8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) – August 7, 2003

MELLON FINANCIAL CORPORATION

(Exact name of registrant as specified in charter)

Pennsylvania	1-7410	25-1233834
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

One Mellon Center 500 Grant Street Pittsburgh, Pennsylvania
(Address of principal executive offices)	15258 (Zip code)

Registrant’s telephone number, including area code – (412) 234-5000

ITEM 7.    FINANCIAL STATEMENTS AND EXHIBITS

The following exhibit is filed herewith.

Exhibit Number	Description
99.1	Mellon Financial Corporation Business Sectors Financial Information and Financial Trends through Second Quarter 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MELLON FINANCIAL CORPORATION
Date:    August 7, 2003
	By:    /s/    MICHAEL A. BRYSON
	Michael A. Bryson           Chief Financial Officer

EXHIBIT INDEX

Number	Description	Method of Filing
99.1	Mellon Financial Corporation Business Sectors Financial Information and Financial Trends through Second Quarter 2003.	Filed herewith

EX-99.1

MELLON FINANCIAL CORPORATION                                                                                                                           Exhibit 99.1

BUSINESS SECTORS (a)

(dollar amounts in millions, averages in	Institutional Asset Mgmt									Mutual Funds									Private Wealth Mgmt									Asset Servicing
billions; presented on an FTE basis)	2002			2001			2000			2002			2001			2000			2002			2001			2000			2002			2001			2000
Revenue:
Trust and investment fee revenue	$	561		$	537		$	510		$	549		$	538		$	538		$	305		$	312		$	313		$	507		$	439		$	393
Other fee revenue		14			9			7			(5	)		3			24			15			15			11			132			168			148
Net interest revenue (expense)		(29	)		(13	)		(3	)		7			1			(8	)		208			165			125			95			124			109
Total revenue		546			533			514			551			542			554			528			492			449			734			731			650
Credit quality expense		—			—			—			—			—			—			—			1			1			—			—			—
Operating expense:
Amortization of goodwill		—			11			11			—			11			10			—			16			15			—			6			6
Other expense		474			386			343			339			328			326			277			254			233			541			456			398
Total operating expense		474			397			354			339			339			336			277			270			248			541			462			404
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		72			136			160			212			203			218			251			221			200			193			269			246
Income taxes (benefits)		27			53			62			85			82			89			89			82			76			68			96			90
Income (loss) from continuing operations before cumulative effect of accounting change		45			83			98			127			121			129			162			139			124			125			173			156
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			—			—			—			—
Income from continuing operations		45			83			98			127			121			129			162			139			124			125			173			156
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	45		$	83		$	98		$	127		$	121		$	129		$	162		$	139		$	124		$	125		$	173		$	156
Average loans	$	—		$	—		$	—		$	—		$	—		$	—		$	2.7		$	2.3		$	2.3		$	—		$	—		$	—
Average assets (c)	$	1.2		$	0.9		$	0.8		$	0.7		$	0.7		$	0.7		$	5.0		$	4.8		$	4.6		$	4.7		$	4.9		$	4.8
Average deposits	$	—		$	—		$	—		$	—		$	—		$	—		$	4.4		$	4.2		$	4.1		$	3.4		$	3.7		$	3.5
Average common equity	$	0.2		$	0.2		$	0.2		$	0.4		$	0.4		$	0.3		$	0.2		$	0.2		$	0.3		$	0.5		$	0.5		$	0.4
Average Tier I preferred equity	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Market value of assets under management at period end (in billions)	$	332		$	349		$	322		$	164		$	152		$	112		$	44		$	50		$	56		$	41		$	41		$	40
Market value of assets under administration or custody at period end (in billions)	$	13		$	6		$	—		$	—		$	—		$	—		$	18		$	21		$	33		$	2,129		$	2,029		$	2,202
Return on common equity (d)		20	%		37	%		52	%		31	%		34	%		40	%		77	%		61	%		54	%		26	%		36	%		37	%
Pretax operating margin (d)		13	%		26	%		31	%		38	%		38	%		39	%		48	%		45	%		45	%		26	%		37	%		38	%

