General

In this Quarterly Report on Form 10-Q, references to "our," "we," "us," the "Company," and similar terms refer to The Bank of New York Mellon Corporation.

Certain business terms used in this document are defined in the glossary included in our 2008 Annual Report on Form 10-K.

The following should be read in conjunction with the Consolidated Financial Statements included in this report. Investors should also read the section entitled Forward-looking Statements.

How we reported results

All information in this Quarterly Report on Form 10-Q is reported on a continuing operations basis, unless otherwise noted. For a description of discontinued operations, see Note 4 to the Notes to Consolidated Financial Statements.

Throughout this Form 10-Q, certain measures, which are noted, exclude certain items. We believe the presentation of this information enhances investors' understanding of period-to-period results. In addition, these measures reflect the principal basis on which our management monitors financial performance. See Supplemental information - Explanation of non-GAAP financial measures.

Certain amounts are presented on a fully taxable equivalent (FTE) basis. We believe that this presentation allows for comparison of amounts arising from both taxable and tax-exempt sources and is consistent with industry practice. The adjustment to an FTE basis has no impact on net income.

In the first quarter of 2009, we adopted Financial Accounting Standards Board ("FASB") Staff Position No. 115-2 and FASB 124-2 ("FAS 115-2") "Recognition and Presentation of Other-Than-Temporary Impairments" and FASB Staff Position No. 157-4 ("FAS 157-4"), "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are

Not Orderly". The impact of adopting FAS 115-2 and FAS 157-4 is discussed in Critical Accounting Estimates and Notes 5 and 15 to the Notes to Consolidated Financial Statements.

Overview

The Bank of New York Mellon Corporation (NYSE symbol: BK) is a global leader in providing a comprehensive array of services that enable institutions and individuals to manage and service their financial assets in more than 100 markets worldwide. We strive to be the global provider of choice for asset and wealth management and institutional services and be recognized for our broad and deep capabilities, superior client service and consistent outperformance versus peers. Our global client base consists of financial institutions, corporations, government agencies, endowments and foundations and high-net-worth individuals. At March 31, 2009, we had $19.5 trillion in assets under custody and administration, $881 billion in assets under management, serviced more than $11 trillion in outstanding debt and on average, processed $1.8 trillion global payments per day.

The Company's businesses benefit during periods of global growth in financial assets and concentration of wealth, and also benefit from the globalization of the investment process. Over the long term, our financial goals are focused on deploying capital to accelerate the long-term growth of our businesses and on achieving superior total returns to shareholders by generating first quartile earnings per share growth over time relative to a group of peer companies.

Key components of our strategy include: providing superior client service versus peers (as measured through independent surveys); strong investment performance (relative to investment benchmarks); above median revenue growth (relative to peer companies for each of our businesses); an increasing percentage of revenue and income derived from outside the U.S.; successful integration of acquisitions; competitive margins and positive operating leverage. We have established Tier 1 capital as our principal capital measure and have established a targeted minimum ratio of Tier 1 capital to risk-weighted assets of 10%.

4 The Bank of New York Mellon Corporation

Highlights of first quarter 2009 results

We reported net income applicable to the common shareholders of The Bank of New York Mellon Corporation of $322 million and diluted earnings per common share of $0.28. This compares to net income of $746 million, or diluted earnings per common share of $0.65, in the first quarter of 2008 and net income of $28 million, or diluted earnings per common share of $0.02 in the fourth quarter of 2008. Results in the fourth quarter of 2008 include an extraordinary after-tax loss of $26 million or $0.02 per common share.

Results for the first quarter of 2009 include:

• Investment and goodwill write-downs resulted in a $0.21 decrease in continuing earnings per share. Investment write-downs of $347 million (pre-tax) primarily reflected the deterioration of credit quality of certain securities, the adverse impact of low interest rates on a structured tax investment and the write-down of an equity investment. (See Consolidated balance sheet review beginning on page 33). The goodwill impairment charge of $50 million (pre-tax) related to our Mellon United National Bank subsidiary in Miami, Florida. (See Noninterest expense on page 12); and

• M&I expenses of $68 million (pre-tax), or $0.04 per common share. (See Noninterest expense on page 12).

