||||||||||||||||||||||
Long-term | 7 | 26 | 9 | 14 | 40 | ||||||||||||||||||||
Money market | (9 | ) | (14 | ) | 9 | (6 | ) | (13 | ) | ||||||||||||||||
Total net inflows (outflows) | (2 | ) | 12 | 18 | 8 | 27 | |||||||||||||||||||
Net market/currency impact | 50 | (21 | ) | 42 | 19 | 16 | |||||||||||||||||||
Ending balance of AUM | $ | 1,308 | $ | 1,299 | $ | 1,359 | $ | 1,386 | $ | 1,429 | 9 | % | 3 | % |
(a) | Excludes securities lending cash management assets and assets managed in the Investment Services business. |
(b) | Includes liability-driven investments. |
1Q13 vs. | |||||||||||||||||||||||||
(dollar amounts in millions, unless otherwise noted) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 1Q13 | 1Q12 | 4Q12 | ||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Investment services fees: | |||||||||||||||||||||||||
Asset servicing | $ | 906 | $ | 928 | $ | 912 | $ | 917 | $ | 938 | 4 | % | 2 | % | |||||||||||
Issuer services | 251 | 275 | 310 | 213 | 236 | (6 | ) | 11 | |||||||||||||||||
Clearing services | 303 | 309 | 287 | 294 | 304 | — | 3 | ||||||||||||||||||
Treasury services | 136 | 132 | 135 | 140 | 140 | 3 | — | ||||||||||||||||||
Total investment services fees | 1,596 | 1,644 | 1,644 | 1,564 | 1,618 | 1 | 3 | ||||||||||||||||||
Foreign exchange and other trading revenue | 176 | 179 | 158 | 128 | 172 | (2 | ) | 34 | |||||||||||||||||
Other (a) | 71 | 66 | 75 | 73 | 70 | (1 | ) | (4 | ) | ||||||||||||||||
Total fee and other revenue (a) | 1,843 | 1,889 | 1,877 | 1,765 | 1,860 | 1 | 5 | ||||||||||||||||||
Net interest revenue | 648 | 614 | 617 | 591 | 653 | 1 | 10 | ||||||||||||||||||
Total revenue | 2,491 | 2,503 | 2,494 | 2,356 | 2,513 | 1 | 7 | ||||||||||||||||||
Provision for credit losses | 16 | (14 | ) | (4 | ) | — | — | N/M | N/M | ||||||||||||||||
Noninterest expense (ex. amortization of intangible assets) | 1,798 | 2,103 | 1,744 | 1,782 | 1,781 | (1 | ) | — | |||||||||||||||||
Income before taxes (ex. amortization of intangible assets) | 677 | 414 | 754 | 574 | 732 | 8 | 28 | ||||||||||||||||||
Amortization of intangible assets | 48 | 49 | 47 | 48 | 47 | (2 | ) | (2 | ) | ||||||||||||||||
Income before taxes | $ | 629 | $ | 365 | $ | 707 | $ | 526 | $ | 685 | 9 | % | 30 | % | |||||||||||
Pre-tax operating margin | 25 | % | 15 | % | 28 | % | 22 | % | 27 | % | |||||||||||||||
Pre-tax operating margin (ex. amortization of intangible assets) | 27 | % | 17 | % | 30 | % | 24 | % | 29 | % | |||||||||||||||
Investment services fees as a percentage of noninterest expense (b) | 93 | % | 94 | % | 95 | % | 89 | % | 93 | % | |||||||||||||||
Securities lending revenue | $ | 39 | $ | 48 | $ | 37 | $ | 31 | $ | 31 | (21 | )% | — | % | |||||||||||
Metrics: | |||||||||||||||||||||||||
Average loans | $ | 22,639 | $ | 24,742 | $ | 24,054 | $ | 24,034 | $ | 26,024 | 15 | % | 8 | % | |||||||||||
Average deposits | $ | 174,041 | $ | 171,309 | $ | 188,023 | $ | 203,043 | $ | 198,701 | 14 | % | (2 | )% | |||||||||||
AUC/A at period end (in trillions) (c)(d) | $ | 25.7 | $ | 25.2 | $ | 26.4 | $ | 26.3 | $ | 26.3 | 2 | % | — | % | |||||||||||
Market value of securities on loan at period end (in billions) (d)(e) | $ | 256 | $ | 267 | $ | 251 | $ | 237 | $ | 244 | (5 | )% | 3 | % | |||||||||||
Asset servicing: | |||||||||||||||||||||||||
Estimated new business wins (AUC/A) (in billions) | $ | 453 | $ | 314 | $ | 522 | $ | 190 | $ | 205 | |||||||||||||||
Depositary Receipts: | |||||||||||||||||||||||||
Number of sponsored programs | 1,391 | 1,393 | 1,393 | 1,379 | 1,359 | (2 | )% | (1 | )% | ||||||||||||||||
Clearing services: | |||||||||||||||||||||||||
Global DARTS volume (in thousands) (d) | 199.6 | 191.9 | 175.5 | 187.9 | 221.4 | 11 | % | 18 | % | ||||||||||||||||
Average active clearing accounts (U.S. platform) (in thousands) (d) | 5,408 | 5,421 | 5,447 | 5,489 | 5,552 | 3 | % | 1 | % | ||||||||||||||||
Average long-term mutual fund assets (U.S. platform) | $ | 306,212 | $ | 306,973 | $ | 323,289 | $ | 334,883 | $ | 357,647 | 17 | % | 7 | % | |||||||||||
Average investor margin loans (U.S. platform) | $ | 7,900 | $ | 8,231 | $ | 7,922 | $ | 7,987 | $ | 8,212 | 4 | % | 3 | % | |||||||||||
Broker-Dealer: | |||||||||||||||||||||||||
Average tri-party repo balances (in billions) (d) | $ | 1,937 | $ | 2,001 | $ | 2,005 | $ | 2,113 | $ | 2,070 | 7 | % | (2 | )% |
(a) | Total fee and other revenue includes investment management fees and distribution and servicing revenue. |
(b) | Noninterest expense excludes amortization of intangible assets, support agreement charges and litigation expense. |
(c) | Includes the AUC/A of CIBC Mellon Global Securities Services Company (“CIBC Mellon”), a joint venture with the Canadian Imperial Bank of Commerce, of $1.2 trillion at March 31, 2012, June 30, 2012 and Sept. 30, 2012, $1.1 trillion at Dec. 31, 2012 and $1.2 trillion at March 31, 2013. |
(d) | Reflects revisions, which were not material, for prior periods as a result of our previously disclosed reviews of our AUC/A and our process for reporting information. See pages 4-5 of our 2012 Annual Report. |
(e) | Represents the total amount of securities on loan managed by the Investment Services business. Excludes securities on loan at CIBC Mellon. |
• | Asset servicing fees (global custody, broker-dealer services and global collateral services) were $938 million in the first quarter of 2013 compared with $906 million in the first quarter of 2012 and $917 million in the fourth quarter of 2012 . Both increases primarily reflect increased activity with existing clients and improved market values. The year-over-year increase was partially offset by lower securities lending revenue due to lower spreads and the loss of a client. |
• | Issuer services fees (Corporate Trust and Depositary Receipts) were $236 million in the first quarter of 2013, compared with $251 million in the first quarter of 2012 and $213 million in the fourth quarter of 2012. The year-over-year decrease primarily resulted from lower Depositary Receipts revenue, driven by lower issuance volumes and lower servicing fees. The sequential increase primarily resulted from higher Depositary Receipts revenue driven by an improvement in dividends and higher core volumes, partially offset by lower Corporate Trust revenue. |
• | Clearing services fees (Pershing) were $304 million in the first quarter of 2013 compared with $303 million in the first quarter of 2012 and $294 million in the fourth quarter of 2012. Both increases were driven by higher mutual fund fees, increases in positions and assets, higher cash management fees and an increase in DARTS, partially offset by higher money market fee waivers and fewer trading days. |
• | Treasury services fees were $140 million in the first quarter of 2013 compared with $136 million in the first quarter of 2012 and $140 million in the fourth quarter of 2012. The year-over-year increase primarily reflects higher cash management fees. |
(dollars in millions) | 1Q12 | 2Q12 | 3Q12 | 4Q12 | 1Q13 | |||||||||||||||
Revenue: | ||||||||||||||||||||
Fee and other revenue | $ | 175 | $ | 104 | $ | 152 | $ | 183 | $ | 124 | ||||||||||
Net interest revenue | 62 | 68 | 80 | 79 | 4 | |||||||||||||||
Total revenue | 237 | 172 | 232 | 262 | 128 | |||||||||||||||
Provision for credit losses | (11 | ) | (5 | ) | (1 | ) | (61 | ) | (24 | ) | ||||||||||
Noninterest expense (ex. M&I and restructuring charges) | 231 | 181 | 207 | 206 | 250 | |||||||||||||||
Income (loss) before taxes (ex. M&I and restructuring charges) | 17 | (4 | ) | 26 | 117 | (98 | ) | |||||||||||||
M&I and restructuring charges | 9 | 22 | 13 | 27 | 5 | |||||||||||||||
Income (loss) before taxes | $ | 8 | $ | (26 | ) | $ | 13 | $ | 90 | $ | (103 | ) | ||||||||
Average loans and leases | $ | 10,139 | $ | 10,487 | $ | 10,252 | $ | 11,100 | $ | 11,283 |
Critical policy | Reference |
Allowance for loan losses and allowance for lending-related commitments | 2012 Annual Report, pages 34 and 35. This policy is also disclosed in the “Asset quality and allowance for credit loss” section of this Form 10-Q. |
Fair value of financial instruments and derivatives | 2012 Annual Report, pages 35 - 37. |
OTTI | 2012 Annual Report, page 37. |
Goodwill and other intangibles | 2012 Annual Report, pages 37 and 38. |
Pension accounting | 2012 Annual Report, pages 38 - 40. |
On- and off-balance sheet exposure at March 31, 2013 | |||||||||||||||
(in millions) | Ireland | Italy | Spain | Total | |||||||||||
On-balance sheet exposure | |||||||||||||||
Gross: | |||||||||||||||
Interest-bearing deposits with banks (a) | $ | 99 | $ | 160 | $ | — | $ | 259 | |||||||
Investment securities (primarily European Floating Rate Notes) (b) | 160 | 120 | — | 280 | |||||||||||
Loans and leases (c) | 208 | 2 | 4 | 214 | |||||||||||
Trading assets (d) | 80 | 29 | 22 | 131 | |||||||||||
Total gross on-balance sheet exposure | 547 | 311 | 26 | 884 | |||||||||||
Less: | |||||||||||||||
Collateral | 78 | 28 | 21 | 127 | |||||||||||
Guarantees | — | 2 | 1 | 3 | |||||||||||
Total collateral and guarantees | 78 | 30 | 22 | 130 | |||||||||||
Total net on-balance sheet exposure | $ | 469 | $ | 281 | $ | 4 | $ | 754 | |||||||
Off-balance sheet exposure | |||||||||||||||
Gross: | |||||||||||||||
Lending-related commitments (e) | $ | 107 | $ | — | $ | — | $ | 107 | |||||||
Letters of credit (f) | 72 | 4 | 14 | 90 | |||||||||||
Total gross off-balance sheet exposure | 179 | 4 | 14 | 197 | |||||||||||
Less: | |||||||||||||||
Collateral | 95 | — | 14 | 109 | |||||||||||
Total net off-balance sheet exposure | $ | 84 | $ | 4 | $ | — | $ | 88 | |||||||
Total exposure: | |||||||||||||||
Total gross on- and off-balance sheet exposure | $ | 726 | $ | 315 | $ | 40 | $ | 1,081 | |||||||
Less: Total collateral and guarantees | 173 | 30 | 36 | 239 | |||||||||||
Total net on- and off-balance sheet exposure | $ | 553 | $ | 285 | $ | 4 | $ | 842 |
(a) | Interest-bearing deposits with banks represent a $99 million placement with an Irish subsidiary of a UK holding company and $160 million of nostro accounts related to our custody business. |
(b) | Represents $252 million, fair value, of residential mortgage-backed securities located in Ireland and Italy, of which 47% were investment grade, $25 million, fair value, of investment grade asset-backed CLOs located in Ireland, and $3 million, fair value, of money market fund investments located in Ireland. |
(c) | Loans and leases include $139 million of overdrafts primarily to Irish-domiciled investment funds resulting from our custody business, a $68 million commercial lease to an Irish company, which was fully collateralized by U.S. Treasuries, a $1 million loan to a security company located in Ireland, a $3 million custody overdraft to financial institutions located in Spain and $3 million of leases to airline manufacturing companies located in Italy and Spain, which are under joint and several guarantee arrangements with guarantors outside of the Eurozone. There is no impairment associated with these loans and leases. Overdrafts occur on a daily basis in our Investment Services businesses and are generally repaid within two business days. The overdrafts in Spain have been repaid. |
(d) | Trading assets represent over-the-counter mark-to-market on foreign exchange and interest rate receivables, net of master netting agreements. Trading assets include $80 million of receivables primarily due from Irish-domiciled investment funds and $51 million of receivables due from financial institutions in Italy and Spain. Cash collateral on the trading assets totaled $10 million in Ireland, $28 million in Italy and $21 million in Spain. |
(e) | Lending-related commitments include $102 million to an insurance company, collateralized by $27 million of marketable securities, and $5 million to an oil and gas company, fully collateralized by receivables. |
(f) | Represents $70 million of letters of credit extended to an insurance company in Ireland, collateralized by $63 million of marketable securities, a $2 million letter of credit to an oil and gas company in Ireland, a $4 million letter of credit extended to a financial institution in Italy and a $14 million letter of credit extended to an insurance company in Spain, fully collateralized by marketable securities. |
On- and off-balance sheet exposure at Dec. 31, 2012 | |||||||||||||||
(in millions) | Ireland | Italy | Spain | Total | |||||||||||
On-balance sheet exposure | |||||||||||||||
Gross: | |||||||||||||||
Interest-bearing deposits with banks (a) | $ | 101 | $ | 125 | $ | — | $ | 226 | |||||||
Investment securities (primarily European Floating Rate Notes) (b) | 164 | 130 | — | 294 | |||||||||||
Loans and leases (c) | 166 | 7 | 3 | 176 | |||||||||||
Trading assets (d) | 48 | 39 | 15 | 102 | |||||||||||
Total gross on-balance sheet exposure | 479 | 301 | 18 | 798 | |||||||||||
Less: | |||||||||||||||
Collateral | 74 | 38 | 6 | 118 | |||||||||||
Guarantees | — | 2 | 1 | 3 | |||||||||||
Total collateral and guarantees | 74 | 40 | 7 | 121 | |||||||||||
Total net on-balance sheet exposure | $ | 405 | $ | 261 | $ | 11 | $ | 677 | |||||||
Off-balance sheet exposure | |||||||||||||||
Gross: | |||||||||||||||
Lending-related commitments (e) | $ | 101 | $ | — | $ | — | $ | 101 | |||||||
Letters of credit (f) | 74 | 4 | 14 | 92 | |||||||||||
Total gross off-balance sheet exposure | 175 | 4 | 14 | 193 | |||||||||||
Less: | |||||||||||||||
Collateral | 91 | — | 14 | 105 | |||||||||||
Total net off-balance sheet exposure | $ | 84 | $ | 4 | $ | — | $ | 88 | |||||||
Total exposure: | |||||||||||||||
Total gross on- and off-balance sheet exposure | $ | 654 | $ | 305 | $ | 32 | $ | 991 | |||||||
Less: Total collateral and guarantees | 165 | 40 | 21 | 226 | |||||||||||
Total net on- and off-balance sheet exposure | $ | 489 | $ | 265 | $ | 11 | $ | 765 |
(a) | Interest-bearing deposits with banks represent a $101 million placement with an Irish subsidiary of a UK holding company and $125 million of nostro accounts related to our custody business. |
(b) | Represents $266 million, fair value, of residential mortgage-backed securities located in Ireland and Italy, of which 49% were investment grade, $25 million, fair value, of investment grade asset-backed CLOs located in Ireland, and $3 million, fair value, of money market fund investments located in Ireland. |
(c) | Loans and leases include $97 million of overdrafts primarily to Irish-domiciled investment funds resulting from our custody business, a $67 million commercial lease to an Irish company, which was fully collateralized by U.S. Treasuries, a $2 million loan to a security company located in Ireland, a $5 million overdraft to a financial institution located in Italy, a $2 million custody overdraft to financial institutions located in Spain and $3 million of leases to airline manufacturing companies located in Italy and Spain, which are under joint and several guarantee arrangements with guarantors outside of the Eurozone. There is no impairment associated with these loans and leases. Overdrafts occur on a daily basis in our Investment Services businesses and are generally repaid within two business days. The overdrafts in Italy and Spain have been repaid. |
(d) | Trading assets represent over-the-counter mark-to-market on foreign exchange and interest rate receivables, net of master netting agreements. Trading assets include $48 million of receivables primarily due from Irish-domiciled investment funds and $54 million of receivables due from financial institutions in Italy and Spain. Cash collateral on the trading assets totaled $7 million in Ireland, $38 million in Italy and $6 million in Spain. |
(e) | Lending-related commitments include $100 million to an insurance company, collateralized by $25 million of marketable securities, and $1 million to an oil and gas company, fully collateralized by receivables. |
(f) | Represents $72 million of letters of credit extended to an insurance company in Ireland, collateralized by $65 million of marketable securities, a $2 million letter of credit to an oil and gas company in Ireland, a $4 million letter of credit extended to a financial institution in Italy and a $14 million letter of credit extended to an insurance company in Spain, fully collateralized by marketable securities. |
Investment securities portfolio (dollars in millions) | Dec. 31, 2012 | 1Q13 change in unrealized gain/(loss) | March 31, 2013 | Fair value as a % of amortized cost (a) | Unrealized gain/(loss) | Ratings | ||||||||||||||||||||||||
BB+ and lower | ||||||||||||||||||||||||||||||
Fair value | Amortized cost | Fair value | AAA/ AA- | A+/ A- | BBB+/ BBB- | Not rated | ||||||||||||||||||||||||
Agency RMBS | $ | 40,210 | $ | (181 | ) | $ | 44,009 | $ | 44,804 | 102 | % | $ | 795 | 100 | % | — | % | — | % | — | % | — | % | |||||||
U.S. Treasury securities | 18,890 | 47 | 19,686 | 20,073 | 102 | 387 | 100 | — | — | — | — | |||||||||||||||||||
Sovereign debt/sovereign guaranteed (b) | 9,304 | 10 | 9,975 | 10,103 | 101 | 128 | 100 | — | — | — | — | |||||||||||||||||||
Non-agency RMBS (c) | 3,110 | 74 | 2,419 | 3,083 | 78 | 664 | — | 1 | 2 | 96 | 1 | |||||||||||||||||||
Non-agency RMBS | 1,697 | 38 | 1,555 | 1,563 | 92 | 8 | 3 | 17 | 15 | 65 | — | |||||||||||||||||||
European floating rate notes (d) | 4,137 | 22 | 3,780 | 3,681 | 97 | (99 | ) | 75 | 20 | — | 5 | — | ||||||||||||||||||
Commercial MBS | 2,838 | (28 | ) | 2,633 | 2,748 | 104 | 115 | 88 | 10 | 2 | — | — | ||||||||||||||||||
State and political subdivisions | 6,191 | 5 | 6,215 | 6,305 | 101 | 90 | 82 | 16 | 1 | — | 1 | |||||||||||||||||||
Foreign covered bonds (e) | 3,718 | (81 | ) | 3,349 | 3,390 | 101 | 41 | 100 | — | — | — | — | ||||||||||||||||||
Corporate bonds | 1,585 | (5 | ) | 1,517 | 1,572 | 104 | 55 | 21 | 71 | 8 | — | — | ||||||||||||||||||
CLO | 1,206 | 9 | 1,371 | 1,382 | 101 | 11 | 100 | — | — | — | — | |||||||||||||||||||
U.S. Government agency debt | 1,074 | (4 | ) | 1,034 | 1,060 | 103 | 26 | 100 | — | — | — | — | ||||||||||||||||||
Consumer ABS | 2,124 | (2 | ) | 2,012 | 2,020 | 100 | 8 | 91 | 9 | — | — | — | ||||||||||||||||||
Other (f) | 4,619 | (28 | ) | 4,810 | 4,828 | 100 | 18 | 49 | 46 | — | 1 | 4 | ||||||||||||||||||
Total investment securities | $ | 100,703 | (g) | $ | (124 | ) | $ | 104,365 | $ | 106,612 | (g) | 102 | % | $ | 2,247 | 89 | % | 5 | % | 1 | % | 4 | % | 1 | % |
(a) | Amortized cost before impairments. |
(b) | Primarily comprised of exposure to UK, Germany, Netherlands and France. |
(c) | These RMBS were included in the former Grantor Trust and were marked-to-market in 2009. We believe these RMBS would receive higher credit ratings if these ratings incorporated, as additional credit enhancement, the difference between the written-down amortized cost and the current face amount of each of these securities. |
(d) | Includes RMBS, commercial MBS and other securities. Primarily comprised of exposure to UK and Netherlands. |
(e) | Primarily comprised of exposure to Canada, UK and Germany. |
(f) | Includes commercial paper of $2.2 billion and $2.2 billion, fair value, and money market funds of $2.2 billion and $2.5 billion, fair value, at Dec. 31, 2012 and March 31, 2013, respectively. |
(g) | Includes net unrealized losses on derivatives hedging securities available-for-sale of $305 million at Dec. 31, 2012 and $111 million at March 31, 2013. |
Net securities gains (losses) (in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Foreign covered bonds | $ | 8 | $ | — | $ | — | |||||
Commercial MBS | 8 | — | — | ||||||||
European floating rate notes | 4 | (5 | ) | (1 | ) | ||||||
Non-agency RMBS | 4 | (24 | ) | (14 | ) | ||||||
Sovereign Debt | 1 | 13 | 7 | ||||||||
Agency RMBS | — | 43 | — | ||||||||
Corporate bonds | — | 10 | 2 | ||||||||
FDIC-insured debt | — | — | 10 | ||||||||
U.S. Treasury | (4 | ) | 1 | 38 | |||||||
Other | 27 | 12 | (2 | ) | |||||||
Total net securities gains | $ | 48 | $ | 50 | $ | 40 |
European floating rate notes at March 31, 2013 (a) | |||||||||||
(in millions) | RMBS | Other | Total fair value | ||||||||
United Kingdom | $ | 1,830 | $ | 153 | $ | 1,983 | |||||
Netherlands | 1,235 | 51 | 1,286 | ||||||||
Ireland | 133 | 24 | 157 | ||||||||
Italy | 119 | — | 119 | ||||||||
Australia | 69 | — | 69 | ||||||||
Germany | 1 | 66 | 67 | ||||||||
Total fair value | $ | 3,387 | $ | 294 | $ | 3,681 |
(a) | 75% of these securities are in the AAA to AA- ratings category. |
Total exposure – consolidated | March 31, 2013 | Dec. 31, 2012 | |||||||||||||||||
(in billions) | Loans | Unfunded commitments | Total exposure | Loans | Unfunded commitments | Total exposure | |||||||||||||
Non-margin loans: | |||||||||||||||||||
Financial institutions | $ | 13.8 | $ | 15.5 | $ | 29.3 | $ | 11.3 | $ | 15.7 | $ | 27.0 | |||||||
Commercial | 1.5 | 18.7 | 20.2 | 1.4 | 18.3 | 19.7 | |||||||||||||
Subtotal institutional | 15.3 | 34.2 | 49.5 | 12.7 | 34.0 | 46.7 | |||||||||||||
Wealth management loans and mortgages | 9.0 | 1.8 | 10.8 | 8.9 | 1.7 | 10.6 | |||||||||||||
Commercial real estate | 1.9 | 2.0 | 3.9 | 1.7 | 1.9 | 3.6 | |||||||||||||
Lease financings | 2.3 | — | 2.3 | 2.4 | — | 2.4 | |||||||||||||
Other residential mortgages | 1.6 | — | 1.6 | 1.6 | — | 1.6 | |||||||||||||
Overdrafts | 5.3 | — | 5.3 | 5.3 | — | 5.3 | |||||||||||||
Other | 0.6 | — | 0.6 | 0.6 | 0.2 | 0.8 | |||||||||||||
Subtotal non-margin loans | 36.0 | 38.0 | 74.0 | 33.2 | 37.8 | 71.0 | |||||||||||||
Margin loans | 13.2 | 0.8 | 14.0 | 13.4 | 0.9 | 14.3 | |||||||||||||
Total | $ | 49.2 | $ | 38.8 | $ | 88.0 | $ | 46.6 | $ | 38.7 | $ | 85.3 |
Financial institutions portfolio exposure (dollar amounts in billions) | March 31, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||||||
Loans | Unfunded commitments | Total exposure | % Inv grade | % due <1 yr | Loans | Unfunded commitments | Total exposure | ||||||||||||||||||||||
Banks | $ | 8.6 | $ | 1.9 | $ | 10.5 | 86 | % | 93 | % | $ | 5.6 | $ | 2.0 | $ | 7.6 | |||||||||||||
Securities industry | 3.6 | 1.9 | 5.5 | 95 | 94 | 4.2 | 2.1 | 6.3 | |||||||||||||||||||||
Asset managers | 1.3 | 3.5 | 4.8 | 99 | 71 | 1.1 | 3.8 | 4.9 | |||||||||||||||||||||
Insurance | 0.2 | 4.1 | 4.3 | 97 | 26 | 0.1 | 4.3 | 4.4 | |||||||||||||||||||||
Government | — | 3.0 | 3.0 | 97 | 26 | — | 2.1 | 2.1 | |||||||||||||||||||||
Other | 0.1 | 1.1 | 1.2 | 96 | 49 | 0.3 | 1.4 | 1.7 | |||||||||||||||||||||
Total | $ | 13.8 | $ | 15.5 | $ | 29.3 | 93 | % | 71 | % | $ | 11.3 | $ | 15.7 | $ | 27.0 |
Commercial portfolio exposure | March 31, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||||||
(dollar amounts in billions) | Loans | Unfunded commitments | Total exposure | % Inv grade | % due <1 yr | Loans | Unfunded commitments | Total exposure | |||||||||||||||||||||
Services and other | $ | 0.5 | $ | 5.9 | $ | 6.4 | 91 | % | 16 | % | $ | 0.5 | $ | 5.6 | $ | 6.1 | |||||||||||||
Energy and utilities | 0.6 | 5.8 | 6.4 | 98 | 7 | 0.5 | 5.5 | 6.0 | |||||||||||||||||||||
Manufacturing | 0.3 | 5.5 | 5.8 | 93 | 12 | 0.3 | 5.6 | 5.9 | |||||||||||||||||||||
Media and telecom | 0.1 | 1.5 | 1.6 | 90 | 3 | 0.1 | 1.6 | 1.7 | |||||||||||||||||||||
Total | $ | 1.5 | $ | 18.7 | $ | 20.2 | 94 | % | 11 | % | $ | 1.4 | $ | 18.3 | $ | 19.7 |
Percentage of the portfolios that are investment grade | ||||||||||
March 31, 2012 | June 30, 2012 | Sept. 30, 2012 | Dec. 31, 2012 | March 31, 2013 | ||||||
Financial institutions | 92 | % | 92 | % | 93 | % | 93 | % | 93 | % |
Commercial | 92 | % | 93 | % | 93 | % | 93 | % | 94 | % |
Allowance for credit losses activity (dollar amounts in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||
Margin loans | $ | 13,242 | $ | 13,397 | $ | 13,144 | |||
Non-margin loans | 35,982 | 33,232 | 29,884 | ||||||
Total loans | $ | 49,224 | $ | 46,629 | $ | 43,028 | |||
Beginning balance of allowance for credit losses | $ | 387 | $ | 456 | $ | 497 | |||
Provision for credit losses | (24 | ) | (61 | ) | 5 | ||||
Net (charge-offs): | |||||||||
Other residential mortgages | (3 | ) | (3 | ) | (8 | ) | |||
Commercial | (2 | ) | — | — | |||||
Financial institutions | — | (5 | ) | — | |||||
Net (charge-offs) | (5 | ) | (8 | ) | (8 | ) | |||
Ending balance of allowance for credit losses | $ | 358 | $ | 387 | $ | 494 | |||
Allowance for loan losses | $ | 237 | $ | 266 | $ | 386 | |||
Allowance for lending-related commitments | 121 | 121 | 108 | ||||||
Allowance for loan losses as a percentage of total loans | 0.48 | % | 0.57 | % | 0.90 | % | |||
Allowance for loan losses as a percentage of non-margin loans | 0.66 | % | 0.80 | % | 1.29 | % | |||
Total allowance for credit losses as a percentage of total loans | 0.73 | % | 0.83 | % | 1.15 | % | |||
Total allowance for credit losses as a percentage of non-margin loans | 0.99 | % | 1.16 | % | 1.65 | % |
• | an allowance for impaired credits of $1 million or greater; |
• | an allowance for higher risk-rated credits and pass-rated credits; and |
• | an allowance for residential mortgage loans. |
• | Nonperforming loans to total non-margin loans; |
• | Criticized assets to total loans and lending-related commitments; |
• | Ratings volatility; |
• | Borrower concentration; and |
• | Significant concentration in high risk industries. |
• | U.S. non-investment grade default rate; |
• | Unemployment rate; and |
• | Change in real GDP (quarter over quarter). |
Allocation of allowance | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||
Commercial | 27 | % | 27 | % | 20 | % |
Other residential mortgages | 23 | 23 | 33 | |||
Foreign | 13 | 12 | 10 | |||
Lease financing | 11 | 13 | 12 | |||
Financial institutions | 9 | 9 | 11 | |||
Commercial real estate | 9 | 8 | 7 | |||
Wealth management (a) | 8 | 8 | 7 | |||
Total | 100 | % | 100 | % | 100 | % |
(a) | Includes the allowance for wealth management mortgages. |
Nonperforming assets (dollars in millions) | March 31, 2013 | Dec. 31, 2012 | ||||
Nonperforming loans: | ||||||
Other residential mortgages | $ | 148 | $ | 158 | ||
Wealth management loans and mortgages | 30 | 30 | ||||
Commercial | 24 | 27 | ||||
Commercial real estate | 17 | 18 | ||||
Foreign loans | 9 | 9 | ||||
Financial institutions | 3 | 3 | ||||
Total nonperforming loans | 231 | 245 | ||||
Other assets owned | 3 | 4 | ||||
Total nonperforming assets (a) | $ | 234 | $ | 249 | ||
Nonperforming assets ratio | 0.48 | % | 0.53 | % | ||
Nonperforming assets ratio, excluding margin loans | 0.7 | % | 0.7 | % | ||
Allowance for loan losses/nonperforming loans | 102.6 | % | 108.6 | % | ||
Allowance for loan losses/nonperforming assets | 101.3 | % | 106.8 | % | ||
Total allowance for credit losses/nonperforming loans | 155.0 | % | 158.0 | % | ||
Total allowance for credit losses/nonperforming assets | 153.0 | % | 155.4 | % |
(a) | Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in these loans are nonperforming loans of $161 million at March 31, 2013 and $174 million at Dec. 31, 2012. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above. |
Nonperforming assets activity (in millions) | March 31, 2013 | Dec. 31, 2012 | ||||
Balance at beginning of period | $ | 249 | $ | 274 | ||
Additions | 12 | 12 | ||||
Return to accrual status | (11 | ) | (16 | ) | ||
Charge-offs | (3 | ) | (3 | ) | ||
Paydowns/sales | (12 | ) | (16 | ) | ||
Transferred to other real estate owned | (1 | ) | (2 | ) | ||
Balance at end of period | $ | 234 | $ | 249 |
Federal funds purchased and securities sold under repurchase agreements | ||||||||
Quarter ended | ||||||||
(dollar amounts in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||