(a) Results for 2000 and 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 1

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

(dollar amounts in millions, averages in	Human Resources Services									Treasury Services									Total Core Sectors									Other Activity									Consolidated Results
billions; presented on an FTE basis)	2002			2001			2000			2002			2001			2000			2002			2001			2000			2002			2001			2000			2002			2001			2000
Revenue:
Trust and investment fee revenue	$	1,059		$	733		$	476		$	8		$	7		$	4		$	2,989		$	2,566		$	2,234		$	(1	)	$	(11	)	$	27		$	2,988		$	2,555		$	2,261
Other fee revenue (b)		28			—			(4	)		357			340			299			541			535			485			195			(303	)		190			736			232			675
Net interest revenue (expense) (c)		(26	)		(12	)		(7	)		472			395			368			727			660			584			(105	)		(78	)		(29	)		622			582			555
Total revenue		1,061			721			465			837			742			671			4,257			3,761			3,303			89			(392	)		188			4,346			3,369			3,491
Credit quality expense		—			—			—			6			2			9			6			3			10			166			(7	)		(2	)		172			(4	)		8
Operating expense:
Amortization of goodwill		—			11			8			—			13			12			—			68			62			—			5			5			—			73			67
Other expense		1,004			669			440			472			436			399			3,107			2,529			2,139			19			48			55			3,126			2,577			2,194
Total operating expense		1,004			680			448			472			449			411			3,107			2,597			2,201			19			53			60			3,126			2,650			2,261
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		57			41			17			359			291			251			1,144			1,161			1,092			(96	)		(438	)		130			1,048			723			1,222
Income taxes (benefits) (d)		19			16			8			127			105			92			415			434			417			(34	)		(147	)		49			381			287			466
Income (loss) from continuing operations before cumulative effect of accounting change		38			25			9			232			186			159			729			727			675			(62	)		(291	)		81			667			436			756
Cumulative effect of accounting change (e)		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—
Income from continuing operations		38			25			9			232			186			159			729			727			675			(62	)		(291	)		81			667			436			756
Income from discontinued operations after-tax (e)		—			—			—			—			—			—			—			—			—			—			—			—			15			882			251
Net income (loss)	$	38		$	25		$	9		$	232		$	186		$	159		$	729		$	727		$	675		$	(62	)	$	(291	)	$	81		$	682		$	1,318		$	1,007
Average loans	$	—		$	—		$	—		$	5.3		$	5.6		$	6.6		$	8.0		$	7.9		$	8.9		$	1.4		$	1.9		$	1.8		$	9.4		$	9.8		$	10.7
Average assets (f)(g)	$	1.9		$	1.0		$	0.7		$	11.2		$	9.9		$	9.9		$	24.7		$	22.2		$	21.5		$	8.6		$	10.6		$	6.5		$	33.7		$	45.5		$	46.7
Average deposits	$	0.1		$	0.1		$	0.1		$	9.8		$	8.6		$	7.3		$	17.7		$	16.6		$	15.0		$	1.3		$	1.0		$	1.4		$	19.0		$	17.6		$	16.4
Average common equity	$	0.3		$	0.2		$	0.1		$	1.0		$	0.8		$	0.9		$	2.6		$	2.3		$	2.2		$	0.8		$	1.4		$	1.7		$	3.4		$	3.7		$	3.9
Average Tier I preferred equity	$	—		$	—		$	—		$	0.2		$	0.2		$	0.3		$	0.2		$	0.2		$	0.3		$	0.8		$	0.8		$	0.7		$	1.0		$	1.0		$	1.0
Market value of assets under management at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	581		$	592		$	530		$	—		$	—		$	—		$	581		$	592		$	530
Market value of assets under administration or custody at period end (in billions)	$	116		$	26		$	32		$	—		$	—		$	—		$	2,276		$	2,082		$	2,267		$	—		$	—		$	—		$	2,276		$	2,082		$	2,267
Return on common equity (h)		14	%		15	%		10	%		23	%		22	%		17	%		28	%		32	%		31	%		n/m			n/m			n/m			20	%		12	%		19	%
Pretax operating margin (h)		5	%		6	%		4	%		43	%		39	%		37	%		27	%		31	%		33	%		n/m			n/m			n/m			24	%		21	%		35	%

(a) Results for 2000 and 2001 include the after-tax impact of the amortization of goodwill from purchase acquisitions.

(b) Consolidated results include FTE impact of $43 million, $40 million and $34 million for 2002, 2001 and 2000, respectively.

(c) Consolidated results include FTE impact of $12 million, $8 million and $ 5 million for 2002, 2001 and 2000, respectively.

(d) Consolidated results include FTE impact of $55 million, $48 million and $39 million for 2002, 2001 and 2000 respectively.

(e) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(f) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(g) Consolidated average assets includes average assets of discontinued operations of $0.4 billion, $12.7 billion and $18.7 billion for 2002, 2001 and 2000 respectively.

(h) On a continuing operations basis.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursement as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 2

