EXHIBIT 99.1

[LOGO] Mellon

			News Release
	MEDIA:	ANALYSTS:	Corporate Affairs
	Ken Herz (412) 234-0850 Ron Sommer (412) 236-0082	Don MacLeod (412) 234-5601 Andy Clark (412) 234-4633	One Mellon Center Pittsburgh, PA 15258-0001
FOR IMMEDIATE RELEASE

MELLON REPORTS THIRD QUARTER 2001 RESULTS
—  Core business sectors earnings per share contribution increased 9% —

PITTSBURGH, Oct. 16, 2001—Mellon Financial Corporation (NYSE: MEL) today announced third quarter 2001 income from continuing operations of $178 million, or 38 cents per share, compared with $195 million or 40 cents per share reported in the third quarter of 2000. Results in the third quarter of 2001 reflect the weakness in the equity markets and the economy during the quarter that was further intensified by the events of Sept. 11, 2001. Continuing operations returned 20.6 percent on equity and 2.02 percent on assets in the third quarter of 2001 compared with 20.0 percent and 2.55 percent, respectively, in the third quarter of 2000. Core business sectors’ contribution to earnings per share, which excludes the revenues and expenses from discontinued operations, and other non-core activity from both periods, increased 9 percent in the third quarter 2001 over third quarter 2000.

As previously announced on July 17, 2001, the Corporation reached an agreement to sell its mid-Atlantic region consumer, small business and certain middle market banking operations to Citizens Financial Group, Inc. As a result of this agreement and other divestitures completed in the second quarter of 2001, the Corporation is reporting the financial results of these and certain other businesses using the discontinued operations method of accounting. In accordance with generally accepted accounting principles, earnings and net assets or liabilities of these businesses are shown separately in the income statement and balance sheet, respectively, for all periods presented. Accordingly, all information in this earnings release, including all supplemental information, reflects continuing operations, unless otherwise noted.

	Quarter ended							Nine months ended
Financial Highlights
(dollar amounts in millions, except per share	Sept. 30,			Sept. 30,			Sept. 30,				Sept. 30,
amounts; returns are annualized)	2001			2000			2001				2000
Operating results – continuing operations:
Diluted earnings per share	$	.38		$	.40		$	1.19		(a)	$	1.17
Income from continuing operations	$	178		$	195		$	570		(a)	$	580
Return on equity	20.6		%	20.0		%	20.5		%	(a)	20.1		%
Return on assets	2.02		%	2.55		%	2.33		%	(a)	2.50		%
Net income:
Diluted earnings per share	$	.40		$	.51		$	1.06			$	1.51
Net income	$	192		$	252		$	511			$	752
Return on equity	22.2		%	25.8		%	18.4		%		26.0		%
Return on assets		1.68	%	2.18		%	1.47		%		2.15		%

Mellon Reports Earnings
Oct. 16, 2001
Page 2

	Quarter ended							Nine months ended
Financial Highlights
(dollar amounts in millions, except per share	Sept. 30,			Sept. 30,			Sept. 30,				Sept. 30,
amounts; returns are annualized)	2001			2000			2001				2000
Operating results – continuing operations excluding
goodwill amortization (b):
Diluted earnings per share	$	.42		$	.43		$	1.30		(a)	$	1.27
Income from continuing operations	$	197		$	213		$	625		(a)	$	632
Return on equity	22.7		%	21.8		%	22.4		%	(a)	21.9		%
Return on assets	2.23		%	2.77		%	2.56		%	(a)	2.73		%
Fee revenue as a percentage of net interest and fee
revenue (FTE)		83	%		83	%		84	%	(c)		84	%
Trust and investment fee revenue as a percentage of net
interest and fee revenue (FTE)	68		%	64		%	67		%	(c)	64		%
Efficiency ratio excluding amortization of goodwill	66		%	62		%	65		%	(c)	62		%
S&P 500 Index at period end		1,041		1,437

(a)	Results from continuing operations for the first nine months of 2001 exclude a $91 million, or 19 cents per share, after-tax charge for the fair value adjustment of investments in the venture capital portfolio, recorded in the second quarter of 2001.
(b)	Excludes the after-tax impact of the amortization of goodwill from purchase acquisitions. See page 15 for further discussion of these amounts and ratios
(c)	Ratios for the first nine months of 2001 exclude the $140 million pre-tax venture capital fair value adjustment, recorded in the second quarter of 2001

“Having increased retail account deposits by approximately $1 billion since the announcement of our agreement with Citizens, we’re on track for a successful completion of that transaction. And the nine-percent increase in earnings contribution from our core business sectors over the same period a year ago despite extremely challenging external conditions clearly demonstrates that our strategic vision is sound and achievable,” said Martin G. McGuinn, Mellon chairman and chief executive officer.

The Corporation also declared a quarterly common stock dividend of 12 cents per share. This cash dividend is payable on Nov. 15, 2001, to shareholders of record at the close of business on Oct. 31, 2001. The Corporation previously announced on July 17, 2001, that it was realigning its dividend to be consistent with other growth companies in the financial services industry. This will enable the Corporation to re-deploy additional capital to continue to invest in its fee businesses, including acquisitions, and to repurchase shares. The lower dividend will result in additional annual capital for reinvestment of approximately $225 million.

Third Quarter 2001 Financial Data – Continuing Operations:

• Core business sectors’ contribution to earnings per share increased 9 percent over the third quarter of 2000, resulting from good performance in the Private Client Services, and the Processing and Corporate Services sectors.

• Return on equity totaled 20.6 percent compared with 20.0 percent in the third quarter of 2000. Return on assets was 2.02 percent compared with 2.55 percent in the third quarter of 2000.