Highlights for the first quarter of 2009 include:

• Assets under custody and administration totaled $19.5 trillion at March 31, 2009 compared with $20.2 trillion at Dec. 31, 2008 and $23.1 trillion at March 31, 2008, as the benefit of new business conversions was more than offset by weaker market values and the impact of a stronger U.S. dollar. (See the Institutional Services sector beginning on page 21).

• Assets under management totaled $881 billion at March 31, 2009 compared with $928 billion at Dec. 31, 2008 and $1.1 trillion at March 31, 2008, primarily due to the weakness in global market values and outflows in treasury/ government money market funds reflecting the historical low level of interest rates. (See the Asset and Wealth Management sector beginning on page 17).

• Securities servicing revenue totaled $1.2 billion compared with $1.4 billion in the fourth quarter of 2008 and $1.5 billion in the first quarter of 2008. Continued strong new business wins in our asset servicing businesses were more than offset by the impact of lower volumes and spreads associated with securities lending in asset servicing, lower market values, a stronger U.S. dollar and lower levels of fixed income issuances globally. Securities lending fee revenue totaled $90 million in the first quarter of 2009 compared with $187 million in the fourth quarter of 2008 and $245 million in the first quarter of 2008. (See the Institutional Services sector beginning on page 21).

• Asset and wealth management fees totaled $609 million in the first quarter of 2009 compared with $657 million in the fourth quarter of 2008 and $842 million in the first quarter of 2008. The decreases reflect the global weakness in market values and a stronger U.S. dollar which more than offset net new business. (See the Asset Management and Wealth Management segments beginning on page 18).

• Foreign exchange and other trading activities revenue totaled $307 million in the first quarter of 2009 compared with $510 million in the fourth quarter of 2008 and $259 million in the first quarter of 2008. The increase compared with the first quarter of 2008 reflects the benefit from a higher volatility of key currencies, partially offset by lower client volumes. The decrease sequentially reflects the impact of both lower volatility and client volumes. (See Fee and other revenue beginning on page 7).

• Net interest revenue totaled $792 million in the first quarter of 2009 compared with $1.070 billion in the fourth quarter of 2008 and $767 million in the first quarter of 2008. The increase compared with the first quarter of 2008 reflects a higher level of average interest-earning assets. The sequential decrease reflects a lower value of interest-free funds and narrower spreads. (See Net interest revenue beginning on page 10).

• Noninterest expense totaled $2.3 billion in the first quarter of 2009 compared with $2.9 billion in the fourth quarter of 2008 and $2.6 billion in the first quarter of 2008. The decrease compared with both prior periods resulted from lower staff expense, including lower incentives, strong expense management and a stronger U.S. dollar. (See Noninterest expense beginning on page 12).

• The unrealized net of tax loss on our available-for-sale securities portfolio was $4.5 billion at March 31, 2009. The unrealized net of tax loss was $4.1 billion at Dec. 31, 2008 and $1.8 billion

• The Tier 1 capital ratio was 13.8%. at March 31, 2009 compared with 13.2% at Dec. 31, 2008 and 8.8% at March 31, 2008. The tangible common equity to tangible assets ratio was 4.2% at March 31, 2009 compared with 3.8% at Dec. 31, 2008 and 4.4% at March 31, 2008. The Tier 1 capital ratio increased year-over-year primarily reflecting the benefit we received from the $3 billion of Series B preferred stock and warrant issued to the U.S. Treasury in October 2008. (See Capital beginning on page 46).

Impact of the current market environment on our business

The following discusses the impact of the current market environment on the Company's operations.

Regulatory stress test

On May 7, 2009, the regulators released the results of the stress test administered under The Supervisory Capital Assessment Program conducted during the first quarter of 2009. The results confirmed that the Company is not required to raise additional capital, and under the test's adverse scenario our capital ratios strengthened further. Reflecting the favorable results, we plan to move forward to repay TARP upon approval of our regulators.

Impact on our business

Our Asset and Wealth Management businesses have been negatively impacted by global weakness in market values. The S&P 500 and the MSCI EAFE indices declined 40% and 48%, respectively, from March 31, 2008, resulting in lower performance fees, a decline in investment income related to seed capital investments as well as lower asset and wealth management fee revenue as lower market values offset the impact of new business wins.