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

INSTITUTIONAL ASSET MANAGEMENT – 10 Quarter Trend

(dollar amounts in millions, averages in	2001												2002												2003
billions; presented on an FTE basis)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	124		$	122		$	129		$	162		$	150		$	136		$	129		$	146		$	122		$	143
Other fee revenue		(1	)		3			5			2			4			2			2			6			4			3
Net interest revenue (expense)		(1	)		(1	)		(6	)		(5	)		(7	)		(7	)		(8	)		(7	)		(4	)		(4	)
Total revenue		122			124			128			159			147			131			123			145			122			142
Credit quality expense		—			—			—			—			—			—			—			—			—			—
Operating expense:
Amortization of goodwill		3			3			2			3			—			—			—			—			—			—
Other expense		87			83			98			118			117			109			112			136			114			115
Total operating expense		90			86			100			121			117			109			112			136			114			115
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		32			38			28			38			30			22			11			9			8			27
Income taxes (benefits)		12			15			12			14			11			9			4			3			3			9
Income (loss) from continuing operations before cumulative effect of accounting change		20			23			16			24			19			13			7			6			5			18
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			—			—
Income from continuing operations		20			23			16			24			19			13			7			6			5			18
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	20		$	23		$	16		$	24		$	19		$	13		$	7		$	6		$	5		$	18
Average loans	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Average assets (c)	$	0.7		$	0.8		$	1.0		$	1.1		$	1.2		$	1.2		$	1.3		$	1.3		$	1.4		$	1.4
Average deposits	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Average common equity	$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.5		$	0.5
Average Tier I preferred equity	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	0.3		$	0.3
Market value of assets under management at period end (in billions)	$	306		$	318		$	331		$	349		$	350		$	334		$	313		$	332		$	327		$	358
Market value of assets under administration or custody at period end (in billions)	$	—		$	—		$	—		$	6		$	7		$	7		$	7		$	13		$	13		$	14
Return on common equity (d)(e)		40	%		44	%		29	%		40	%		32	%		24	%		13	%		11	%		4	%		15	%
Pretax operating margin (d)		27	%		30	%		22	%		24	%		20	%		17	%		9	%		6	%		6	%		19	%

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

(e) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 3

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

MUTUAL FUNDS – 10 Quarter Trend

(dollar amounts in millions, averages in	2001												2002												2003
billions; presented on an FTE basis)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	128		$	126		$	140		$	144		$	142		$	143		$	135		$	129		$	124		$	122
Other fee revenue		2			2			—			(1	)		(1	)		(1	)		(2	)		(1	)		—			—
Net interest revenue (expense)		(1	)		1			—			1			1			2			2			2			(2	)		(1	)
Total revenue		129			129			140			144			142			144			135			130			122			121
Credit quality expense		—			—			—			—			—			—			—			—			—			—
Operating expense:
Amortization of goodwill		2			4			2			3			—			—			—			—			—			—
Other expense		79			73			84			92			84			86			83			86			77			79
Total operating expense		81			77			86			95			84			86			83			86			77			79
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		48			52			54			49			58			58			52			44			45			42
Income taxes (benefits)		20			21			22			19			24			23			22			16			16			15
Income (loss) from continuing operations before cumulative effect of accounting change		28			31			32			30			34			35			30			28			29			27
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			—			—
Income from continuing operations		28			31			32			30			34			35			30			28			29			27
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	28		$	31		$	32		$	30		$	34		$	35		$	30		$	28		$	29		$	27
Average loans	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Average assets (c)	$	0.7		$	0.6		$	0.6		$	0.7		$	0.7		$	0.7		$	0.7		$	0.7		$	0.7		$	0.6
Average deposits	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Average common equity	$	0.4		$	0.4		$	0.4		$	0.4		$	0.4		$	0.4		$	0.4		$	0.4		$	0.2		$	0.2
Average Tier I preferred equity	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	0.1		$	0.1
Market value of assets under management at period end (in billions)	$	120		$	133		$	131		$	152		$	164		$	164		$	162		$	164		$	152		$	157
Market value of assets under administration or custody at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Return on common equity (d)(e)		34	%		36	%		34	%		33	%		36	%		34	%		29	%		26	%		51	%		47	%
Pretax operating margin (d)		37	%		41	%		38	%		35	%		41	%		40	%		39	%		34	%		37	%		35	%

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

(e) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 4

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

PRIVATE WEALTH MANAGEMENT – 10 Quarter Trend

	2001												2002												2003
(dollar amounts in millions, averages in billions; presented on an FTE basis)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	81		$	81		$	80		$	70		$	80		$	79		$	75		$	71		$	70		$	69
Other fee revenue		3			3			2			7			3			2			4			6			3			4
Net interest revenue (expense)		34			38			44			49			54			54			52			48			58			59
Total revenue		118			122			126			126			137			135			131			125			131			132
Credit quality expense		—			—			—			1			1			—			(1	)		—			—			—
Operating expense:
Amortization of goodwill		4			3			5			4			—			—			—			—			—			—
Other expense		60			63			62			69			70			66			68			73			68			73
Total operating expense		64			66			67			73			70			66			68			73			68			73
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		54			56			59			52			66			69			64			52			63			59
Income taxes (benefits)		21			21			22			18			23			25			23			18			22			22
Income (loss) from continuing operations before cumulative effect of accounting change		33			35			37			34			43			44			41			34			41			37
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			—			—
Income from continuing operations		33			35			37			34			43			44			41			34			41			37
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	33		$	35		$	37		$	34		$	43		$	44		$	41		$	34		$	41		$	37
Average loans	$	2.4		$	2.3		$	2.4		$	2.4		$	2.5		$	2.7		$	2.8		$	2.7		$	2.7		$	2.8
Average assets (c)	$	4.8		$	4.7		$	4.6		$	5.2		$	5.1		$	5.0		$	4.8		$	5.0		$	5.4		$	5.5
Average deposits	$	4.2		$	4.0		$	3.9		$	4.6		$	4.5		$	4.4		$	4.3		$	4.5		$	4.6		$	4.6
Average common equity	$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.4		$	0.4
Average Tier I preferred equity	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	0.2		$	0.2
Market value of total client assets at period end (in billions)	$	84		$	79		$	71		$	74		$	74		$	70		$	64		$	66		$	64		$	69
Return on common equity (d)(e)		59	%		63	%		66	%		59	%		84	%		82	%		78	%		65	%		39	%		36	%
Pretax operating margin (d)		46	%		46	%		47	%		41	%		48	%		51	%		49	%		41	%		48	%		45	%

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

(e) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement.