• Fee revenue totaled 83 percent of net interest and fee revenue in the third quarter of 2001, unchanged from the third quarter of 2000. Trust and investment fee revenue totaled 68 percent of net interest and fee revenue in the third quarter of 2001, compared with 64 percent in the third quarter of 2000.

Mellon Reports Earnings
Oct. 16, 2001
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•	Fee revenue decreased 5 percent compared to the prior-year period excluding the impact of acquisitions, reflecting the weakness in the equity markets. Trust and investment fee revenue was down only 1 percent as business growth primarily offset the impact of a capital markets slowdown.
•	Assets under management totaled $547 billion, compared with $546 billion at June 30, 2001, with assets under management, administration or custody totaling more than $2.6 trillion at Sept. 30, 2001. The July 2001 acquisition of Standish Mellon Asset Management added $41 billion to managed assets in the third quarter of 2001. Assets managed by subsidiaries and affiliates outside the United States totaled $67 billion at Sept. 30, 2001. The equity markets at Sept. 30, 2001, as measured by the Standard and Poor’s 500 Index, decreased 15 percent compared with June 30, 2001.
•	Operating expense was essentially unchanged in the third quarter of 2001 compared with the third quarter of 2000, excluding the impact of acquisitions.
•	Nonperforming assets totaled $126 million, or 1.23 percent of total loans and net acquired property at Sept. 30, 2001, compared with $128 million, or 1.28 percent of total loans and net acquired property at June 30, 2001.
•	The Corporation repurchased approximately 3.4 million common shares during the quarter, bringing year-to-date repurchases to approximately 23.4 million shares. Since Jan. 1, 1999, the Corporation’s common shares outstanding have been reduced by 56.0 million shares, or 10.7 percent, net of reissuances, due to stock repurchases totaling approximately $2.8 billion, at an average share price of $38.12 per share. In addition, during the third quarter of 2001 the Corporation entered into forward stock repurchase contracts for 9.8 million shares of its common stock totaling $342 million, at an average share price of $34.76 per share. These contracts will settle, and the Corporation will acquire the shares, no later than Jan. 2002. At Sept. 30, 2001, after considering the shares repurchased and those committed to be repurchased, an additional 10.4 million shares were available for repurchase under the current program. During the third quarter of 2001, the board of directors also authorized the repurchase of the number of common shares that will be issued in connection with the acquisition of Eagle Investment Systems, expected to close in the fourth quarter of 2001.
Mellon Financial Corporation is a global financial services company. Headquartered in Pittsburgh, Mellon is one of the world’s leading providers of asset management, trust, custody, benefits consulting and administration, shareholder services and cash management, and offers a comprehensive array of financial services for affluent individuals and corporations. Mellon has more than $2.6 trillion in assets under management, administration or custody, including $547 billion under management. Its asset management companies include The Dreyfus Corporation and Newton Investment Management Limited (U.K.).
Pre-recorded comments from Steven G. Elliott, senior vice chairman and chief financial officer, regarding third quarter 2001 earnings and Mellon’s outlook for the fourth quarter of 2001 and full year 2002 are available by calling (412) 236-5385 beginning at approximately 1:30 p.m. EDT on Tuesday, Oct. 16, 2001, through 5 p.m. EDT on Tuesday, Oct. 23, 2001. These comments may include additional forward-looking or other material information. Mr. Elliott’s pre-recorded commentary, plus a related series of graphics, also will be available at our Web site (www.mellon.com) during the same period.
Note: Detailed supplemental financial information follows.

Mellon Reports Earnings
Oct. 16, 2001
Page 4

Discontinued Operations

The results of regional consumer banking, small business banking, middle market banking, jumbo and other consumer mortgages, as well as the Mellon Leasing Corporation businesses that served mid-to-large corporations and vendors of small ticket equipment, and Mellon Business Credit, which were sold in June 2001, are reflected as discontinued operations throughout the Corporation’s financial statements. In accordance with generally accepted accounting principles, earnings and net assets or liabilities of these businesses are shown separately in the income statement and balance sheet, respectively, for all periods presented. The discussion and financial information in this earnings release, including all supplemental information, reflects continuing operations, unless otherwise noted.

Business Sectors

The presentation of the Corporation’s core business sectors’ results is consistent with its emphasis on high growth, fee-based businesses. The core business sectors are classified as either Asset Management or Processing and Corporate Services sectors.

Summary	% of Core Sector Revenue		% of Core Sector Income Before Taxes		% of Core Sector Revenue		% of Core Sector Income Before Taxes
	3Q01	3Q00	3Q01	3Q00	YTD01	YTD00	YTD01	YTD00
Asset Management	43%	47%	48%	53%	42%	47%	47%	53%
Processing and Corporate
Services	57%	53%	52%	47%	58%	53%	53%	47%
Total Core Business Sectors	100%	100%	100%	100%	100%	100%	100%	100%

Contribution To Earnings Per Share From Total Core Business Sectors
(in millions, except per share amounts)	3Q01	3Q00	Growth	YTD01	YTD00	Growth
Net Income	$178	$175	2%	$ 546	$ 513	6%
Contribution to EPS	$ .38	$ .35	9%	$1.14	$1.03	11%
Contribution to EPS – excluding goodwill amortization	$ .41	$ .39	5%	$1.24	$1.13	10%

Contribution To Earnings Per Share From Total Core Business Sectors – Five-Quarter Trend
(in millions, except per share amounts)	3Q01	2Q01	1Q01	4Q00	3Q00
Net Income	$178	$188	$180	$176	$175
Contribution to EPS	$ .38	$ .39	$ .37	$ .36	$ .35
Contribution to EPS – excluding goodwill amortization	$ .41	$ .43	$ .40	$ .39	$ .39