Maximum daily balance during the quarter | $22,123 | $19,971 | $15,636 | |||||
Average daily balance | $9,187 | $10,158 | $8,584 | |||||
Weighted-average rate during the quarter | (0.12 | )% | 0.07 | % | (0.02 | )% | ||
Ending balance | $8,602 | $7,427 | $8,285 | |||||
Weighted-average rate at period end | (0.19 | )% | (0.02 | )% | (0.03 | )% |
Payables to customers and broker-dealers | ||||||||
Quarter ended | ||||||||
(dollar amounts in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||
Maximum daily balance during the quarter | $16,027 | $16,476 | $14,176 | |||||
Average daily balance (a) | $15,026 | $14,275 | $13,123 | |||||
Weighted-average rate during the quarter | 0.09 | % | 0.09 | % | 0.11 | % | ||
Ending balance | $14,986 | $16,095 | $12,959 | |||||
Weighted-average rate at period end | 0.10 | % | 0.10 | % | 0.12 | % |
(a) | The weighted average rate is calculated based on, and is applied to, the average interest-bearing payables to customers and broker-dealers, which were $9,019 million in the first quarter of 2013, $8,532 million in the fourth quarter of 2012 and $7,555 million in the first quarter of 2012. |
Commercial paper | Quarter ended | |||||||
(dollar amounts in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||
Maximum daily balance during the quarter | $1,428 | $2,358 | $1,126 | |||||
Average daily balance | $245 | $805 | $67 | |||||
Weighted-average rate during the quarter | 0.09 | % | 0.12 | % | 0.08 | % | ||
Ending balance | $78 | $338 | $1,070 | |||||
Weighted-average rate at period end | 0.03 | % | 0.10 | % | 0.11 | % |
Other borrowed funds | Quarter ended | |||||||
(dollar amounts in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||
Maximum daily balance during the quarter | $2,514 | $2,072 | $5,506 | |||||
Average daily balance | $1,152 | $1,064 | $2,512 | |||||
Weighted-average rate during the quarter | 0.90 | % | 1.45 | % | 0.79 | % | ||
Ending balance | $789 | $1,380 | $2,062 | |||||
Weighted-average rate at period end | 1.37 | % | 1.89 | % | 1.13 | % |
Available and liquid funds | March 31, 2013 | Dec. 31, 2012 | Average | ||||||||||||||||
(in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||||||||||
Available funds: | |||||||||||||||||||
Liquid funds: | |||||||||||||||||||
Interest-bearing deposits with banks | $ | 40,888 | $ | 43,910 | $ | 40,967 | $ | 41,018 | $ | 35,095 | |||||||||
Federal funds sold and securities purchased under resale agreements | 7,004 | 6,593 | 7,478 | 5,984 | 5,174 | ||||||||||||||
Total liquid funds | 47,892 | 50,503 | 48,445 | 47,002 | 40,269 | ||||||||||||||
Cash and due from banks | 4,440 | 4,727 | 4,534 | 4,284 | 4,271 | ||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | 78,125 | 90,110 | 63,240 | 71,794 | 63,526 | ||||||||||||||
Total available funds | $ | 130,457 | $ | 145,340 | $ | 116,219 | $ | 123,080 | $ | 108,066 | |||||||||
Total available funds as a percentage of total assets | 37 | % | 40 | % | 35 | % | 37 | % | 36 | % |
• | cash on hand; |
• | dividends from its subsidiaries; |
• | access to the commercial paper market; and |
• | access to the long-term debt and equity markets. |
Credit ratings at March 31, 2013 | |||||
Moody’s | S&P | Fitch | DBRS | ||
Parent: | |||||
Long-term senior debt | Aa3 | A+ | AA- | AA (low) | |
Subordinated debt | A1 | A | A+ | A (high) | |
Trust-preferred securities | A2 | BBB | BBB+ | A (high) | |
Short-term debt | P1 | A-1 | F1+ | R-1 (middle) | |
Outlook - Parent: | Negative | Negative | Stable | Stable | |
The Bank of New York Mellon: | |||||
Long-term senior debt | Aa1 | AA- | AA- | AA | |
Long-term deposits | Aa1 | AA- | AA | AA | |
Short-term deposits | P1 | A-1+ | F1+ | R-1 (high) | |
BNY Mellon, N.A.: | |||||
Long-term senior debt | Aa1 | AA- | AA- | (a) | AA |
Long-term deposits | Aa1 | AA- | AA | AA | |
Short-term deposits | P1 | A-1+ | F1+ | R-1 (high) | |
Outlook - Banks: | Stable | Negative | Stable | Stable |
(a) | Represents senior debt issuer default rating. |
Debt issuances | Quarter ended | |||
(in millions) | March 31, 2013 | |||
Senior medium-term notes: | ||||
1.35% senior medium-term notes due 2018 | $ | 600 | ||
0.7% senior medium-term notes due 2016 | 300 | |||
3-month LIBOR + 23 bps senior medium term notes due 2016 | 300 | |||
3-month LIBOR + 44 bps senior medium term notes due 2018 | 300 | |||
Total debt issuances | $ | 1,500 |
Capital data (dollar amounts in millions except per share amounts; common shares in thousands) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||
Average common equity to average assets | 10.5 | % | 10.4 | % | 11.2 | % | |||
At period end: | |||||||||
BNY Mellon shareholders’ equity to total assets ratio | 10.0 | % | 10.1 | % | 11.3 | % | |||
BNY Mellon common shareholders’ equity to total assets ratio | 9.7 | % | 9.9 | % | 11.3 | % | |||
Tangible BNY Mellon shareholders’ equity to tangible assets of operations ratio – Non-GAAP (a) | 5.9 | % | 6.4 | % | 6.5 | % | |||
Total BNY Mellon shareholders’ equity – GAAP | $ | 35,690 | $ | 36,431 | $ | 34,000 | |||
Total BNY Mellon common shareholders’ equity – GAAP | $ | 34,622 | $ | 35,363 | $ | 34,000 | |||
Tangible BNY Mellon shareholders’ equity – Non-GAAP (a) | $ | 14,469 | $ | 14,919 | $ | 13,326 | |||
Book value per common share – GAAP | $ | 29.83 | $ | 30.39 | $ | 28.51 | |||
Tangible book value per common share – Non-GAAP (a) | $ | 12.47 | $ | 12.82 | $ | 11.17 | |||
Closing common stock price per share | $ | 27.99 | $ | 25.70 | $ | 24.13 | |||
Market capitalization | $ | 32,487 | $ | 29,902 | $ | 28,780 | |||
Common shares outstanding | 1,160,647 | 1,163,490 | 1,192,716 | ||||||
Cash dividends per common share | $ | 0.13 | $ | 0.13 | $ | 0.13 | |||
Common dividend payout ratio | N/M | 25 | % | 25 | % | ||||
Common dividend yield (annualized) | 1.9 | % | 2.0 | % | 2.2 | % |
(a) | See “Supplemental information - Explanation of Non-GAAP financial measures” beginning on page 48 for a reconciliation of GAAP to non-GAAP. |
Consolidated and largest bank subsidiary capital ratios | Well capitalized | Adequately capitalized | March 31, | Dec. 31, | March 31, | ||||||
2013 | 2012 | 2012 | |||||||||
Consolidated capital ratios: | |||||||||||
Estimated Basel III Tier 1 common equity ratio – Non-GAAP (a)(b) | N/A | N/A | 9.4 | % | 9.8 | % | N/A | ||||
Determined under Basel I-based guidelines (c): | |||||||||||
Tier 1 common equity to risk-weighted assets ratio – Non-GAAP (b) | N/A | N/A | 12.2 | % | 13.5 | % | 13.9 | % | |||
Tier 1 capital | 6 | % | N/A | 13.6 | % | 15.0 | % | 15.6 | % | ||
Total capital | 10 | % | N/A | 14.7 | % | 16.3 | % | 17.5 | % | ||
Leverage – guideline | 5 | % | N/A | 5.2 | % | 5.3 | % | 5.6 | % | ||
The Bank of New York Mellon capital ratios (c): | |||||||||||
Tier 1 capital | 6 | % | 4 | % | 13.0 | % | 14.0 | % | 14.8 | % | |
Total capital | 10 | % | 8 | % | 13.6 | % | 14.6 | % | 18.0 | % | |
Leverage | 5 | % | 3%-4% | (d) | 5.2 | % | 5.4 | % | 5.7 | % |
(a) | The Federal Reserve’s Notices of Proposed Rulemaking (“NPRs”) require the Tier 1 common equity ratio to be the lower of the ratio as calculated under the Standardized Approach or Advanced Approach. At March 31, 2013, this ratio was 9.4% under the Standardized Approach compared with 9.7% under the Advanced Approach. At Dec. 31, 2012, this ratio was higher under the Standardized Approach, and therefore was presented under the Advanced Approach. The estimated Basel III Tier 1 common equity ratio of 7.6% at March 31, 2012 was based on prior Basel III guidance and the proposed market risk rule. |
(b) | See “Supplemental Information - Explanation of Non-GAAP financial measures” beginning on page 48 for a calculation of this ratio. |
(c) | When in this Form 10-Q we refer to BNY Mellon’s or our bank subsidiary’s “Basel I” capital measures (e.g., Basel I Total capital or Basel I Tier 1 capital), we mean Total or Tier 1 capital, as applicable, as calculated under the Federal Reserve’s risk-based capital guidelines that are based on the 1988 Basel Accord, which is often referred to as “Basel I”. Includes full capital credit for certain capital instruments outstanding at March 31, 2013, because implementing regulations with respect to the Collins amendment to the Dodd-Frank Act have not been adopted. |
(d) | The minimum leverage ratio for state member banks is 3% or 4%, depending on factors specified in regulations. |
Capital above guidelines at March 31, 2013 (in millions) | Consolidated | The Bank of New York Mellon | |||||
Tier 1 capital | $ | 9,056 | $ | 6,951 | |||
Total capital | 5,565 | 3,543 | |||||
Leverage | 545 | 507 |
Basel I Tier 1 common equity generation | Quarter ended | |||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | ||||
Net income (loss) applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | (266 | ) | $ | 622 | |
Add: Amortization of intangible assets, net of tax | 56 | 65 | ||||
Gross Basel I Tier 1 common equity generated | (210 | ) | 687 | |||
Less capital deployed: | ||||||
Dividends | 153 | 154 | ||||
Common stock repurchased | 211 | 170 | ||||
Goodwill and intangible assets related to acquisitions | — | 93 | ||||
Total capital deployed | 364 | 417 | ||||
Add: Other | 119 | 145 | ||||
Net Basel I Tier 1 common equity (deployed) generated | $ | (455 | ) | $ | 415 |
Potential impact to capital ratios as of March 31, 2013 | ||||
Increase or decrease of | ||||
(basis points) | $100 million in common equity | $1 billion in risk-weighted assets/quarterly average assets (a) | ||
Basel I: | ||||
Tier 1 capital | 8 | bps | 11 | bps |
Total capital | 8 | 12 | ||
Leverage | 3 | 2 | ||
Basel III: | ||||
Estimated Tier 1 common equity ratio | 7 | bps | 6 | bps |
(a) | Quarterly average assets determined under Basel I regulatory guidelines. |
Components of Basel I Tier 1 and total risk-based capital (a) | March 31, | Dec. 31, | March 31, | ||||||||
(in millions) | 2013 | 2012 | 2012 | ||||||||
Tier 1 capital: | |||||||||||
Common shareholders’ equity | $ | 34,622 | $ | 35,363 | $ | 34,000 | |||||
Preferred stock | 1,068 | 1,068 | — | ||||||||
Trust preferred securities | 603 | 623 | 1,669 | ||||||||
Adjustments for: | |||||||||||
Goodwill and other intangibles (b) | (20,153 | ) | (20,445 | ) | (20,674 | ) | |||||
Pensions/cash flow hedges | 1,410 | 1,454 | 1,397 | ||||||||
Securities valuation allowance | (1,314 | ) | (1,350 | ) | (663 | ) | |||||
Merchant banking investments | (17 | ) | (19 | ) | (34 | ) | |||||
Total Tier 1 capital | 16,219 | 16,694 | 15,695 | ||||||||
Tier 2 capital: | |||||||||||
Qualifying unrealized gains on equity securities | 4 | 2 | 2 | ||||||||
Qualifying subordinated debt | 922 | 1,058 | 1,414 | ||||||||
Qualifying allowance for credit losses | 358 | 386 | 494 | ||||||||
Total Tier 2 capital | 1,284 | 1,446 | 1,910 | ||||||||
Total risk-based capital | $ | 17,503 | $ | 18,140 | $ | 17,605 | |||||
Total risk-weighted assets | $ | 119,382 | $ | 111,180 | $ | 100,763 | |||||
Average assets for leverage capital purposes | $ | 313,482 | $ | 315,273 | $ | 281,281 |
(a) | On a regulatory basis as determined under Basel I guidelines. |
(b) | Reduced by deferred tax liabilities associated with non-tax deductible identifiable intangible assets of $1,293 million at March 31, 2013, $1,310 million at Dec. 31, 2012 and $1,428 million at March 31, 2012 and deferred tax liabilities associated with tax deductible goodwill of $1,170 million at March 31, 2013, $1,130 million at Dec. 31, 2012 and $972 million at March 31, 2012. |
VaR (a) | 1st Quarter 2013 | March 31, 2013 | ||||||||||
(in millions) | Average | Minimum | Maximum | |||||||||
Interest rate | $ | 11.3 | $ | 8.6 | $ | 14.8 | $ | 12.4 | ||||
Foreign exchange | 1.0 | 0.5 | 2.0 | 0.9 | ||||||||
Equity | 1.9 | 1.1 | 3.9 | 3.1 | ||||||||
Diversification | (2.6 | ) | N/M | N/M | (3.4 | ) | ||||||
Overall portfolio | $ | 11.6 | $ | 8.8 | $ | 14.8 | $ | 13.0 |
VaR (a) | 4th Quarter 2012 | Dec. 31, 2012 | ||||||||||
(in millions) | Average | Minimum | Maximum | |||||||||
Interest rate | $ | 11.4 | $ | 7.8 | $ | 14.1 | $ | 10.7 | ||||
Foreign exchange | 0.8 | 0.2 | 1.8 | 0.7 | ||||||||
Equity | 2.1 | 1.4 | 3.2 | 1.8 | ||||||||
Diversification | (2.6 | ) | N/M | N/M | (2.7 | ) | ||||||
Overall portfolio | $ | 11.7 | $ | 7.9 | $ | 14.9 | $ | 10.5 |
VaR (a) | 1st Quarter 2012 | March 31, 2012 | ||||||||||
(in millions) | Average | Minimum | Maximum | |||||||||
Interest rate | $ | 9.7 | $ | 6.0 | $ | 13.0 | $ | 8.2 | ||||
Foreign exchange | 3.3 | 1.8 | 4.8 | 3.1 | ||||||||
Equity | 2.3 | 1.4 | 3.4 | 2.1 | ||||||||
Diversification | (4.4 | ) | N/M | N/M | (4.4 | ) | ||||||
Overall portfolio | $ | 10.9 | $ | 6.8 | $ | 14.8 | $ | 9.0 |
(a) | VaR figures do not reflect the impact of CVA guidance in ASC 820. This is consistent with the regulatory treatment. VaR exposure does not include the impact of the Company’s consolidated investment management funds and seed capital investments. |
Distribution of trading revenues (losses) (a) | ||||||||||
(dollar amounts in millions) | Quarter ended | |||||||||
March 31, 2012 | June 30, 2012 | Sept. 30, 2012 | Dec. 31, 2012 | March 31, 2013 | ||||||
Revenue range: | Number of days | |||||||||
Less than $(2.5) | — | — | — | 1 | — | |||||
$(2.5) - $0 | 1 | 4 | 2 | — | 4 | |||||
$0 - $2.5 | 25 | 25 | 35 | 41 | 24 | |||||
$2.5 - $5.0 | 32 | 29 | 23 | 20 | 32 | |||||
More than $5.0 | 4 | 6 | 3 | — | 1 |
(a) | Distribution of trading revenues (losses) does not reflect the impact of the CVA and corresponding hedge. |
Foreign exchange and other trading counterparty risk rating profile (a) | ||||||||||
Quarter ended | ||||||||||
March 31, 2012 | June 30, 2012 | Sept. 30, 2012 | Dec. 31, 2012 | March 31, 2013 | ||||||
Rating: | ||||||||||
AAA to AA- | 45 | % | 40 | % | 43 | % | 38 | % | 37 | % |
A+ to A- | 29 | 31 | 27 | 35 | 40 | |||||
BBB+ to BBB- | 22 | 22 | 23 | 22 | 19 | |||||
Non-investment grade (BB+ and lower) | 4 | 7 | 7 | 5 | 4 | |||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(a) | Represents credit rating agency equivalent of internal credit ratings. |
Estimated changes in net interest revenue at March 31, 2013 (dollar amounts in millions) | |||
up 200 bps parallel rate shift vs. baseline (a) | $ | 351 | |
up 100 bps parallel rate shift vs. baseline (a) | 311 | ||
Long-term up 50 bps, short-term unchanged (b) | 142 | ||
Long-term down 50 bps, short-term unchanged (b) | (114 | ) |
(a) | In the parallel rate shift, both short-term and long-term rates move equally. |
(b) | Long-term is equal to or greater than one year. |
• | Global economic uncertainty, particularly in Europe; |
• | Our ratings relative to other financial institutions’ ratings; and |
• | Money market mutual fund reform. |
Three months ended March 31, 2013 | ||||||||
(in millions, except per share amounts) | Earnings per share | Net income (loss) applicable to common shareholders of The Bank of New York Mellon Corporation | ||||||
GAAP results | $ | (0.23 | ) | $ | (266 | ) | ||
Add: Charge related to the disallowance of certain foreign tax credits | 0.73 | 854 | ||||||
Non-GAAP results | $ | 0.50 | $ | 588 |
Reconciliation of income before income taxes – pre-tax operating margin (dollars in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Income before income taxes – GAAP | $ | 809 | $ | 853 | $ | 885 | |||||
Less: Net income attributable to noncontrolling interests of consolidated investment management funds | 16 | 11 | 11 | ||||||||
Add: Amortization of intangible assets | 86 | 96 | 96 | ||||||||
M&I, litigation and restructuring charges | 39 | 46 | 109 | ||||||||
Income before income taxes excluding net income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges – Non-GAAP | $ | 918 | $ | 984 | $ | 1,079 | |||||
Fee and other revenue – GAAP | $ | 2,844 | $ | 2,850 | $ | 2,838 | |||||
Income from consolidated investment management funds – GAAP | 50 | 42 | 43 | ||||||||
Net interest revenue – GAAP | 719 | 725 | 765 | ||||||||
Total revenue – GAAP | 3,613 | 3,617 | 3,646 | ||||||||
Less: Net income attributable to noncontrolling interests of consolidated investment management funds | 16 | 11 | 11 | ||||||||
Total revenue excluding net income attributable to noncontrolling interests of consolidated investment management funds – Non-GAAP | $ | 3,597 | $ | 3,606 | $ | 3,635 | |||||
Pre-tax operating margin (a) | 22 | % | 24 | % | 24 | % | |||||
Pre-tax operating margin, excluding net income attributable to noncontrolling interests of consolidated investment management funds, amortization of intangible assets and M&I, litigation and restructuring charges – Non-GAAP (a) | 26 | % | 27 | % | 30 | % |
(a) | Income before taxes divided by total revenue. |
Return on common equity and tangible common equity (dollars in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Net income (loss) applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP | $ | (266 | ) | $ | 622 | $ | 619 | ||||
Add: Amortization of intangible assets, net of tax | 56 | 65 | 61 | ||||||||
Net income (loss) applicable to common shareholders of The Bank of New York Mellon Corporation excluding amortization of intangible assets – Non-GAAP | (210 | ) | 687 | 680 | |||||||
Add: M&I, litigation and restructuring charges | 24 | 31 | 65 | ||||||||
Charge related to the disallowance of certain foreign tax credits | 854 | — | — | ||||||||
Net income applicable to common shareholders of The Bank of New York Mellon Corporation excluding amortization of intangible assets, M&I, litigation and restructuring charges and the charge related to the disallowance of certain foreign tax credits – Non-GAAP | $ | 668 | $ | 718 | $ | 745 | |||||
Average common shareholders’ equity | $ | 34,898 | $ | 34,962 | $ | 33,718 | |||||
Less: Average goodwill | 17,993 | 18,046 | 17,962 | ||||||||
Average intangible assets | 4,758 | 4,860 | 5,121 | ||||||||
Add: Deferred tax liability – tax deductible goodwill | 1,170 | 1,130 | 972 | ||||||||
Deferred tax liability – non-tax deductible intangible assets | 1,293 | 1,310 | 1,428 | ||||||||
Average tangible common shareholders’ equity – Non-GAAP | $ | 14,610 | $ | 14,496 | $ | 13,035 | |||||
Return on common equity – GAAP (a) | N/M | 7.1 | % | 7.4 | % | ||||||
Return on common equity excluding amortization of intangible assets, M&I, litigation and restructuring charges and the charge related to the disallowance of certain foreign tax credits – Non-GAAP (a) | 7.8 | % | 8.2 | % | 8.9 | % | |||||
Return on tangible common equity – Non-GAAP (a) | N/M | 18.8 | % | 21.0 | % | ||||||
Return on tangible common equity excluding M&I, litigation and restructuring charges and the charge related to the disallowance of certain foreign tax credits – Non-GAAP (a) | 18.5 | % | 19.7 | % | 23.0 | % |
(a) | Annualized. |
Income from consolidated investment management funds, net of noncontrolling interests (in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Income from consolidated investment management funds | $ | 50 | $ | 42 | $ | 43 | |||||
Less: Net income attributable to noncontrolling interests of consolidated investment management funds | 16 | 11 | 11 | ||||||||
Income from consolidated investment management funds, net of noncontrolling interests | $ | 34 | $ | 31 | $ | 32 |
Income from consolidated investment management funds, net of noncontrolling interests (in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Investment management fees | $ | 20 | $ | 19 | $ | 22 | |||||
Other (Investment income) | 14 | 12 | 10 | ||||||||
Income from consolidated investment management funds, net of noncontrolling interests | $ | 34 | $ | 31 | $ | 32 |
Equity to assets and book value per common share (dollars in millions, unless otherwise noted) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
BNY Mellon shareholders’ equity at period end – GAAP | $ | 35,690 | $ | 36,431 | $ | 34,000 | |||||
Less: Preferred stock | 1,068 | 1,068 | — | ||||||||
BNY Mellon common shareholders’ equity at period end – GAAP | 34,622 | 35,363 | 34,000 | ||||||||
Less: Goodwill | 17,920 | 18,075 | 18,002 | ||||||||
Intangible assets | 4,696 | 4,809 | 5,072 | ||||||||
Add: Deferred tax liability – tax deductible goodwill | 1,170 | 1,130 | 972 | ||||||||
Deferred tax liability – non-tax deductible intangible assets | 1,293 | 1,310 | 1,428 | ||||||||
Tangible BNY Mellon shareholders’ equity at period end – Non-GAAP | $ | 14,469 | $ | 14,919 | $ | 13,326 | |||||
Total assets at period end – GAAP | $ | 355,942 | $ | 358,990 | $ | 300,169 | |||||
Less: Assets of consolidated investment management funds | 11,236 | 11,481 | 11,609 | ||||||||
Subtotal assets of operations – Non-GAAP | 344,706 | 347,509 | 288,560 | ||||||||
Less: Goodwill | 17,920 | 18,075 | 18,002 | ||||||||
Intangible assets | 4,696 | 4,809 | 5,072 | ||||||||
Cash on deposit with the Federal Reserve and other central banks (a) | 78,059 | 90,040 | 61,992 | ||||||||
Tangible total assets of operations at period end – Non-GAAP | $ | 244,031 | $ | 234,585 | $ | 203,494 | |||||
BNY Mellon shareholders’ equity to total assets – GAAP | 10.0 | % | 10.1 | % | 11.3 | % | |||||
BNY Mellon common shareholders’ equity to total assets – GAAP | 9.7 | % | 9.9 | % | 11.3 | % | |||||
Tangible BNY Mellon shareholders’ equity to tangible assets of operations – Non-GAAP | 5.9 | % | 6.4 | % | 6.5 | % | |||||
Period end common shares outstanding (in thousands) | 1,160,647 | 1,163,490 | 1,192,716 | ||||||||
Book value per common share | $ | 29.83 | $ | 30.39 | $ | 28.51 | |||||
Tangible book value per common share – Non-GAAP | $ | 12.47 | $ | 12.82 | $ | 11.17 |
(a) | Assigned a zero percentage risk weighting by the regulators. |
Effective tax rate | |||
(dollars in millions) | 1Q13 | ||
Provision for income taxes | $ | 1,046 | |
Less: Charge related to the disallowance of certain foreign tax credits | 854 | ||
Provision for income taxes – Non-GAAP | $ | 192 | |
Income before taxes | $ | 809 | |
Effective tax rate – GAAP | 129.3 | % | |
Effective tax rate – Operating basis – Non-GAAP | 23.7 | % |
Calculation of Basel I Tier 1 common equity to risk-weighted assets ratio (a) | |||||||||||
(dollars in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
Total Tier 1 capital – Basel I | $ | 16,219 | $ | 16,694 | $ | 15,695 | |||||
Less: Trust preferred securities | 603 | 623 | 1,669 | ||||||||
Preferred stock | 1,068 | 1,068 | — | ||||||||
Total Tier 1 common equity | $ | 14,548 | $ | 15,003 | $ | 14,026 | |||||
Total risk-weighted assets – Basel I | $ | 119,382 | $ | 111,180 | $ | 100,763 | |||||
Basel I Tier 1 common equity to risk-weighted assets ratio – Non-GAAP | 12.2 | % | 13.5 | % | 13.9 | % |
(a) | Determined under Basel I regulatory guidelines. |
Estimated Basel III Tier 1 common equity ratio – Non-GAAP (a) | |||||||||||
(dollars in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
Total Tier 1 capital – Basel I | $ | 16,219 | $ | 16,694 | $ | 15,695 | |||||
Add: Deferred tax liability - tax deductible intangible assets | 78 | 78 | — | ||||||||
Less: Trust preferred securities | 603 | 623 | 1,669 | ||||||||
Preferred stock | 1,068 | 1,068 | — | ||||||||
Adjustments related to AFS securities and pension liabilities included in AOCI (b) | 78 | 85 | 700 | ||||||||
Adjustments related to equity method investments (b) | 488 | 501 | 571 | ||||||||
Deferred tax assets | 52 | 47 | — | ||||||||
Net pension fund assets (b) | 258 | 249 | 100 | ||||||||
Other | 1 | — | (2 | ) | |||||||
Total estimated Basel III Tier 1 common equity | $ | 13,749 | $ | 14,199 | $ | 12,657 | |||||
Total risk-weighted assets – Basel I | $ | 119,382 | $ | 111,180 | $ | 100,763 | |||||
Add: Adjustments (c) | 26,898 | 33,104 | 65,997 | ||||||||
Total estimated Basel III risk-weighted assets | $ | 146,280 | $ | 144,284 | $ | 166,760 | |||||
Estimated Basel III Tier 1 common equity ratio – (Non-GAAP) | 9.4 | % | 9.8 | % | 7.6 | % |
(a) | The Federal Reserve’s Notices of Proposed Rulemaking (“NPRs”) require the Tier 1 common equity ratio to be the lower of the ratio as calculated under the Standardized Approach or Advanced Approach. At March 31, 2013, this ratio was 9.4% under the Standardized Approach compared with 9.7% under the Advanced Approach. For all periods prepared under the NPRs prior to March 31, 2013, this ratio was higher under the Standardized Approach, and therefore was presented under the Advanced Approach. The estimated Basel III Tier 1 common equity ratio at March 31, 2012 was based on our interpretation of prior Basel III guidance and the proposed market risk rule. |
(b) | The NPRs and prior Basel III guidance do not add back to capital the adjustment to other comprehensive income that Basel I makes for pension liabilities and available-for-sale securities. Also, under the NPRs and prior Basel III guidance, pension assets recorded on the balance sheet and adjustments related to equity method investments are a deduction from capital. |
(c) | Primary differences between risk-weighted assets determined under Basel I compared with the NPRs and prior Basel III guidance include: the determination of credit risk under Basel I uses predetermined risk weights and asset classes and relies in part on the use of external credit ratings, while the NPRs use, in addition to the broader range of predetermined risk weights and asset classes, certain alternatives to external credit ratings. Securitization exposure receives a higher risk-weighting under the NPRs and prior Basel III guidance than Basel I; also, the NPRs and prior Basel III guidance includes additional adjustments for operational risk, market risk, counterparty credit risk and equity exposures. |
• | All of our SEC filings, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports, SEC Forms 3, 4 and 5 and any proxy statement mailed in connection with the solicitation of proxies; |
• | Financial statements and footnotes prepared using Extensible Business Reporting Language (“XBRL”); |
• | Our earnings releases and selected management conference calls and presentations; |
• | Other regulatory disclosures, including: Basel II.5 Market Risk Disclosures; Basel II Pillar 3 Disclosures; Federal Financial Institutions Examination Council - Consolidated Reports of Condition and Income for a Bank With Domestic and Foreign Offices; Consolidated Financial Statements for Bank Holding Companies; and the Dodd-Frank Act Stress Test Results for BNY Mellon and The Bank of New York Mellon; and |
• | Our Corporate Governance Guidelines, Directors Code of Conduct and the charters of the Audit, Corporate Governance and Nominating, Human Resources and Compensation, Risk, Technology and Corporate |
Quarter ended | |||||||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
Fee and other revenue | |||||||||||
Investment services fees: | |||||||||||
Asset servicing | $ | 969 | $ | 945 | $ | 943 | |||||
Issuer services | 237 | 215 | 251 | ||||||||
Clearing services | 304 | 294 | 303 | ||||||||
Treasury services | 141 | 141 | 136 | ||||||||
Total investment services fees | 1,651 | 1,595 | 1,633 | ||||||||
Investment management and performance fees | 822 | 853 | 745 | ||||||||
Foreign exchange and other trading revenue | 161 | 139 | 191 | ||||||||
Distribution and servicing | 49 | 52 | 46 | ||||||||
Financing-related fees | 41 | 45 | 44 | ||||||||
Investment and other income | 72 | 116 | 139 | ||||||||
Total fee revenue | 2,796 | 2,800 | 2,798 | ||||||||
Net securities gains (losses)—including other-than-temporary impairment | 48 | 82 | 73 | ||||||||
Noncredit-related gains (losses) on securities not expected to be sold (recognized in OCI) | — | 32 | 33 | ||||||||
Net securities gains | 48 | 50 | 40 | ||||||||