The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 5

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

ASSET SERVICING – 10 Quarter Trend

(dollar amounts in millions, averages in billions; presented on an FTE basis)	2001												2002												2003
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	106		$	115		$	103		$	115		$	122		$	134		$	128		$	123		$	116		$	127
Other fee revenue		47			43			38			40			32			34			38			28			33			21
Net interest revenue (expense)		31			28			30			35			28			24			22			21			20			23
Total revenue		184			186			171			190			182			192			188			172			169			171
Credit quality expense		—			—			—			—			—			—			—			—			—			—
Operating expense:
Amortization of goodwill		1			2			1			2			—			—			—			—			—			—
Other expense		110			111			109			126			129			135			139			138			127			129
Total operating expense		111			113			110			128			129			135			139			138			127			129
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		73			73			61			62			53			57			49			34			42			42
Income taxes (benefits)		27			26			22			21			19			20			18			11			15			15
Income (loss) from continuing operations before cumulative effect of accounting change		46			47			39			41			34			37			31			23			27			27
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			—			—
Income from continuing operations		46			47			39			41			34			37			31			23			27			27
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	46		$	47		$	39		$	41		$	34		$	37		$	31		$	23		$	27		$	27
Average loans	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	0.1
Average assets (c)	$	5.3		$	4.6		$	4.9		$	4.9		$	4.5		$	4.6		$	4.9		$	4.8		$	5.4		$	5.7
Average deposits	$	3.9		$	3.3		$	3.8		$	3.7		$	3.2		$	3.4		$	3.4		$	3.4		$	3.5		$	4.2
Average common equity	$	0.4		$	0.4		$	0.4		$	0.5		$	0.4		$	0.5		$	0.4		$	0.5		$	0.5		$	0.6
Average Tier I preferred equity	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	0.1		$	0.1
Market value of assets under management at period end (in billions)	$	44		$	43		$	39		$	41		$	45		$	43		$	44		$	41		$	45		$	51
Market value of assets under administration or custody at period end (in billions)	$	2,193		$	2,243		$	2,030		$	2,029		$	2,162		$	2,066		$	2,071		$	2,129		$	2,157		$	2,369
Return on common equity (d)(e)		40	%		39	%		32	%		33	%		29	%		32	%		26	%		18	%		21	%		19	%
Pretax operating margin (d)		40	%		39	%		36	%		32	%		29	%		30	%		26	%		19	%		25	%		25	%

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

(e) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 6

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

HUMAN RESOURCES SERVICES – 10 Quarter Trend

(dollar amounts in millions, averages in billions; presented on an FTE basis)	2001												2002												2003
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	181		$	193		$	179		$	180		$	279		$	275		$	240		$	265		$	248		$	254
Other fee revenue		(1	)		—			(2	)		3			1			4			17			6			4			1
Net interest revenue (expense)		(2	)		(4	)		(3	)		(3	)		(6	)		(6	)		(7	)		(7	)		(2	)		1
Total revenue		178			189			174			180			274			273			250			264			250			256
Credit quality expense		—			—			—			—			—			—			—			—			—			—
Operating expense:
Amortization of goodwill		2			4			3			2			—			—			—			—			—			—
Other expense		160			169			165			175			252			256			246			250			249			258
Total operating expense		162			173			168			177			252			256			246			250			249			258
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		16			16			6			3			22			17			4			14			1			(2	)
Income taxes (benefits)		6			6			3			1			8			6			1			4			—			(2	)
Income (loss) from continuing operations before cumulative effect of accounting change		10			10			3			2			14			11			3			10			1			—
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			—			—
Income from continuing operations		10			10			3			2			14			11			3			10			1			—
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	10		$	10		$	3		$	2		$	14		$	11		$	3		$	10		$	1		$	—
Average loans	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Average assets (c)	$	0.9		$	0.9		$	0.9		$	1.2		$	1.7		$	1.7		$	2.0		$	2.0		$	2.2		$	2.2
Average deposits	$	0.1		$	0.1		$	0.1		$	0.1		$	0.1		$	0.1		$	0.1		$	0.1		$	0.1		$	0.3
Average common equity	$	0.2		$	0.2		$	0.2		$	0.2		$	0.3		$	0.3		$	0.3		$	0.3		$	0.4		$	0.5
Average Tier I preferred equity	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	0.2		$	0.2
Market value of assets under management at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Market value of assets under administration or custody at period end (in billions)	$	27		$	28		$	26		$	26		$	135		$	121		$	114		$	116		$	112		$	107
Return on common equity (d)(e)		23	%		25	%		9	%		4	%		21	%		15	%		4	%		15	%		1	%		0	%
Pretax operating margin (d)		9	%		9	%		4	%		1	%		8	%		6	%		2	%		5	%		0	%		-1	%