Mellon Reports Earnings
Oct. 16, 2001
Page 5

(dollar amounts in millions,    presented on a FTE basis)	Third Quarter 2001						Third Quarter 2000
Sector	Total Revenue	Income Before Taxes		Return on Common Equity		Total Revenue	Income Before Taxes	Return on Common Equity
Asset Management:
Private Client Services	$126	$	61	66	%	$114	$ 49	50	%
Global Investment Management	271		79	29		278	105	44
Total Asset Management Sectors	397		140	39		392	154	45
Processing and Corporate Services:
Global Investment Services	326		69	27		268	64	31
Global Cash Management	112		39	67		95	29	50
Relationship Lending	78		43	17		87	41	12
Total Processing and Corporate
Services Sectors	516		151	27		450	134	23
Total Core Business Sectors	$913	$	291	32	%	$842	$288	31	%

(dollar amounts in millions,    presented on a FTE basis)	First Nine Months 2001						First Nine Months 2000
Sector	Total Revenue	Income Before Taxes	Return on Common Equity		Total Revenue		Income Before Taxes	Return on Common Equity
Asset Management:
Private Client Services	$   366	$170	62	%	$	329	$141	51	%
Global Investment Management	789	250	32			828	298	43
Total Asset Management Sectors	1,155	420	40			1,157	439	45
Processing and Corporate Services:
Global Investment Services	1,023	243	33			802	198	34
Global Cash Management	317	99	53			276	81	50
Relationship Lending	240	125	15			243	117	12
Total Processing and Corporate
Services Sectors	1,580	467	26			1,321	396	23
Total Core Business Sectors	$2,735	$887	31	%	$	2,478	$835	31	%

Mellon Reports Earnings
Oct. 16, 2001
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Asset Management
3Q 2001 vs. 3Q 2000	Total Revenue		Operating Expense	Income Before
	Growth		Growth	Taxes Growth
Private Client Services	11	%	1%	23	%
Global Investment Management	(2	)%	12%	(24	)%
Total Asset Management	2	%	9%	(9	)%
YTD 2001 vs. YTD 2000	Total Revenue		Operating Expense	Income Before
	Growth		Growth	Taxes Growth
Private Client Services	11	%	5%	20	%
Global Investment Management	(5	)%	2%	(16	)%
Total Asset Management	—	%	2%	(4	)%

The Asset Management sectors’ results reflect the continued weakness in the equity markets, as represented by the Standard and Poor’s 500 Index, which was down 27.5% at Sept. 30, 2001 compared with Sept. 30, 2000, partially offset by a stronger fixed income market as represented by the Lehman Brothers Long-Term Government Bond Index, which is up 14.3% over the same period. The Private Client Services sector continued to show good revenue and income before taxes growth for the third quarter and first nine months of 2001, primarily resulting from higher net interest revenue and effective expense management. The results of the Global Investment Management sector were impacted by the July 2001 Standish Mellon Asset Management acquisition Excluding the impact of the acquisition, revenue decreased 7% and 6% respectively, for the third quarter and first nine months of 2001, while expenses increased 4% for the third quarter and decreased 1% for the first nine months of 2001. The lower revenue levels reflected the equity market conditions in 2001.

Processing and Corporate Services

3Q 2001 vs. 3Q 2000	Total Revenue		Operating Expense		Income Before
	Growth		Growth		Taxes Growth
Global Investment Services	21	%	25	%	10%
Global Cash Management	17	%	5	%	45%
Relationship Lending	(5	)%	(9	)%	8%
Total Processing and Corporate Services	15	%	16	%	17%
YTD 2001 vs. YTD 2000	Total Revenue		Operating Expense		Income Before
	Growth		Growth		Taxes Growth
Global Investment Services	28	%	29	%	23%
Global Cash Management	15	%	12	%	22%
Relationship Lending	(1	)%	(1	)%	7%
Total Processing and Corporate Services	20	%	22	%	18%

Mellon Reports Earnings
Oct. 16, 2001
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Processing and Corporate Services revenue increased 15% and 20%, respectively, for the third quarter and first nine months of 2001, while income before taxes increased 17% and 18% for the same periods. The results of the Global Investment Services sector were favorably impacted by the December 2000 acquisition of the remaining 50% interest in Mellon Investor Services. Excluding the impact of the acquisition, revenue for this sector increased 4% and 9%, respectively, for the third quarter and first nine months of 2001, while operating expenses increased 5% and 6%, respectively, for the third quarter and for the first nine months of 2001. The Global Cash Management sector reported excellent growth in revenue and income before taxes from new business and higher volumes from existing customers. The results of the Relationship Lending sector reflected lower fee revenue offset by lower operating expenses compared with the prior periods.

Noninterest Revenue

	Quarter ended								Nine months ended
(dollar amounts in millions,	Sept. 30,			Sept. 30,					Sept. 30,		Sept. 30,
unless otherwise noted)	2001			2000					2001		2000
Trust and investment fee revenue:
Investment management fee revenue:
Managed mutual funds	$	182			$	173		$	520				$	499
Institutional		83				75			240					223
Private clients		80				78			241					231
Total investment management fee revenue		345				326			1,001					953
Administration and custody fee revenue		188				150			602					496
Benefits consulting		70				66			205					185
Brokerage fees		7				11			30					45
Total trust and investment fee revenue		610				553			1,838					1,679
Cash management revenue		62				53			176					150
Foreign currency and securities trading revenue		39				42			141					135
Financing-related revenue		40				37			117					104
Equity investment revenue		(20	)			20			(157	)				73
Other		10				7			30					29
Total fee and other revenue		741				712			2,145					2,170
Gains on sales of securities	—					—			—					—
Total noninterest revenue	$	741			$	712		$	2,145				$	2,170
Fee revenue as a percentage of net interest and
fee revenue (FTE)		83	%			83	%		84	%		(a)		84	%
Trust and investment fee revenue as a percentage of
net interest and fee revenue (FTE)		68	%			64	%		67	%		(a)		64	%
Assets under management at period end (in billions)	$	547			$	540
Assets under administration or custody at period
end (in billions)	$	2,077			$	2,298
S&P 500 Index at period end	1,041					1,437
(a)    Excludes the second quarter 2001 $140 million pre-tax impact of the fair value adjustment of venture capital investments.
Note: For analytical purposes, the term “fee revenue,” as utilized throughout this earnings release, is defined as total noninterest revenue less gains on the sales of securities.