FX revenues returned to more normalized levels in the first quarter of 2009 from the record levels experienced in the fourth quarter of 2008, reflecting lower volatility and lower customer volumes. While volatility was down from the fourth quarter of 2008, it continues to remain elevated.

Our securities lending business continues to be impacted by lower market valuations, volumes and spreads, as well as overall de-leveraging in the financial markets.

Market conditions continue to drive a lower volume of new fixed income securities issuances, which has impacted the level of new business in our Corporate Trust business.

However, the market environment has also resulted in new opportunities for the Company, primarily through our Global Corporate Trust and Asset Servicing businesses. Among other things, these businesses continue to play a role in supporting governments' stabilization efforts in North America and Europe to bring liquidity back to the financial markets.

Securities write-downs

The Company adopted FAS 115-2 and FAS 157-4 effective Jan. 1, 2009. Adopting these staff positions impacted both impairment charges and the unrealized loss on the securities portfolio. The ongoing disruption in the fixed income securities market has resulted in additional impairment charges, as well as an increase in unrealized securities losses. In the first quarter of 2009, we recorded write-downs of $200 million (pre-tax) reflecting a deterioration in the credit quality of certain securities and $95 million (pre-tax) from the impact of low interest rates on a structured tax investment. The unrealized loss on the securities portfolio was $4.5 billion at March 31, 2009, compared with $4.1 billion at Dec. 31, 2008. The unrealized loss continues to reflect deterioration in housing market indicators and the broader economy. See investment securities discussion in Consolidated balance sheet review for additional information.

FDIC Temporary Liquidity Guarantee Program

In October 2008, the FDIC announced the Temporary Liquidity Guarantee Program ("TLGP"). This program, as amended by interim rules adopted in February and March 2009:

• Guarantees certain types of senior unsecured debt issued by most U.S. bank holding companies, U.S. savings and loan holding companies and FDIC-insured depositary institutions between Oct. 14, 2008 and Oct. 31, 2009, including promissory notes, commercial paper and any unsecured portion of secured debt. Prepayment of debt not guaranteed by the FDIC and replacement with FDIC-guaranteed debt is not permitted. The amount of debt covered by the guarantee may not exceed 125% of the par value

6 The Bank of New York Mellon Corporation

• Provides full FDIC deposit insurance coverage for funds held by FDIC-insured banks in noninterest-bearing transaction deposit accounts at FDIC-insured depositary institutions until Dec. 31, 2009. For such accounts, a 10 basis point surcharge on the depositary institution's current assessment rate will be applied to deposits not otherwise covered by the existing deposit insurance limit of $250,000. At March 31, 2009, $25 billion of deposits with us were covered by the FDIC's TLGP.

Proposed FDIC Emergency Deposit Assessment

In the first quarter of 2009, the FDIC proposed a 10-20 basis point special emergency deposit assessment for all depository institutions which is expected to be recorded in the second quarter of 2009, if approved. Based on first quarter 2009 average assessable deposits and assuming a 10 basis point rate, the charge relating to this proposal would have been approximately $75 million.

Fee and other revenue

Fee and other revenue                                                                        1Q09 vs.
(dollars in millions unless otherwise noted)       1Q09          4Q08         1Q08        1Q08       4Q08
Securities servicing fees:
Asset servicing (a)                               $   609      $    782      $   899       (32 )%     (22 )%
Issuer services                                       364           388          376        (3 )       (6 )
Clearing services (b)                                 253           279          263        (4 )       (9 )
Total securities servicing fees                     1,226         1,449        1,538       (20 )      (15 )
Asset and wealth management fees                      609           657          842       (28 )       (7 )
Performance fees                                        7            44           20       (65 )      (84 )
Foreign exchange and other trading activities         307           510          259        19        (40 )
Treasury services                                     126           134          124         2         (6 )
Distribution and servicing                            111           106           98        13          5
Financing-related fees                                 48            45           48         -          7
Investment income (b)                                 (17 )          45           40       N/M        N/M
Other (b)                                              16            67           84       (81 )      (76 )
Total fee revenue (non-FTE)                       $ 2,433      $  3,057      $ 3,053       (20 )%     (20 )%
Net securities gains (losses)                        (295 )      (1,241 )        (73 )     N/M        N/M
Total fee and other revenue (non-FTE)             $ 2,138      $  1,816      $ 2,980       (28 )%      18 %
Fee and other revenue as a percentage of total
revenue (FTE) (c)                                      73 %          63 %         79 %
Market value of AUM at period end (in
billions)                                         $   881      $    928      $ 1,105       (20 )%      (5 )%
Market value of AUC or administration at
period end (in trillions)                         $  19.5      $   20.2      $  23.1       (16 )%      (3 )%