Total fee and other revenue | 2,844 | 2,850 | 2,838 | ||||||||
Operations of consolidated investment management funds | |||||||||||
Investment income | 146 | 137 | 153 | ||||||||
Interest of investment management fund note holders | 96 | 95 | 110 | ||||||||
Income from consolidated investment management funds | 50 | 42 | 43 | ||||||||
Net interest revenue | |||||||||||
Interest revenue | 815 | 843 | 912 | ||||||||
Interest expense | 96 | 118 | 147 | ||||||||
Net interest revenue | 719 | 725 | 765 | ||||||||
Provision for credit losses | (24 | ) | (61 | ) | 5 | ||||||
Net interest revenue after provision for credit losses | 743 | 786 | 760 | ||||||||
Noninterest expense | |||||||||||
Staff | 1,472 | 1,457 | 1,453 | ||||||||
Professional, legal and other purchased services | 295 | 322 | 299 | ||||||||
Net occupancy | 163 | 156 | 147 | ||||||||
Software | 140 | 151 | 119 | ||||||||
Distribution and servicing | 106 | 108 | 101 | ||||||||
Furniture and equipment | 88 | 82 | 86 | ||||||||
Business development | 68 | 88 | 56 | ||||||||
Sub-custodian | 64 | 64 | 70 | ||||||||
Other | 307 | 255 | 220 | ||||||||
Amortization of intangible assets | 86 | 96 | 96 | ||||||||
Merger and integration, litigation and restructuring charges | 39 | 46 | 109 | ||||||||
Total noninterest expense | 2,828 | 2,825 | 2,756 | ||||||||
Income (loss) | |||||||||||
Income before income taxes | 809 | 853 | 885 | ||||||||
Provision for income taxes | 1,046 | 207 | 254 | ||||||||
Net income (loss) | (237 | ) | 646 | 631 | |||||||
Net (income) attributable to noncontrolling interests (includes $(16), $(11) and $(11) related to consolidated investment management funds) | (16 | ) | (11 | ) | (12 | ) | |||||
Net income (loss) applicable to shareholders of The Bank of New York Mellon Corporation | (253 | ) | 635 | 619 | |||||||
Preferred stock dividends | (13 | ) | (13 | ) | — | ||||||
Net income (loss) applicable to common shareholders of The Bank of New York Mellon Corporation | $ | (266 | ) | $ | 622 | $ | 619 |
Net income (loss) applicable to common shareholders of The Bank of New York Mellon Corporation used for the earnings per share calculation | Quarter ended | ||||||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
Net income (loss) applicable to common shareholders of The Bank of New York Mellon Corporation | $ | (266 | ) | $ | 622 | $ | 619 | ||||
Less: Earnings allocated to participating securities | 2 | 9 | 8 | ||||||||
Change in the excess of redeemable value over the fair value of noncontrolling interests | 1 | — | (6 | ) | |||||||
Net income (loss) applicable to the common shareholders of The Bank of New York Mellon Corporation after required adjustments for the calculation of basic and diluted earnings per common share | $ | (269 | ) | $ | 613 | $ | 617 |
Average common shares and equivalents outstanding of The Bank of New York Mellon Corporation | Quarter ended | |||||||
(in thousands) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||
Basic | 1,158,819 | 1,161,212 | 1,193,931 | |||||
Common stock equivalents | — | 13,427 | 8,688 | |||||
Less: Participating securities | — | (10,886 | ) | (7,061 | ) | |||
Diluted | 1,158,819 | (a) | 1,163,753 | 1,195,558 | ||||
Anti-dilutive securities (b) | 81,659 | 87,117 | 94,498 |
Earnings per share applicable to the common shareholders of The Bank of New York Mellon Corporation (c) | Quarter ended | ||||||||||
(in dollars) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
Basic | $ | (0.23 | ) | $ | 0.53 | $ | 0.52 | ||||
Diluted (a) | $ | (0.23 | ) | $ | 0.53 | $ | 0.52 |
(a) | Diluted earnings per share for the three months ended March 31, 2013 was calculated using average basic shares. Adding back the dilutive shares would result in anti-dilution. |
(b) | Represents stock options, restricted stock, restricted stock units and participating securities outstanding but not included in the computation of diluted average common shares because their effect would be anti-dilutive. |
(c) | Basic and diluted earnings per share under the two-class method are determined on the net income applicable to common shareholders of The Bank of New York Mellon Corporation reported on the income statement less earnings allocated to participating securities, and the change in the excess of redeemable value over the fair value of noncontrolling interests. |
Quarter ended | |||||||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||||
Net income (loss) | $ | (237 | ) | $ | 646 | $ | 631 | ||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustments | (309 | ) | 54 | 172 | |||||||
Unrealized gain (loss) on assets available-for-sale: | |||||||||||
Unrealized gain (loss) arising during the period | (6 | ) | (65 | ) | 237 | ||||||
Reclassification adjustment | (30 | ) | (32 | ) | (24 | ) | |||||
Total unrealized gain (loss) on assets available-for-sale | (36 | ) | (97 | ) | 213 | ||||||
Defined benefit plans: | |||||||||||
Prior service cost arising during the period | — | 57 | — | ||||||||
Net loss arising during the period | — | (190 | ) | — | |||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost | 43 | 25 | 27 | ||||||||
Total defined benefit plans | 43 | (108 | ) | 27 | |||||||
Net unrealized gain (loss) on cash flow hedges | 1 | (3 | ) | 3 | |||||||
Total other comprehensive income (loss), net of tax (a) | (301 | ) | (154 | ) | 415 | ||||||
Net (income) loss attributable to noncontrolling interests | (16 | ) | (11 | ) | (12 | ) | |||||
Other comprehensive (income) loss attributable to noncontrolling interests | 29 | (18 | ) | (17 | ) | ||||||
Net comprehensive income (loss) | $ | (525 | ) | $ | 463 | $ | 1,017 |
(a) | Other comprehensive income (loss) attributable to The Bank of New York Mellon Corporation shareholders was $(272) million for the quarter ended March 31, 2013, $(172) million for the quarter ended Dec. 31, 2012 and $398 million for the quarter ended March 31, 2012. |
March 31, 2013 | Dec. 31, 2012 | ||||||
(dollars in millions, except per share amounts) | |||||||
Assets | |||||||
Cash and due from: | |||||||
Banks | $ | 4,440 | $ | 4,727 | |||
Interest-bearing deposits with the Federal Reserve and other central banks | 78,125 | 90,110 | |||||
Interest-bearing deposits with banks | 40,888 | 43,910 | |||||
Federal funds sold and securities purchased under resale agreements | 7,004 | 6,593 | |||||
Securities: | |||||||
Held-to-maturity (fair value of $11,845 and $8,389) | 11,678 | 8,205 | |||||
Available-for-sale | 94,878 | 92,619 | |||||
Total securities | 106,556 | 100,824 | |||||
Trading assets | 12,225 | 9,378 | |||||
Loans | 49,224 | 46,629 | |||||
Allowance for loan losses | (237 | ) | (266 | ) | |||
Net loans | 48,987 | 46,363 | |||||
Premises and equipment | 1,624 | 1,659 | |||||
Accrued interest receivable | 537 | 593 | |||||
Goodwill | 17,920 | 18,075 | |||||
Intangible assets | 4,696 | 4,809 | |||||
Other assets (includes $1,460 and $1,321, at fair value) | 21,704 | 20,468 | |||||
Subtotal assets of operations | 344,706 | 347,509 | |||||
Assets of consolidated investment management funds, at fair value: | |||||||
Trading assets | 10,400 | 10,961 | |||||
Other assets | 836 | 520 | |||||
Subtotal assets of consolidated investment management funds, at fair value | 11,236 | 11,481 | |||||
Total assets | $ | 355,942 | $ | 358,990 | |||
Liabilities | |||||||
Deposits: | |||||||
Noninterest-bearing (principally U.S. offices) | $ | 80,915 | $ | 93,019 | |||
Interest-bearing deposits in U.S. offices | 54,972 | 53,826 | |||||
Interest-bearing deposits in Non-U.S. offices | 103,785 | 99,250 | |||||
Total deposits | 239,672 | 246,095 | |||||
Federal funds purchased and securities sold under repurchase agreements | 8,602 | 7,427 | |||||
Trading liabilities | 8,767 | 8,176 | |||||
Payables to customers and broker-dealers | 14,986 | 16,095 | |||||
Commercial paper | 78 | 338 | |||||
Other borrowed funds | 789 | 1,380 | |||||
Accrued taxes and other expenses | 7,576 | 7,316 | |||||
Other liabilities (including allowance for lending-related commitments of $121 and $121, also includes $310 and $704, at fair value) | 9,002 | 6,010 | |||||
Long-term debt (includes $341 and $345, at fair value) | 19,854 | 18,530 | |||||
Subtotal liabilities of operations | 309,326 | 311,367 | |||||
Liabilities of consolidated investment management funds, at fair value: | |||||||
Trading liabilities | 9,908 | 10,152 | |||||
Other liabilities | 34 | 29 | |||||
Subtotal liabilities of consolidated investment management funds, at fair value | 9,942 | 10,181 | |||||
Total liabilities | 319,268 | 321,548 | |||||
Temporary equity | |||||||
Redeemable noncontrolling interests | 178 | 178 | |||||
Permanent equity | |||||||
Preferred stock - par value $0.01 per share; authorized 100,000,000 shares; issued 10,826 and 10,826 shares | 1,068 | 1,068 | |||||
Common stock – par value $0.01 per share; authorized 3,500,000,000 shares; issued 1,260,549,075 and 1,254,182,209 shares | 13 | 13 | |||||
Additional paid-in capital | 23,688 | 23,485 | |||||
Retained earnings | 14,202 | 14,622 | |||||
Accumulated other comprehensive loss, net of tax | (915 | ) | (643 | ) | |||
Less: Treasury stock of 99,902,366 and 90,691,868 common shares, at cost | (2,366 | ) | (2,114 | ) | |||
Total The Bank of New York Mellon Corporation shareholders’ equity | 35,690 | 36,431 | |||||
Nonredeemable noncontrolling interests of consolidated investment management funds | 806 | 833 | |||||
Total permanent equity | 36,496 | 37,264 | |||||
Total liabilities, temporary equity and permanent equity | $ | 355,942 | $ | 358,990 |
Three months ended March 31, | |||||||
(in millions) | 2013 | 2012 | |||||
Operating activities | |||||||
Net income (loss) | $ | (237 | ) | $ | 631 | ||
Net (income) attributable to noncontrolling interests | (16 | ) | (12 | ) | |||
Net income (loss) applicable to shareholders of The Bank of New York Mellon Corporation | (253 | ) | 619 | ||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||||||
Provision for credit losses | (24 | ) | 5 | ||||
Pension plan contribution | (15 | ) | (11 | ) | |||
Depreciation and amortization | 333 | 299 | |||||
Deferred tax (benefit) expense | 150 | 31 | |||||
Net securities (gains) and venture capital (income) | (45 | ) | (44 | ) | |||
Change in trading activities | (2,256 | ) | 176 | ||||
Change in accruals and other, net | (634 | ) | (961 | ) | |||
Net cash (used for) provided by operating activities | (2,744 | ) | 114 | ||||
Investing activities | |||||||
Change in interest-bearing deposits with banks | 3,260 | 1,845 | |||||
Change in interest-bearing deposits with the Federal Reserve and other central banks | 11,985 | 28,213 | |||||
Purchases of securities held-to-maturity | (1,425 | ) | (1,441 | ) | |||
Paydowns of securities held-to-maturity | 327 | 61 | |||||
Maturities of securities held-to-maturity | 16 | 131 | |||||
Purchases of securities available-for-sale | (10,486 | ) | (13,227 | ) | |||
Sales of securities available-for-sale | 3,817 | 4,582 | |||||
Paydowns of securities available-for-sale | 2,450 | 2,182 | |||||
Maturities of securities available-for-sale | 954 | 2,273 | |||||
Net change in loans | (2,651 | ) | 1,055 | ||||
Sales of loans and other real estate | 24 | 111 | |||||
Change in federal funds sold and securities purchased under resale agreements | (411 | ) | (927 | ) | |||
Change in seed capital investments | (20 | ) | (11 | ) | |||
Purchases of premises and equipment/capitalized software | (126 | ) | (129 | ) | |||
Proceeds from the sale of premises and equipment | — | 5 | |||||
Acquisitions, net of cash | (4 | ) | — | ||||
Other, net | (449 | ) | (356 | ) | |||
Net cash provided by investing activities | 7,261 | 24,367 | |||||
Financing activities | |||||||
Change in deposits | (5,080 | ) | (27,549 | ) | |||
Change in federal funds purchased and securities sold under repurchase agreements | 1,175 | 2,018 | |||||
Change in payables to customers and broker-dealers | (1,109 | ) | 288 | ||||
Change in other borrowed funds | (577 | ) | (126 | ) | |||
Change in commercial paper | (260 | ) | 1,060 | ||||
Net proceeds from the issuance of long-term debt | 1,497 | 1,264 | |||||
Repayments of long-term debt | (43 | ) | (773 | ) | |||
Proceeds from the exercise of stock options | 111 | 3 | |||||
Issuance of common stock | 6 | 6 | |||||
Treasury stock acquired | (252 | ) | (398 | ) | |||
Common cash dividends paid | (153 | ) | (158 | ) | |||
Preferred cash dividends paid | (13 | ) | — | ||||
Other, net | (57 | ) | 13 | ||||
Net cash (used for) financing activities | (4,755 | ) | (24,352 | ) | |||
Effect of exchange rate changes on cash | (49 | ) | 29 | ||||
Change in cash and due from banks | |||||||
Change in cash and due from banks | (287 | ) | 158 | ||||
Cash and due from banks at beginning of period | 4,727 | 4,175 | |||||
Cash and due from banks at end of period | $ | 4,440 | $ | 4,333 | |||
Supplemental disclosures | |||||||
Interest paid | $ | 95 | $ | 106 | |||
Income taxes paid | 64 | 208 | |||||
Income taxes refunded | 6 | 2 |
The Bank of New York Mellon Corporation shareholders | Non- redeemable noncontrolling interests of consolidated investment management funds | Total permanent equity | Redeemable non- controlling interests/ temporary equity | |||||||||||||||||||||||||
(in millions, except per share amounts) | Preferred stock | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive (loss), net of tax | Treasury stock | ||||||||||||||||||||||
Balance at Dec 31, 2012 | $ | 1,068 | $ | 13 | $ | 23,485 | $ | 14,622 | $ | (643 | ) | $ | (2,114 | ) | $ | 833 | $ | 37,264 | (a) | $ | 178 | |||||||
Shares issued to shareholders of noncontrolling interests | — | — | — | — | — | — | — | — | 13 | |||||||||||||||||||
Redemption of subsidiary shares from noncontrolling interests | — | — | — | — | — | — | — | — | (23 | ) | ||||||||||||||||||
Other net changes in noncontrolling interests | — | — | 10 | (1 | ) | — | — | (23 | ) | (14 | ) | 19 | ||||||||||||||||
Net income (loss) | — | — | — | (253 | ) | — | — | 16 | (237 | ) | — | |||||||||||||||||
Other comprehensive (loss) | — | — | — | — | (272 | ) | — | (20 | ) | (292 | ) | (9 | ) | |||||||||||||||
Dividends: | ||||||||||||||||||||||||||||
Common stock at $0.13 per share | — | — | — | (153 | ) | — | — | — | (153 | ) | — | |||||||||||||||||
Preferred stock | — | — | — | (13 | ) | — | — | — | (13 | ) | — | |||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (252 | ) | — | (252 | ) | — | |||||||||||||||||
Common stock issued under: | ||||||||||||||||||||||||||||
Employee benefit plans | — | — | 7 | — | — | — | — | 7 | — | |||||||||||||||||||
Direct stock purchase and dividend reinvestment plan | — | — | 5 | — | — | — | — | 5 | — | |||||||||||||||||||
Stock awards and options exercised | — | — | 181 | — | — | — | — | 181 | — | |||||||||||||||||||
Balance at March 31, 2013 | $ | 1,068 | $ | 13 | $ | 23,688 | $ | 14,202 | $ | (915 | ) | $ | (2,366 | ) | $ | 806 | $ | 36,496 | (a) | $ | 178 |
(a) | Includes total The Bank of New York Mellon Corporation common shareholders’ equity of $35,363 million at Dec. 31, 2012, and $34,622 million at March 31, 2013. |
Notes to Consolidated Financial Statements |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Securities at March 31, 2013 | Amortized cost | Gross unrealized | Fair value | ||||||||||
(in millions) | Gains | Losses | |||||||||||
Available-for-sale: | |||||||||||||
U.S. Treasury | $ | 17,480 | $ | 348 | $ | 36 | $ | 17,792 | |||||
U.S. Government agencies | 1,034 | 26 | — | 1,060 | |||||||||
State and political subdivisions | 6,162 | 116 | 28 | 6,250 | |||||||||
Agency RMBS | 35,763 | 720 | 30 | 36,453 | |||||||||
Alt-A RMBS | 249 | 49 | 13 | 285 | |||||||||
Prime RMBS | 613 | 10 | 7 | 616 | |||||||||
Subprime RMBS | 472 | 5 | 41 | 436 | |||||||||
Other RMBS | 2,672 | 57 | 94 | 2,635 | |||||||||
Commercial MBS | 2,856 | 123 | 39 | 2,940 | |||||||||
Asset-backed CLOs | 1,449 | 12 | 5 | 1,456 | |||||||||
Other asset-backed securities | 2,019 | 10 | 3 | 2,026 | |||||||||
Foreign covered bonds | 3,349 | 41 | — | 3,390 | |||||||||
Corporate bonds | 1,517 | 60 | 5 | 1,572 | |||||||||
Other debt securities | 12,154 | 245 | — | 12,399 | (a) | ||||||||
Equity securities | 22 | 6 | — | 28 | |||||||||
Money market funds | 2,457 | — | — | 2,457 | |||||||||
Alt-A RMBS (b) | 1,514 | 457 | 3 | 1,968 | |||||||||
Prime RMBS (b) | 791 | 190 | — | 981 | |||||||||
Subprime RMBS (b) | 114 | 20 | — | 134 | |||||||||
Total securities available-for-sale | 92,687 | 2,495 | 304 | 94,878 | |||||||||
Held-to-maturity: | |||||||||||||
U.S. Treasury | 2,206 | 71 | — | 2,277 | |||||||||
State and political subdivisions | 53 | 2 | — | 55 | |||||||||
Agency RMBS | 8,246 | 107 | 2 | 8,351 | |||||||||
Alt-A RMBS | 102 | 10 | 6 | 106 | |||||||||
Prime RMBS | 91 | 1 | — | 92 | |||||||||
Subprime RMBS | 28 | — | — | 28 | |||||||||
Other RMBS | 804 | 29 | 45 | 788 | |||||||||
Commercial MBS | 21 | — | 1 | 20 | |||||||||
Other securities | 127 | 1 | — | 128 | |||||||||
Total securities held-to-maturity | 11,678 | 221 | 54 | 11,845 | |||||||||
Total securities | $ | 104,365 | $ | 2,716 | $ | 358 | $ | 106,723 |
(a) | Includes $10.2 billion, at fair value, of government-sponsored and guaranteed entities, and sovereign debt. |
(b) | Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011. |
Securities at Dec. 31, 2012 | Amortized cost | Gross unrealized | Fair value | ||||||||||
(in millions) | Gains | Losses | |||||||||||
Available-for-sale: | |||||||||||||
U.S. Treasury | $ | 17,539 | $ | 467 | $ | 3 | $ | 18,003 | |||||
U.S. Government agencies | 1,044 | 30 | — | 1,074 | |||||||||
State and political subdivisions | 6,039 | 112 | 29 | 6,122 | |||||||||
Agency RMBS | 33,355 | 846 | 8 | 34,193 | |||||||||
Alt-A RMBS | 255 | 40 | 16 | 279 | |||||||||
Prime RMBS | 728 | 9 | 9 | 728 | |||||||||
Subprime RMBS | 508 | 6 | 62 | 452 | |||||||||
Other RMBS | 2,850 | 53 | 109 | 2,794 | |||||||||
Commercial MBS | 3,031 | 153 | 45 | 3,139 | |||||||||
Asset-backed CLOs | 1,285 | 7 | 10 | 1,282 | |||||||||
Other asset-backed securities | 2,123 | 11 | 3 | 2,131 | |||||||||
Foreign covered bonds | 3,596 | 122 | — | 3,718 | |||||||||
Corporate bonds | 1,525 | 63 | 3 | 1,585 | |||||||||
Other debt securities | 11,516 | 276 | — | 11,792 | (a) | ||||||||
Equity securities | 23 | 4 | — | 27 | |||||||||
Money market funds | 2,190 | — | — | 2,190 | |||||||||
Alt-A RMBS (b) | 1,574 | 400 | 4 | 1,970 | |||||||||
Prime RMBS (b) | 833 | 177 | — | 1,010 | |||||||||
Subprime RMBS (b) | 113 | 17 | — | 130 | |||||||||
Total securities available-for-sale | 90,127 | 2,793 | 301 | 92,619 | |||||||||
Held-to-maturity: | |||||||||||||
U.S. Treasury | 1,011 | 59 | — | 1,070 | |||||||||
State and political subdivisions | 67 | 2 | — | 69 | |||||||||
Agency RMBS | 5,879 | 139 | 1 | 6,017 | |||||||||
Alt-A RMBS | 111 | 9 | 6 | 114 | |||||||||
Prime RMBS | 97 | 1 | 1 | 97 | |||||||||
Subprime RMBS | 28 | — | 1 | 27 | |||||||||
Other RMBS | 983 | 36 | 52 | 967 | |||||||||
Commercial MBS | 26 | — | 1 | 25 | |||||||||
Other securities | 3 | — | — | 3 | |||||||||
Total securities held-to-maturity | 8,205 | 246 | 62 | 8,389 | |||||||||
Total securities | $ | 98,332 | $ | 3,039 | $ | 363 | $ | 101,008 |
(a) | Includes $9.4 billion, at fair value, of government-sponsored and guaranteed entities, and sovereign debt. |
(b) | Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011. |
Net securities gains (losses) | |||||||||||
(in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Realized gross gains | $ | 57 | $ | 80 | $ | 62 | |||||
Realized gross losses | (5 | ) | (1 | ) | — | ||||||
Recognized gross impairments | (4 | ) | (29 | ) | (22 | ) | |||||
Total net securities gains (losses) | $ | 48 | $ | 50 | $ | 40 |
Notes to Consolidated Financial Statements (continued) |
Temporarily impaired securities at March 31, 2013 | Less than 12 months | 12 months or more | Total | ||||||||||||||||||||
(in millions) | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | |||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
U.S. Treasury | $ | 2,190 | $ | 36 | $ | — | $ | — | $ | 2,190 | $ | 36 | |||||||||||
State and political subdivisions | 612 | 5 | 306 | 23 | 918 | 28 | |||||||||||||||||
Agency RMBS | 6,061 | 30 | 96 | — | 6,157 | 30 | |||||||||||||||||
Alt-A RMBS | 13 | 3 | 37 | 10 | 50 | 13 | |||||||||||||||||
Prime RMBS | 66 | 1 | 219 | 6 | 285 | 7 | |||||||||||||||||
Subprime RMBS | — | — | 413 | 41 | 413 | 41 | |||||||||||||||||
Other RMBS | 144 | 1 | 635 | 93 | 779 | 94 | |||||||||||||||||
Commercial MBS | 285 | 2 | 301 | 37 | 586 | 39 | |||||||||||||||||
Asset-backed CLOs | 141 | 1 | 297 | 4 | 438 | 5 | |||||||||||||||||
Other asset-backed securities | 832 | 2 | 9 | 1 | 841 | 3 | |||||||||||||||||
Corporate bonds | 198 | 5 | — | — | 198 | 5 | |||||||||||||||||
Alt-A RMBS (a) | 4 | — | 25 | 3 | 29 | 3 | |||||||||||||||||
Total securities available-for-sale | $ | 10,546 | $ | 86 | $ | 2,338 | $ | 218 | $ | 12,884 | $ | 304 | |||||||||||
Held-to-maturity: | |||||||||||||||||||||||
Agency RMBS | $ | 839 | $ | 2 | $ | — | $ | — | $ | 839 | $ | 2 | |||||||||||
Alt-A RMBS | — | — | 20 | 6 | 20 | 6 | |||||||||||||||||
Other RMBS | — | — | 430 | 45 | 430 | 45 | |||||||||||||||||
Commercial MBS | — | — | 20 | 1 | 20 | 1 | |||||||||||||||||
Total securities held-to-maturity | $ | 839 | $ | 2 | $ | 470 | $ | 52 | $ | 1,309 | $ | 54 | |||||||||||
Total temporarily impaired securities | $ | 11,385 | $ | 88 | $ | 2,808 | $ | 270 | $ | 14,193 | $ | 358 |
(a) | Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011. |
Temporarily impaired securities at Dec. 31, 2012 | Less than 12 months | 12 months or more | Total | ||||||||||||||||||||
(in millions) | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | |||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
U.S. Treasury | $ | 956 | $ | 3 | $ | — | $ | — | $ | 956 | $ | 3 | |||||||||||
State and political subdivisions | 1,139 | 7 | 173 | 22 | 1,312 | 29 | |||||||||||||||||
Agency RMBS | 1,336 | 8 | 96 | — | 1,432 | 8 | |||||||||||||||||
Alt-A RMBS | 31 | 13 | 39 | 3 | 70 | 16 | |||||||||||||||||
Prime RMBS | 110 | 2 | 253 | 7 | 363 | 9 | |||||||||||||||||
Subprime RMBS | 13 | 3 | 397 | 59 | 410 | 62 | |||||||||||||||||
Other RMBS | 64 | 19 | 670 | 90 | 734 | 109 | |||||||||||||||||
Commercial MBS | 131 | 1 | 310 | 44 | 441 | 45 | |||||||||||||||||
Asset-backed CLOs | 314 | 1 | 321 | 9 | 635 | 10 | |||||||||||||||||
Other asset-backed securities | 779 | 2 | 7 | 1 | 786 | 3 | |||||||||||||||||
Corporate bonds | 178 | 3 | — | — | 178 | 3 | |||||||||||||||||
Alt-A RMBS (a) | 22 | — | 30 | 4 | 52 | 4 | |||||||||||||||||
Total securities available-for-sale | $ | 5,073 | $ | 62 | $ | 2,296 | $ | 239 | $ | 7,369 | $ | 301 | |||||||||||
Held-to-maturity: | |||||||||||||||||||||||
Agency RMBS | $ | 234 | $ | 1 | $ | — | $ | — | $ | 234 | $ | 1 | |||||||||||
Alt-A RMBS | 38 | — | 24 | 6 | 62 | 6 | |||||||||||||||||
Prime RMBS | — | — | 56 | 1 | 56 | 1 | |||||||||||||||||
Subprime RMBS | — | — | 24 | 1 | 24 | 1 | |||||||||||||||||
Other RMBS | 413 | — | 373 | 52 | 786 | 52 | |||||||||||||||||
Commercial MBS | — | — | 25 | 1 | 25 | 1 | |||||||||||||||||
Total securities held-to-maturity | $ | 685 | $ | 1 | $ | 502 | $ | 61 | $ | 1,187 | $ | 62 | |||||||||||
Total temporarily impaired securities | $ | 5,758 | $ | 63 | $ | 2,798 | $ | 300 | $ | 8,556 | $ | 363 |
(a) | Previously included in the Grantor Trust. The Grantor Trust was dissolved in 2011. |
Notes to Consolidated Financial Statements (continued) |
Maturity distribution and yield on investment securities | U.S. Treasury | U.S. Government agencies | State and political subdivisions | Other bonds, notes and debentures | Mortgage/ asset-backed and equity securities | ||||||||||||||||||||||||||||
(dollars in millions) | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Amount | Yield (a) | Total | ||||||||||||||||||||||
Securities available-for-sale: | |||||||||||||||||||||||||||||||||
One year or less | $ | 4,332 | 0.66 | % | $ | 328 | 1.14 | % | $ | 151 | 1.18 | % | $ | 3,333 | 1.11 | % | $ | — | — | % | $ | 8,144 | |||||||||||
Over 1 through 5 years | 7,204 | 1.03 | 677 | 1.85 | 3,064 | 1.79 | 11,567 | 1.04 | — | — | 22,512 | ||||||||||||||||||||||
Over 5 through 10 years | 2,041 | 2.70 | 55 | 2.06 | 2,737 | 3.24 | 2,449 | 2.54 | — | — | 7,282 | ||||||||||||||||||||||
Over 10 years | 4,215 | 3.12 | — | — | 298 | 2.72 | 12 | — | — | — | 4,525 | ||||||||||||||||||||||
Mortgage-backed securities | — | — | — | — | — | — | — | — | 46,448 | 2.65 | 46,448 | ||||||||||||||||||||||
Asset-backed securities | — | — | — | — | — | — | — | — | 3,482 | 1.28 | 3,482 | ||||||||||||||||||||||
Equity securities (b) | — | — | — | — | — | — | — | — | 2,485 | — | 2,485 | ||||||||||||||||||||||
Total | $ | 17,792 | 1.63 | % | $ | 1,060 | 1.64 | % | $ | 6,250 | 2.46 | % | $ | 17,361 | 1.27 | % | $ | 52,415 | 2.43 | % | $ | 94,878 | |||||||||||
Securities held-to-maturity: | |||||||||||||||||||||||||||||||||
One year or less | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | — | |||||||||||
Over 1 through 5 years | 1,180 | 1.24 | — | — | % | — | — | 127 | 0.53 | — | — | 1,307 | |||||||||||||||||||||
Over 5 through 10 years | 1,026 | 2.25 | — | — | % | 38 | 6.78 | — | — | — | — | 1,064 | |||||||||||||||||||||
Over 10 years | — | — | — | — | % | 15 | 5.81 | — | — | — | — | 15 | |||||||||||||||||||||
Mortgage-backed securities | — | — | — | — | — | — | — | — | 9,292 | 2.76 | % | 9,292 | |||||||||||||||||||||
Total | $ | 2,206 | 1.71 | % | $ | — | — | % | $ | 53 | 6.51 | % | $ | 127 | 0.53 | % | $ | 9,292 | 2.76 | % | $ | 11,678 |
(a) | Yields are based upon the amortized cost of securities. |
(b) | Includes money market funds. |
• | Default rate - the number of mortgage loans expected to go into default over the life of the transaction, which is driven by the roll rate of loans in each performance bucket that will ultimately migrate to default; and |
• | Severity - the loss expected to be realized when a loan defaults. |
Projected weighted-average default rates and loss severities | |||||||||||
March 31, 2013 | Dec. 31, 2012 | ||||||||||
Default rate | Severity | Default rate | Severity | ||||||||
Alt-A | 42 | % | 57 | % | 43 | % | 57 | % | |||
Subprime | 60 | % | 72 | % | 61 | % | 72 | % | |||
Prime | 24 | % | 43 | % | 24 | % | 43 | % |
Notes to Consolidated Financial Statements (continued) |
Net securities gains (losses) | |||||||||||
(in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Foreign covered bonds | $ | 8 | $ | — | $ | — | |||||
Commercial MBS | 8 | — | — | ||||||||
European floating rate notes | 4 | (5 | ) | (1 | ) | ||||||
Non-agency RMBS | 4 | (24 | ) | (14 | ) | ||||||
Sovereign Debt | 1 | 13 | 7 | ||||||||
Agency RMBS | — | 43 | — | ||||||||
Corporate bonds | — | 10 | 2 | ||||||||
FDIC-insured debt | — | — | 10 | ||||||||
U.S. Treasury | (4 | ) | 1 | 38 | |||||||
Other | 27 | 12 | (2 | ) | |||||||
Total net securities gains | $ | 48 | $ | 50 | $ | 40 |
Debt securities credit loss roll forward | |||||||
(in millions) | 1Q13 | 1Q12 | |||||
Beginning balance as of Jan. 1 | $ | 288 | $ | 253 | |||
Add: Initial OTTI credit losses | — | 9 | |||||
Subsequent OTTI credit losses | 4 | 12 | |||||
Less: Realized losses for securities sold | 118 | 8 | |||||
Ending balance as of March 31 | $ | 174 | $ | 266 |
Loans | March 31, | Dec. 31, | |||||
(in millions) | 2013 | 2012 | |||||
Domestic: | |||||||
Financial institutions | $ | 4,920 | $ | 5,455 | |||
Commercial | 1,351 | 1,306 | |||||
Wealth management loans and mortgages | 8,919 | 8,796 | |||||