Mellon Reports Earnings
Oct. 16, 2001
Page 8

Fee revenue

Fee revenue of $741 million in the third quarter of 2001 when compared with the third quarter of 2000 was impacted by the December 2000 acquisition of the remaining 50% interest in Mellon Investor Services and the July 2001 acquisition of Standish Mellon Asset Management. Excluding the impact of acquisitions, fee revenue decreased 5% in the third quarter of 2001, compared with the third quarter of 2000, reflecting the weakness in the equity markets. Trust and investment fee revenue excluding the effect of acquisitions was down only 1% in the third quarter of 2001 compared with the third quarter of 2000, despite the 27.5% drop in the equity markets as represented by the Standard and Poor’s 500 Index.

	3rd Qtr. 2001		Nine Mo. 2001
	over		over
Fee revenue growth (a)	3rd Qtr. 2000		Nine Mo. 2000
Trust and investment fee revenue growth	(1	)%	2	%
Total fee revenue growth (b)	(5	)%	(1	)%
– excluding equity investment revenue	1	%	3	%
S&P 500 Index at period end	1,041		1,437

(a)	Excludes the effect of acquisitions and the May 2000 expiration of the long-term mutual fund administration contract with a third party.
(b)	Also excludes the second quarter 2001 $140 million pre-tax fair value adjustment of venture capital investments.

Investment management fee revenue

Investment management fee revenue increased $19 million, or 6%, in the third quarter of 2001, compared with the third quarter of 2000, and increased $48 million, or 5%, in the first nine months of 2001, compared with the first nine months of 2000. The increase in the third quarter of 2001 compared to the third quarter of 2000 primarily resulted from increased investment management fee revenue relating to fixed-income and money market mutual funds as well as the Standish Mellon acquisition. Excluding the effect of this acquisition, investment management fee revenue increased 2% as the positive effect of new business offset the effect of the weakened equity markets.

Mutual fund management fees are based upon the daily average net assets of each fund. The average assets of proprietary mutual funds managed in the third quarter of 2001 were $164 billion, up $22 billion, or 15%, from $142 billion in the third quarter of 2000. The increase primarily resulted from increases in average net assets of institutional taxable money market funds, offset in part by lower average net assets of equity funds. Proprietary equity funds averaged $47 billion in the third quarter of 2001, a decrease of $12 billion, or 20%, compared with $59 billion in the third quarter of 2000.

As shown in the table on the following page, the market value of assets under management was $547 billion at Sept. 30, 2001, a $1 billion increase from $546 billion at June 30, 2001, and a $7 billion increase from $540 billion at Sept. 30, 2000. The increase compared with the prior periods was due to the Standish Mellon acquisition, which added $41 billion to managed assets, offsetting the effect of weakness in equity markets in 2001. The equity markets at Sept. 30, 2001, as measured by the Standard and Poor’s 500 Index, decreased

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Oct. 16, 2001
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15.0% compared with June 30, 2001, and decreased 27.5% compared with Sept. 30, 2000, while a key bond market benchmark, the Lehman Brothers Long-Term Government Bond Index, increased 6.6% at Sept. 30, 2001, compared to June 30, 2001, and increased 14.3% compared to Sept. 30, 2000.

Market value of assets under management, administration or custody at period end
	Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,
(in billions)	2001		2001		2001		2000		2000
Mutual funds managed:
Equity funds	$	43	$	51	$	47	$	54	$	60
Money market funds		93		92		81		68		64
Bond and fixed-income funds		27		22		22		21		21
Nonproprietary		22		25		23		31		32
Total mutual funds managed		185		190		173		174		177
Institutional (a)		316		306		298		302		309
Private clients		46		50		49		54		54
Total market value of assets
under management	$	547	$	546	$	520	$	530	$	540
Market value of assets under
administration or custody (b)(c)	$	2,077	$	2,295	$	2,251	$	2,267	$	2,298
Total market value of assets under
management, administration or custody	$	2,624	$	2,841	$	2,771	$	2,797	$	2,838
S&P 500 Index at period end	1,041			1,224		1,160		1,320		1,437

(a)	Includes assets managed at Pareto Partners of $28 billion at Sept. 30, 2001, $29 billion at June 30, 2001, $28 billion at March 31, 2001, $29 billion at Dec. 31, 2000, and $29 billion at Sept. 30, 2000. The Corporation has a 30% equity interest in Pareto Partners.
(b)	Includes $276 billion of assets at Sept. 30, 2001; $299 billion of assets at June 30, 2001; $300 billion of assets at March 31, 2001; $323 billion of assets at Dec. 31, 2000; and $330 billion of assets at Sept. 30, 2000, administered by CIBC Mellon Global Securities Services, a joint venture between the Corporation and the Canadian Imperial Bank of Commerce.
(c)	Assets administered by the Corporation under ABN AMRO Mellon, a strategic alliance of the Corporation and ABN AMRO, included in the table above, were $118 billion at Sept. 30, 2001; $123 billion at June 30, 2001; $103 billion at March 31, 2001; $95 billion at Dec. 31, 2000; and $84 billion at Sept. 30, 2000.