(a) Includes securities lending revenue of $90 million in the first quarter of 2009, $187 million in the fourth quarter of 2008 and $245 million in the first quarter of 2008.

(b) In the first quarter of 2009, fee revenue associated with equity investments was reclassified from clearing services revenue and other revenue to investment income. Fee revenue associated with an equity investment previously recorded in clearing services revenue was a loss of $58 million in the first quarter of 2009, income of $9 million in the fourth quarter of 2008 and income of $4 million in the first quarter of 2008. Fee revenue associated with an equity investment previously recorded in other revenue was income of $4 million in the first quarter of 2009, a loss of $2 million in the fourth quarter of 2008 and income of $12 million in the first quarter of 2008. Prior periods have been reclassified.

(c) Excluding investment write-downs, fee and other revenue as a percentage of total revenue (FTE) was 76% in the first quarter of 2009, 74% in the fourth quarter of 2008 and 80% in the first quarter of 2008.

N/M - Not meaningful.

Fee revenue

The results of many of our businesses are influenced by client and market activities that vary by quarter.

Fee revenue decreased 20% versus the year-ago quarter primarily due to decreases in asset servicing fees, asset and wealth management fees, investment income and other revenue, partially offset by an increase in foreign exchange and other trading activities. Sequentially, fee revenue decreased 20% reflecting lower securities servicing fees, foreign exchange and other trading activities, investment income and asset and wealth management fees.

Securities servicing fees

Securities servicing fees were impacted by the following, compared with the fourth quarter of 2008 and first quarter of 2008:

• Asset servicing fees - Continued strong new business wins over the past year offset by lower securities lending revenue, lower market values and transaction volumes and a stronger U.S. dollar, impacted the year-over-year and sequential results.

• Issuer services fees - Lower levels of fixed income issuances globally, partially offset by higher Depositary Receipts due to the timing of corporate actions, impacted the year-over-year results. The decrease sequentially reflects lower revenue from Depositary Receipts due to timing of corporate actions and lower revenue from Shareowner Services as a result of lower corporate action activity and the impact of lower equity values on stock option plan fees.

• Clearing services fees - Year-over-year results were impacted by lower asset values and lower money market mutual fund related revenue. The linked quarter decline was driven by lower trading volumes in the first quarter of 2009, as compared to the record level of trading activity in the fourth quarter of 2008, and lower money market mutual fund related revenue.

See the Institutional Services sector in Business segments review for additional details.

Asset and wealth management fees

Asset and wealth management fees decreased from the first quarter of 2008, and sequentially, as new business was more

than offset by global weakness in market values and the impact of a stronger U.S. dollar.

Total AUM for the Asset and Wealth Management sector were $881 billion at March 31, 2009 compared with $928 billion at Dec. 31, 2008 and $1.1 trillion at March 31, 2008. The decrease compared with both prior periods resulted from market depreciation, the impact of a stronger U.S. dollar and long-term outflows. The S&P 500 Index was 798 at March 31, 2009 compared with 903 at Dec. 31, 2008 (a 12% decrease) and 1323 at March 31, 2008 (a 40% decrease). Sequentially, net outflows totaled $12 billion, primarily due to outflows in treasury/government money market funds reflecting the historically low level of interest rates.

See the Asset and Wealth Management sector in Business segments review for additional details regarding the drivers of asset and wealth management fees.