Commercial real estate | 1,822 | 1,677 | |||||
Lease financings (a) | 1,295 | 1,329 | |||||
Other residential mortgages | 1,570 | 1,632 | |||||
Overdrafts | 2,772 | 2,228 | |||||
Other | 644 | 639 | |||||
Margin loans | 13,242 | 13,397 | |||||
Total domestic | 36,535 | 36,459 | |||||
Foreign: | |||||||
Financial institutions | 8,864 | 5,833 | |||||
Commercial | 129 | 111 | |||||
Wealth management loans and mortgages | 72 | 68 | |||||
Commercial real estate | 52 | 63 | |||||
Lease financings (a) | 1,025 | 1,025 | |||||
Other (primarily overdrafts) | 2,547 | 3,070 | |||||
Total foreign | 12,689 | 10,170 | |||||
Total loans | $ | 49,224 | $ | 46,629 |
(a) | Net of unearned income on domestic and foreign lease financings of $1,106 million at March 31, 2013 and $1,135 million at Dec. 31, 2012. |
Notes to Consolidated Financial Statements (continued) |
Allowance for credit losses activity for the quarter ended March 31, 2013 | Wealth management loans and mortgages | Other residential mortgages | |||||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | All Other | Foreign | Total | ||||||||||||||||||||||
Beginning balance | $ | 104 | $ | 30 | $ | 36 | $ | 49 | $ | 30 | $ | 88 | $ | 2 | $ | 48 | $ | 387 | |||||||||||
Charge-offs | (2 | ) | — | — | — | — | (3 | ) | — | — | (5 | ) | |||||||||||||||||
Recoveries | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Net (charge-offs) | (2 | ) | — | — | — | — | (3 | ) | — | — | (5 | ) | |||||||||||||||||
Provision | (5 | ) | 1 | (3 | ) | (10 | ) | (1 | ) | (4 | ) | — | (2 | ) | (24 | ) | |||||||||||||
Ending balance | $ | 97 | $ | 31 | $ | 33 | $ | 39 | $ | 29 | $ | 81 | $ | 2 | $ | 46 | $ | 358 | |||||||||||
Allowance for: | |||||||||||||||||||||||||||||
Loans losses | $ | 22 | $ | 19 | $ | 11 | $ | 39 | $ | 25 | $ | 81 | $ | 2 | $ | 38 | $ | 237 | |||||||||||
Unfunded commitments | 75 | 12 | 22 | — | 4 | — | — | 8 | 121 | ||||||||||||||||||||
Individually evaluated for impairment: | |||||||||||||||||||||||||||||
Loan balance | $ | 54 | $ | 16 | $ | 3 | $ | — | $ | 31 | $ | — | $ | — | $ | 9 | $ | 113 | |||||||||||
Allowance for loan losses | 7 | 1 | — | — | 7 | — | — | 5 | 20 | ||||||||||||||||||||
Collectively evaluated for impairment: | |||||||||||||||||||||||||||||
Loan balance | $ | 1,297 | $ | 1,806 | $ | 4,917 | $ | 1,295 | $ | 8,888 | $ | 1,570 | $ | 16,658 | (a) | $ | 12,680 | $ | 49,111 | ||||||||||
Allowance for loan losses | 15 | 18 | 11 | 39 | 18 | 81 | 2 | 33 | 217 |
(a) | Includes $2,772 million of domestic overdrafts, $13,242 million of margin loans and $644 million of other loans at March 31, 2013. |
Allowance for credit losses for quarter ended Dec. 31, 2012 | Wealth management loans and mortgages | Other residential mortgages | |||||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | All Other | Foreign | Total | ||||||||||||||||||||||
Beginning balance | $ | 98 | $ | 35 | $ | 37 | $ | 55 | $ | 33 | $ | 141 | $ | 2 | $ | 55 | $ | 456 | |||||||||||
Charge-offs | — | — | (5 | ) | — | (1 | ) | (4 | ) | — | — | (10 | ) | ||||||||||||||||
Recoveries | — | — | — | — | 1 | 1 | — | — | 2 | ||||||||||||||||||||
Net (charge-offs) | — | — | (5 | ) | — | — | (3 | ) | — | — | (8 | ) | |||||||||||||||||
Provision | 6 | (5 | ) | 4 | (6 | ) | (3 | ) | (50 | ) | — | (7 | ) | (61 | ) | ||||||||||||||
Ending balance | $ | 104 | $ | 30 | $ | 36 | $ | 49 | $ | 30 | $ | 88 | $ | 2 | $ | 48 | $ | 387 | |||||||||||
Allowance for: | |||||||||||||||||||||||||||||
Loans losses | $ | 30 | $ | 20 | $ | 12 | $ | 49 | $ | 26 | $ | 88 | $ | 2 | $ | 39 | $ | 266 | |||||||||||
Unfunded commitments | 74 | 10 | 24 | — | 4 | — | — | 9 | 121 | ||||||||||||||||||||
Individually evaluated for impairment: | |||||||||||||||||||||||||||||
Loan balance | $ | 57 | $ | 17 | $ | 3 | $ | — | $ | 31 | $ | — | $ | — | $ | 9 | $ | 117 | |||||||||||
Allowance for loan losses | 12 | 1 | — | — | 7 | — | — | 4 | 24 | ||||||||||||||||||||
Collectively evaluated for impairment: | |||||||||||||||||||||||||||||
Loan balance | $ | 1,249 | $ | 1,660 | $ | 5,452 | $ | 1,329 | $ | 8,765 | $ | 1,632 | $ | 16,264 | (a) | $ | 10,161 | $ | 46,512 | ||||||||||
Allowance for loan losses | 18 | 19 | 12 | 49 | 19 | 88 | 2 | 35 | 242 |
(a) | Includes $2,228 million of domestic overdrafts, $13,397 million of margin loans and $639 million of other loans at Dec. 31, 2012. |
Notes to Consolidated Financial Statements (continued) |
Allowance for credit losses activity for the quarter ended March 31, 2012 | Wealth management loans and mortgages | Other residential mortgages | All Other | Foreign | Total | ||||||||||||||||||||||||
(in millions) | Commercial | Commercial real estate | Financial institutions | Lease financings | |||||||||||||||||||||||||
Beginning balance | $ | 91 | $ | 34 | $ | 63 | $ | 66 | $ | 29 | $ | 156 | $ | — | $ | 58 | $ | 497 | |||||||||||
Charge-offs | — | — | — | — | — | (10 | ) | — | — | (10 | ) | ||||||||||||||||||
Recoveries | — | — | — | — | — | 2 | — | — | 2 | ||||||||||||||||||||
Net (charge-offs) | — | — | — | — | — | (8 | ) | — | — | (8 | ) | ||||||||||||||||||
Provision | 6 | (1 | ) | (10 | ) | (4 | ) | 5 | 17 | — | (8 | ) | 5 | ||||||||||||||||
Ending balance | $ | 97 | $ | 33 | $ | 53 | $ | 62 | $ | 34 | $ | 165 | $ | — | $ | 50 | $ | 494 | |||||||||||
Allowance for: | |||||||||||||||||||||||||||||
Loans losses | $ | 36 | $ | 22 | $ | 30 | $ | 62 | $ | 29 | $ | 165 | $ | — | $ | 42 | $ | 386 | |||||||||||
Unfunded commitments | 61 | 11 | 23 | — | 5 | — | — | 8 | 108 | ||||||||||||||||||||
Individually evaluated for impairment: | |||||||||||||||||||||||||||||
Loan balance | $ | 66 | $ | 38 | $ | 14 | $ | — | $ | 31 | $ | — | $ | — | $ | 10 | $ | 159 | |||||||||||
Allowance for loan losses | 17 | 6 | 5 | — | 7 | — | — | 3 | 38 | ||||||||||||||||||||
Collectively evaluated for impairment: | |||||||||||||||||||||||||||||
Loan balance | $ | 697 | $ | 1,403 | $ | 4,881 | $ | 1,518 | $ | 7,281 | $ | 1,854 | $ | 15,964 | (a) | $ | 9,271 | $ | 42,869 | ||||||||||
Allowance for loan losses | 19 | 16 | 25 | 62 | 22 | 165 | — | 39 | 348 |
(a) | Includes $1,971 million of domestic overdrafts, $13,144 million of margin loans and $849 million of other loans at March 31, 2012. |
Nonperforming assets | March 31, 2013 | Dec. 31, 2012 | |||||
(in millions) | |||||||
Nonperforming loans: | |||||||
Other residential mortgages | $ | 148 | $ | 158 | |||
Wealth management loans and mortgages | 30 | 30 | |||||
Commercial | 24 | 27 | |||||
Commercial real estate | 17 | 18 | |||||
Foreign loans | 9 | 9 | |||||
Financial institutions | 3 | 3 | |||||
Total nonperforming loans | 231 | 245 | |||||
Other assets owned | 3 | 4 | |||||
Total nonperforming assets (a) | $ | 234 | $ | 249 |
(a) | Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in these loans are nonperforming loans of $161 million at March 31, 2013 and $174 million at Dec. 31, 2012. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above. |
Notes to Consolidated Financial Statements (continued) |
Impaired loans | Quarter ended | ||||||||||||||||||||||
March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||||||||||||||||||
(in millions) | Average recorded investment | Interest income recognized | Average recorded investment | Interest income recognized | Average recorded investment | Interest income recognized | |||||||||||||||||
Impaired loans with an allowance: | |||||||||||||||||||||||
Commercial | $ | 56 | $ | 1 | $ | 59 | $ | 1 | $ | 46 | $ | 1 | |||||||||||
Commercial real estate | 9 | — | 20 | — | 35 | — | |||||||||||||||||
Financial institutions | 1 | — | 1 | — | 16 | — | |||||||||||||||||
Wealth management loans and mortgages | 27 | — | 28 | — | 28 | — | |||||||||||||||||
Foreign | 9 | — | 9 | — | 10 | — | |||||||||||||||||
Total impaired loans with an allowance | 102 | 1 | 117 | 1 | 135 | 1 | |||||||||||||||||
Impaired loans without an allowance: | |||||||||||||||||||||||
Commercial real estate | 8 | — | 2 | — | 3 | — | |||||||||||||||||
Financial institutions | 1 | — | 2 | — | 3 | — | |||||||||||||||||
Wealth management loans and mortgages | 4 | — | 6 | — | 3 | — | |||||||||||||||||
Total impaired loans without an allowance (a) | 13 | — | 10 | — | 9 | — | |||||||||||||||||
Total impaired loans | $ | 115 | $ | 1 | $ | 127 | $ | 1 | $ | 144 | $ | 1 |
(a) | When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans. |
Impaired loans | March 31, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
(in millions) | Recorded investment | Unpaid principal balance | Related allowance (a) | Recorded investment | Unpaid principal balance | Related allowance (a) | |||||||||||||||||
Impaired loans with an allowance: | |||||||||||||||||||||||
Commercial | $ | 54 | $ | 58 | $ | 7 | $ | 57 | $ | 61 | $ | 12 | |||||||||||
Commercial real estate | 3 | 4 | 1 | 15 | 16 | 1 | |||||||||||||||||
Financial institutions | 1 | 1 | — | 1 | 1 | — | |||||||||||||||||
Wealth management loans and mortgages | 27 | 27 | 7 | 28 | 28 | 7 | |||||||||||||||||
Foreign | 9 | 17 | 5 | 9 | 17 | 4 | |||||||||||||||||
Total impaired loans with an allowance | 94 | 107 | 20 | 110 | 123 | 24 | |||||||||||||||||
Impaired loans without an allowance: | |||||||||||||||||||||||
Commercial real estate | 13 | 13 | N/A | 2 | 2 | N/A | |||||||||||||||||
Financial institutions | 2 | 8 | N/A | 1 | 8 | N/A | |||||||||||||||||
Wealth management loans and mortgages | 4 | 4 | N/A | 4 | 4 | N/A | |||||||||||||||||
Total impaired loans without an allowance (b) | 19 | 25 | N/A | 7 | 14 | N/A | |||||||||||||||||
Total impaired loans (c) | $ | 113 | $ | 132 | $ | 20 | $ | 117 | $ | 137 | $ | 24 |
(a) | The allowance for impaired loans is included in the allowance for loan losses. |
(b) | When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans. |
(c) | Excludes an aggregate of $1 million and $2 million of impaired loans in amounts individually less than $1 million at March 31, 2013 and Dec. 31, 2012, respectively. The allowance for loan loss associated with these loans totaled less than $1 million at both March 31, 2013 and Dec. 31, 2012. |
Notes to Consolidated Financial Statements (continued) |
Past due loans and still accruing interest | March 31, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||||||||
Days past due | Total past due | Days past due | Total past due | ||||||||||||||||||||||||||||
(in millions) | 30-59 | 60-89 | >90 | 30-59 | 60-89 | >90 | |||||||||||||||||||||||||
Domestic: | |||||||||||||||||||||||||||||||
Commercial real estate | $ | 45 | $ | — | $ | 8 | $ | 53 | $ | 44 | $ | — | $ | — | $ | 44 | |||||||||||||||
Wealth management loans and mortgages | 30 | 4 | — | 34 | 33 | 7 | 1 | 41 | |||||||||||||||||||||||
Commercial | — | — | — | — | — | 60 | — | 60 | |||||||||||||||||||||||
Other residential mortgages | 29 | 6 | 6 | 41 | 50 | 9 | 5 | 64 | |||||||||||||||||||||||
Financial institutions | 1 | — | — | 1 | — | — | — | — | |||||||||||||||||||||||
Total domestic | 105 | 10 | 14 | 129 | 127 | 76 | 6 | 209 | |||||||||||||||||||||||
Foreign | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total past due loans | $ | 105 | $ | 10 | $ | 14 | $ | 129 | $ | 127 | $ | 76 | $ | 6 | $ | 209 |
TDRs | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||||||||||||||||||||
Outstanding recorded investment | Outstanding recorded investment | Outstanding recorded investment | ||||||||||||||||||||||||
(dollars in millions) | Number of contracts | Pre-modification | Post-modification | Number of contracts | Pre-modification | Post-modification | Number of contracts | Pre-modification | Post-modification | |||||||||||||||||
Other residential mortgages | 31 | $ | 5 | $ | 6 | 36 | $ | 8 | $ | 11 | 30 | $ | 7 | $ | 8 | |||||||||||
Wealth management loans and mortgages | — | — | — | 2 | 1 | 1 | — | — | — | |||||||||||||||||
Commercial | — | — | — | — | — | — | 2 | 38 | 32 | |||||||||||||||||
Commercial real estate | — | — | — | — | — | — | 2 | 11 | 12 | |||||||||||||||||
Foreign | — | — | — | — | — | — | 1 | 3 | 3 | |||||||||||||||||
Total TDRs | 31 | $ | 5 | $ | 6 | 38 | $ | 9 | $ | 12 | 35 | $ | 59 | $ | 55 |
Notes to Consolidated Financial Statements (continued) |
Commercial loan portfolio – Credit risk profile by creditworthiness category | |||||||||||||||||||||||
Commercial | Commercial real estate | Financial institutions | |||||||||||||||||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2013 | Dec. 31, 2012 | March 31, 2013 | Dec 31, 2012 | |||||||||||||||||
Investment grade | $ | 1,110 | $ | 1,064 | $ | 1,493 | $ | 1,289 | $ | 12,128 | $ | 9,935 | |||||||||||
Noninvestment grade | 370 | 353 | 381 | 451 | 1,656 | 1,353 | |||||||||||||||||
Total | $ | 1,480 | $ | 1,417 | $ | 1,874 | $ | 1,740 | $ | 13,784 | $ | 11,288 |
Wealth management loans and mortgages – Credit risk profile by internally assigned grade | |||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | |||||
Wealth management loans: | |||||||
Investment grade | $ | 4,583 | $ | 4,597 | |||
Noninvestment grade | 121 | 125 | |||||
Wealth management mortgages | 4,287 | 4,142 | |||||
Total | $ | 8,991 | $ | 8,864 |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Goodwill by business (in millions) | Investment Management | Investment Services | Other | Consolidated | |||||||||||
Balance at Dec. 31, 2012 | $ | 9,508 | $ | 8,517 | $ | 50 | $ | 18,075 | |||||||
Foreign exchange translation | (108 | ) | (51 | ) | — | (159 | ) | ||||||||
Other (a) | 4 | — | — | 4 | |||||||||||
Balance at March 31, 2013 | $ | 9,404 | $ | 8,466 | $ | 50 | $ | 17,920 |
(a) | Other changes in goodwill include purchase price adjustments and certain other reclassifications. |
Goodwill by business (in millions) | Investment Management | Investment Services | Other | Consolidated | |||||||||||
Balance at Dec. 31, 2011 | $ | 9,373 | $ | 8,491 | $ | 40 | $ | 17,904 | |||||||
Foreign exchange translation | 59 | 40 | — | 99 | |||||||||||
Other (a) | (1 | ) | (10 | ) | 10 | (1 | ) | ||||||||
Balance at March 31, 2012 | $ | 9,431 | $ | 8,521 | $ | 50 | $ | 18,002 |
(a) | Other changes in goodwill include purchase price adjustments and certain other reclassifications |
Intangible assets – net carrying amount by business (in millions) | Investment Management | Investment Services | Other | Consolidated | |||||||||||
Balance at Dec. 31, 2012 | $ | 2,228 | $ | 1,732 | $ | 849 | $ | 4,809 | |||||||
Amortization | (39 | ) | (47 | ) | — | (86 | ) | ||||||||
Foreign exchange translation | (24 | ) | (3 | ) | — | (27 | ) | ||||||||
Balance at March 31, 2013 | $ | 2,165 | $ | 1,682 | $ | 849 | $ | 4,696 |
Intangible assets – net carrying amount by business (in millions) | Investment Management | Investment Services | Other | Consolidated | |||||||||||
Balance at Dec. 31, 2011 | $ | 2,382 | $ | 1,922 | $ | 848 | $ | 5,152 | |||||||
Amortization | (48 | ) | (48 | ) | — | (96 | ) | ||||||||
Foreign exchange translation | 13 | 3 | — | 16 | |||||||||||
Other (a) | — | (2 | ) | 2 | — | ||||||||||
Balance at March 31, 2012 | $ | 2,347 | $ | 1,875 | $ | 850 | $ | 5,072 |
(a) | Other changes in intangible assets include purchase price adjustments and certain other reclassifications. |
Intangible assets | March 31, 2013 | Dec. 31, 2012 | |||||||||||||||
(in millions) | Gross carrying amount | Accumulated amortization | Net carrying amount | Remaining weighted average amortization period | Net carrying amount | ||||||||||||
Subject to amortization: | |||||||||||||||||
Customer relationships—Investment Management | $ | 2,062 | $ | (1,351 | ) | $ | 711 | 12 years | $ | 761 | |||||||
Customer contracts—Investment Services | 2,348 | (1,061 | ) | 1,287 | 12 years | 1,335 | |||||||||||
Other | 123 | (101 | ) | 22 | 5 years | 25 | |||||||||||
Total subject to amortization | 4,533 | (2,513 | ) | 2,020 | 12 years | 2,121 | |||||||||||
Not subject to amortization: (a) | |||||||||||||||||
Trade name | 1,366 | N/A | 1,366 | N/A | 1,368 | ||||||||||||
Customer relationships | 1,310 | N/A | 1,310 | N/A | 1,320 | ||||||||||||
Total not subject to amortization | 2,676 | N/A | 2,676 | N/A | 2,688 | ||||||||||||
Total intangible assets | $ | 7,209 | $ | (2,513 | ) | $ | 4,696 | N/A | $ | 4,809 |
(a) | Intangible assets not subject to amortization have an indefinite life. |
Notes to Consolidated Financial Statements (continued) |
For the year ended Dec. 31, | Estimated amortization expense (in millions) | |||
2013 | $ | 340 | ||
2014 | 302 | |||
2015 | 269 | |||
2016 | 240 | |||
2017 | 216 |
Other assets | March 31, | Dec. 31, | |||||
(in millions) | 2013 | 2012 | |||||
Accounts receivable | $ | 4,514 | $ | 4,255 | |||
Corporate/bank owned life insurance | 4,376 | 4,360 | |||||
Income taxes receivable | 3,049 | 3,099 | |||||
Equity in joint ventures and other investments (a) | 2,784 | 2,664 | |||||
Fails to deliver | 2,124 | 1,148 | |||||
Fair value of hedging derivatives | 1,135 | 989 | |||||
Software | 1,130 | 1,117 | |||||
Prepaid expenses | 575 | 508 | |||||
Prepaid pension assets | 436 | 419 | |||||
Due from customers on acceptances | 421 | 376 | |||||
Other | 1,160 | 1,533 | |||||
Total other assets | $ | 21,704 | $ | 20,468 |
(a) | Includes Federal Reserve Bank stock of $436 million and $436 million, respectively, at cost. |
Seed capital and private equity investments valued using NAV | |||||||||||||||||
March 31, 2013 | Dec. 31, 2012 | ||||||||||||||||
(dollar amounts in millions) | Fair value | Unfunded commitments | Redemption frequency | Redemption notice period | Fair value | Unfunded commitments | Redemption frequency | Redemption notice period | |||||||||
Private equity funds (a) | $ | 88 | $ | 12 | N/A | N/A | $ | 99 | $ | 13 | N/A | N/A | |||||
Other funds (b) | 168 | 29 | Monthly-yearly | 3-45 days | 153 | 31 | Monthly-yearly | 3-45 days | |||||||||
Total | $ | 256 | $ | 41 | $ | 252 | $ | 44 |
(a) | Private equity funds primarily include numerous venture capital funds that invest in various sectors of the economy. Private equity funds do not have redemption rights. Distributions from such funds will be received as the underlying investments in the funds are liquidated. |
(b) | Other funds include various market neutral, leveraged loans, hedge funds, real estate and structured credit funds. Redemption notice periods vary by fund. |
Notes to Consolidated Financial Statements (continued) |
Net interest revenue | Quarter ended | ||||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||
Interest revenue | |||||||||
Non-margin loans | $ | 165 | $ | 166 | $ | 169 | |||
Margin loans | 38 | 42 | 42 | ||||||
Securities: | |||||||||
Taxable | 441 | 449 | 503 | ||||||
Exempt from federal income taxes | 24 | 25 | 15 | ||||||
Total securities | 465 | 474 | 518 | ||||||
Deposits in banks | 71 | 82 | 114 | ||||||
Deposits with the Federal Reserve and other central banks | 31 | 37 | 43 | ||||||
Federal funds sold and securities purchased under resale agreements | 10 | 9 | 9 | ||||||
Trading assets | 35 | 33 | 17 | ||||||
Total interest revenue | 815 | 843 | 912 | ||||||
Interest expense | |||||||||
Deposits | 30 | 32 | 43 | ||||||
Federal funds purchased and securities sold under repurchase agreements | (3 | ) | 2 | — | |||||
Trading liabilities | 9 | 7 | 4 | ||||||
Other borrowed funds | 2 | 4 | 5 | ||||||
Customer payables | 2 | 2 | 2 | ||||||
Long-term debt | 56 | 71 | 93 | ||||||
Total interest expense | 96 | 118 | 147 | ||||||
Net interest revenue | $ | 719 | $ | 725 | $ | 765 |
Net periodic benefit cost (credit) | Quarter ended | ||||||||||||||||||||||
March 31, 2013 | March 31, 2012 | ||||||||||||||||||||||
(in millions) | Domestic pension benefits | Foreign pension benefits | Health care benefits | Domestic pension benefits | Foreign pension benefits | Health care benefits | |||||||||||||||||
Service cost | $ | 16 | $ | 9 | $ | 1 | $ | 15 | $ | 8 | $ | 1 | |||||||||||
Interest cost | 43 | 10 | 2 | 42 | 9 | 3 | |||||||||||||||||
Expected return on assets | (73 | ) | (12 | ) | (2 | ) | (68 | ) | (12 | ) | (2 | ) | |||||||||||
Other | 47 | 4 | 1 | 38 | 3 | 3 | |||||||||||||||||
Net periodic benefit cost | $ | 33 | $ | 11 | $ | 2 | $ | 27 | $ | 8 | $ | 5 |
Notes to Consolidated Financial Statements (continued) |
Operational excellence initiatives 2011 – restructuring reserve activity | |||||||||
(in millions) | Severance | Other | Total | ||||||
Original restructuring charge | $ | 78 | $ | 29 | $ | 107 | |||
Net additional charges (net recovery/gain) | 55 | (57 | ) | (2 | ) | ||||
Utilization | (41 | ) | 28 | (13 | ) | ||||
Balance at Dec. 31, 2012 | $ | 92 | $ | — | $ | 92 | |||
Net additional charges | 5 | — | 5 | ||||||
Utilization | (13 | ) | — | (13 | ) | ||||
Balance at March 31, 2013 | $ | 84 | $ | — | $ | 84 |
Operational excellence initiatives 2011 – restructuring charge (recovery) by business | Total charges since inception | ||||||||
(in millions) | 1Q13 | 4Q12 | |||||||
Investment Management | $ | 1 | $ | 28 | $ | 49 | |||
Investment Services | — | 21 | 60 | ||||||
Other segment (including Business Partners) | 4 | (47 | ) | 1 | |||||
Total restructuring charge | $ | 5 | $ | 2 | $ | 110 |
Effective tax rate | Three months ended | |||
March 31, 2013 | March 31, 2012 | |||
Federal rate | 35.0 | % | 35.0 | % |
State and local income taxes, net of federal income tax benefit | 1.7 | 3.1 | ||
Tax-exempt income | (3.0 | ) | (2.1 | ) |
Foreign operations | (5.0 | ) | (4.4 | ) |
Tax credits | (5.5 | ) | (2.7 | ) |
Tax litigation | 105.6 | — | ||
Other - net | 0.5 | (0.2 | ) | |
Effective rate | 129.3 | % | 28.7 | % |
Notes to Consolidated Financial Statements (continued) |
Investments consolidated under ASC 810 and ASU 2009-17 at March 31, 2013 | |||||||||
(in millions) | Investment Management funds | Securitizations | Total consolidated investments | ||||||
Available-for-sale | $ | — | $ | 500 | $ | 500 | |||
Trading assets | 10,400 | — | 10,400 | ||||||
Other assets | 836 | — | 836 | ||||||
Total assets | $ | 11,236 | $ | 500 | $ | 11,736 | |||
Trading liabilities | 9,908 | — | 9,908 | ||||||
Other liabilities | 34 | 458 | 492 | ||||||
Total liabilities | $ | 9,942 | $ | 458 | $ | 10,400 | |||
Non-redeemable noncontrolling interests | $ | 806 | $ | — | $ | 806 |
Investments consolidated under ASC 810 and ASU 2009-17 at Dec. 31, 2012 | |||||||||
(in millions) | Investment Management funds | Securitizations | Total consolidated investments | ||||||
Available-for-sale | $ | — | $ | 499 | $ | 499 | |||
Trading assets | 10,961 | — | 10,961 | ||||||
Other assets | 520 | — | 520 | ||||||
Total assets | $ | 11,481 | $ | 499 | $ | 11,980 | |||
Trading liabilities | 10,152 | — | 10,152 | ||||||
Other liabilities | 29 | 461 | 490 | ||||||
Total liabilities | $ | 10,181 | $ | 461 | $ | 10,642 | |||
Non-redeemable noncontrolling interests | $ | 833 | $ | — | $ | 833 |
Non-consolidated VIEs at March 31, 2013 | Maximum loss exposure | ||||||||
(in millions) | Assets | Liabilities | |||||||
Other | $ | 116 | $ | — | $ | 116 |
Non-consolidated VIEs at Dec. 31, 2012 | Maximum loss exposure | ||||||||
(in millions) | Assets | Liabilities | |||||||
Other | $ | 100 | $ | — | $ | 100 |
Notes to Consolidated Financial Statements (continued) |
Preferred stock summary | Total shares issued and outstanding | Liquidation preference per share (in dollars) | Carrying value (a) | Per annum dividend rate | Dividends paid per share for the three months ended (in dollars) | |||||||||||||||||||
(dollars in millions, unless otherwise noted) | ||||||||||||||||||||||||
Series | Description | March 31, 2013 | Dec 31, 2012 | March 31, 2013 | Dec 31, 2012 | March 31, 2013 | Dec 31, 2012 | |||||||||||||||||
Series A | Noncumulative Perpetual Preferred Stock | 5,001 | 5,001 | $ | 100,000 | $ | 500 | $ | 500 | Greater of (i) three- month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000% | $ | 1,000.00 | $ | 1,011.11 | ||||||||||
Series C | Noncumulative Perpetual Preferred Stock | 5,825 | 5,825 | $ | 100,000 | $ | 568 | $ | 568 | 5.2 | % | $ | 1,300.00 | $ | 1,314.44 |
(a) | The carrying value of the Series C preferred stock is recorded net of issuance costs. |
Notes to Consolidated Financial Statements (continued) |
Components of other comprehensive income (loss) | |||||||||||||||||||||||||||||
Quarter ended | |||||||||||||||||||||||||||||
March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||||||||||||||||||||||||
(in millions) | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | Pre-tax amount | Tax (expense) benefit | After-tax amount | ||||||||||||||||||||
Foreign currency translation adjustments arising during the period | $ | (229 | ) | $ | (80 | ) | $ | (309 | ) | $ | 40 | $ | 14 | $ | 54 | $ | 129 | $ | 43 | $ | 172 | ||||||||
Unrealized gain (loss) on assets available-for-sale: | |||||||||||||||||||||||||||||
Unrealized gain (loss) arising during period | (9 | ) | 3 | (6 | ) | (33 | ) | (32 | ) | (65 | ) | 378 | (141 | ) | 237 | ||||||||||||||
Reclassification adjustment (a) | (48 | ) | 18 | (30 | ) | (50 | ) | 18 | (32 | ) | (40 | ) | 16 | (24 | ) | ||||||||||||||
Net unrealized gain (loss) on assets available-for-sale | (57 | ) | 21 | (36 | ) | (83 | ) | (14 | ) | (97 | ) | 338 | (125 | ) | 213 | ||||||||||||||
Defined benefit plans: | |||||||||||||||||||||||||||||
Prior service cost arising during the period | — | — | — | 98 | (41 | ) | 57 | — | — | — | |||||||||||||||||||
Net loss arising during the period | — | — | — | (298 | ) | 108 | (190 | ) | — | — | — | ||||||||||||||||||
Amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost (a) | 68 | (25 | ) | 43 | 42 | (17 | ) | 25 | 44 | (17 | ) | 27 | |||||||||||||||||
Total defined benefit plans | 68 | (25 | ) | 43 | (158 | ) | 50 | (108 | ) | 44 | (17 | ) | 27 | ||||||||||||||||
Unrealized gain (loss) on cash flow hedges: | |||||||||||||||||||||||||||||
Unrealized hedge gain (loss) arising during period | 185 | (76 | ) | 109 | 932 | (382 | ) | 550 | 342 | (141 | ) | 201 | |||||||||||||||||
Reclassification adjustment (a) | (184 | ) | 76 | (108 | ) | (936 | ) | 383 | (553 | ) | (336 | ) | 138 | (198 | ) | ||||||||||||||
Net unrealized gain (loss) on cash flow hedges | 1 | — | 1 | (4 | ) | 1 | (3 | ) | 6 | (3 | ) | 3 | |||||||||||||||||
Total other comprehensive income (loss) | $ | (217 | ) | $ | (84 | ) | $ | (301 | ) | $ | (205 | ) | $ | 51 | $ | (154 | ) | $ | 517 | $ | (102 | ) | $ | 415 |
(a) | The reclassification adjustment related to the unrealized gain (loss) on assets available-for-sale is recorded as net securities gains on the Consolidated Income Statement. The amortization of prior service credit, net loss and initial obligation included in net periodic benefit cost is recorded as staff expense on the Consolidated Income Statement. See Note 17 for the location of reclassification adjustment related to cash flow hedges on the Consolidated Income Statement. |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Assets measured at fair value on a recurring basis at March 31, 2013 | |||||||||||||||||||
(dollar amounts in millions) | Level 1 | Level 2 | Level 3 | Netting (a) | Total carrying value | ||||||||||||||
Available-for-sale securities: | |||||||||||||||||||
U.S. Treasury | $ | 17,792 | $ | — | $ | — | $ | — | $ | 17,792 | |||||||||
U.S. Government agencies | — | 1,060 | — | — | 1,060 | ||||||||||||||
Sovereign debt | 41 | 10,047 | — | — | 10,088 | ||||||||||||||
State and political subdivisions (b) | — | 6,206 | 44 | — | 6,250 | ||||||||||||||
Agency RMBS | — | 36,453 | — | — | 36,453 | ||||||||||||||
Alt-A RMBS | — | 285 | — | — | 285 | ||||||||||||||
Prime RMBS | — | 616 | — | — | 616 | ||||||||||||||
Subprime RMBS | — | 436 | — | — | 436 | ||||||||||||||