Administration and custody fee revenue

Administration and custody fee revenue increased $38 million, or 25%, in the third quarter of 2001 compared with the third quarter of 2000, and increased $106 million, or 21%, in the first nine months of 2001, compared with the first nine months of 2000. These increases resulted from the December 2000 acquisition of the remaining 50% interest in Mellon Investor Services. Excluding the acquisition, administration and custody fee revenue decreased 5% compared to the third quarter of 2000, primarily due to lower securities lending revenue and lower mutual fund administration revenue. The results of Mellon Investor Services had been accounted for under the equity method of accounting prior to the acquisition, with the net results recorded as institutional trust and custody revenue. Following the acquisition, the gross fee revenue from this business is primarily included in institutional trust and custody revenue. Mellon Investor Services generated $49 million of gross fee revenue in the third quarter of 2001.

The market value of assets under administration or custody, shown in the table above, was $2,077 billion at Sept. 30, 2001, a decrease of $218 billion, or 10% unannualized, compared with $2,295 billion at June 30, 2001, and a decrease of $221 billion, or 10%, compared with $2,298 billion at Sept. 30, 2000, reflecting, in large part, the weakened equity market.

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Oct. 16, 2001
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Benefits consulting fees generated by Buck Consultants increased $4 million, or 6%, in the third quarter of 2001, compared with the third quarter of 2000. This increase primarily reflects new client project activity and revenue from existing clients.

The $4 million, or 34%, decrease in brokerage fees in the third quarter of 2001 compared to the third quarter of 2000 resulted from lower trading volumes in the volatile equities markets. Dreyfus Brokerage Services, Inc. averaged approximately 5,300 trades per day in the third quarter of 2001, compared with approximately 11,000 trades per day in the third quarter of 2000.

Cash management revenue increased $9 million, or 19%, in the third quarter of 2001, compared with the prior-year period. The increase primarily resulted from higher volumes of cash management business, particularly in electronic and lockbox services. Cash management revenue does not include revenue from customers holding compensating balances on deposits in lieu of paying cash fees. The earnings on the compensating balances are recognized in net interest revenue.

Foreign currency and securities trading revenue decreased $3 million, or 8%, to $39 million in the third quarter of 2001, compared with the prior-year period, primarily due in part to lower securities trading revenue.

Financing-related and equity investment revenue totaled $20 million in the third quarter of 2001, compared with $57 million of revenue in the third quarter of 2000. Financing-related revenue, which primarily includes loan commitment fees; letters of credit and acceptance fees; gains or losses on loan sales; and gains or losses on lease residuals, increased $3 million in the third quarter of 2001 compared with the third quarter of 2000. Equity investment revenue, which includes realized and unrealized gains and losses on venture capital and non-venture capital investments, decreased $40 million in the third quarter of 2001, compared with the third quarter of 2000, primarily due to additional charges for fair value adjustments of investments in the venture capital portfolio. A net charge of $28 million pre-tax, $18 million after-tax, or $.04 per share, for the venture capital portfolio was recorded in the third quarter of 2001, compared with net gains of $8 million pre-tax, $5 million after-tax, or $.01 per share in the third quarter of 2000. The Corporation recorded a $140 million pre-tax, $91 million after-tax, or $.19 per share, charge for fair value adjustments in the second quarter of 2001.

Fee revenue for the first nine months of 2001 totaled $2.145 billion, a $25 million decrease compared with the first nine months of 2000. Fee revenue in the first nine months of 2001 was positively impacted by the December 2000 acquisition of the remaining 50% interest in Mellon Investor Services and the July 2001 acquisition of Standish Mellon, offset by the previously-disclosed May 2000 expiration of a long-term mutual fund administration contract with a third party, and the second quarter 2001 fair value adjustment of venture capital investments. Excluding these factors, fee revenue for the first nine months of 2001 decreased 1% compared with the first nine months of 2000, due to lower equity investment revenue, offset in part by higher trust and investment and cash management revenue.

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Oct. 16, 2001
Page 11

Net Interest Revenue
	Quarter ended							Nine months ended
	Sept. 30,			Sept. 30,			Sept. 30,			Sept. 30,
(dollar amounts in millions)	2001			2000			2001			2000
Net interest revenue (FTE)	$	151		$	147		$	437		$	428
Net interest margin (FTE)		2.36	%		2.93	%		2.51	%		2.82	%
Average money market investments	$	4,296		$	2,005		$	3,114		$	1,976
Average trading account securities	$	345		$	322		$	363		$	262
Average securities	$	10,888		$	6,166		$	9,378		$	6,148
Average loans	$	10,026		$	11,252		$	10,461		$	11,685
Average interest-earning assets	$	25,555		$	19,745		$	23,316		$	20,071

Net interest revenue on a fully taxable equivalent basis increased $4 million in the third quarter of 2001 compared with the third quarter of 2000, on a higher level of interest-earning assets, while the net interest margin of 2.36% was 57 basis points lower than in the prior-year period, reflecting a lower yielding asset mix. Average interest-earning assets increased $5.8 billion, as a $4.7 billion increase in average securities and a $2.3 billion increase in average money market investments were partially offset by a $1.2 billion decrease in average loans.

Net interest revenue on a fully taxable equivalent basis increased $9 million, or 2%, in the first nine months of 2001 compared with the prior-year period. This increase primarily resulted from the same factors that impacted the quarterly comparisons.