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

(e) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 7

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

TREASURY SERVICES – 10 Quarter Trend

(dollar amounts in millions, averages in billions; presented on an FTE basis)	2001												2002												2003
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	1		$	3		$	1		$	2		$	2		$	2		$	2		$	2		$	2		$	3
Other fee revenue		79			86			86			89			85			90			90			92			90			90
Net interest revenue (expense)		94			98			106			97			113			120			125			114			119			120
Total revenue		174			187			193			188			200			212			217			208			211			213
Credit quality expense		1			—			1			—			1			—			1			4			4			—
Operating expense:
Amortization of goodwill		4			2			3			4			—			—			—			—			—			—
Other expense		103			112			107			114			112			117			116			127			119			120
Total operating expense		107			114			110			118			112			117			116			127			119			120
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		66			73			82			70			87			95			100			77			88			93
Income taxes (benefits)		24			27			30			24			31			34			36			26			31			33
Income (loss) from continuing operations before cumulative effect of accounting change		42			46			52			46			56			61			64			51			57			60
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			—			—
Income from continuing operations		42			46			52			46			56			61			64			51			57			60
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	42		$	46		$	52		$	46		$	56		$	61		$	64		$	51		$	57		$	60
Average loans	$	5.9		$	5.7		$	5.3		$	5.4		$	5.3		$	5.5		$	5.4		$	5.1		$	4.0		$	3.7
Average assets (c)	$	10.4		$	9.7		$	9.7		$	9.7		$	9.8		$	9.4		$	12.5		$	13.2		$	14.1		$	10.1
Average deposits	$	9.0		$	8.3		$	8.6		$	8.7		$	8.5		$	8.0		$	11.0		$	11.8		$	12.4		$	8.5
Average common equity	$	0.9		$	0.9		$	0.8		$	0.8		$	1.1		$	1.0		$	1.1		$	0.9		$	1.2		$	1.1
Average Tier I preferred equity	$	0.3		$	0.3		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.1		$	0.1
Market value of assets under management at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Market value of assets under administration or custody at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Return on common equity (d)(e)		18	%		21	%		27	%		24	%		22	%		24	%		24	%		21	%		19	%		22	%
Pretax operating margin (d)		38	%		39	%		42	%		37	%		44	%		45	%		46	%		37	%		42	%		44	%

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

(e) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 8

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

TOTAL CORE SECTORS – 10 Quarter Trend

(dollar amounts in millions, averages in	2001												2002												2003
billions; presented on an FTE basis)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	621		$	640		$	632		$	673		$	775		$	769		$	709		$	736		$	682		$	718
Other fee revenue		129			137			129			140			124			131			149			137			134			119
Net interest revenue (expense)		155			160			171			174			183			187			186			171			189			198
Total revenue		905			937			932			987			1,082			1,087			1,044			1,044			1,005			1,035
Credit quality expense		1			—			1			1			2			—			—			4			4			—
Operating expense:
Amortization of goodwill		16			18			16			18			—			—			—			—			—			—
Other expense		599			611			625			694			764			769			764			810			754			774
Total operating expense		615			629			641			712			764			769			764			810			754			774
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		289			308			290			274			316			318			280			230			247			261
Income taxes (benefits)		110			116			111			97			116			117			104			78			87			92
Income (loss) from continuing operations before cumulative effect of accounting change		179			192			179			177			200			201			176			152			160			169
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			—			—
Income from continuing operations		179			192			179			177			200			201			176			152			160			169
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	179		$	192		$	179		$	177		$	200		$	201		$	176		$	152		$	160		$	169
Average loans	$	8.3		$	8.0		$	7.7		$	7.8		$	7.8		$	8.2		$	8.2		$	7.8		$	6.7		$	6.6
Average assets (c)	$	22.8		$	21.3		$	21.7		$	22.8		$	23.0		$	22.6		$	26.2		$	27.0		$	29.2		$	25.5
Average deposits	$	17.2		$	15.7		$	16.4		$	17.1		$	16.3		$	15.9		$	18.8		$	19.8		$	20.6		$	17.6
Average common equity	$	2.3		$	2.3		$	2.2		$	2.3		$	2.6		$	2.6		$	2.6		$	2.5		$	3.2		$	3.3
Average Tier I preferred equity	$	0.3		$	0.3		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	1.0		$	1.0
Market value of assets under management at period end (in billions)	$	520		$	546		$	547		$	592		$	610		$	588		$	562		$	581		$	566		$	612
Market value of assets under administration or custody at period end (in billions)	$	2,251		$	2,295		$	2,077		$	2,082		$	2,324		$	2,213		$	2,209		$	2,276		$	2,300		$	2,510
Return on common equity (d)(e)		31	%		33	%		32	%		31	%		31	%		31	%		27	%		24	%		20	%		21	%
Pretax operating margin (d)		32	%		33	%		31	%		28	%		29	%		29	%		27	%		22	%		25	%		25	%