Other RMBS | — | 2,635 | — | — | 2,635 | ||||||||||||||
Commercial MBS | — | 2,940 | — | — | 2,940 | ||||||||||||||
Asset-backed CLOs | — | 1,456 | — | — | 1,456 | ||||||||||||||
Other asset-backed securities | — | 2,026 | — | — | 2,026 | ||||||||||||||
Equity securities | 28 | — | — | — | 28 | ||||||||||||||
Money market funds (b) | 2,457 | — | — | — | 2,457 | ||||||||||||||
Corporate bonds | — | 1,572 | — | — | 1,572 | ||||||||||||||
Other debt securities | — | 2,311 | — | — | 2,311 | ||||||||||||||
Foreign covered bonds | 2,722 | 668 | — | — | 3,390 | ||||||||||||||
Alt-A RMBS (c) | — | 1,968 | — | — | 1,968 | ||||||||||||||
Prime RMBS (c) | — | 981 | — | — | 981 | ||||||||||||||
Subprime RMBS (c) | — | 134 | — | — | 134 | ||||||||||||||
Total available-for-sale | 23,040 | 71,794 | 44 | — | 94,878 | ||||||||||||||
Trading assets: | |||||||||||||||||||
Debt and equity instruments (b) | 2,710 | 5,227 | 11 | — | 7,948 | ||||||||||||||
Derivative assets not designated as hedging: | |||||||||||||||||||
Interest rate | 2 | 19,877 | 10 | (17,877 | ) | 2,012 | |||||||||||||
Foreign exchange | 4,028 | 212 | 1 | (2,239 | ) | 2,002 | |||||||||||||
Equity | 112 | 283 | 31 | (163 | ) | 263 | |||||||||||||
Total derivative assets not designated as hedging | 4,142 | 20,372 | 42 | (20,279 | ) | 4,277 | |||||||||||||
Total trading assets | 6,852 | 25,599 | 53 | (20,279 | ) | 12,225 | |||||||||||||
Other assets: | |||||||||||||||||||
Derivative assets designated as hedging: | |||||||||||||||||||
Interest rate | — | 897 | — | — | 897 | ||||||||||||||
Foreign exchange | 238 | — | — | — | 238 | ||||||||||||||
Total other assets - derivative assets | 238 | 897 | — | — | 1,135 | ||||||||||||||
Other assets (d) | 112 | 101 | 112 | — | 325 | ||||||||||||||
Total other assets | 350 | 998 | 112 | — | 1,460 | ||||||||||||||
Subtotal assets of operations at fair value | 30,242 | 98,391 | 209 | (20,279 | ) | 108,563 | |||||||||||||
Percentage of assets prior to netting | 24 | % | 76 | % | — | % | |||||||||||||
Assets of consolidated investment management funds: | |||||||||||||||||||
Trading assets | 17 | 10,339 | 44 | — | 10,400 | ||||||||||||||
Other assets | 691 | 145 | — | — | 836 | ||||||||||||||
Total assets of consolidated investment management funds | 708 | 10,484 | 44 | — | 11,236 | ||||||||||||||
Total assets | $ | 30,950 | $ | 108,875 | $ | 253 | $ | (20,279 | ) | $ | 119,799 | ||||||||
Percentage of assets prior to netting | 22 | % | 78 | % | — | % |
Notes to Consolidated Financial Statements (continued) |
Liabilities measured at fair value on a recurring basis at March 31, 2013 | |||||||||||||||||||
(dollar amounts in millions) | Level 1 | Level 2 | Level 3 | Netting (a) | Total carrying value | ||||||||||||||
Trading liabilities: | |||||||||||||||||||
Debt and equity instruments | $ | 1,553 | $ | 962 | $ | — | $ | — | $ | 2,515 | |||||||||
Derivative liabilities not designated as hedging: | |||||||||||||||||||
Interest rate | — | 20,261 | 115 | (16,666 | ) | 3,710 | |||||||||||||
Foreign exchange | 3,931 | 145 | — | (1,913 | ) | 2,163 | |||||||||||||
Equity and other contracts | 46 | 441 | 55 | (163 | ) | 378 | |||||||||||||
Total derivative liabilities not designated as hedging | 3,977 | 20,847 | 170 | (18,742 | ) | 6,252 | |||||||||||||
Total trading liabilities | 5,530 | 21,809 | 170 | (18,742 | ) | 8,767 | |||||||||||||
Long-term debt (b) | — | 341 | — | — | 341 | ||||||||||||||
Other liabilities - derivative liabilities designated as hedging: | |||||||||||||||||||
Interest rate | — | 251 | — | — | 251 | ||||||||||||||
Foreign exchange | 59 | — | — | — | 59 | ||||||||||||||
Total other liabilities - derivative liabilities | 59 | 251 | — | — | 310 | ||||||||||||||
Subtotal liabilities at fair value | 5,589 | 22,401 | 170 | (18,742 | ) | 9,418 | |||||||||||||
Percentage of liabilities prior to netting | 20 | % | 80 | % | — | % | |||||||||||||
Liabilities of consolidated investment management funds: | |||||||||||||||||||
Trading liabilities | — | 9,908 | — | — | 9,908 | ||||||||||||||
Other liabilities | — | 34 | — | — | 34 | ||||||||||||||
Total liabilities of consolidated investment management funds | — | 9,942 | — | — | 9,942 | ||||||||||||||
Total liabilities | $ | 5,589 | $ | 32,343 | $ | 170 | $ | (18,742 | ) | $ | 19,360 | ||||||||
Percentage of liabilities prior to netting | 15 | % | 85 | % | — | % |
a) | ASC 815 permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities, and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product. |
(b) | Includes certain interests in securitizations. |
(c) | Previously included in the Grantor Trust. |
(d) | Includes private equity investments, seed capital and a brokerage account. |
Notes to Consolidated Financial Statements (continued) |
Assets measured at fair value on a recurring basis at Dec. 31, 2012 | |||||||||||||||||||
(dollar amounts in millions) | Level 1 | Level 2 | Level 3 | Netting (a) | Total carrying value | ||||||||||||||
Available-for-sale securities: | |||||||||||||||||||
U.S. Treasury | $ | 18,003 | $ | — | $ | — | $ | — | $ | 18,003 | |||||||||
U.S. Government agencies | — | 1,074 | — | — | 1,074 | ||||||||||||||
Sovereign debt | 41 | 9,383 | — | — | 9,424 | ||||||||||||||
State and political subdivisions (b) | — | 6,077 | 45 | — | 6,122 | ||||||||||||||
Agency RMBS | — | 34,193 | — | — | 34,193 | ||||||||||||||
Alt-A RMBS | — | 279 | — | — | 279 | ||||||||||||||
Prime RMBS | — | 728 | — | — | 728 | ||||||||||||||
Subprime RMBS | — | 452 | — | — | 452 | ||||||||||||||
Other RMBS | — | 2,794 | — | — | 2,794 | ||||||||||||||
Commercial MBS | — | 3,139 | — | — | 3,139 | ||||||||||||||
Asset-backed CLOs | — | 1,282 | — | — | 1,282 | ||||||||||||||
Other asset-backed securities | — | 2,131 | — | — | 2,131 | ||||||||||||||
Equity securities | 27 | — | — | — | 27 | ||||||||||||||
Money market funds (b) | 2,190 | — | — | — | 2,190 | ||||||||||||||
Corporate bonds | — | 1,585 | — | — | 1,585 | ||||||||||||||
Other debt securities | — | 2,368 | — | — | 2,368 | ||||||||||||||
Foreign covered bonds | 2,995 | 723 | — | — | 3,718 | ||||||||||||||
Alt-A RMBS (c) | — | 1,970 | — | — | 1,970 | ||||||||||||||
Prime RMBS (c) | — | 1,010 | — | — | 1,010 | ||||||||||||||
Subprime RMBS (c) | — | 130 | — | — | 130 | ||||||||||||||
Total available-for-sale | 23,256 | 69,318 | 45 | — | 92,619 | ||||||||||||||
Trading assets: | |||||||||||||||||||
Debt and equity instruments (b) | 912 | 4,116 | 48 | — | 5,076 | ||||||||||||||
Derivative assets not designated as hedging: | |||||||||||||||||||
Interest rate | 36 | 22,734 | 19 | (20,042 | ) | 2,747 | |||||||||||||
Foreign exchange | 3,364 | 148 | 1 | (2,171 | ) | 1,342 | |||||||||||||
Equity | 121 | 152 | 38 | (98 | ) | 213 | |||||||||||||
Total derivative assets not designated as hedging | 3,521 | 23,034 | 58 | (22,311 | ) | 4,302 | |||||||||||||
Total trading assets | 4,433 | 27,150 | 106 | (22,311 | ) | 9,378 | |||||||||||||
Other assets: | |||||||||||||||||||
Derivative assets designated as hedging: | |||||||||||||||||||
Interest rate | — | 928 | — | — | 928 | ||||||||||||||
Foreign exchange | 61 | — | — | — | 61 | ||||||||||||||
Total derivative assets | 61 | 928 | — | — | 989 | ||||||||||||||
Other assets (d) | 96 | 116 | 120 | — | 332 | ||||||||||||||
Total other assets | 157 | 1,044 | 120 | — | 1,321 | ||||||||||||||
Subtotal assets of operations at fair value | 27,846 | 97,512 | 271 | (22,311 | ) | 103,318 | |||||||||||||
Percentage of assets prior to netting | 22 | % | 78 | % | — | % | |||||||||||||
Assets of consolidated investment management funds: | |||||||||||||||||||
Trading assets | 182 | 10,735 | 44 | — | 10,961 | ||||||||||||||
Other assets | 390 | 130 | — | — | 520 | ||||||||||||||
Total assets of consolidated investment management funds | 572 | 10,865 | 44 | — | 11,481 | ||||||||||||||
Total assets | $ | 28,418 | $ | 108,377 | $ | 315 | $ | (22,311 | ) | $ | 114,799 | ||||||||
Percentage of assets prior to netting | 21 | % | 79 | % | — | % |
Notes to Consolidated Financial Statements (continued) |
Liabilities measured at fair value on a recurring basis at Dec. 31, 2012 | |||||||||||||||||||
(dollar amounts in millions) | Level 1 | Level 2 | Level 3 | Netting (a) | Total carrying value | ||||||||||||||
Trading liabilities: | |||||||||||||||||||
Debt and equity instruments | $ | 1,121 | $ | 659 | $ | — | $ | — | $ | 1,780 | |||||||||
Derivative liabilities not designated as hedging: | |||||||||||||||||||
Interest rate | — | 23,173 | 168 | (19,069 | ) | 4,272 | |||||||||||||
Foreign exchange | 3,535 | 97 | — | (1,823 | ) | 1,809 | |||||||||||||
Equity | 91 | 266 | 56 | (98 | ) | 315 | |||||||||||||
Total derivative liabilities not designated as hedging | 3,626 | 23,536 | 224 | (20,990 | ) | 6,396 | |||||||||||||
Total trading liabilities | 4,747 | 24,195 | 224 | (20,990 | ) | 8,176 | |||||||||||||
Long-term debt (b) | — | 345 | — | — | 345 | ||||||||||||||
Other liabilities - derivative liabilities designated as hedging: | |||||||||||||||||||
Interest rate | — | 343 | — | — | 343 | ||||||||||||||
Foreign exchange | 361 | — | — | — | 361 | ||||||||||||||
Total other liabilities - derivative liabilities | 361 | 343 | — | — | 704 | ||||||||||||||
Subtotal liabilities at fair value | 5,108 | 24,883 | 224 | (20,990 | ) | 9,225 | |||||||||||||
Percentage of liabilities prior to netting | 17 | % | 82 | % | 1 | % | |||||||||||||
Liabilities of consolidated investment management funds: | |||||||||||||||||||
Trading liabilities | — | 10,152 | — | — | 10,152 | ||||||||||||||
Other liabilities | — | 29 | — | — | 29 | ||||||||||||||
Total liabilities of consolidated investment management funds | — | 10,181 | — | — | 10,181 | ||||||||||||||
Total liabilities | $ | 5,108 | $ | 35,064 | $ | 224 | $ | (20,990 | ) | $ | 19,406 | ||||||||
Percentage of liabilities prior to netting | 13 | % | 87 | % | — | % |
(a) | ASC 815 permits the netting of derivative receivables and derivative payables under legally enforceable master netting agreements and permits the netting of cash collateral. Netting is applicable to derivatives not designated as hedging instruments included in trading assets or trading liabilities, and derivatives designated as hedging instruments included in other assets or other liabilities. Netting is allocated to the derivative products based on the net fair value of each product. |
(b) | Includes certain interests in securitizations. |
(c) | Previously included in the Grantor Trust. |
(d) | Includes private equity investments, seed capital and a brokerage account. |
Notes to Consolidated Financial Statements (continued) |
Details of certain items measured at fair value on a recurring basis | March 31, 2013 | Dec. 31, 2012 | |||||||||||||||||||||||
Total carrying value (a) | Ratings | Total carrying value (a) | Ratings | ||||||||||||||||||||||
AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | AAA/ AA- | A+/ A- | BBB+/ BBB- | BB+ and lower | ||||||||||||||||||
(dollar amounts in millions) | |||||||||||||||||||||||||
Alt-A RMBS, originated in: | |||||||||||||||||||||||||
2006-2007 | $ | 117 | — | % | — | % | — | % | 100 | % | $ | 111 | — | % | — | % | — | % | 100 | % | |||||
2005 | 109 | — | — | — | 100 | 107 | — | — | — | 100 | |||||||||||||||
2004 and earlier | 59 | 3 | 9 | 25 | 63 | 61 | 4 | 9 | 25 | 62 | |||||||||||||||
Total Alt-A RMBS | $ | 285 | 1 | % | 2 | % | 5 | % | 92 | % | $ | 279 | 1 | % | 2 | % | 6 | % | 91 | % | |||||
Prime RMBS, originated in: | |||||||||||||||||||||||||
2007 | $ | 102 | — | % | — | % | 45 | % | 55 | % | $ | 106 | — | % | — | % | 45 | % | 55 | % | |||||
2006 | 63 | — | — | — | 100 | 70 | — | — | — | 100 | |||||||||||||||
2005 | 160 | — | 43 | — | 57 | 215 | — | 33 | 7 | 60 | |||||||||||||||
2004 and earlier | 291 | 9 | 42 | 8 | 41 | 337 | 16 | 42 | 7 | 35 | |||||||||||||||
Total prime RMBS | $ | 616 | 5 | % | 31 | % | 11 | % | 53 | % | $ | 728 | 7 | % | 29 | % | 12 | % | 52 | % | |||||
Subprime RMBS, originated in: | |||||||||||||||||||||||||
2005 | $ | 111 | — | % | 8 | % | 37 | % | 55 | % | $ | 108 | 4 | % | 8 | % | 34 | % | 54 | % | |||||
2004 and earlier | 325 | 2 | 5 | 6 | 87 | 344 | 3 | 4 | 6 | 87 | |||||||||||||||
Total subprime RMBS | $ | 436 | 2 | % | 5 | % | 14 | % | 79 | % | $ | 452 | 3 | % | 5 | % | 13 | % | 79 | % | |||||
Commercial MBS - Domestic, originated in: | |||||||||||||||||||||||||
2009-2012 | $ | 322 | 93 | % | 7 | % | — | % | — | % | $ | 283 | 97 | % | 3 | % | — | % | — | % | |||||
2008 | 24 | 59 | 41 | — | — | 24 | 59 | 41 | — | — | |||||||||||||||
2007 | 682 | 78 | 16 | 6 | — | 707 | 78 | 16 | 6 | — | |||||||||||||||
2006 | 834 | 85 | 15 | — | — | 900 | 85 | 14 | 1 | — | |||||||||||||||
2005 | 618 | 98 | 1 | 1 | — | 640 | 98 | 1 | 1 | — | |||||||||||||||
2004 and earlier | 267 | 96 | 4 | — | — | 285 | 100 | — | — | — | |||||||||||||||
Total commercial MBS - Domestic | $ | 2,747 | 88 | % | 10 | % | 2 | % | — | % | $ | 2,839 | 89 | % | 9 | % | 2 | % | — | % | |||||
Foreign covered bonds: | |||||||||||||||||||||||||
Canada | $ | 869 | 100 | % | — | % | — | % | — | % | $ | 925 | 100 | % | — | % | — | % | — | % | |||||
United Kingdom | 732 | 100 | — | — | — | 756 | 100 | — | — | — | |||||||||||||||
Germany | 624 | 98 | 2 | — | — | 866 | 98 | 2 | — | — | |||||||||||||||
Netherlands | 282 | 100 | — | — | — | 360 | 100 | — | — | — | |||||||||||||||
Other | 883 | 100 | — | — | — | 811 | 100 | — | — | — | |||||||||||||||
Total foreign covered bonds | $ | 3,390 | 100 | % | — | % | — | % | — | % | $ | 3,718 | 100 | % | — | % | — | % | — | % | |||||
European floating rate notes - available-for-sale: | |||||||||||||||||||||||||
United Kingdom | $ | 1,657 | 84 | % | 16 | % | — | % | — | % | $ | 1,873 | 79 | % | 19 | % | 2 | % | — | % | |||||
Netherlands | 812 | 100 | — | — | — | 841 | 100 | — | — | — | |||||||||||||||
Ireland | 157 | 16 | — | — | 84 | 161 | 15 | — | — | 85 | |||||||||||||||
Italy | 116 | — | 100 | — | — | 125 | — | 100 | — | — | |||||||||||||||
Australia | 69 | 94 | 6 | — | — | 77 | 94 | 6 | — | — | |||||||||||||||
Germany | 63 | — | 3 | — | 97 | 68 | — | 9 | — | 91 | |||||||||||||||
Total European floating rate notes - available-for-sale | $ | 2,874 | 80 | % | 13 | % | — | % | 7 | % | $ | 3,145 | 77 | % | 15 | % | 2 | % | 6 | % | |||||
Sovereign debt: | |||||||||||||||||||||||||
United Kingdom | $ | 4,487 | 100 | % | — | % | — | % | — | % | $ | 4,771 | 100 | % | — | % | — | % | — | % | |||||
Germany | 2,204 | 100 | — | — | — | 1,646 | 100 | — | — | — | |||||||||||||||
Netherlands | 1,990 | 100 | — | — | — | 2,054 | 100 | — | — | — | |||||||||||||||
France | 1,352 | 100 | — | — | — | 897 | 100 | — | — | — | |||||||||||||||
Other | 55 | 100 | — | — | — | 56 | 100 | — | — | — | |||||||||||||||
Total sovereign debt | $ | 10,088 | 100 | % | — | % | — | % | — | % | $ | 9,424 | 100 | % | — | % | — | % | — | % | |||||
Alt-A RMBS (b), originated in: | |||||||||||||||||||||||||
2006-2007 | $ | 1,138 | — | % | — | % | — | % | 100 | % | $ | 1,128 | — | % | — | % | — | % | 100 | % | |||||
2005 | 615 | — | 4 | 1 | 95 | 622 | 4 | — | 1 | 95 | |||||||||||||||
2004 and earlier | 215 | — | — | 13 | 87 | 220 | — | 2 | 12 | 86 | |||||||||||||||
Total Alt-A RMBS (b) | $ | 1,968 | — | % | 1 | % | 2 | % | 97 | % | $ | 1,970 | 1 | % | — | % | 2 | % | 97 | % | |||||
Prime RMBS (b), originated in: | |||||||||||||||||||||||||
2006-2007 | $ | 586 | — | % | — | % | — | % | 100 | % | $ | 601 | — | % | — | % | — | % | 100 | % | |||||
2005 | 366 | — | 1 | 1 | 98 | 378 | — | 1 | 2 | 97 | |||||||||||||||
2004 and earlier | 29 | — | 7 | 24 | 69 | 31 | — | 8 | 24 | 68 | |||||||||||||||
Total prime RMBS (b) | $ | 981 | — | % | — | % | 1 | % | 99 | % | $ | 1,010 | — | % | 1 | % | 1 | % | 98 | % | |||||
Subprime RMBS (b), originated in: | |||||||||||||||||||||||||
2005-2007 | $ | 98 | — | % | — | % | — | % | 100 | % | $ | 94 | — | % | — | % | — | % | 100 | % | |||||
2004 and earlier | 36 | 1 | 5 | 37 | 57 | 36 | 5 | — | 36 | 59 | |||||||||||||||
Total subprime RMBS (b) | $ | 134 | — | % | 1 | % | 10 | % | 89 | % | $ | 130 | 2 | % | — | % | 10 | % | 88 | % |
(a) | At March 31, 2013 and Dec. 31, 2012, foreign covered bonds were included in Level 1 and Level 2 in the valuation hierarchy. All other assets in the table are Level 2 assets in the valuation hierarchy. |
(b) | Previously included in the Grantor Trust. |
Notes to Consolidated Financial Statements (continued) |
Fair value measurements for assets using significant unobservable inputs for the three months ended March 31, 2013 | |||||||||||||||||||||||
Available-for-sale securities | Trading assets | Assets of consolidated management funds | |||||||||||||||||||||
(in millions) | State and political subdivisions | Debt and equity instruments | Derivative assets | (a) | Other assets | Total assets of operations | |||||||||||||||||
Fair value at Dec. 31, 2012 | $ | 45 | $ | 48 | $ | 58 | $ | 120 | $ | 271 | 44 | ||||||||||||
Transfers out of Level 3 | — | — | (5 | ) | — | (5 | ) | — | |||||||||||||||
Total gains or (losses) for the period: | |||||||||||||||||||||||
Included in earnings (or changes in net assets) | (1 | ) | (b) | 3 | (c) | (11 | ) | (c) | (5 | ) | (d) | (14 | ) | — | (e) | ||||||||
Purchases, sales and settlements: | |||||||||||||||||||||||
Purchases | — | — | — | 3 | 3 | — | |||||||||||||||||
Sales | — | (40 | ) | — | (6 | ) | (46 | ) | — | ||||||||||||||
Fair value at March 31, 2013 | $ | 44 | $ | 11 | $ | 42 | $ | 112 | $ | 209 | $ | 44 | |||||||||||
Change in unrealized gains or (losses) for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period | $ | — | $ | (11 | ) | $ | (2 | ) | $ | (13 | ) | $ | — |
(a) | Derivative assets are reported on a gross basis. |
(b) | Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses). |
(c) | Reported in foreign exchange and other trading revenue. |
(d) | Reported in investment and other income. |
(e) | Reported in income from consolidated investment management funds. |
Fair value measurements for liabilities using significant unobservable inputs for the three months ended March 31, 2013 | |||||||
Trading liabilities | Total liabilities | ||||||
(in millions) | Derivative liabilities | (a) | |||||
Fair value at Dec. 31, 2012 | $ | 224 | $ | 224 | |||
Total (gains) or losses for the period: | |||||||
Included in earnings (or changes in net liabilities) | (56 | ) | (b) | (56 | ) | ||
Settlements | 2 | 2 | |||||
Fair value at March 31, 2013 | $ | 170 | $ | 170 | |||
Change in unrealized (gains) or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period | $ | (27 | ) | $ | (27 | ) |
(a) | Derivative liabilities are reported on a gross basis. |
(b) | Reported in foreign exchange and other trading revenue. |
Notes to Consolidated Financial Statements (continued) |
Fair value measurements for assets using significant unobservable inputs for the three months ended March 31, 2012 | ||||||||||||||||||||||||
Available-for-sale securities | Trading assets | |||||||||||||||||||||||
(in millions) | State and political subdivisions | Other debt securities | Debt and equity instruments | Derivative assets | (a) | Other assets | Total assets | |||||||||||||||||
Fair value at Dec. 31, 2011 | $ | 45 | $ | 3 | $ | 63 | $ | 97 | $ | 157 | $ | 365 | ||||||||||||
Total gains or (losses) for the period: | ||||||||||||||||||||||||
Included in earnings (or changes in net assets) | — | (b) | (3 | ) | (b) | (3 | ) | (c) | (25 | ) | (c) | 3 | (d) | (28 | ) | |||||||||
Purchases, sales and settlements: | ||||||||||||||||||||||||
Purchases | — | — | — | — | 3 | 3 | ||||||||||||||||||
Sales | — | — | (2 | ) | — | (4 | ) | (6 | ) | |||||||||||||||
Settlements | (2 | ) | — | — | — | (8 | ) | (10 | ) | |||||||||||||||
Fair value at March 31, 2012 | $ | 43 | $ | — | $ | 58 | $ | 72 | $ | 151 | $ | 324 | ||||||||||||
Change in unrealized gains or (losses) for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period | (3 | ) | (25 | ) | — | (28 | ) |
(a) | Derivative assets are reported on a gross basis. |
(b) | Realized gains (losses) are reported in securities gains (losses). Unrealized gains (losses) are reported in accumulated other comprehensive income (loss) except for the credit portion of OTTI losses which are recorded in securities gains (losses). |
(c) | Reported in foreign exchange and other trading revenue. |
(d) | Reported in investment and other income. |
Fair value measurements for liabilities using significant unobservable inputs for the year ended March 31, 2012 | |||||||
Trading liabilities | Total liabilities | ||||||
(in millions) | Derivative liabilities | (a) | |||||
Fair value at Dec. 31, 2011 | $ | 314 | $ | 314 | |||
Total (gains) or losses for the period: | |||||||
Included in earnings (or changes in net liabilities) | (68 | ) | (b) | (68 | ) | ||
Fair value at March 31, 2012 | $ | 246 | $ | 246 | |||
Change in unrealized (gains) or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period | $ | (51 | ) | $ | (51 | ) |
(a) | Derivative liabilities are reported on a gross basis. |
(b) | Reported in foreign exchange and other trading revenue. |
Assets measured at fair value on a nonrecurring basis at March 31, 2013 | Total carrying value | ||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | ||||||||||||
Loans (a) | $ | — | $ | 178 | $ | 21 | $ | 199 | |||||||
Other assets (b) | — | 52 | — | 52 | |||||||||||
Total assets at fair value on a nonrecurring basis | $ | — | $ | 230 | $ | 21 | $ | 251 |
Notes to Consolidated Financial Statements (continued) |
Assets measured at fair value on a nonrecurring basis at Dec. 31, 2012 | Total carrying value | ||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | ||||||||||||
Loans (a) | $ | — | $ | 183 | $ | 23 | $ | 206 | |||||||
Other assets (b) | — | 79 | — | 79 | |||||||||||
Total assets at fair value on a nonrecurring basis | $ | — | $ | 262 | $ | 23 | $ | 285 |
(a) | During the quarters ended March 31, 2013 and Dec. 31, 2012, the fair value of these loans was reduced $2 million and $2 million, based on the fair value of the underlying collateral as allowed by ASC 310, Accounting by Creditors for Impairment of a loan, with an offset to the allowance for credit losses. |
(b) | Includes other assets received in satisfaction of debt and loans held for sale. Loans held for sale are carried on the balance sheet at the lower of cost or market value. |
Quantitative information about Level 3 fair value measurements of assets | |||||||
(dollars in millions) | Fair value at March 31, 2013 | Valuation techniques | Unobservable input | Range | |||
Measured on a recurring basis: | |||||||
Available-for-sale securities: | |||||||
State and political subdivisions | $ | 44 | Discounted cash flow | Expected credit loss | 6%-37% | ||
Trading assets: | |||||||
Debt and equity instruments: | |||||||
Distressed debt | 11 | Discounted cash flow | Expected maturity | 1-15 years | |||
Credit spreads | 200-1,000 bps | ||||||
Derivative assets: | |||||||
Interest rate: | |||||||
Structured foreign exchange swaptions | 10 | Option pricing model (a) | Correlation risk | 0%-25% | |||
Long-term foreign exchange volatility | 11%-16% | ||||||
Foreign exchange contracts: | |||||||
Long-term foreign exchange options | 1 | Option pricing model (a) | Long-term foreign exchange volatility | 18% | |||
Equity: | |||||||
Equity options | 31 | Option pricing model (a) | Long-term equity volatility | 23%-28% | |||
Measured on a nonrecurring basis: | |||||||
Loans | 21 | Discounted cash flows | Timing of sale | 0-12 months | |||
Cap rate | 8% | ||||||
Cost to complete/sell | 0%-30% |
Quantitative information about Level 3 fair value measurements of liabilities | |||||||
(dollars in millions) | Fair value at March 31, 2013 | Valuation techniques | Unobservable input | Range | |||
Measured on a recurring basis: | |||||||
Trading liabilities: | |||||||
Derivative liabilities: | |||||||
Interest rate: | |||||||
Structured foreign exchange swaptions | $ | 115 | Option pricing model (a) | Correlation risk | 0%-25% | ||
Long-term foreign exchange volatility | 11%-16% | ||||||
Equity: | |||||||
Equity options | 55 | Option pricing model (a) | Long-term equity volatility | 22%-28% |
(a) | The option pricing model uses market inputs such as foreign currency exchange rates, interest rates and volatility to calculate the fair value of the option. |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Summary of financial instruments | March 31, 2013 | ||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying amount | ||||||||||||
Assets: | |||||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | — | $ | 78,125 | $ | — | $ | 78,125 | $ | 78,125 | |||||||
Interest-bearing deposits with banks | — | 40,914 | — | 40,914 | 40,888 | ||||||||||||
Federal funds sold and securities purchased under resale agreements | — | 7,004 | — | 7,004 | 7,004 | ||||||||||||
Securities held-to-maturity | 2,277 | 9,568 | — | 11,845 | 11,678 | ||||||||||||
Loans | — | 46,800 | — | 46,800 | 46,667 | ||||||||||||
Other financial assets | 4,440 | 1,060 | — | 5,500 | 5,500 | ||||||||||||
Total | $ | 6,717 | $ | 183,471 | $ | — | $ | 190,188 | $ | 189,862 | |||||||
Liabilities: | |||||||||||||||||
Noninterest-bearing deposits | $ | — | $ | 80,915 | $ | — | $ | 80,915 | $ | 80,915 | |||||||
Interest-bearing deposits | — | 158,638 | — | 158,638 | 158,757 | ||||||||||||
Federal funds purchased and securities sold under repurchase agreements | — | 8,602 | — | 8,602 | 8,602 | ||||||||||||
Payables to customers and broker-dealers | — | 14,986 | — | 14,986 | 14,986 | ||||||||||||
Borrowings | — | 1,033 | — | 1,033 | 1,033 | ||||||||||||
Long-term debt | — | 20,360 | — | 20,360 | 19,513 | ||||||||||||
Total | $ | — | $ | 284,534 | $ | — | $ | 284,534 | $ | 283,806 |
Summary of financial instruments | Dec. 31, 2012 | ||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying amount | ||||||||||||
Assets: | |||||||||||||||||
Interest-bearing deposits with the Federal Reserve and other central banks | $ | — | $ | 90,110 | $ | — | $ | 90,110 | $ | 90,110 | |||||||
Interest-bearing deposits with banks | — | 43,936 | — | 43,936 | 43,910 | ||||||||||||
Federal funds sold and securities purchased under resale agreements | — | 6,593 | — | 6,593 | 6,593 | ||||||||||||
Securities held-to-maturity | 1,070 | 7,319 | — | 8,389 | 8,205 | ||||||||||||
Loans | — | 44,031 | — | 44,031 | 44,010 | ||||||||||||
Other financial assets | 4,727 | 1,115 | — | 5,842 | 5,842 | ||||||||||||
Total | $ | 5,797 | $ | 193,104 | $ | — | $ | 198,901 | $ | 198,670 | |||||||
Liabilities: | |||||||||||||||||
Noninterest-bearing deposits | $ | — | $ | 93,019 | $ | — | $ | 93,019 | $ | 93,019 | |||||||
Interest-bearing deposits | — | 153,030 | — | 153,030 | 153,076 | ||||||||||||
Federal funds purchased and securities sold under repurchase agreements | — | 7,427 | — | 7,427 | 7,427 | ||||||||||||
Payables to customers and broker-dealers | — | 16,095 | — | 16,095 | 16,095 | ||||||||||||
Borrowings | — | 1,883 | — | 1,883 | 1,883 | ||||||||||||
Long-term debt | — | 19,397 | — | 19,397 | 18,530 | ||||||||||||
Total | $ | — | $ | 290,851 | $ | — | $ | 290,851 | $ | 290,030 |
Notes to Consolidated Financial Statements (continued) |
Hedged financial instruments | Carrying amount | Notional amount of hedge | Unrealized | ||||||||||||
(in millions) | Gain | (Loss) | |||||||||||||
At March 31, 2013: | |||||||||||||||
Interest-bearing deposits with banks | $ | 6,932 | $ | 6,932 | $ | 88 | $ | (27 | ) | ||||||
Securities available-for-sale | 6,152 | 6,088 | 101 | (246 | ) | ||||||||||
Deposits | 10 | 10 | 1 | — | |||||||||||