Operating Expense
		Quarter ended							Nine months ended
(dollar amounts in millions)	Sept. 30, 2001			Sept. 30, 2000			Sept. 30, 2001				Sept. 30, 2000
Staff expense	$	364		$	338			$	1,101		$	1,002
Professional, legal and other purchased services		78			69				228			192
Net occupancy expense		54			45				159			135
Equipment expense		40			32				113			97
Amortization of goodwill		20			18				59			55
Amortization of other intangible assets		2			2				5			5
Other expense		54			57				176			193
Total operating expense	$	612		$	561			$	1,841		$	1,679
Efficiency ratio (a)	68		%	65		%			67	%		64	%
Efficiency ratio excluding amortization of goodwill	66		%	62		%			65	%		62	%

(a) Operating expense as a percentage of fee and net interest revenue, computed on a taxable equivalent basis, excluding the second quarter 2001 fair value adjustment of venture capital investments, and the gains on the sales of securities.

The higher levels of operating expense in 2001 compared with the comparable periods in 2000 were due to acquisitions. Excluding the effect of acquisitions, operating expense was essentially flat compared with the prior-year periods.

MellonReports Earnings
Oct. 16, 2001
Page 12

		3rd Qtr. 2001	Nine mo. 2001
		over	over
Operating expense growth		3rd Qtr. 2000	Nine mo. 2000
Operating expense growth (a)		–%		1%
(a)	Excludes the effect of acquisitions.

Income Taxes

The Corporation’s effective tax rate on income from continuing operations for the first nine months of 2001 was 35.5% compared with 36.3% for the first nine months of 2000. It is currently anticipated that the effective tax rate will be approximately the same for the remainder of 2001.

Provision for Credit Losses, Reserve for Credit Losses and Review of Net Credit Losses

	Quarter ended							Nine months ended
(dollar amounts in millions)	Sept. 30, 2001			Sept. 30, 2000			Sept. 30, 2001			Sept. 30, 2000
Provision for credit losses	$	5		$	(8	)	$	(9	)	$	4
Net credit (losses) recoveries:
Commercial real estate	$	—		$	—		$	—		$	5
Commercial and financial		(21	)		(3	)	(42		)		(16	)
Consumer credit	—				(1	)	—				(1	)
Total net credit losses	$	(21	)	$	(4	)	$	(42	)	$	(12	)
Annualized net credit losses to average loans	.85		%	.13		%	.55		%		.14	%
Reserve for credit losses at end of period	$	221		$	280
Reserve as a percentage of total loans		2.16	%	2.47		%
Reserve as a percentage of nonperforming loans	180		%	214		%

Net credit losses totaled $21 million in the third quarter of 2001 and primarily resulted from credit losses on loans that were on nonperforming status, which were sold in the third quarter of 2001. An impairment reserve, which approximated the amount of the credit losses, had been previously assigned to these loans. The reserve for credit losses as a percentage of loans was 2.16% at Sept. 30, 2001, compared with 2.47% at Sept. 30, 2000.

MellonReportsEarnings
Oct. 16, 2001
Page13

Nonperforming Assets
(dollar amounts in millions)	Sept. 30, 2001			June 30, 2001				Dec. 31, 2000			Sept. 30, 2000
Nonperforming loans:
Commercial and financial	$	121			$	121		$	159		$	121
Consumer credit		1				2			5			7
Commercial real estate		1				1			1			3
Total nonperforming loans		123				124			165			131
Real estate acquired		2				3			7			4
Other assets acquired		1				1		—				—
Total acquired property		3				4			7			4
Total nonperforming assets	$	126			$	128		$	172		$	135
Nonperforming loans as a percentage of total loans	1.20		%			1.24	%	1.51		%	1.16		%
Nonperforming assets as a percentage of total loans
and net acquired property		1.23	%	1.28			%	1.58		%	1.19		%
Nonperforming assets as a percentage of Tier I capital
plus the reserve for credit losses	4.67		%	4.23			%	4.95		%	3.89		%

Nonperforming assets decreased $2 million, compared with June 30, 2001, $46 million compared with Dec. 31, 2000, and $9 million, compared with Sept. 30, 2000. The decreases resulted from the sale of nonperforming loans and principal repayments offset in part by the addition of new credits to nonperformingstatus. Approximately one-third of the $126 million balance oftotal nonperforming assets at Sept. 30, 2001, resulted from $41 million of outstandings to a California-based electric and natural gas utility company that voluntarily filed for Chapter 11 bankruptcy protection in the second quarter of 2001 as the result of its inability, due to rules governing the industry’s deregulation, to increase rates to levels needed to cover higher costs for power. Theborrower expects that aproposed reorganization plan will become effective during the fourth quarter of 2002.

Mellon ReportsEarnings
Oct. 16, 2001
Page 14

Selected Capital Data
(dollar amounts in millions, except per share amounts; common shares in thousands)	Sept. 30, 2001			Dec. 31, 2000			Sept. 30, 2000
Total shareholders’ equity	$	3,560		$	4,152			$	4,032
Total shareholders’ equity to assets ratio		9.55	%	11.92		%	13.43			%
Tangible shareholders’ equity (a)	$	2,159		$	2,967			$	2,870
Tangible shareholders’ equity to assets ratio (b)		6.02	%		8.84	%			9.97	%
Tier I capital ratio (c)		6.4	% (d)		7.23	%			7.21	%
Total (Tier I plus Tier II) capital ratio (c)		10.5	% (d)	11.74		%	11.72			%
Leverage capital ratio (c)		5.7	% (d)		7.11	%			7.18	%
Book value per common share	$	7.61		$	8.53			$	8.26
Tangible book value per common share	$	4.61		$	6.10			$	5.88
Closing common stock price	$	32.33		$	49.19			$	46.38
Market capitalization	$	15,125		$	23,941			$	22,631
Common shares outstanding	467,834			486,739			487,990

(a)	Includes $47 million, $89 million and $81 million, respectively, of minority interest, primarily related to Newton. In addition, includes $ 291 million, $191 million and $169 million, respectively, of tax benefits related to tax deductible goodwill and intangible assets.
(b)	Shareholders’ equity plus minority interest and less goodwill and intangible assets divided by total assets less goodwill and intangible assets. The amount of goodwill and intangible assets subtracted from shareholders’ equity and total assets is net of the tax benefit.
(c)	Includes discontinued operations
(d)	Estimated.