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

(e) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 9

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

OTHER ACTIVITY – 10 Quarter Trend

(dollar amounts in millions, averages in	2001												2002												2003
billions; presented on an FTE basis)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	(3	)	$	(2	)	$	(3	)	$	(3	)	$	—		$	(1	)	$	1		$	(1	)	$	—		$	(1	)
Other fee revenue		40			(114	)		14			(243	)		54			36			34			71			45			50
Net interest revenue (expense)		(13	)		(22	)		(23	)		(20	)		(25	)		(31	)		(27	)		(22	)		(29	)		(30	)
Total revenue		24			(138	)		(12	)		(266	)		29			4			8			48			16			19
Credit quality expense		(16	)		1			4			4			2			160			2			2			—			3
Operating expense:
Amortization of goodwill		2			—			2			1			—			—			—			—			—			—
Other expense		6			(2	)		(18	)		62			8			(9	)		(8	)		28			4			9
Total operating expense		8			(2	)		(16	)		63			8			(9	)		(8	)		28			4			9
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		32			(137	)		—			(333	)		19			(147	)		14			18			12			7
Income taxes (benefits)		12			(47	)		—			(112	)		8			(52	)		4			6			5			3
Income (loss) from continuing operations before cumulative effect of accounting change		20			(90	)		—			(221	)		11			(95	)		10			12			7			4
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			(7	)		—
Income from continuing operations		20			(90	)		—			(221	)		11			(95	)		10			12			—			4
Income from discontinued operations after-tax (b)		—			—			—			—			—			—			—			—			—			—
Net income (loss)	$	20		$	(90	)	$	—		$	(221	)	$	11		$	(95	)	$	10		$	12		$	—		$	4
Average loans	$	2.0		$	2.1		$	1.9		$	1.6		$	1.3		$	1.5		$	1.6		$	1.4		$	1.5		$	1.3
Average assets (c)	$	8.2		$	9.4		$	12.8		$	12.0		$	9.0		$	10.3		$	8.0		$	7.2		$	6.1		$	8.8
Average deposits	$	1.1		$	1.0		$	0.9		$	0.8		$	1.2		$	2.0		$	1.1		$	0.9		$	0.8		$	1.5
Average common equity	$	1.7		$	1.4		$	1.2		$	1.5		$	0.9		$	0.8		$	0.7		$	0.8		$	0.2		$	0.3
Average Tier I preferred equity	$	0.7		$	0.7		$	0.8		$	0.8		$	0.8		$	0.8		$	0.8		$	0.8		$	—		$	—
Market value of assets under management at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Market value of assets under administration or custody at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Return on common equity (d)(e)		n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m
Pretax operating margin (d)		n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) On a continuing operations basis.

(e) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 10

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS (a)

CONSOLIDATED RESULTS – 10 Quarter Trend

(dollar amounts in millions, averages in	2001												2002												2003
billions; presented on an FTE basis)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Revenue:
Trust and investment fee revenue	$	618		$	638		$	629		$	670		$	775		$	768		$	710		$	735		$	682		$	717
Other fee revenue		169			23			143			(103	)		178			167			183			208			179			169
Net interest revenue (expense)		142			138			148			154			158			156			159			149			160			168
Total revenue		929			799			920			721			1,111			1,091			1,052			1,092			1,021			1,054
Credit quality expense		(15	)		1			5			5			4			160			2			6			4			3
Operating expense:
Amortization of goodwill		18			18			18			19			—			—			—			—			—			—
Other expense		605			609			607			756			772			760			756			838			758			783
Total operating expense		623			627			625			775			772			760			756			838			758			783
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		321			171			290			(59	)		335			171			294			248			259			268
Income taxes (benefits)		122			69			111			(15	)		124			65			108			84			92			95
Income (loss) from continuing operations before cumulative effect of accounting change		199			102			179			(44	)		211			106			186			164			167			173
Cumulative effect of accounting change (b)		—			—			—			—			—			—			—			—			(7	)		—
Income from continuing operations		199			102			179			(44	)		211			106			186			164			160			173
Income from discontinued operations after-tax (b)		65			(47	)		13			851			5			3			5			2			1			2
Net income (loss)	$	264		$	55		$	192		$	807		$	216		$	109		$	191		$	166		$	161		$	175
Average loans	$	10.3		$	10.1		$	9.6		$	9.4		$	9.1		$	9.7		$	9.8		$	9.2		$	8.2		$	7.9
Average assets (c)(d)	$	48.2		$	45.8		$	45.5		$	42.5		$	33.0		$	33.4		$	34.2		$	34.2		$	35.3		$	34.3
Average deposits	$	18.3		$	16.7		$	17.3		$	17.9		$	17.5		$	17.9		$	19.9		$	20.7		$	21.4		$	19.1
Average common equity	$	4.0		$	3.7		$	3.4		$	3.8		$	3.5		$	3.4		$	3.3		$	3.3		$	3.4		$	3.6
Average Tier I preferred equity	$	1.0		$	1.0		$	1.0		$	1.0		$	1.0		$	1.0		$	1.0		$	1.0		$	1.0		$	1.0
Market value of assets under management at period end (in billions)	$	520		$	546		$	547		$	592		$	610		$	588		$	562		$	581		$	566		$	612
Market value of assets under administration or custody at period end (in billions)	$	2,251		$	2,295		$	2,077		$	2,082		$	2,324		$	2,213		$	2,209		$	2,276		$	2,300		$	2,510
Return on common equity (e)(f)		20	%		11	%		21	%		n/m			25	%		13	%		23	%		19	%		20	%		20	%
Pretax operating margin (e)		35	%		21	%		32	%		n/m			30	%		16	%		28	%		23	%		25	%		25	%