Long-term debt | 15,088 | 14,414 | 795 | (5 | ) | ||||||||||
At Dec. 31, 2012: | |||||||||||||||
Interest-bearing deposits with banks | $ | 11,328 | $ | 11,328 | $ | 38 | $ | (224 | ) | ||||||
Securities available-for-sale | 5,597 | 5,355 | 12 | (339 | ) | ||||||||||
Deposits | 10 | 10 | 1 | — | |||||||||||
Long-term debt | 15,100 | 14,314 | 911 | (4 | ) |
Assets and liabilities of consolidated investment management funds, at fair value | ||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | ||||
Assets of consolidated investment management funds: | ||||||
Trading assets | $ | 10,400 | $ | 10,961 | ||
Other assets | 836 | 520 | ||||
Total assets of consolidated investment management funds | $ | 11,236 | $ | 11,481 | ||
Liabilities of consolidated investment management funds: | ||||||
Trading liabilities | $ | 9,908 | $ | 10,152 | ||
Other liabilities | 34 | 29 | ||||
Total liabilities of consolidated investment management funds | $ | 9,942 | $ | 10,181 |
Foreign exchange and other trading revenue | |||||||
Quarter ended | |||||||
(in millions) | March 31, 2013 | March 31, 2012 | |||||
Changes in the fair value of long-term debt (a) | $ | 4 | $ | 6 |
(a) | The change in fair value of the long-term debt is approximately offset by an economic hedge included in trading. |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Ineffectiveness | Three months ended | ||||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | ||||||
Fair value hedges of securities | 4.6 | (1.6 | ) | 3.4 | |||||
Fair value hedges of deposits and long-term debt | (0.3 | ) | (7.5 | ) | (3.5 | ) | |||
Cash flow hedges | 0.1 | — | 0.1 | ||||||
Other (a) | (0.1 | ) | 1.7 | (0.1 | ) | ||||
Total | $ | 4.3 | $ | (7.4 | ) | $ | (0.1 | ) |
(a) | Includes ineffectiveness recorded on foreign exchange hedges. |
Impact of derivative instruments on the balance sheet | Notional value | Asset derivatives fair value | Liability derivatives fair value | |||||||||||||||||
(in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2013 | Dec. 31, 2012 | March 31, 2013 | Dec. 31, 2012 | ||||||||||||||
Derivatives designated as hedging instruments (a): | ||||||||||||||||||||
Interest rate contracts | $ | 20,512 | $ | 19,679 | $ | 897 | $ | 928 | $ | 251 | $ | 343 | ||||||||
Foreign exchange contracts | 12,303 | 16,805 | 238 | 61 | 59 | 361 | ||||||||||||||
Total derivatives designated as hedging instruments | $ | 1,135 | $ | 989 | $ | 310 | $ | 704 | ||||||||||||
Derivatives not designated as hedging instruments (b): | ||||||||||||||||||||
Interest rate contracts | $ | 824,106 | $ | 796,155 | $ | 19,889 | $ | 22,789 | $ | 20,376 | $ | 23,341 | ||||||||
Foreign exchange contracts | 407,468 | 359,204 | 4,241 | 3,513 | 4,076 | 3,632 | ||||||||||||||
Equity contracts | 10,976 | 11,375 | 426 | 311 | 541 | 413 | ||||||||||||||
Credit contracts | 151 | 166 | — | — | 1 | — | ||||||||||||||
Total derivatives not designated as hedging instruments | $ | 24,556 | $ | 26,613 | $ | 24,994 | $ | 27,386 | ||||||||||||
Total derivatives fair value (c) | $ | 25,691 | $ | 27,602 | $ | 25,304 | $ | 28,090 | ||||||||||||
Effect of master netting agreements (d) | (20,279 | ) | (22,311 | ) | (18,742 | ) | (20,990 | ) | ||||||||||||
Fair value after effect of master netting agreements | $ | 5,412 | $ | 5,291 | $ | 6,562 | $ | 7,100 |
(a) | The fair value of asset derivatives and liability derivatives designated as hedging instruments is recorded as other assets and other liabilities, respectively, on the balance sheet. |
(b) | The fair value of asset derivatives and liability derivatives not designated as hedging instruments is recorded as trading assets and trading liabilities, respectively, on the balance sheet. |
(c) | Fair values are on a gross basis, before consideration of master netting agreements, as required by ASC 815. |
(d) | Master netting agreements are reported net of cash collateral received and paid of $1,709 million and $172 million, respectively, at March 31, 2013, and $1,452 million and $131 million, respectively, at Dec. 31, 2012. |
Notes to Consolidated Financial Statements (continued) |
Impact of derivative instruments on the income statement (in millions) | |||||||||||||||||||||||||||
Derivatives in fair value hedging relationships | Location of gain or (loss) recognized in income on derivatives | Gain or (loss) recognized in income on derivatives | Location of gain or(loss) recognized in income on hedged item | Gain or (loss) recognized in hedged item | |||||||||||||||||||||||
1Q13 | 4Q12 | 1Q12 | 1Q13 | 4Q12 | 1Q12 | ||||||||||||||||||||||
Interest rate contracts | Net interest revenue | $ | 75 | $ | 39 | $ | 127 | Net interest revenue | $ | (71 | ) | $ | (48 | ) | $ | (127 | ) |
Derivatives in cash flow hedging relationships | Gain or (loss) recognized in accumulated OCI on derivatives(effective portion) | Location of gain or (loss) reclassified from accumulated OCI into income (effective portion) | Gain or (loss) reclassified from accumulated OCI into income (effective portion) | Location of gain or (loss) recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing) | Gain or (loss) recognized in income on derivatives (ineffectiveness portion and amount excluded from effectiveness testing) | ||||||||||||||||||||||||||||
1Q13 | 4Q12 | 1Q12 | 1Q13 | 4Q12 | 1Q12 | 1Q13 | 4Q12 | 1Q12 | |||||||||||||||||||||||||
FX contracts | $ | 2 | $ | (3 | ) | $ | (2 | ) | Net interest revenue | $ | 1 | $ | (4 | ) | $ | (5 | ) | Net interest revenue | $ | — | $ | — | $ | — | |||||||||
FX contracts | 2 | (3 | ) | 3 | Other revenue | — | 1 | 1 | Other revenue | 0.1 | — | 0.1 | |||||||||||||||||||||
FX contracts | 183 | 939 | 342 | Trading revenue | 183 | 939 | 342 | Trading revenue | — | — | — | ||||||||||||||||||||||
FX contracts | (2 | ) | (1 | ) | (1 | ) | Salary expense | — | — | (2 | ) | Salary expense | — | — | — | ||||||||||||||||||
Total | $ | 185 | $ | 932 | $ | 342 | $ | 184 | $ | 936 | $ | 336 | $ | 0.1 | $ | — | $ | 0.1 |
Derivatives in net investment hedging relationships | Gain or (loss) recognized in accumulated OCI on derivatives (effective portion) | Location of gain or (loss) reclassified from accumulated OCI into income (effective portion) | Gain or (loss) reclassified from accumulated OCI into income (effective portion) | Location of gain or (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing) | Gain or (loss) recognized in income on derivatives (ineffectiveness portion and amount excluded from effectiveness testing) | ||||||||||||||||||||||||||||
1Q13 | 4Q12 | 1Q12 | 1Q13 | 4Q12 | 1Q12 | 1Q13 | 4Q12 | 1Q12 | |||||||||||||||||||||||||
FX contracts | $ | 167 | $ | (19 | ) | $ | (139 | ) | Net interest revenue | $ | — | $ | — | $ | — | Other revenue | $ | (0.1 | ) | $ | 1.7 | $ | (0.1 | ) |
Foreign exchange and other trading revenue | |||||||||||
(in millions) | 1Q13 | 4Q12 | 1Q12 | ||||||||
Foreign exchange | $ | 149 | $ | 106 | $ | 136 | |||||
Other trading revenue: | |||||||||||
Fixed income | 8 | 25 | 47 | ||||||||
Equity/other | 4 | 8 | 8 | ||||||||
Total other trading revenue | 12 | 33 | 55 | ||||||||
Total | $ | 161 | $ | 139 | $ | 191 |
Notes to Consolidated Financial Statements (continued) |
If The Bank of New York Mellon’s rating was changed to (Moody’s/S&P) | Potential close-out exposures (fair value) (a) | |||
A3/A- | $ | 824 | million | |
Baa2/BBB | $ | 993 | million | |
Bal/BB+ | $ | 2,010 | million |
(a) | The change between rating categories is incremental, not cumulative. |
Notes to Consolidated Financial Statements (continued) |
Offsetting of financial assets and derivative assets | |||||||||||||||||||||
March 31, 2013 | Dec. 31, 2012 | ||||||||||||||||||||
(in millions) | Gross assets recognized | Offset in the balance sheet | (a) | Net assets recognized | Gross assets recognized | Offset in the balance sheet | (a) | Net assets recognized | |||||||||||||
Derivatives subject to netting arrangements: | |||||||||||||||||||||
Interest rate contracts | $ | 19,366 | $ | 17,877 | $ | 1,489 | $ | 22,234 | $ | 20,042 | $ | 2,192 | |||||||||
Foreign exchange contracts | 4,248 | 2,239 | 2,009 | 3,255 | 2,171 | 1,084 | |||||||||||||||
Equity and other contracts | 320 | 163 | 157 | 264 | 98 | 166 | |||||||||||||||
Total derivatives subject to netting arrangements | 23,934 | 20,279 | 3,655 | 25,753 | 22,311 | 3,442 | |||||||||||||||
Total derivatives not subject to netting arrangements | 1,757 | — | 1,757 | 1,849 | — | 1,849 | |||||||||||||||
Total derivatives | 25,691 | 20,279 | 5,412 | 27,602 | 22,311 | 5,291 | |||||||||||||||
Reverse repurchase agreements | 1,085 | 269 | (b) | 816 | 1,477 | 137 | (b) | 1,340 | |||||||||||||
Total | $ | 26,776 | $ | 20,548 | $ | 6,228 | $ | 29,079 | $ | 22,448 | $ | 6,631 |
(a) | Includes the effect of netting agreements and net cash collateral paid. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions. |
(b) | Offsetting of reverse repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system. |
Offsetting of financial liabilities and derivative liabilities | |||||||||||||||||||||
March 31, 2013 | Dec. 31, 2012 | ||||||||||||||||||||
(in millions) | Gross liabilities recognized | Offset in the balance sheet | (a) | Net liabilities recognized | Gross liabilities recognized | Offset in the balance sheet | (a) | Net liabilities recognized | |||||||||||||
Derivatives subject to netting arrangements: | |||||||||||||||||||||
Interest rate contracts | $ | 20,313 | $ | 16,666 | $ | 3,647 | $ | 23,274 | $ | 19,069 | $ | 4,205 | |||||||||
Foreign exchange contracts | 4,115 | 1,913 | 2,202 | 3,423 | 1,823 | 1,600 | |||||||||||||||
Equity and other contracts | 380 | 163 | 217 | 310 | 98 | 212 | |||||||||||||||
Total derivatives subject to netting arrangements | 24,808 | 18,742 | 6,066 | 27,007 | 20,990 | 6,017 | |||||||||||||||
Total derivatives not subject to netting arrangements | 496 | — | 496 | 1,083 | — | 1,083 | |||||||||||||||
Total derivatives | 25,304 | 18,742 | 6,562 | 28,090 | 20,990 | 7,100 | |||||||||||||||
Repurchase agreements | 2,308 | 269 | (b) | 2,039 | 2,443 | 137 | (b) | 2,306 | |||||||||||||
Total | $ | 27,612 | $ | 19,011 | $ | 8,601 | $ | 30,533 | $ | 21,127 | $ | 9,406 |
(a) | Includes the effect of netting agreements and net cash collateral received. The offset related to the over-the-counter derivatives was allocated to the various types of derivatives based on the net positions. |
(b) | Offsetting of repurchase agreements relates to our involvement in the Fixed Income Clearing Corporation, where we settle government securities transactions on a net basis for payment and delivery through the Fedwire system. |
Notes to Consolidated Financial Statements (continued) |
Financial institutions portfolio exposure (in billions) | March 31, 2013 | ||||||||
Loans | Unfunded commitments | Total exposure | |||||||
Banks | $ | 8.6 | $ | 1.9 | $ | 10.5 | |||
Securities industry | 3.6 | 1.9 | 5.5 | ||||||
Asset managers | 1.3 | 3.5 | 4.8 | ||||||
Insurance | 0.2 | 4.1 | 4.3 | ||||||
Government | — | 3.0 | 3.0 | ||||||
Other | 0.1 | 1.1 | 1.2 | ||||||
Total | $ | 13.8 | $ | 15.5 | $ | 29.3 |
Commercial portfolio exposure (in billions) | March 31, 2013 | ||||||||
Loans | Unfunded commitments | Total exposure | |||||||
Services and other | $ | 0.5 | $ | 5.9 | $ | 6.4 | |||
Energy and utilities | 0.6 | 5.8 | 6.4 | ||||||
Manufacturing | 0.3 | 5.5 | 5.8 | ||||||
Media and telecom | 0.1 | 1.5 | 1.6 | ||||||
Total | $ | 1.5 | $ | 18.7 | $ | 20.2 |
Off-balance sheet credit risks | March 31, | Dec. 31, | |||||
(in millions) | 2013 | 2012 | |||||
Lending commitments (a) | $ | 31,522 | $ | 31,265 | |||
Standby letters of credit (b) | 7,129 | 7,167 | |||||
Commercial letters of credit | 156 | 219 | |||||
Securities lending indemnifications | 251,977 | 245,717 |
(a) | Net of participations totaling $612 million at March 31, 2013 and $350 million at Dec. 31, 2012. |
(b) | Net of participations totaling $1.0 billion at March 31, 2013 and $1.0 billion at Dec. 31, 2012. |
Standby letters of credit | March 31, | Dec. 31, | |||
2013 | 2012 | ||||
Investment grade | 91 | % | 93 | % | |
Noninvestment grade | 9 | % | 7 | % |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Notes to Consolidated Financial Statements (continued) |
Business | Primary types of revenue |
Investment Management | Investment management and performance fees from: Mutual funds Institutional clients Private clients High-net-worth individuals and families, endowments and foundations and related entities Distribution and servicing fees |
Investment Services | Asset servicing fees, including institutional trust and custody fees, broker-dealer services and securities lending Issuer services fees, including Corporate Trust and Depositary Receipts Clearing services fees, including broker-dealer services, registered investment advisor services and prime brokerage services Treasury services fees, including global payment services and working capital solutions Foreign exchange |
Other segment | Credit-related activities Leasing operations Corporate treasury activities Global markets and institutional banking services Business exits |
• | Revenue amounts reflect fee and other revenue generated by each business. Fee and other revenue transferred between businesses under |
• | Revenues and expenses associated with specific client bases are included in those businesses. For example, foreign exchange activity |
Notes to Consolidated Financial Statements (continued) |
• | Net interest revenue is allocated to businesses based on the yields on the assets and liabilities generated by each business. We employ a funds transfer pricing system that matches funds with the specific assets and liabilities of each business based on their interest sensitivity and maturity characteristics. |
• | Support and other indirect expenses are allocated to businesses based on internally-developed methodologies. |
• | Recurring FDIC expense is allocated to the businesses based on average deposits generated within each business. |
• | Litigation expense is generally recorded in the business in which the charge occurs. |
• | Management of the investment securities portfolio is a shared service contained in the |
• | Client deposits serve as the primary funding source for our investment securities portfolio. We typically allocate all interest revenue to the businesses generating the deposits. Accordingly, accretion related to the restructured investment securities portfolio has been included in the results of the businesses. |
• | M&I expenses and restructuring charges are corporate level items and are therefore recorded in the Other segment. |
• | Balance sheet assets and liabilities and their related income or expense are specifically assigned to each business. Businesses with a net liability position have been allocated assets. |
• | Goodwill and intangible assets are reflected within individual businesses. |
For the quarter ended March 31, 2013 (dollar amounts in millions) | Investment Management | Investment Services | Other | Consolidated | ||||||||||||
Fee and other revenue | $ | 894 | (a) | $ | 1,860 | $ | 124 | $ | 2,878 | (a) | ||||||
Net interest revenue | 62 | 653 | 4 | 719 | ||||||||||||
Total revenue | 956 | 2,513 | 128 | 3,597 | ||||||||||||
Provision for credit losses | — | — | (24 | ) | (24 | ) | ||||||||||
Noninterest expense | 745 | 1,828 | 255 | 2,828 | ||||||||||||
Income (loss) before taxes | $ | 211 | (a) | $ | 685 | $ | (103 | ) | $ | 793 | (a) | |||||
Pre-tax operating margin (b) | 22 | % | 27 | % | N/M | 22 | % | |||||||||
Average assets | $ | 38,743 | $ | 238,374 | $ | 56,547 | $ | 333,664 |
(a) | Total fee and other revenue includes income from consolidated investment management funds of $50 million, net of noncontrolling interests of $16 million, for a net impact of $34 million. Income before taxes includes noncontrolling interests of $16 million. |
(b) | Income before taxes divided by total revenue. |
For the quarter ended Dec. 31, 2012 (dollar amounts in millions) | Investment Management | Investment Services | Other | Consolidated | ||||||||||||
Fee and other revenue | $ | 933 | (a) | $ | 1,765 | $ | 183 | $ | 2,881 | (a) | ||||||
Net interest revenue | 55 | 591 | 79 | 725 | ||||||||||||
Total revenue | 988 | 2,356 | 262 | 3,606 | ||||||||||||
Provision for credit losses | — | — | (61 | ) | (61 | ) | ||||||||||
Noninterest expense | 762 | 1,830 | 233 | 2,825 | ||||||||||||
Income before taxes | $ | 226 | (a) | $ | 526 | $ | 90 | $ | 842 | (a) | ||||||
Pre-tax operating margin (b) | 23 | % | 22 | % | N/M | 23 | % | |||||||||
Average assets | $ | 37,750 | $ | 241,653 | $ | 56,592 | $ | 335,995 |
(a) | Total fee and other revenue includes income from consolidated investment management funds of $42 million, net of noncontrolling interests of $11 million, for a net impact of $31 million. Income before taxes includes noncontrolling interests of $11 million. |
(b) | Income before taxes divided by total revenue. |
Notes to Consolidated Financial Statements (continued) |
For the quarter ended March 31, 2012 (dollar amounts in millions) | Investment Management | Investment Services | Other | Consolidated | ||||||||||||
Fee and other revenue | $ | 852 | (a) | $ | 1,843 | $ | 175 | $ | 2,870 | (a) | ||||||
Net interest revenue | 55 | 648 | 62 | 765 | ||||||||||||
Total revenue | 907 | 2,491 | 237 | 3,635 | ||||||||||||
Provision for credit losses | — | 16 | (11 | ) | 5 | |||||||||||
Noninterest expense | 670 | 1,846 | 240 | 2,756 | ||||||||||||
Income before taxes | $ | 237 | (a) | $ | 629 | $ | 8 | $ | 874 | (a) | ||||||
Pre-tax operating margin (b) | 26 | % | 25 | % | N/M | 24 | % | |||||||||
Average assets | $ | 36,473 | $ | 212,737 | $ | 52,134 | $ | 301,344 |
(a) | Total fee and other revenue includes income from consolidated investment management funds of $43 million, net of noncontrolling interests of $11 million, for a net impact of $32 million. Income before taxes includes noncontrolling interests of $11 million. |
(b) | Income before taxes divided by total revenue. |
Noncash investing and financing transactions | Three months ended March 31, | ||||||
(in millions) | 2013 | 2012 | |||||
Transfers from loans to other assets for OREO | $ | 1 | $ | 3 | |||
Change in assets of consolidated VIEs | 245 | 262 | |||||
Change in liabilities of consolidated VIEs | 239 | 243 | |||||
Change in noncontrolling interests of consolidated VIEs | 27 | 39 | |||||
Held-to-maturity securities not settled | 2,608 | — |
Item 4. Controls and Procedures |
Forward-looking Statements |
Forward-looking Statements (continued) |
Part II - Other Information |
(c) | The following table discloses repurchases of our common stock made in the first quarter of 2013. All of the Company’s preferred stock outstanding has preference over the Company’s common stock with respect to the payment of dividends. |
Share repurchases during first quarter of 2013 | ||||||||||||||
(dollars in millions, except per share information; common shares in thousands) | Total shares repurchased | Average price per share | Total shares repurchased as part of a publicly announced plan | Maximum approximate dollar value of shares that may yet be purchased under the Board authorized plans or programs at March 31, 2013 | ||||||||||
January 2013 | 4,515 | $ | 26.93 | 4,500 | $ | 295 | ||||||||
February 2013 | 3,517 | 27.59 | 3,250 | 205 | ||||||||||
March 2013 | 1,176 | 28.75 | — | 1,350 | (b) | |||||||||
First quarter of 2013 | 9,208 | (a) | $ | 27.42 | (a) | 7,750 | $ | 1,350 | (b) |
(a) | Includes 1,458 shares repurchased at a purchase price of $41 million from employees, primarily in connection with the employees’ payment of taxes upon the vesting of restricted stock. The average price per share of open market purchases was $27.21. |
(b) | On March 13, 2012, in connection with the Federal Reserve’s non-objection to our 2012 capital plan, the Board of Directors authorized a stock purchase program providing for the repurchase of an aggregate of $1.16 billion of common stock. While there is no expiration date on the prior share repurchase authorization, BNY Mellon does not intend to use the prior authorization for any future share repurchases. On March 14, 2013, in connection with the Federal Reserve’s non-objection to our 2013 capital plan, the Board of Directors authorized a new stock purchase program providing for the repurchase of an aggregate of $1.35 billion of common stock beginning in the second quarter of 2013 and continuing through the first quarter of 2014. The share repurchase program may be executed through open market purchases or privately negotiated transactions at such prices, times and upon such other terms as may be determined from time to time. |
THE BANK OF NEW YORK MELLON CORPORATION | |
(Registrant) |
Date: May 9, 2013 | By: | /s/ John A. Park | |
John A. Park | |||
Corporate Controller | |||
(Duly Authorized Officer and | |||
Principal Accounting Officer of | |||
the Registrant) | |||
Index to Exhibits |
Exhibit No. | Description | Method of Filing | ||
2.1 | Amended and Restated Agreement and Plan of Merger, dated as of Dec. 3, 2006, as amended and restated as of Feb. 23, 2007, and as further amended and restated as of March 30, 2007, between The Bank of New York Company, Inc., Mellon Financial Corporation and The Bank of New York Mellon Corporation (the “Company”). | Previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File Nos. 000-52710 and 001-06152) as filed with the Commission on July 2, 2007, and incorporated herein by reference. | ||
2.2 | Stock Purchase Agreement, dated as of Feb. 1, 2010, by and between The PNC Financial Services Group, Inc. and The Bank of New York Mellon Corporation. | Previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on Feb. 3, 2010, and incorporated herein by reference. | ||
3.1 | Restated Certificate of Incorporation of The Bank of New York Mellon Corporation. | Previously filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File Nos. 000-52710 and 001-06152) as filed with the Commission on July 2, 2007, and incorporated herein by reference. | ||
3.2 | Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series A Noncumulative Preferred Stock dated June 15, 2007. | Previously filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 000-52710) as filed with the Commission on July 5, 2007, and incorporated herein by reference. | ||
3.3 | Certificate of Designations of The Bank of New York Mellon Corporation with respect to Series C Noncumulative Perpetual Preferred Stock dated Sept. 13, 2012. | Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form 8A12B (File No. 001-35651) as filed with the Commission on Sept. 14, 2012, and incorporated herein by reference. | ||
3.4 | Amended and Restated By-Laws of The Bank of New York Mellon Corporation, as amended and restated on Oct. 12, 2010. | Previously filed as Exhibit 3.2 to the Company’s Annual Report on Form 10-K (File No. 000-52710) for the year ended Dec. 31, 2010, as filed with the Commission on Feb. 28, 2011, and incorporated herein by reference. | ||
4.1 | None of the instruments defining the rights of holders of long-term debt of the Parent or any of its subsidiaries represented long-term debt in excess of 10% of the total assets of the Company as of March 31, 2013. The Company hereby agrees to furnish to the Commission, upon request, a copy of any such instrument. | N/A |
Index to Exhibits (continued) |
Exhibit No. | Description | Method of Filing | ||
12.1 | Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividend. | Filed herewith. | ||
31.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | ||
31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith. | ||
32.1 | Certification of the Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Furnished herewith. | ||
32.2 | Certification of the Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Furnished herewith. | ||
101.INS | XBRL Instance Document. | Filed herewith. | ||
101.SCH | XBRL Taxonomy Extension Schema Document. | Filed herewith. | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | Filed herewith. | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | Filed herewith. | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | Filed herewith. | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | Filed herewith. |
Quarter ended | ||||||||||||
(dollar amounts in millions) | March 31, 2013 | Dec. 31, 2012 | March 31, 2012 | |||||||||
Earnings | ||||||||||||
Income before income taxes | $ | 809 | $ | 853 | $ | 885 | ||||||
Net (income) attributable to noncontrolling interests | (16 | ) | (11 | ) | (12 | ) | ||||||
Income before income taxes attributable to shareholders of The Bank of New York Mellon Corporation | 793 | 842 | 873 | |||||||||
Fixed charges, excluding interest on deposits | 94 | 112 | 131 | |||||||||
Income before income taxes and fixed charges, excluding interest on deposits applicable to the shareholders of The Bank of New York Mellon Corporation | 887 | 954 | 1,004 | |||||||||
Interest on deposits | 30 | 32 | 43 | |||||||||
Income before income taxes and fixed charges, including interest on deposits applicable to shareholders of The Bank of New York Mellon Corporation | $ | 917 | $ | 986 | $ | 1,047 | ||||||
Fixed charges | ||||||||||||
Interest expense, excluding interest on deposits | $ | 66 | $ | 86 | $ | 104 | ||||||
One-third net rental expense (a) | 28 | 26 | 27 | |||||||||
Total fixed charges, excluding interest on deposits | 94 | 112 | 131 | |||||||||
Interest on deposits | 30 | 32 | 43 | |||||||||
Total fixed charges, including interests on deposits | $ | 124 | $ | 144 | $ | 174 | ||||||
Preferred stock dividends | $ | 13 | $ | 13 | $ | — | ||||||
Total fixed charges and preferred stock dividends, excluding interest on deposits | $ | 107 | $ | 125 | $ | 131 | ||||||
Total fixed charges and preferred stock dividends, including interest on deposits | $ | 137 | $ | 157 | $ | 174 | ||||||
Earnings to fixed charges ratios | ||||||||||||
Excluding interest on deposits | 9.44 | 8.52 | 7.66 | |||||||||
Including interest on deposits | 7.40 | 6.85 | 6.02 | |||||||||
Earnings to fixed charges and preferred stock dividends ratios | ||||||||||||
Excluding interest on deposits | 8.29 | 7.63 | 7.66 | |||||||||
Including interest on deposits | 6.69 | 6.28 | 6.02 |
(a) | The proportion deemed representative of the interest factor. |
1. | I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Gerald L. Hassell | |
Name: Gerald L. Hassell | |
Title: Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of The Bank of New York Mellon Corporation (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Thomas P. Gibbons | |
Name: Thomas P. Gibbons | |
Title: Chief Financial Officer |
Dated: May 9, 2013 | /s/ Gerald L. Hassell | |||
Name: | Gerald L. Hassell | |||
Title: | Chief Executive Officer |
Dated: May 9, 2013 | /s/ Thomas P. Gibbons | |||
Name: | Thomas P. Gibbons | |||
Title: | Chief Financial Officer |
Income Taxes (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
|
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate | The statutory federal income tax rate is reconciled to our effective income tax rate below:
|
Supplemental information to the Consolidated Statement of Cash Flows (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncash Investing and Financing Transactions that are Not Reflected in Consolidated Statement of Cash Flows | Noncash investing and financing transactions that, appropriately, are not reflected in the Consolidated Statement of Cash Flows are listed below.