The Corporation’s equityto assets capital ratios compared with Dec. 31, 2000, reflect the effectofcommon stock repurchases anda higher level of assets,primarily duetoahigher level of money market investments and securities. The decrease in the Corporation’s risk-basedcapital ratios compared withDec. 31, 2000, reflect the effectof common stock repurchases partially offset by a lower level of risk-weighted assets. The risk-based capital ratios include discontinued operations.

During the third quarter of 2001, approximately3.4 million shares of commonstock were repurchased, bringing year-to-date repurchases to approximately 23.4 million shares at a purchasepriceof$1.045 billion for an average share price of $44.64 per share. Common shares outstanding at Sept. 30, 2001, were 10.7% lower than at Dec. 31, 1998, reflecting a56.0million share reduction, net of shares reissued,primarily for employee benefit plan purposes. This reduction was due to stockrepurchases totaling approximately $2.8 billion, at an average share price of $38.12 per share. In addition, during the third quarter of 2001 the Corporation entered into forward stock repurchase contracts for 9.8 million shares of its common stock totaling $342 million, at an average share priceof $34.76 per share. These contracts willsettle, and the Corporation will acquire the shares, no later than Jan. 2002. At Sept. 30, 2001, afterconsidering the shares repurchased and those committedto berepurchased, an additional 10.4 million common shares were available for repurchase under the current share repurchase program authorized by the board of directors in May 2001. During the third quarter of 2001, the board of directors also authorized the repurchase of the number of common shares that will be issued in connection with the acquisition of Eagle Investment Systems, expected to close in the fourth quarter of 2001.

Mellon Reports Earnings
Oct. 16, 2001
Page 15

Impact of New AccountingStandards

In June 2001,the Financial AccountingStandards Board issued Statementsof Financial Accounting Standards (FAS)No. 141, “Business Combinations” and FAS No. 142, “Goodwilland Other Intangible Assets.” These standards,among other things, eliminatedthe pooling of interestsmethodofaccountingand require that goodwill no longer be amortized, but goodwill is subject to impairment testing. The effective date for the elimination of the pooling of interest method was July 1, 2001. For acquisitions completed prior to July 1, 2001, existing goodwill is being amortized through the end of 2001 after whichamortization willcease. For acquisitionscompleted after June 30, 2001, including the Standish Mellon acquisition,thegoodwill is not being amortized. Results excluding the impact of goodwillamortization are shown in the table below.

Pro forma financial results - excluding the amortization of goodwill
		Quarter ended						Nine months ended
(dollar amounts in millions, except per share amounts; ratios annualized)	Sept. 30, 2001			Sept. 30, 2000			Sept. 30, 2001		(a)	Sept. 30, 2000
Operating results - income from continuing operations	$	178		$	195		$	570		$	580
Plus after-tax impact of amortization of goodwill
from purchase acquisitions:
Goodwill		17			17			51			48
Other (b)		2			1			4			4
Pro forma income from continuing operations	$	197		$	213		$	625		$	632
Pro forma earnings per share - diluted	$	.42		$	.43		$	1.30		$	1.27
Pro forma return on common equity	22.7		%	21.8		%	22.4		%	21.9		%
Pro forma return on assets	2.23		%	2.77		%	2.56		%		2.73	%

(a)	Results from continuing operations for the first nine months of 2001 exclude a $91 million after-tax charge for the fair value adjustment of investments in the ventures capital portfolio, which was recorded in the second quarter of 2001.
(b)	Primarily relates to the goodwill on investments in joint ventures.

Mellon Reports Earnings

Oct. 16, 2001

Page 16

SUMMARY DATA

Mellon Financial Corporation

(dollar amounts in millions,  except per share amounts;  common shares in thousands)	Quarter ended Sept. 30,						Nine months ended Sept. 30,
	2001			2000			2001			2000
Selected key data
Continuing operations (a):
Diluted earnings per share	$	.38		$	.40		$	1.00		$	1.17
Income from continuing operations	$	178		$	195		$	479		$	580
Return on equity		20.6	%		20.0	%		17.2	%		20.1	%
Return on assets		2.02	%		2.55	%		1.96	%		2.50	%
Net income (a):
Diluted earnings per share	$	.40		$	.51		$	1.06		$	1.51
Net income	$	192		$	252		$	511		$	752
Return on equity		22.2	%		25.8	%		18.4	%		26.0	%
Return on assets		1.68	%		2.18	%		1.47	%		2.15	%
Operating results—continuing operations (b):
Diluted earnings per share	$	.38		$	.40		$	1.19		$	1.17
Income from continuing operations	$	178		$	195		$	570		$	580
Return on equity		20.6	%		20.0	%		20.5	%		20.1	%
Return on assets		2.02	%		2.55	%		2.33	%		2.50	%
Operating results—continuing operations excluding
goodwill amortization (b):
Diluted earnings per share	$	.42		$	.43		$	1.30		$	1.27
Income from continuing operations	$	197		$	213		$	625		$	632
Return on equity		22.7	%		21.8	%		22.4	%		21.9	%
Return on assets		2.23	%		2.77	%		2.56	%		2.73	%
Fee revenue as a percentage of net interest and fee revenue      (FTE)		83	%		83	%		84%	(c)		84	%
Trust and investment fee revenue as a percentage of net interest      and fee revenue (FTE)		68	%		64	%		67%	(c)		64	%
Efficiency ratio excluding amortization of goodwill		66	%		62	%		65%	(c)		62	%
Average common shares and equivalents outstanding:
Basic		468,579			488,188			475,232			491,458
Diluted		473,076			495,332			480,892			497,439