(a) Results for 2001 include the impact of the amortization of goodwill from purchase acquisitions.

(b) The cumulative effect of accounting change and income from discontinued operations have not been allocated to any of the Corporation's reportable sectors.

(c) Where average deposits are in excess of average loans, average assets include an allocation of investment securities equal to such excess.

(d) Consolidated average assets includes average assets of discontinued operations of $1.0 billion, $0.5 billion, $- billion and $- billion for the first, second, third and fourth quarter, respectively, of 2002; $17.2 billion, $15.1 billion, $11.0 billion and $7.7 billion for the first, second, third and fourth quarter, respectively, of 2001.

(e) On a continuing operations basis.

(f) Ratios are annualized.

n/m – not meaningful

In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

Note: Prior periods sector data reflects immaterial reclassifications resulting from minor changes to be consistent with current period presentation.

Page 11

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS – 10 Quarter Trend

NONINTEREST REVENUE

(dollar amounts in millions unless	2001 (a)												2002												2003
otherwise noted)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Investment management	$	324		$	332		$	345		$	374		$	370		$	355		$	340		$	349		$	318		$	334
Human resource services (b)		170			183			168			170			269			264			232			255			240			245
Institutional trust & custody		101			92			97			102			117			125			122			115			109			116
Securities lending revenue		23			31			19			24			19			24			16			16			15			22
Trust and investment fee revenue		618			638			629			670			775			768			710			735			682			717
Cash management revenue		53			61			62			63			68			71			72			74			75			74
Foreign exchange revenue		48			42			38			43			35			37			44			30			38			28
Securities trading revenue		7			5			1			10			4			6			14			13			5			4
Financing-related revenue		40			38			39			(20	)		34			38			34			41			32			38
Equity investment revenue		6			(146	)		(17	)		(223	)		21			(5	)		(23	)		(21	)		3			(18	)
Other revenue		5			13			9			15			6			8			5			28			6			10
Total fee and other revenue		777			651			761			558			943			923			856			900			841			853
Gains on the sales of securities		—			—			—			—			—			—			28			31			11			21
Total noninterest revenue (non-FTE)	$	777		$	651		$	761		$	558		$	943		$	923		$	884		$	931		$	852		$	874
FTE impact		10			10			11			9			10			12			9			12			9			12
Total noninterest revenue (FTE)	$	787		$	661		$	772		$	567		$	953		$	935		$	893		$	943		$	861		$	886
Fee revenue as a percentage of fee and net interest revenue (FTE)		85	%		83	%		84	%		79	%		86	%		86	%		84	%		86	%		84	%		84	%
Trust and investment fee revenue as a percentage of fee and net interest revenue (FTE)		67	%		80	%		68	%		93	%		70	%		70	%		69	%		69	%		67	%		69	%
Market value of assets under management at period end (in billions)	$	520		$	546		$	547		$	592		$	610		$	588		$	562		$	581		$	566		$	612
Market value of assets under administration or custody at period end (in billions)	$	2,251		$	2,295		$	2,077		$	2,082		$	2,324		$	2,213		$	2,209		$	2,276		$	2,300		$	2,510
S&P 500 Index – period end		1,160			1,224			1,041			1,148			1,147			990			815			880			848			975
S&P 500 Index – daily average		1,273			1,234			1,154			1,115			1,132			1,070			895			887			861			938

(a) In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursements as a reduction of expenses. Prior period amounts have been reclassified.

(b) Amounts do no necessarily agree with those presented in Business Sectors which include revenue transferred between sectors under revenue transfer agreements. Additionally, sector amounts are reported on a fully taxable equivalent basis.

Note: For analytical purposes, the term "fee revenue", as utilized throughout this report, is defined as total noninterest revenue less gains on the sales of securities.