|
Loans and asset quality- Credit Quality Indicators - Wealth Management Loans and Mortgages - Credit Risk Profile by Internally Assigned Grade (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 49,224 | $ 46,629 |
Wealth Management Loans Portfolio Segment | Investment grade
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,583 | 4,597 |
Wealth Management Loans Portfolio Segment | Noninvestment grade
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 121 | 125 |
Wealth Management Mortgages Portfolio Segment
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,287 | 4,142 |
Wealth management loans and mortgages
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 8,991 | $ 8,864 |
Securities-Projected Weighted-Average Default Rates and Loss Severities (Detail) (Recent Vintage)
|
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Alt-A
|
||
Gain (Loss) on Investments [Line Items] | ||
Default rate (percent) | 42.00% | 43.00% |
Severity (percent) | 57.00% | 57.00% |
Subprime RMBS
|
||
Gain (Loss) on Investments [Line Items] | ||
Default rate (percent) | 60.00% | 61.00% |
Severity (percent) | 72.00% | 72.00% |
Prime RMBS
|
||
Gain (Loss) on Investments [Line Items] | ||
Default rate (percent) | 24.00% | 24.00% |
Severity (percent) | 43.00% | 43.00% |
Other Assets-Seed Capital and Private Equity Investments Valued Using Net Asset Value (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||||||||
Fair value | $ 256 | $ 252 | ||||||
Unfunded commitments | 41 | 44 | ||||||
Private Equity Funds
|
||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||||||||
Fair value | 88 | [1] | 99 | [1] | ||||
Unfunded commitments | 12 | [1] | 13 | [1] | ||||
Other Funds
|
||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items] | ||||||||
Fair value | 168 | [2] | 153 | [2] | ||||
Unfunded commitments | $ 29 | [2] | $ 31 | [2] | ||||
Redemption frequency | Monthly-yearly | [2] | Monthly-yearly | [2] | ||||
Redemption notice period | 3-45 days | [2] | 3-45 days | [2] | ||||
|
Derivative Instruments- Additional Information (Detail) (USD $)
|
3 Months Ended | 3 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Mar. 31, 2013
Available-for-sale
|
Dec. 31, 2012
Available-for-sale
|
Mar. 31, 2013
Deposits
|
Dec. 31, 2012
Deposits
|
Mar. 31, 2013
Long-term Debt
|
Dec. 31, 2012
Long-term Debt
|
Mar. 31, 2013
Interest Rate Swap
Available-for-sale
|
Mar. 31, 2013
Interest Rate Swap
Deposits
|
Mar. 31, 2013
Interest Rate Swap
Long-term Debt
|
Mar. 31, 2013
Foreign Exchange Contract
|
Mar. 31, 2013
Interest Rate Contract
|
Mar. 31, 2013
Cash Flow Hedging
Foreign Exchange Contract
|
Mar. 31, 2013
Cash Flow Hedging
Foreign Exchange Contract
Fair Value Hedge
|
Mar. 31, 2013
Cash Flow Hedging
Foreign Exchange Contract
Fair Value Hedge
Maximum
|
Mar. 31, 2013
Net Investment Hedging
Foreign Exchange Contract
|
|
Derivative Instruments and Hedging Activities Disclosure [Line Items] | |||||||||||||||||
Counterparty default losses | $ 0 | $ 1,000,000 | |||||||||||||||
Original maturities, maximum (in years) of hedged instruments | 30 years | 30 years | |||||||||||||||
Hedged financial instruments | 5,900,000,000 | 10,000,000 | 14,000,000,000 | ||||||||||||||
Hedged financial instruments, notional amount of derivative | 6,088,000,000 | 5,355,000,000 | 10,000,000 | 10,000,000 | 14,414,000,000 | 14,314,000,000 | 6,100,000,000 | 10,000,000 | 14,000,000,000 | 139,000,000 | 6,900,000,000 | 5,200,000,000 | |||||
Original maturities, (in years) of hedged instruments | 10 years | ||||||||||||||||
Original maturities, minimum (in years) of hedged instruments | 5 years | ||||||||||||||||
Hedging derivatives, maturities, maximum (in months or in years) | 9 months | 9 months | 2 years | ||||||||||||||
Amount of (pre-tax) gain recorded in other comprehensive income that will be reclassified to income or expense | 1,000,000 | 1,000,000 | |||||||||||||||
Non-derivative financial instruments designated as hedges of net investments in foreign subsidiaries were all long-term liabilities of BNY Mellon in various currencies | 500,000,000 | ||||||||||||||||
Notional amount of derivatives that will mature within one year | 405,000,000,000 | 473,000,000,000 | |||||||||||||||
Notional amount of derivatives that will mature between one and five years | 6,000,000,000 | 188,000,000,000 | |||||||||||||||
Notional amount of derivatives that will mature after 5 years | 9,000,000,000 | 184,000,000,000 | |||||||||||||||
Value-at-risk methodology assumed holding period for instruments (in days) | 1 day | ||||||||||||||||
Value-at-risk methodology confidence level percentage | 99.00% | ||||||||||||||||
Additional collateral the Company would have to post for existing collateral arrangements, if the company's debt rating had fallen below investment grade | $ 576,000,000 |
Commitments and Contingent Liabilities (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Industry Concentrations Related to Credit Exposure | Significant industry concentrations related to credit exposure at March 31, 2013 are disclosed in the financial institutions portfolio exposure table and the commercial portfolio exposure table below.
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Summary of Off-Balance Sheet Credit Risks, Net of Participations | The following table presents a summary of our off-balance sheet credit risks, net of participations.
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Standby Letters of Credits by Investment Grade | The table below shows SBLCs by investment grade:
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Loans and Asset Quality (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan Portfolio | The table below provides the details of our loan distribution and industry concentrations of credit risk at March 31, 2013 and Dec. 31, 2012.
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Allowance for Credit Losses Activity | Transactions in the allowance for credit losses are summarized as follows:
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Nonperforming Assets | The table below sets forth information about our nonperforming assets.
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Lost Interest |
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Information about Impaired Loans | The table below sets forth information about our impaired loans. We use the discounted cash flow method as the primary method for valuing impaired loans.
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Information about Past Due Loans | The table below sets forth information about our past due loans.
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Troubled Debt Restructurings | The following table presents TDRs that occurred in the first quarter of 2013, the fourth quarter of 2012 and the first quarter of 2012.
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Credit Quality Indicators - Commercial Portfolio - Credit Risk Profile by Creditworthiness Category | The following tables set forth information about credit quality indicators. Commercial loan portfolio
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Credit Quality Indicators - Wealth Management Loans and Mortgages - Credit Risk Profile by Internally Assigned Grade | Wealth management loans and mortgages
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Net Interest Revenue (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
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Dec. 31, 2012
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Mar. 31, 2012
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Interest revenue | |||
Non-margin loans | $ 165 | $ 166 | $ 169 |
Margin loans | 38 | 42 | 42 |
Securities: | |||
Taxable | 441 | 449 | 503 |
Exempt from federal income taxes | 24 | 25 | 15 |
Total securities | 465 | 474 | 518 |
Deposits in banks | 71 | 82 | 114 |
Deposits with the Federal Reserve and other central banks | 31 | 37 | 43 |
Federal funds sold and securities purchased under resale agreements | 10 | 9 | 9 |
Trading assets | 35 | 33 | 17 |
Total interest revenue | 815 | 843 | 912 |
Interest expense | |||
Deposits | 30 | 32 | 43 |
Federal funds purchased and securities sold under repurchase agreements | (3) | 2 | 0 |
Trading liabilities | 9 | 7 | 4 |
Other borrowed funds | 2 | 4 | 5 |
Customer payables | 2 | 2 | 2 |
Long-term debt | 56 | 71 | 93 |
Total interest expense | 96 | 118 | 147 |
Net interest revenue | $ 719 | $ 725 | $ 765 |
Lines of Businesses- Contribution of Segments to Overall Profitability (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |||||||||||||
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Mar. 31, 2013
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Dec. 31, 2012
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Mar. 31, 2012
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||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Fee and other revenue | $ 2,878 | [1] | $ 2,881 | [2] | $ 2,870 | [3] | ||||||||
Net interest revenue | 719 | 725 | 765 | |||||||||||
Total revenue | 3,597 | 3,606 | 3,635 | |||||||||||
Provision for credit losses | (24) | (61) | 5 | |||||||||||
Noninterest expense | 2,828 | 2,825 | 2,756 | |||||||||||
Income (loss) before taxes | 793 | [1] | 842 | [2] | 874 | [3] | ||||||||
Pre-tax operating margin (percent) | 22.00% | [4] | 23.00% | [4] | 24.00% | [4] | ||||||||
Average assets | 333,664 | 335,995 | 301,344 | |||||||||||
Investment Management
|
||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Fee and other revenue | 894 | [1] | 933 | [2] | 852 | [3] | ||||||||
Net interest revenue | 62 | 55 | 55 | |||||||||||
Total revenue | 956 | 988 | 907 | |||||||||||
Provision for credit losses | 0 | 0 | 0 | |||||||||||
Noninterest expense | 745 | 762 | 670 | |||||||||||
Income (loss) before taxes | 211 | [1] | 226 | [2] | 237 | [3] | ||||||||
Pre-tax operating margin (percent) | 22.00% | [4] | 23.00% | [4] | 26.00% | [4] | ||||||||
Average assets | 38,743 | 37,750 | 36,473 | |||||||||||
Investment Services
|
||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Fee and other revenue | 1,860 | 1,765 | 1,843 | |||||||||||
Net interest revenue | 653 | 591 | 648 | |||||||||||
Total revenue | 2,513 | 2,356 | 2,491 | |||||||||||
Provision for credit losses | 0 | 0 | 16 | |||||||||||
Noninterest expense | 1,828 | 1,830 | 1,846 | |||||||||||
Income (loss) before taxes | 685 | 526 | 629 | |||||||||||
Pre-tax operating margin (percent) | 27.00% | [4] | 22.00% | [4] | 25.00% | [4] | ||||||||
Average assets | 238,374 | 241,653 | 212,737 | |||||||||||
Other
|
||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Fee and other revenue | 124 | 183 | 175 | |||||||||||
Net interest revenue | 4 | 79 | 62 | |||||||||||
Total revenue | 128 | 262 | 237 | |||||||||||
Provision for credit losses | (24) | (61) | (11) | |||||||||||
Noninterest expense | 255 | 233 | 240 | |||||||||||
Income (loss) before taxes | (103) | 90 | 8 | |||||||||||
Average assets | $ 56,547 | $ 56,592 | $ 52,134 | |||||||||||
|
Goodwill and Intangible Assets-Intangible Assets by Business Segment (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
||||
Intangible Assets [Roll Forward] | ||||||
Beginning Balance | $ 4,809 | $ 5,152 | ||||
Amortization | (86) | (96) | (96) | |||
Foreign exchange translation | (27) | 16 | ||||
Other | 0 | [1] | ||||
Ending Balance | 4,696 | 4,809 | 5,072 | |||
Investment Management
|
||||||
Intangible Assets [Roll Forward] | ||||||
Beginning Balance | 2,228 | 2,382 | ||||
Amortization | (39) | (48) | ||||
Foreign exchange translation | (24) | 13 | ||||
Other | 0 | [1] | ||||
Ending Balance | 2,165 | 2,347 | ||||
Investment Services
|
||||||
Intangible Assets [Roll Forward] | ||||||
Beginning Balance | 1,732 | 1,922 | ||||
Amortization | (47) | (48) | ||||
Foreign exchange translation | (3) | 3 | ||||
Other | (2) | [1] | ||||
Ending Balance | 1,682 | 1,875 | ||||
Other
|
||||||
Intangible Assets [Roll Forward] | ||||||
Beginning Balance | 849 | 848 | ||||
Amortization | 0 | 0 | ||||
Foreign exchange translation | 0 | 0 | ||||
Other | 2 | [1] | ||||
Ending Balance | $ 849 | $ 850 | ||||
|
Preferred Stock Preferred Stock Summary (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|||||
Class of Stock [Line Items] | ||||||
Carrying value | $ 1,068 | $ 1,068 | ||||
Series A Noncumulative Perpetual Preferred Stock
|
||||||
Class of Stock [Line Items] | ||||||
Total shares issued and outstanding (shares) | 5,001 | 5,001 | ||||
Liquidation preference per share (usd per share) | $ 100,000 | |||||
Carrying value | 500 | [1] | 500 | [1] | ||
Per annum dividend rate | Greater of (i) three- month LIBOR plus 0.565% for the related distribution period; or (ii) 4.000% | |||||
Dividends paid per share (usd per share) | $ 1,000 | $ 1,011 | ||||
Series C Noncumulative Perpetual Preferred Stock
|
||||||
Class of Stock [Line Items] | ||||||
Total shares issued and outstanding (shares) | 5,825 | 5,825 | ||||
Liquidation preference per share (usd per share) | $ 100,000 | |||||
Carrying value | $ 568 | [1] | $ 568 | [1] | ||
Per annum dividend rate (percent) | 5.20% | |||||
Dividends paid per share (usd per share) | $ 1,300 | $ 1,314 | ||||
|
Securities-Debt Securities Credit Losses Roll Forward Recorded in Earnings (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Other than Temporary Impairment [Roll Forward] | ||
Beginning balance | $ 288 | $ 253 |
Add: Initial OTTI credit losses | 0 | 9 |
Subsequent OTTI credit losses | 4 | 12 |
Less: Realized losses for securities sold | 118 | 8 |
Ending balance | $ 174 | $ 266 |
Derivative Instruments- Revenue from Foreign Exchange and Other Trading (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
|
Trading Activity, Gains and Losses, Net [Line Items] | |||
Foreign exchange | $ 149 | $ 106 | $ 136 |
Other trading revenue | 12 | 33 | 55 |
Foreign exchange and other trading revenue | 161 | 139 | 191 |
Fixed Income
|
|||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Other trading revenue | 8 | 25 | 47 |
Credit Derivatives/Other
|
|||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Other trading revenue | $ 4 | $ 8 | $ 8 |
Other Assets (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||
---|---|---|---|---|---|---|
Other Assets [Abstract] | ||||||
Accounts receivable | $ 4,514 | $ 4,255 | ||||
Corporate/bank owned life insurance | 4,376 | 4,360 | ||||
Income taxes receivable | 3,049 | 3,099 | ||||
Equity in joint ventures and other investments (a) | 2,784 | [1] | 2,664 | [1] | ||
Fails to deliver | 2,124 | 1,148 | ||||
Fair value of hedging derivatives | 1,135 | 989 | ||||
Software | 1,130 | 1,117 | ||||
Prepaid expenses | 575 | 508 | ||||
Prepaid pension assets | 436 | 419 | ||||
Due from customers on acceptances | 421 | 376 | ||||
Other | 1,160 | 1,533 | ||||
Total other assets | $ 21,704 | $ 20,468 | ||||
|
Securitizations and Variable Interest Entities- Incremental Assets and Liabilities of Variable Interest Entities Included in Consolidated Financial Statements (Detail) (Variable Interest Entity, Primary Beneficiary, USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Variable Interest Entity [Line Items] | ||
Available-for-sale | $ 500 | $ 499 |
Trading assets | 10,400 | 10,961 |
Other assets | 836 | 520 |
Subtotal assets of consolidated investment management funds, at fair value | 11,736 | 11,980 |
Trading liabilities | 9,908 | 10,152 |
Other liabilities | 492 | 490 |
Subtotal liabilities of consolidated investment management funds, at fair value | 10,400 | 10,642 |
Nonredeemable noncontrolling interests of consolidated investment management funds | 806 | 833 |
Investment Management Funds
|
||
Variable Interest Entity [Line Items] | ||
Available-for-sale | 0 | 0 |
Trading assets | 10,400 | 10,961 |
Other assets | 836 | 520 |
Subtotal assets of consolidated investment management funds, at fair value | 11,236 | 11,481 |
Trading liabilities | 9,908 | 10,152 |
Other liabilities | 34 | 29 |
Subtotal liabilities of consolidated investment management funds, at fair value | 9,942 | 10,181 |
Nonredeemable noncontrolling interests of consolidated investment management funds | 806 | 833 |
Securitizations
|
||
Variable Interest Entity [Line Items] | ||
Available-for-sale | 500 | 499 |
Trading assets | 0 | 0 |
Other assets | 0 | 0 |
Subtotal assets of consolidated investment management funds, at fair value | 500 | 499 |
Trading liabilities | 0 | 0 |
Other liabilities | 458 | 461 |
Subtotal liabilities of consolidated investment management funds, at fair value | 458 | 461 |
Nonredeemable noncontrolling interests of consolidated investment management funds | $ 0 | $ 0 |
Restructuring Charges- Additional Information (Detail) (Operational Efficiency Initiatives 2011, USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
Person
|
|
Operational Efficiency Initiatives 2011
|
||||
Restructuring Cost and Reserve [Line Items] | ||||
Estimated reduction in workforce due to restructuring (positions) | 1,500 | |||
Restructuring charge | $ 5 | $ (2) | $ 2 | $ (107) |
Securitizations and Variable Interest Entities- Non-consolidated Variable Interest Entities (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Other Assets and Liabilities, Net
|
||
Variable Interest Entity [Line Items] | ||
Assets | $ 116 | $ 100 |
Liabilities | 0 | 0 |
Variable Interest Entity, Not Primary Beneficiary
|
||
Variable Interest Entity [Line Items] | ||
Maximum loss exposure | $ 116 | $ 100 |
Other Assets-Parenthetical (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Other Assets [Abstract] | ||
Federal Reserve Bank stock | $ 436 | $ 436 |
Loans and asset quality- Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 3 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2013
Other residential mortgages
Contract
|
Dec. 31, 2012
Other residential mortgages
|
Mar. 31, 2013
Wealth Management Mortgages Portfolio Segment
|
Dec. 31, 2012
Wealth Management Mortgages Portfolio Segment
|
Mar. 31, 2013
Wealth Management Mortgages Portfolio Segment
New York State
|
Mar. 31, 2013
Wealth Management Mortgages Portfolio Segment
California State
|
Mar. 31, 2013
Wealth Management Mortgages Portfolio Segment
Massachusetts
|
Mar. 31, 2013
Wealth Management Mortgages Portfolio Segment
Florida
|
Mar. 31, 2013
Wealth Management Mortgages Portfolio Segment
Other
|
Mar. 31, 2013
Overdrafts
|
Dec. 31, 2012
Overdrafts
|
Mar. 31, 2013
Margin loans
|
Dec. 31, 2012
Margin loans
|
Mar. 31, 2013
Domestic
|
Dec. 31, 2012
Domestic
|
Mar. 31, 2013
Domestic
Other residential mortgages
|
Dec. 31, 2012
Domestic
Other residential mortgages
|
Mar. 31, 2013
Domestic
Overdrafts
|
Dec. 31, 2012
Domestic
Overdrafts
|
Mar. 31, 2012
Domestic
Overdrafts
|
Mar. 31, 2013
Domestic
Margin loans
|
Dec. 31, 2012
Domestic
Margin loans
|
Mar. 31, 2012
Domestic
Margin loans
|
Mar. 31, 2013
Domestic
Margin loans
Minimum
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||||||||||||||
Subsequently defaulted number of contracts (contracts) | 15 | |||||||||||||||||||||||||
Subsequently defaulted recorded investment | $ 4 | |||||||||||||||||||||||||
Loan to value ratio at origination (percent) | 63.00% | |||||||||||||||||||||||||
Percentage of past due mortgages (percent) | 1.00% | |||||||||||||||||||||||||
Geographic concentrations (percent) | 22.00% | 20.00% | 16.00% | 8.00% | 34.00% | |||||||||||||||||||||
Loans | 49,224 | 46,629 | 1,570 | 1,632 | 4,287 | 4,142 | 5,319 | 5,298 | 13,242 | 13,397 | 36,535 | 36,459 | 1,570 | 1,632 | 2,772 | 2,228 | 1,971 | 13,242 | 13,397 | 13,144 | ||||||
Purchased mortgages | $ 480 | |||||||||||||||||||||||||
Purchased residential mortgages, loan to value ratio (percent) | 75.00% | |||||||||||||||||||||||||
Percentage of purchased residential mortgages that were at least 60 days delinquent (percent) | 23.00% | |||||||||||||||||||||||||
Number of business days in which overdrafts are generally repaid | 2 days | 2 days | ||||||||||||||||||||||||
Required daily collateral margin (percent) | 100.00% |
Fair Value Measurement
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | Fair value measurement The guidance related to “Fair Value Measurement” included in ASC 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date and establishes a framework for measuring fair value. It establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and expands the disclosures about instruments measured at fair value. ASC 820 requires consideration of a company’s own creditworthiness when valuing liabilities. The standard provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The objective is to determine from weighted indicators of fair value a reasonable point within the range that is most representative of fair value under current market conditions. Determination of fair value Following is a description of our valuation methodologies for assets and liabilities measured at fair value. We have established processes for determining fair values. Fair value is based upon quoted market prices in active markets, where available. For financial instruments where quotes from recent exchange transactions are not available, we determine fair value based on discounted cash flow analysis, comparison to similar instruments, and the use of financial models. Discounted cash flow analysis is dependent upon estimated future cash flows and the level of interest rates. Model-based pricing uses inputs of observable prices, where available, for interest rates, foreign exchange rates, option volatilities and other factors. Models are benchmarked and validated by an independent internal risk management function. Our valuation process takes into consideration factors such as counterparty credit quality, liquidity, concentration concerns, and observability of model parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. Most derivative contracts are valued using internally developed models which are calibrated to observable market data and employ standard market pricing theory for their valuations. An initial “risk-neutral” valuation is performed on each position assuming time-discounting based on a AA credit curve. Then, to arrive at a fair value that incorporates counter-party credit risk, a credit adjustment is made to these results by discounting each trade’s expected exposures to the counterparty using the counterparty’s credit spreads, as implied by the credit default swap market. We also adjust expected liabilities to the counterparty using BNY Mellon’s own credit spreads, as implied by the credit default swap market. Accordingly, the valuation of our derivative position is sensitive to the current changes in our own credit spreads as well as those of our counterparties. In certain cases, recent prices may not be observable for instruments that trade in inactive or less active markets. Upon evaluating the uncertainty in valuing financial instruments subject to liquidity issues, we make an adjustment to their value. The determination of the liquidity adjustment includes the availability of external quotes, the time since the latest available quote and the price volatility of the instrument. Certain parameters in some financial models are not directly observable and, therefore, are based on management’s estimates and judgments. These financial instruments are normally traded less actively. We apply valuation adjustments to mitigate the possibility of error and revision in the model based estimate value. Examples include products where parameters such as correlation and recovery rates are unobservable. The methods described above for instruments that trade in inactive or less active markets may produce a current fair value calculation that may not be indicative of net realizable value or reflective of future fair values. We believe our methods of determining fair value are appropriate and consistent with other market participants. However, the use of different methodologies or different assumptions to value certain financial instruments could result in a different estimate of fair value. Valuation hierarchy ASC 820 established a three-level valuation hierarchy for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are described below. Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 1 assets and liabilities include debt and equity securities and derivative financial instruments actively traded on exchanges and U.S. Treasury securities that are actively traded in highly liquid over-the-counter markets. Level 2: Observable inputs other than Level 1 prices, for example, quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs that are observable or can be corroborated, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 assets and liabilities include debt instruments that are traded less frequently than exchange-traded securities and derivative instruments whose model inputs are observable in the market or can be corroborated by market-observable data. Examples in this category are agency and non-agency mortgage-backed securities, corporate debt securities and over-the-counter derivative contracts. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Examples in this category include certain private equity investments, derivative contracts that are highly structured or long-dated, and interests in certain securitized financial assets. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy. Securities Where quoted prices are available in an active market, we classify the securities within Level 1 of the valuation hierarchy. Securities include both long and short positions. Level 1 securities include highly liquid government bonds, money market mutual funds and exchange-traded equities. If quoted market prices are not available, we estimate fair values using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Examples of such instruments, which would generally be classified within Level 2 of the valuation hierarchy, include agency and non-agency mortgage-backed securities, commercial mortgage-backed securities, sovereign debt, corporate bonds and foreign covered bonds. For securities where quotes from recent transactions are not available for identical securities, we determine fair value primarily based on pricing sources with reasonable levels of price transparency that employ financial models or obtain comparison to similar instruments to arrive at “consensus” prices. Specifically, the pricing sources obtain recent transactions for similar types of securities (e.g., vintage, position in the securitization structure) and ascertain variables such as discount rate and speed of prepayment for the types of transaction and apply such variables to similar types of bonds. We view these as observable transactions in the current marketplace and classify such securities as Level 2. Pricing sources discontinue pricing any specific security whenever they determine there is insufficient observable data to provide a good faith opinion on price. In addition, we have significant investments in more actively traded agency RMBS and other types of securities such as sovereign debt. The pricing sources derive the prices for these securities largely from quotes they obtain from three major inter-dealer brokers. The pricing sources receive their daily observed trade price and other information feeds from the inter-dealer brokers. For securities with bond insurance, the financial strength of the insurance provider is analyzed and that information is included in the fair value assessment for such securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, we classify those securities in Level 3 of the valuation hierarchy. Securities classified within Level 3 primarily include securities of state and political subdivisions and distressed debt securities. At March 31, 2013, more than 99% of our securities were valued by pricing sources with reasonable levels of price transparency. Less than 1% of our securities were priced based on economic models and non-binding dealer quotes, and are included in Level 3 of the ASC 820 hierarchy. Consolidated collateralized loan obligations BNY Mellon values assets in consolidated CLOs using observable market prices observed from the secondary loan market. The returns to the note holders are solely dependent on the assets and accordingly equal the value of those assets. Based on the structure of the CLOs, the valuation of the assets is attributable to the senior note holders. Changes in the values of assets and liabilities are reflected in the income statement as investment income and interest of investment management fund note holders, respectively. Derivatives We classify exchange-traded derivatives valued using quoted prices in Level 1 of the valuation hierarchy. Examples include exchanged-traded equity and foreign exchange options. Since few other classes of derivative contracts are listed on an exchange, most of our derivative positions are valued using internally developed models that use as their basis readily observable market parameters, and we classify them in Level 2 of the valuation hierarchy. Such derivatives include basic swaps and options and credit default swaps. Derivatives valued using models with significant unobservable market parameters in markets that lack two-way flow are classified in Level 3 of the valuation hierarchy. Examples include long-dated interest rate or currency swaps and options, where parameters may be unobservable for longer maturities; and certain products, where correlation risk is unobservable. The fair value of these derivatives compose less than 1% of our derivative financial instruments. Additional disclosures of derivative instruments are provided in Note 17 of the Notes to Consolidated Financial Statements. Loans and unfunded lending-related commitments Where quoted market prices are not available, we generally base the fair value of loans and unfunded lending-related commitments on observable market prices of similar instruments, including bonds, credit derivatives and loans with similar characteristics. If observable market prices are not available, we base the fair value on estimated cash flows adjusted for credit risk which are discounted using an interest rate appropriate for the maturity of the applicable loans or the unfunded lending-related commitments. Unrealized gains and losses, if any, on unfunded lending-related commitments carried at fair value are classified in Other assets and Other liabilities, respectively. Loans and unfunded lending-related commitments carried at fair value are generally classified within Level 2 of the valuation hierarchy. Seed capital In our Investment Management business, we manage investment assets, including equities, fixed income, money market and alternative investment funds for institutions and other investors. As part of that activity, we make seed capital investments in certain funds. Seed capital is included in other assets. When applicable, we value seed capital based on the published NAV of the fund. We include funds in which ownership interests in the fund are publicly traded in an active market and institutional funds in which investors trade in and out daily in Level 1 of the valuation hierarchy. We include open-end funds where investors are allowed to sell their ownership interest back to the fund less frequently than daily and where our interest in the fund contains no other rights or obligations in Level 2 of the valuation hierarchy. However, we generally include investments in funds that allow investors to sell their ownership interest back to the fund less frequently than monthly in Level 3, unless actual redemption prices are observable. For other types of investments in funds, we consider all of the rights and obligations inherent in our ownership interest, including the reported NAV as well as other factors that affect the fair value of our interest in the fund. To the extent the NAV measurements reported for the investments are based on unobservable inputs or include other rights and obligations (e.g., obligation to meet cash calls), we generally classify them in Level 3 of the valuation hierarchy. Certain interests in securitizations For certain interests in securitizations that are classified in securities available-for-sale, trading assets and long-term debt, we use discounted cash flow models, which generally include assumptions of projected finance charges related to the securitized assets, estimated net credit losses, prepayment assumptions and estimates of payments to third-party investors. When available, we compare our fair value estimates and assumptions to market activity and to the actual results of the securitized portfolio. Private equity investments Our Other segment includes holdings of nonpublic private equity investment through funds managed by third-party investment managers. We value private equity investments initially based upon the transaction price, which we subsequently adjust to reflect expected exit values as evidenced by financing and sale transactions with third parties or through ongoing reviews by the investment managers. Private equity investments also include publicly held equity investments, generally obtained through the initial public offering of privately held equity investments. These equity investments are often held in a partnership structure. Publicly held investments are marked-to-market at the quoted public value less adjustments for regulatory or contractual sales restrictions or adjustments to reflect the difficulty in selling a partnership interest. Discounts for restrictions are quantified by analyzing the length of the restriction period and the volatility of the equity security. Publicly held private equity investments are primarily classified in Level 2 of the valuation hierarchy. The following tables present the financial instruments carried at fair value at March 31, 2013 and Dec. 31 2012, by caption on the consolidated balance sheet and by ASC 820 valuation hierarchy (as described above). We have included credit ratings information in certain of the tables because the information indicates the degree of credit risk to which we are exposed, and significant changes in ratings classifications could result in increased risk for us. There were no material transfers between Level 1 and Level 2 during the first quarter of 2013.