- continued -

Mellon Reports Earnings
Oct. 16, 2001
Page 17

SUMMARY DATA
Mellon Financial Corporation
(continued)

	Quarter ended				Nine months ended
	Sept. 30,				Sept. 30,
(dollar amounts in millions)	2001		2000		2001		2000
Average balances
Money market investments	$	4,296	$	2,005	$	3,114	$	1,976
Trading account securities		345		322		363		262
Securities		10,888		6,166		9,378		6,148
Total money market investments and securities		15,529		8,493		12,855		8,386
Loans		10,026		11,252		10,461		11,685
Total interest-earning assets		25,555		19,745		23,316		20,071
Total assets		35,005		30,546		32,672		30,983
Deposits		18,101		17,076		18,278		17,059
Total shareholders’ equity		3,444		3,893		3,722		3,863

(a)	Computed in accordance with generally accepted accounting principles.
(b)	Operating results for the first nine months of 2001 exclude a $91 million after-tax charge for the fair value adjustment of investments in the venture capital portfolio, which was recorded in the second quarter of 2001.
(c)	Ratios for the first nine months of 2001 exclude the $140 million pre-tax venture capital fair value adjustment.
Note:	All calculations are based on unrounded numbers. FTE denotes presentation on a fully taxable equivalent basis.   Returns are annualized.

Mellon Reports Earnings

Oct. 16, 2001

Page 18

CONDENSED CONSOLIDATED INCOME STATEMENT

Mellon Financial Corporation

	Quarter ended Sept. 30,						Nine months ended Sept. 30,
(in millions, except per share amounts)	2001			2000			2001			2000
Net Interest revenue
Net interest revenue	$	148		$	144		$	431		$	424
Provision for credit losses		5			(8	)		(9	)		4
Net interest revenue after provision for credit losses		143			152			440			420
Noninterest revenue
Trust and investment fee revenue		610			553			1,838			1,679
Cash management revenue		62			53			176			150
Foreign currency and securities trading revenue		39			42			141			135
Financing-related revenue		40			37			117			104
Equity investment revenue		(20	)		20			(157	)		73
Other		10			7			30			29
Total fee and other revenue		741			712			2,145			2,170
Gains on sales of securities		—			—			—			—
Total noninterest revenue		741			712			2,145			2,170
Operating expense
Staff expense		364			338			1,101			1,002
Professional, legal and other purchased services		78			69			228			192
Net occupancy expense		54			45			159			135
Equipment expense		40			32			113			97
Amortization of goodwill		20			18			59			55
Amortization of other intangible assets		2			2			5			5
Other expense		54			57			176			193
Total operating expense		612			561			1,841			1,679
Income from continuing operations before income taxes		272			303			744			911
Provision for income taxes		94			108			265			331
Income from continuing operations		178			195			479			580
Discontinued operations:
Income from operations after tax		14			57			133			172
Loss on disposal after tax		—			—			(101	)		—
Income from discontinued operations (net of applicable tax                     expense of $10, $35, $46 and $100)		14			57			32			172
Net income	$	192			$252			$511			$752
Earnings per common share
Continuing operations
Basic	$	.38		$	.40		$	1.01		$	1.18
Diluted	$	.38		$	.40		$	1.00		$	1.17
Net income
Basic	$	.41		$	.52		$	1.08		$	1.53
Diluted	$	.40		$	.51		$	1.06		$	1.51

Mellon Reports Earnings

Oct. 16, 2001

Page 19

CONDENSED CONSOLIDATED BALANCE SHEET

Mellon Financial Corporation

(dollar amounts in millions)	Sept. 30, 2001			Dec. 31, 2000			Sept. 30, 2000
Assets
Cash and due from banks	$	3,456		$	3,234		$	2,624
Money market investments		5,577			3,909			1,208
Trading account securities		224			276			371
Securities available for sale		9,949			7,910			5,323
Investment securities (approximate fair value of $860, $1,027 and $1,058)		838			1,022			1,063
Loans		10,213			10,884			11,331
Reserve for credit losses		(221	)		(273	)		(280	)
Net loans		9,992			10,611			11,051
Premises and equipment		640			581			466
Goodwill		1,692			1,441			1,387
Other intangibles		47			24			25
Net assets of discontinued operations		—			1,150			1,879
Other assets		4,882			4,687			4,630
Total assets	$	37,297		$	34,845		$	30,027
Liabilities
Deposits	$	19,248			21,940		$	16,771
Short-term borrowings		2,102			2,024			2,279
Other liabilities		2,677			2,217			2,423
Notes and debentures (with original maturities over one year)		3,767			3,520			3,531
Trust-preferred securities		1,015			992			991
Net liabilities of discontinued operations		4,928			—			—
Total liabilities		33,737			30,693			25,995
Shareholders’ equity
Common stock—$.50 par value     Authorized—800,000,000 shares     Issued— 588,661,920 shares		294			294			294
Additional paid-in capital		1,863			1,837			1,821
Retained earnings		4,355			4,270			4,155
Accumulated unrealized gain (loss), net of tax		103			(38	)		(87	)
Treasury stock of 120,828,054; 101,922,986, and 100,671,971 shares at cost		(3,055	)		(2,211	)		(2,151	)
Total shareholders’ equity		3,560			4,152			4,032
Total liabilities and shareholders’ equity	$	37,297		$	34,845		$	30,027