Performance fees

Performance fees, which are reported in the Asset Management segment, are generally calculated as a percentage of a portfolio's performance in excess of a benchmark index or a peer group's performance. There is an increase/decrease in incentive expense with a related change in performance fees.

Performance fees decreased $13 million compared with the first quarter of 2008 and decreased $37 million compared with the fourth quarter of 2008. The decreases were primarily due to a lower level of fees generated on certain equity and alternative strategies.

Foreign exchange and other trading activities

Foreign exchange and other trading activities revenue, which is primarily reported in the Asset Servicing segment, increased 19% compared with the first quarter of 2008, and decreased 40% (unannualized) compared with the fourth quarter of 2008. The increase compared with the first quarter of 2008 reflects the benefit from higher volatility of key currencies, partially offset by lower client volumes. The decrease from the fourth quarter of 2008 reflects the impact of both lower volatility and client volumes.

8 The Bank of New York Mellon Corporation

Treasury services

Treasury services fees, which are primarily reported in the Treasury Services segment, include fees related to funds transfer, cash management and liquidity management. Treasury services fees increased $2 million compared with the first quarter of 2008 and decreased $8 million compared with the fourth quarter of 2008. The sequential decrease was driven by lower global payment volumes.

Distribution and servicing fees

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

Distribution and servicing fee revenue increased $13 million compared with the first quarter of 2008 and $5 million compared with the fourth quarter of 2008. These increases primarily reflect positive flows in prime money market mutual funds (shifting from treasury/government funds). The impact of these fees on income in any one period can be more than offset by distribution and servicing expense paid to other financial intermediaries to cover their cost for distribution and servicing of mutual funds. Distribution and servicing expense is recorded as noninterest expense on the income statement.

Financing-related fees

Financing-related fees, which are primarily reported in the Treasury Services segment, include capital markets fees, loan commitment fees and credit-related trade fees. Financing-related fees were flat compared with the first quarter of 2008 and increased $3 million sequentially. The increase sequentially reflected higher capital markets fees.

Investment income

             Investment income
             (in millions)                         1Q09      4Q08      1Q08
             Corporate/bank-owned life insurance   $  41     $  34     $  35
             Lease residual gains (losses)            26        59         1
             Seed capital gains (losses)             (10 )     (37 )     (19 )
             Private equity gains (losses)           (20 )     (18 )       7
             Equity investment income (loss)         (54 )       7        16
             Total investment income               $ (17 )   $  45     $  40

Investment income, which is primarily reported in the Other and Asset Management segments, includes income from insurance contracts, lease residual gains and losses, gains and losses on seed capital investments and private equity investments and equity investment revenue. The decrease for the first quarter of 2009 compared with the first and fourth quarters of 2008 resulted primarily from the write-down of certain equity investments, partially offset by the change in fair market value of seed capital investments associated with our Asset Management business and higher revenue from insurance contracts. The decrease from the first quarter of 2008 also reflects a loss on private equity investments of $20 million in the first quarter of 2009 compared with revenue of $7 million in the first quarter of 2008, partially offset by higher lease residual gains.

Other revenue

           Other revenue
           (in millions)                                1Q09    4Q08      1Q08
           Asset-related gains (losses)                 $   7   $ (18 )   $  42
           Expense reimbursements from joint ventures       8       8         4
           Other                                            1      77        38
           Total other revenue                          $  16   $  67     $  84

Other revenue includes asset-related gains (losses), expense reimbursements from joint ventures and other. Asset-related gains (losses) include loan, real estate and other asset dispositions. Expense reimbursements from joint ventures relate to expenses incurred by the Company on behalf of joint ventures. Other primarily includes foreign currency translation gains, other investments and various miscellaneous revenues.

Other revenue decreased compared to the first quarter of 2008 reflecting a $42 million gain related to the initial public offering of VISA recorded in the first quarter of 2008.

Net securities gains (losses)

Net securities portfolio losses totaled $295 million in the first quarter of 2009 compared to losses of $73 million in the first quarter of 2008 and losses of $1.241 billion in the fourth quarter of 2008.

The following table details securities write-downs by type of security. These write-downs primarily reflect deterioration in the housing market and the general economy. See Consolidated balance sheet review for further information on the investment portfolio.

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