Changes in Level 3 fair value measurements Our classification of a financial instrument in Level 3 of the valuation hierarchy is based on the significance of the unobservable factors to the overall fair value measurement. However, these instruments generally include other observable components that are actively quoted or validated to third-party sources; accordingly, the gains and losses in the table below include changes in fair value due to observable parameters as well as the unobservable parameters in our valuation methodologies. We also frequently manage the risks of Level 3 financial instruments using securities and derivatives positions that are Level 1 or 2 instruments which are not included in the table; accordingly, the gains or losses below do not reflect the effect of our risk management activities related to the Level 3 instruments. The Company has a Level 3 Pricing Committee which evaluates the valuation techniques used in determining the fair value of Level 3 assets and liabilities. The tables below include a roll forward of the balance sheet amounts for the quarter ended March 31, 2013 and 2012 (including the change in fair value), for financial instruments classified in Level 3 of the valuation hierarchy.
Assets and liabilities measured at fair value on a nonrecurring basis Under certain circumstances, we make adjustments to fair value our assets, liabilities and unfunded lending-related commitments although they are not measured at fair value on an ongoing basis. An example would be the recording of an impairment of an asset. The following table presents the financial instruments carried on the consolidated balance sheet by caption and by level in the fair value hierarchy as of March 31, 2013 and Dec. 31, 2012, for which a nonrecurring change in fair value has been recorded during the quarters ended March 31, 2013 and Dec. 31, 2012.
Level 3 unobservable inputs The following tables present the unobservable inputs used in valuation of assets and liabilities classified as Level 3 within the fair value hierarchy.
Estimated fair value of financial instruments The carrying amounts of our financial instruments (i.e., monetary assets and liabilities) are determined under different accounting methods - see Note 1 of the Notes to Consolidated Financial Statements in our 2012 Annual Report. The following disclosure discusses these instruments on a uniform fair value basis. However, active markets do not exist for a significant portion of these instruments. For financial instruments where quoted prices from identical assets and liabilities in active markets do not exist, we determine fair value based on discounted cash flow analysis and comparison to similar instruments. Discounted cash flow analysis is dependent upon estimated future cash flows and the level of interest rates. Other judgments would result in different fair values. The assumptions we used at March 31, 2013 and Dec. 31, 2012 include discount rates ranging principally from 0.20% to 4.87%. The fair value information supplements the basic financial statements and other traditional financial data presented throughout this report. A summary of the practices used for determining fair value and the respective level in the valuation hierarchy for financial assets and liabilities not recorded at fair value follows. Interest-bearing deposits with the Federal Reserve and other central banks and interest-bearing deposits with banks The estimated fair value of interest-bearing deposits with the Federal Reserve and other central banks is equal to the book value as these interest-bearing deposits are generally considered cash equivalents. These instruments are classified as Level 2 within the valuation hierarchy. The estimated fair value of interest-bearing deposits with banks is generally determined using discounted cash flows and duration of the instrument to maturity. The primary inputs used to value these transactions are interest rates based on current LIBOR market rates and time to maturity. Interest-bearing deposits with banks are classified as Level 2 within the valuation hierarchy. Federal funds sold and securities purchased under resale agreements The estimated fair value of federal funds sold and securities purchased under resale agreements is based on inputs such as interest rates and tenors. Federal funds sold and securities purchased under resale agreements are classified as Level 2 within the valuation hierarchy. Securities held-to-maturity Where quoted prices are available in an active market for identical assets and liabilities, we classify the securities as Level 1 within the valuation hierarchy. Securities are defined as both long and short positions. Level 1 securities include U.S. Treasury securities. If quoted market prices are not available for identical assets and liabilities, we estimate fair value using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Examples of such instruments, which would generally be classified as Level 2 within the valuation hierarchy, include certain agency and non-agency mortgage-backed securities, commercial mortgage-backed securities and state and political subdivision securities. For securities where quotes from active markets are not available for identical securities, we determine fair value primarily based on pricing sources with reasonable levels of price transparency that employ financial models or obtain comparison to similar instruments to arrive at “consensus” prices. Specifically, the pricing sources obtain active market prices for similar types of securities (e.g., vintage, position in the securitization structure) and ascertain variables such as discount rate and speed of prepayment for the types of transaction and apply such variables to similar types of bonds. We view these as observable transactions in the current marketplace and classify such securities as Level 2 within the valuation hierarchy. Loans For residential mortgage loans, fair value is estimated using discounted cash flow analysis, adjusting where appropriate for prepayment estimates, using interest rates currently being offered for loans with similar terms and maturities to borrowers. The estimated fair value of margin loans and overdrafts is equal to the book value due to the short-term nature of these assets. The estimated fair value of other types of loans is determined using discounted cash flows. Inputs include current LIBOR market rates adjusted for credit spreads. These loans are generally classified as Level 2 within the valuation hierarchy. Other financial assets Other financial assets include cash, the Federal Reserve Bank stock and accrued interest receivable. Cash is classified as Level 1 within the valuation hierarchy. The Federal Reserve Bank stock is not redeemable or transferable. The estimated fair value of the Federal Reserve Bank stock is based on the issue price and is classified as Level 2 within the valuation hierarchy. Accrued interest receivable is generally short-term. As a result, book value is considered to equal fair value. Accrued interest receivable is included as Level 2 within the valuation hierarchy. Noninterest-bearing and interest-bearing deposits Interest-bearing deposits are comprised of money market rate and demand deposits, savings deposits and time deposits. Except for time deposits, book value is considered to equal fair value for these deposits due to their short duration to maturity or payable on demand feature. The fair value of interest-bearing time deposits is determined using discounted cash flow analysis. Inputs primarily consist of current LIBOR market rates and time to maturity. For all noninterest-bearing deposits, book value is considered to equal fair value as a result of the short duration of the deposit. Interest-bearing and noninterest-bearing deposits are classified as Level 2 within the valuation hierarchy. Federal funds purchased and securities sold under repurchase agreements The estimated fair value of federal funds purchased and securities sold under repurchase agreements is based on inputs such as interest rates and tenors. Federal funds purchased and securities sold under repurchase agreements are classified as Level 2 within the valuation hierarchy. Payables to customers and broker-dealers The estimated fair value of payables to customers and broker-dealers is equal to the book value, due to the demand feature of the payables to customers and broker-dealers, and are classified as Level 2 within the valuation hierarchy. Borrowings Borrowings primarily consist of overdrafts of subcustodian account balances in our Investment Services businesses, commercial paper and accrued interest payable. The estimated fair value of overdrafts of subcustodian account balances in our Investment Services businesses is considered to equal book value as a result of the short duration of the overdrafts. Overdrafts are typically repaid within two days. The estimated fair value of our commercial paper is based on discount and duration of the commercial paper. Our commercial paper matures within 397 days from date of issue and is not redeemable prior to maturity or subject to voluntary prepayment. Our commercial paper is included in Level 2 of the valuation hierarchy. Accrued interest payable is generally short-term. As a result, book value is considered to equal fair value. Accrued interest payable is included as Level 2 within the valuation hierarchy. Long-term debt The estimated fair value of long-term debt is based on current rates for instruments of the same remaining maturity or quoted market prices for the same or similar issues. Long-term debt is classified as Level 2 within the valuation hierarchy. The following table presents the estimated fair value and the carrying amount of financial instruments not carried at fair value on the consolidated balance sheet at March 31, 2013 and Dec. 31, 2012, by caption on the consolidated balance sheet and by ASC 820 valuation hierarchy (as described above).
The table below summarizes the carrying amount of the hedged financial instruments, the notional amount of the hedge and the unrealized gain (loss) (estimated fair value) of the derivatives.
|
Securities-Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Securities (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | $ 104,365 | $ 98,332 | ||||||||
Gross unrealized Gains | 2,716 | 3,039 | ||||||||
Gross unrealized Losses | 358 | 363 | ||||||||
Fair value | 106,723 | 101,008 | ||||||||
Available-for-sale
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 92,687 | 90,127 | ||||||||
Gross unrealized Gains | 2,495 | 2,793 | ||||||||
Gross unrealized Losses | 304 | 301 | ||||||||
Fair value | 94,878 | 92,619 | ||||||||
Available-for-sale | U.S. Treasury
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 17,480 | 17,539 | ||||||||
Gross unrealized Gains | 348 | 467 | ||||||||
Gross unrealized Losses | 36 | 3 | ||||||||
Fair value | 17,792 | 18,003 | ||||||||
Available-for-sale | U.S. Government agencies
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 1,034 | 1,044 | ||||||||
Gross unrealized Gains | 26 | 30 | ||||||||
Gross unrealized Losses | 0 | 0 | ||||||||
Fair value | 1,060 | 1,074 | ||||||||
Available-for-sale | State and political subdivisions
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 6,162 | 6,039 | ||||||||
Gross unrealized Gains | 116 | 112 | ||||||||
Gross unrealized Losses | 28 | 29 | ||||||||
Fair value | 6,250 | 6,122 | ||||||||
Available-for-sale | Agency RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 35,763 | 33,355 | ||||||||
Gross unrealized Gains | 720 | 846 | ||||||||
Gross unrealized Losses | 30 | 8 | ||||||||
Fair value | 36,453 | 34,193 | ||||||||
Available-for-sale | Alt-A RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 249 | 255 | ||||||||
Gross unrealized Gains | 49 | 40 | ||||||||
Gross unrealized Losses | 13 | 16 | ||||||||
Fair value | 285 | 279 | ||||||||
Available-for-sale | Prime RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 613 | 728 | ||||||||
Gross unrealized Gains | 10 | 9 | ||||||||
Gross unrealized Losses | 7 | 9 | ||||||||
Fair value | 616 | 728 | ||||||||
Available-for-sale | Subprime RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 472 | 508 | ||||||||
Gross unrealized Gains | 5 | 6 | ||||||||
Gross unrealized Losses | 41 | 62 | ||||||||
Fair value | 436 | 452 | ||||||||
Available-for-sale | Other RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 2,672 | 2,850 | ||||||||
Gross unrealized Gains | 57 | 53 | ||||||||
Gross unrealized Losses | 94 | 109 | ||||||||
Fair value | 2,635 | 2,794 | ||||||||
Available-for-sale | Commercial MBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 2,856 | 3,031 | ||||||||
Gross unrealized Gains | 123 | 153 | ||||||||
Gross unrealized Losses | 39 | 45 | ||||||||
Fair value | 2,940 | 3,139 | ||||||||
Available-for-sale | Asset-backed CLOs
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 1,449 | 1,285 | ||||||||
Gross unrealized Gains | 12 | 7 | ||||||||
Gross unrealized Losses | 5 | 10 | ||||||||
Fair value | 1,456 | 1,282 | ||||||||
Available-for-sale | Other asset-backed securities
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 2,019 | 2,123 | ||||||||
Gross unrealized Gains | 10 | 11 | ||||||||
Gross unrealized Losses | 3 | 3 | ||||||||
Fair value | 2,026 | 2,131 | ||||||||
Available-for-sale | Foreign covered bonds
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 3,349 | 3,596 | ||||||||
Gross unrealized Gains | 41 | 122 | ||||||||
Gross unrealized Losses | 0 | 0 | ||||||||
Fair value | 3,390 | 3,718 | ||||||||
Available-for-sale | Corporate bonds
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 1,517 | 1,525 | ||||||||
Gross unrealized Gains | 60 | 63 | ||||||||
Gross unrealized Losses | 5 | 3 | ||||||||
Fair value | 1,572 | 1,585 | ||||||||
Available-for-sale | Other debt securities
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 12,154 | 11,516 | ||||||||
Gross unrealized Gains | 245 | 276 | ||||||||
Gross unrealized Losses | 0 | 0 | ||||||||
Fair value | 12,399 | [1] | 11,792 | [2] | ||||||
Available-for-sale | Equity securities
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 22 | 23 | ||||||||
Gross unrealized Gains | 6 | 4 | ||||||||
Gross unrealized Losses | 0 | 0 | ||||||||
Fair value | 28 | 27 | ||||||||
Available-for-sale | Money market funds
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 2,457 | 2,190 | ||||||||
Gross unrealized Gains | 0 | 0 | ||||||||
Gross unrealized Losses | 0 | 0 | ||||||||
Fair value | 2,457 | 2,190 | ||||||||
Available-for-sale | Alt-A RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 1,514 | [3] | 1,574 | [3] | ||||||
Gross unrealized Gains | 457 | [3] | 400 | [3] | ||||||
Gross unrealized Losses | 3 | [3] | 4 | [3] | ||||||
Fair value | 1,968 | [3] | 1,970 | [3] | ||||||
Available-for-sale | Prime RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 791 | [3] | 833 | [3] | ||||||
Gross unrealized Gains | 190 | [3] | 177 | [3] | ||||||
Gross unrealized Losses | 0 | [3] | 0 | [3] | ||||||
Fair value | 981 | [3] | 1,010 | [3] | ||||||
Available-for-sale | Sub Prime RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 114 | [3] | 113 | [3] | ||||||
Gross unrealized Gains | 20 | [3] | 17 | [3] | ||||||
Gross unrealized Losses | 0 | [3] | 0 | [3] | ||||||
Fair value | 134 | [3] | 130 | [3] | ||||||
Held-to-maturity
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 11,678 | 8,205 | ||||||||
Gross unrealized Gains | 221 | 246 | ||||||||
Gross unrealized Losses | 54 | 62 | ||||||||
Fair value | 11,845 | 8,389 | ||||||||
Held-to-maturity | U.S. Treasury
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 2,206 | 1,011 | ||||||||
Gross unrealized Gains | 71 | 59 | ||||||||
Gross unrealized Losses | 0 | 0 | ||||||||
Fair value | 2,277 | 1,070 | ||||||||
Held-to-maturity | State and political subdivisions
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 53 | 67 | ||||||||
Gross unrealized Gains | 2 | 2 | ||||||||
Gross unrealized Losses | 0 | 0 | ||||||||
Fair value | 55 | 69 | ||||||||
Held-to-maturity | Agency RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 8,246 | 5,879 | ||||||||
Gross unrealized Gains | 107 | 139 | ||||||||
Gross unrealized Losses | 2 | 1 | ||||||||
Fair value | 8,351 | 6,017 | ||||||||
Held-to-maturity | Alt-A RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 102 | 111 | ||||||||
Gross unrealized Gains | 10 | 9 | ||||||||
Gross unrealized Losses | 6 | 6 | ||||||||
Fair value | 106 | 114 | ||||||||
Held-to-maturity | Prime RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 91 | 97 | ||||||||
Gross unrealized Gains | 1 | 1 | ||||||||
Gross unrealized Losses | 0 | 1 | ||||||||
Fair value | 92 | 97 | ||||||||
Held-to-maturity | Subprime RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 28 | 28 | ||||||||
Gross unrealized Gains | 0 | 0 | ||||||||
Gross unrealized Losses | 0 | 1 | ||||||||
Fair value | 28 | 27 | ||||||||
Held-to-maturity | Other RMBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 804 | 983 | ||||||||
Gross unrealized Gains | 29 | 36 | ||||||||
Gross unrealized Losses | 45 | 52 | ||||||||
Fair value | 788 | 967 | ||||||||
Held-to-maturity | Commercial MBS
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 21 | 26 | ||||||||
Gross unrealized Gains | 0 | 0 | ||||||||
Gross unrealized Losses | 1 | 1 | ||||||||
Fair value | 20 | 25 | ||||||||
Held-to-maturity | Other securities
|
||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||
Amortized cost | 127 | 3 | ||||||||
Gross unrealized Gains | 1 | 0 | ||||||||
Gross unrealized Losses | 0 | 0 | ||||||||
Fair value | $ 128 | $ 3 | ||||||||
|
Other Comprehensive Income (Loss) (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Other Comprehensive Income | Other comprehensive income (loss)
|
Goodwill and Intangible Assets-Estimated Annual Amortization Expense (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2013 | $ 340 |
2014 | 302 |
2015 | 269 |
2016 | 240 |
2017 | $ 216 |
Fair Value Measurement- Quantitative Information about Level 3 Fair Value Measurements of Assets (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
|
Dec. 31, 2012
Fair Value, Measurements, Recurring
Level 3
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Available-for-sale
State and political subdivisions
Discounted Cash Flow
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Available-for-sale
State and political subdivisions
Discounted Cash Flow
Minimum
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Available-for-sale
State and political subdivisions
Discounted Cash Flow
Maximum
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Distressed Debt
Discounted Cash Flow
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Distressed Debt
Discounted Cash Flow
Minimum
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Distressed Debt
Discounted Cash Flow
Maximum
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Structured Foreign Exchange Swaptions
Option Pricing Model
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Structured Foreign Exchange Swaptions
Option Pricing Model
Minimum
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Structured Foreign Exchange Swaptions
Option Pricing Model
Maximum
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Long-Term Foreign Exchange Options
Option Pricing Model
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Equity Options
Option Pricing Model
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Equity Options
Option Pricing Model
Minimum
|
Mar. 31, 2013
Fair Value, Measurements, Recurring
Level 3
Trading Assets
Equity Options
Option Pricing Model
Maximum
|
Mar. 31, 2013
Fair Value, Measurements, Nonrecurring
|
Dec. 31, 2012
Fair Value, Measurements, Nonrecurring
|
Mar. 31, 2013
Fair Value, Measurements, Nonrecurring
Level 3
|
Dec. 31, 2012
Fair Value, Measurements, Nonrecurring
Level 3
|
Mar. 31, 2013
Fair Value, Measurements, Nonrecurring
Level 3
Loans
|
Mar. 31, 2013
Fair Value, Measurements, Nonrecurring
Level 3
Loans
Minimum
|
Mar. 31, 2013
Fair Value, Measurements, Nonrecurring
Level 3
Loans
Maximum
|
Mar. 31, 2013
Fair Value, Measurements, Nonrecurring
Level 3
Loans
Discounted Cash Flow
|
Mar. 31, 2013
Fair Value, Measurements, Nonrecurring
Level 3
Loans
Discounted Cash Flow
Minimum
|
Mar. 31, 2013
Fair Value, Measurements, Nonrecurring
Level 3
Loans
Discounted Cash Flow
Maximum
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||||||||||||||||||||||||
Fair Value Inputs Expected Credit Loss | 6.00% | 37.00% | |||||||||||||||||||||||
Fair value of assets | $ 253 | $ 315 | $ 44 | $ 11 | $ 10 | $ 1 | $ 31 | $ 251 | $ 285 | $ 21 | $ 23 | $ 21 | |||||||||||||
Correlation risk (percent) | 0.00% | 25.00% | |||||||||||||||||||||||
Volatility (percent) | 11.00% | 16.00% | 18.00% | 23.00% | 28.00% | ||||||||||||||||||||
Expected maturity | 1 year | 15 years | |||||||||||||||||||||||
Credit spreads (percent) | 2.00% | 9.50% | |||||||||||||||||||||||
Timing of sale | 0 months | 12 months | |||||||||||||||||||||||
Cap rate (percent) | 8.00% | ||||||||||||||||||||||||
Cost to complete/sell (percent) | 0.00% | 30.00% |
Employee Benefit Plans (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
|
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Periodic Benefit Cost (Credit) | The components of net periodic benefit cost are as follows:
|
Securities-Net Securities Gains (Losses) (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
|
Disclosure Net Securities Gains Losses [Abstract] | |||
Realized gross gains | $ 57 | $ 80 | $ 62 |
Realized gross losses | (5) | (1) | 0 |
Recognized gross impairments | (4) | (29) | (22) |
Net securities gains | $ 48 | $ 50 | $ 40 |
Loans and asset quality- Information about Past Due Loans (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days past due | $ 105 | $ 127 |
60-89 Days past due | 10 | 76 |
>90 Days past due | 14 | 6 |
Total past due | 129 | 209 |
Domestic
|
||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days past due | 105 | 127 |
60-89 Days past due | 10 | 76 |
>90 Days past due | 14 | 6 |
Total past due | 129 | 209 |
Domestic | Commercial real estate
|
||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days past due | 45 | 44 |
60-89 Days past due | 0 | 0 |
>90 Days past due | 8 | 0 |
Total past due | 53 | 44 |
Domestic | Wealth management loans and mortgages
|
||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days past due | 30 | 33 |
60-89 Days past due | 4 | 7 |
>90 Days past due | 0 | 1 |
Total past due | 34 | 41 |
Domestic | Commercial
|
||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days past due | 0 | 0 |
60-89 Days past due | 0 | 60 |
>90 Days past due | 0 | 0 |
Total past due | 0 | 60 |
Domestic | Other residential mortgages
|
||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days past due | 29 | 50 |
60-89 Days past due | 6 | 9 |
>90 Days past due | 6 | 5 |
Total past due | 41 | 64 |
Domestic | Financial institutions
|
||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days past due | 1 | 0 |
60-89 Days past due | 0 | 0 |
>90 Days past due | 0 | 0 |
Total past due | 1 | 0 |
Foreign
|
||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days past due | 0 | 0 |
60-89 Days past due | 0 | 0 |
>90 Days past due | 0 | 0 |
Total past due | $ 0 | $ 0 |
Derivative Instruments- Offsetting (Details) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Derivative [Line Items] | ||||||||||||||||
Asset derivatives fair value | $ 25,691 | [1] | $ 27,602 | [1] | ||||||||||||
Asset derivatives fair value, effect of master netting agreements | 20,279 | [2],[3] | 22,311 | [2],[3] | ||||||||||||
Asset derivatives fair value, fair value after effect of master netting agreements | 5,412 | 5,291 | ||||||||||||||
Derivative Asset, Not Subject to Master Netting Arrangement | 1,757 | 1,849 | ||||||||||||||
Securities Purchased under Agreements to Resell | 1,085 | 1,477 | ||||||||||||||
Securities purchased under agreements to resell amount offset against collateral | 269 | [2],[4] | 137 | [2],[4] | ||||||||||||
Securities purchased under agreements to resell amount not offset against collateral | 816 | 1,340 | ||||||||||||||
Fair value of financial and derivative asset | 26,776 | 29,079 | ||||||||||||||
Fair value of financial and derivative asset amount offset against collateral | 20,548 | [2] | 22,448 | [2] | ||||||||||||
Fair value of financial and derivative asset amount not offset against collateral | 6,228 | 6,631 | ||||||||||||||
Liability derivatives fair value | 25,304 | [1] | 28,090 | [1] | ||||||||||||
Derivative Liability, Fair Value, Amount Offset Against Collateral | 18,742 | [3],[5] | 20,990 | [3],[5] | ||||||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 6,562 | 7,100 | ||||||||||||||
DerivativeLiabilityNotSubjectToMasterNettingArrangement | 496 | 1,083 | ||||||||||||||
Securities Sold under Agreements to Repurchase | 2,308 | 2,443 | ||||||||||||||
SecuritiesSoldUnderAgreementsToRepurchaseAmountOffsetAgainstCollateral | 269 | [5],[6] | 137 | [5],[6] | ||||||||||||
SecuritiesSoldUnderAgreementsToRepurchaseAmountNotOffsetAgainstCollateralAbstract | 2,039 | 2,306 | ||||||||||||||
FairValueOfFinancialandDerivativeLiability | 27,612 | 30,533 | ||||||||||||||
FairValueOfFinancialandDerivativeLiabilityAmountOffsetAgainstCollateral | 19,011 | [5] | 21,127 | [5] | ||||||||||||
FairValueOfFinancialandDerivativeLiabilityAmountNotOffsetAgainstCollateral | 8,601 | 9,406 | ||||||||||||||
DerivativesSubjectToNettingArrangments [Member]
|
||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Asset derivatives fair value | 23,934 | 25,753 | ||||||||||||||
Asset derivatives fair value, effect of master netting agreements | 20,279 | [2] | 22,311 | [2] | ||||||||||||
Asset derivatives fair value, fair value after effect of master netting agreements | 3,655 | 3,442 | ||||||||||||||
Liability derivatives fair value | 24,808 | 27,007 | ||||||||||||||
Derivative Liability, Fair Value, Amount Offset Against Collateral | 18,742 | [5] | 20,990 | [5] | ||||||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 6,066 | 6,017 | ||||||||||||||
Interest Rate Contract | DerivativesSubjectToNettingArrangments [Member]
|
||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Asset derivatives fair value | 19,366 | 22,234 | ||||||||||||||
Asset derivatives fair value, effect of master netting agreements | 17,877 | [2] | 20,042 | [2] | ||||||||||||
Asset derivatives fair value, fair value after effect of master netting agreements | 1,489 | 2,192 | ||||||||||||||
Liability derivatives fair value | 20,313 | 23,274 | ||||||||||||||
Derivative Liability, Fair Value, Amount Offset Against Collateral | 16,666 | [5] | 19,069 | [5] | ||||||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 3,647 | 4,205 | ||||||||||||||
Foreign Exchange Contract | DerivativesSubjectToNettingArrangments [Member]
|
||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Asset derivatives fair value | 4,248 | 3,255 | ||||||||||||||
Asset derivatives fair value, effect of master netting agreements | 2,239 | [2] | 2,171 | [2] | ||||||||||||
Asset derivatives fair value, fair value after effect of master netting agreements | 2,009 | 1,084 | ||||||||||||||
Liability derivatives fair value | 4,115 | 3,423 | ||||||||||||||
Derivative Liability, Fair Value, Amount Offset Against Collateral | 1,913 | [5] | 1,823 | [5] | ||||||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 2,202 | 1,600 | ||||||||||||||
Equity Contract | DerivativesSubjectToNettingArrangments [Member]
|
||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Asset derivatives fair value | 320 | 264 | ||||||||||||||
Asset derivatives fair value, effect of master netting agreements | 163 | [2] | 98 | [2] | ||||||||||||
Asset derivatives fair value, fair value after effect of master netting agreements | 157 | 166 | ||||||||||||||
Liability derivatives fair value | 380 | 310 | ||||||||||||||
Derivative Liability, Fair Value, Amount Offset Against Collateral | 163 | [5] | 98 | [5] | ||||||||||||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | $ 217 | $ 212 | ||||||||||||||
|
Loans and asset quality- Allowance for Credit Losses Activity (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
---|---|---|---|
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans | $ 49,224 | $ 46,629 | |
Domestic
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans | 36,535 | 36,459 | |
Overdrafts
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans | 5,319 | 5,298 | |
Overdrafts | Domestic
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans | 2,772 | 2,228 | 1,971 |
Margin loans
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans | 13,242 | 13,397 | |
Margin loans | Domestic
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans | 13,242 | 13,397 | 13,144 |
Other | Domestic
|
|||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans | $ 644 | $ 639 | $ 849 |
Lines of Businesses (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contribution of Segments to Overall Profitability | The following consolidating schedules show the contribution of our businesses to our overall profitability.
N/M - Not meaningful. |
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Consolidated Statement of Changes in Equity (USD $)
In Millions, unless otherwise specified |
Total
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Preferred stock
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Common stock
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Additional paid-in capital
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Retained earnings
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Accumulated other comprehensive (loss), net of tax
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Treasury stock
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Non- redeemable noncontrolling interests of consolidated investment management funds
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Redeemable non- controlling interests/ temporary equity
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Beginning Balance at Dec. 31, 2012 | $ 37,264 | [1] | $ 1,068 | $ 13 | $ 23,485 | $ 14,622 | $ (643) | $ (2,114) | $ 833 | $ 178 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Shares issued to shareholders of noncontrolling interests | 13 | |||||||||||
Redemption of subsidiary shares from noncontrolling interests | (23) | |||||||||||
Other net changes in noncontrolling interests | (14) | 10 | (1) | (23) | 19 | |||||||
Net income (loss) | (237) | (253) | 16 | 0 | ||||||||
Other comprehensive (loss) | (292) | (272) | (20) | (9) | ||||||||
Dividends, Common stock at $0.13 per share | (153) | (153) | ||||||||||
Dividends, Preferred stock | (13) | (13) | ||||||||||
Repurchase of common stock | (252) | (252) | ||||||||||
Common stock issued under employee benefit plans | 7 | 7 | ||||||||||
Common stock issued under direct stock purchase and dividend reinvestment plan | 5 | 5 | ||||||||||
Stock awards and options exercised | 181 | 0 | 181 | 0 | ||||||||
Common stockholders' equity | 34,622 | |||||||||||
Ending Balance at Mar. 31, 2013 | $ 36,496 | [1] | $ 1,068 | $ 13 | $ 23,688 | $ 14,202 | $ (915) | $ (2,366) | $ 806 | $ 178 | ||
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Commitments and Contingent Liabilities- Standby Letters of Credits by Investment Grade (Detail) (Standby letters of credit)
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3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2013
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Dec. 31, 2012
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Investment grade
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Concentration Risk [Line Items] | ||
Concentration risk (percent) | 91.00% | 93.00% |
Noninvestment grade
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||
Concentration Risk [Line Items] | ||
Concentration risk (percent) | 9.00% | 7.00% |
Loans and asset quality- Nonperforming Assets (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
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Financing Receivable, Impaired [Line Items] | ||||||
Nonperforming loans | $ 231 | $ 245 | ||||
Other assets owned | 3 | 4 | ||||
Total nonperforming assets | 234 | [1] | 249 | [1] | ||
Domestic | Other residential mortgages
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||||||
Financing Receivable, Impaired [Line Items] | ||||||
Nonperforming loans | 148 | 158 | ||||
Domestic | Wealth management loans and mortgages
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||||||
Financing Receivable, Impaired [Line Items] | ||||||
Nonperforming loans | 30 | 30 | ||||
Domestic | Commercial
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||||||
Financing Receivable, Impaired [Line Items] | ||||||
Nonperforming loans | 24 | 27 | ||||
Domestic | Commercial real estate
|
||||||
Financing Receivable, Impaired [Line Items] | ||||||
Nonperforming loans | 17 | 18 | ||||
Domestic | Financial institutions
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||||||
Financing Receivable, Impaired [Line Items] | ||||||
Nonperforming loans | 3 | 3 | ||||
Foreign
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||||||
Financing Receivable, Impaired [Line Items] | ||||||
Nonperforming loans | $ 9 | $ 9 | ||||
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