Page 12

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS – 10 Quarter Trend

OPERATING EXPENSE

	2001 (a)												2002												2003
(dollar amounts in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Staff Expense:
Compensation	$	265		$	264		$	269		$	311		$	325		$	322		$	322		$	350		$	327		$	324
Employee benefits		19			18			18			20			38			39			32			40			59			58
Incentive (b)		84			84			76			113			113			97			86			101			67			78
Total staff expense		368			366			363			444			476			458			440			491			453			460
Professional, legal and other purchased services		75			78			80			114			83			94			105			107			92			109
Net occupancy expense		52			53			55			59			63			60			63			60			64			65
Equipment expense		38			35			40			44			56			53			51			62			54			50
Business development		30			28			27			32			32			34			32			33			25			26
Communications expense		22			26			24			23			28			30			25			27			27			29
Amortization of goodwill		18			18			18			19			—			—			—			—			—			—
Amortization of other intangible assets		2			1			2			2			3			4			3			5			5			4
Other expense		18			22			16			38			31			27			37			53			38			40
Total operating expense	$	623		$	627		$	625		$	775		$	772		$	760		$	756		$	838		$	758		$	783
Efficiency ratio (c)		67	%		78	%		68	%		108	%		70	%		70	%		74	%		79	%		75	%		76	%

(a) In January 2002, the Corporation began to record customer expense reimbursements as revenue in accordance with a Financial Accounting Standards Board (FASB) staff announcement. The Corporation had historically reported expense reimbursement as a reduction of expenses. Prior period amounts have been reclassified.

(b) Effective January 1, 2003, the Corporation began recording an expense for the estimated fair value of stock options using the prospective method under transitional guidance provided in the Statements of Financial Accounting Standards (SFAS) No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure." Stock option expense totaled less than $1 million in the first and second quarters of 2003.

(c) Operating expense, as a percentage of fee and net interest revenue, computed on a taxable equivalent basis, excluding gains on the sales of securities.

Page 13

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS – 10 Quarter Trend

PROVISION AND RESERVES FOR CREDIT EXPOSURE

	2001												2002												2003
(dollar amounts in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Provision for credit losses	$	(15	)	$	1		$	5		$	5		$	4		$	160		$	2		$	6		$	4		$	3
Net credit (losses) recoveries (a):
Commercial and financial		(1	)		(20	)		(21	)		(39	)		(2	)		(7	)		(114	)		1			(3	)		(2	)
Commercial real estate		—			—			—			—			—			—			(1	)		1			1			—
Consumer credit		—			—			—			(1	)		(1	)		—			—			—			—			—
Total net credit losses	$	(1	)	$	(20	)	$	(21	)	$	(40	)	$	(3	)	$	(7	)	$	(115	)	$	2		$	(2	)	$	(2	)
Annualized net credit losses to average loans		0.06	%		0.79	%		0.89	%		1.67	%		0.15	%		0.26	%		4.64	%		-0.08	%		0.09	%		0.11	%
Reserve for loan losses (b)(c):	$	219		$	217		$	187		$	96		$	106		$	242		$	127		$	127		$	114		$	113
Reserve for unfunded commitments (b)(c)		37			19			33			42			32			51			52			52			64			66
Total reserve for credit exposure	$	256		$	236		$	220		$	138		$	138		$	293		$	179		$	179		$	178		$	179
Reserve for loan losses (b)(c):
As a percentage of total loans (c)		2.09	%		2.28	%		1.89	%		1.12	%		1.11	%		2.47	%		1.36	%		1.51	%		1.46	%		1.46	%
As a percentage of nonperforming loans (c)		117	%		175	%		153	%		164	%		143	%		138	%		188	%		222	%		253	%		189	%

(a) Includes write-downs resulting from loan sales.

(b) In the second quarter of 2002, the Corporation began to record the reserve for unfunded loan commitments as a liability. Previously, any such reserve was included in the reserve for loan losses. A loss of $1 million was charged against the reserve for unfunded commitments in the third quarter of 2002 resulting from the sale of a loan commitment.

(c) At period end.

Page 14

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS – 10 Quarter Trend

NONPERFORMING ASSETS

	2001												2002												2003
(dollar amounts in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr
Nonperforming loans:
Commercial and financial	$	183		$	121		$	121		$	56		$	69		$	160		$	55		$	54		$	42		$	57
Consumer credit		2			2			1			2			2			4			5			3			3			3
Commercial real estate		1			1			1			1			3			11			7			—			—			—
Total nonperforming loans		186			124			123			59			74			175			67			57			45			60
Acquired property:
Real estate acquired		6			3			2			2			1			1			2			2			1			1
Reserve for real estate acquired		—			—			—			—			—			—			—			—			—			—
Net real estate acquired		6			3			2			2			1			1			2			2			1			1
Other assets acquired		—			1			1			1			—			—			—			—			—			—
Total acquired property		6			4			3			3			1			1			2			2			1			1
Total nonperforming assets	$	192		$	128		$	126		$	62		$	75		$	176		$	69		$	59		$	46		$	61
Nonperforming loans as a percentage of total loans		1.78	%		1.30	%		1.24	%		0.69	%		0.77	%		1.78	%		0.72	%		0.68	%		0.58	%		0.77	%
Nonperforming assets as a percentage of total loans and net acquired property		1.84	%		1.34	%		1.28	%		0.72	%		0.79	%		1.79	%		0.74	%		0.70	%		0.59	%		0.79	%
Nonperforming assets as a percentage of Tier I capital plus the reserve for loan losses		6.15	%		4.24	%		4.74	%		2.30	%		3.00	%		7.55	%		3.14	%		2.66	%		2.01	%		2.51	%

Page 15