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Post Earnings Coverage as BNY Mellon's Q1 EPS Rise 14% Y-o-Y

Upcoming AWS Coverage on Franklin Resources

LONDON, UK / ACCESSWIRE / April 25, 2017 / Active Wall St. announces its post-earnings coverage on The Bank of New York Mellon Corp. (NYSE: BK). The banking and financial services Company posted its financial results for the first quarter fiscal 2017 (Q1 FY17) on April 20, 2017. BNY Mellon's GAAP total revenues increased 3% y-o-y; while diluted EPS grew 14% y-o-y. Register with us now for your free membership at:


One of Bank of New York Mellon's competitors within the Asset Management space, Franklin Resources, Inc. (NYSE: BEN), is estimated to report earnings on April 26, 2017. AWS will be initiating a research report on Franklin Resources following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on BK; touching on BEN. Get our free coverage by signing up to:


Earnings Reviewed

During Q1 FY17, BNY Mellon's GAAP total revenue was $3.84 billion compared to $3.73 billion in Q1 FY16. The bank's non-GAAP total revenue for Q1 FY17 rose to $3.83 billion from $3.74 billion in the prior year's same quarter. Non-GAAP total revenues for the reported quarter came in in-line with the market consensus estimates. Fee and other revenue for Q1 FY17 came in at $3.02 billion compared to $2.97 million in Q1 FY16. Meanwhile, the Company's GAAP net interest income was up by 3% to $792 million in Q1 FY17 from $766 million in the prior year's comparable quarter.

The New York-based bank reported GAAP net income applicable to common shareholders of $880 million, or $0.83 per diluted share, in Q1 FY17, compared to $804 million, or $0.73 per diluted share in Q1 FY16. Furthermore, GAAP net income applicable to common shareholders for the reported quarter included $0.03 per common share tax benefit related to new accounting guidance for stock awards. Wall Street had expected the Company to report net income applicable to common shareholders of $0.80 per diluted share.

Earnings Metrics

During the reported quarter, BNY Mellon's GAAP return on common equity was 10.2%, which came in above 9.2% reported in the year ago same period. Adjusted return on common equity for Q1 FY17 stood at 10.7% compared to 9.7% in Q1 FY16. The GAAP return on tangible common equity came in at 22.2% in Q1 FY17 compared to 20.6% in Q1 FY16. Adjusted return on tangible common equity for Q1 FY17 was 22.4% versus 20.8% in Q1 FY16.

The Company's GAAP net interest margin improved 14 basis points in the reported quarter to 1.13% from 0.99% in Q1 FY16. Non-GAAP net interest margin on Fully Tax Equivalent (FTE) for the reported quarter was 1.14% compared to 1.01% in Q1 FY16. However, average interest-earning assets fell to $283.42 billion in Q1 FY17 from $310.68 billion in the previous year's corresponding quarter. Furthermore, the bank's yield on average interest-earning assets was 1.38% for Q1 FY17 compared to 1.16% in the prior year's same quarter.

As on March 31, 2017, the Company's common equity Tier 1 ratio was 12.0% compared to 12.3% as on December 31, 2016. Furthermore, supplementary leverage ratio stood at 6.1% as on March 31, 2017, versus 6.0% as on December 31, 2016.

Segment Performance

BNY Mellon's total investment services fees rose 4% to $1.80 billion in Q1 FY17 from $1.74 billion in Q1 FY16. Furthermore, the segment reported income before taxes of $942 million, or 34% of the segment's revenues, in Q1 FY17 compared to $887 million, or 33% of the segment's revenues, in the prior year's comparable quarter.

For Q1 FY17, investment management fees were $814 million compared to $786 million in Q1 FY16. Additionally, the segment's income before taxes surged 28% to $277 million, or 29% of the segment's revenues, in Q1 FY17 from $217 million, or 24% of the segment's revenues, in the past year's comparable quarter.

Balance Sheet Analyzed

BNY Mellon's net loan balance fell to $60.70 billion during quarter ended March 31, 2017, from $64.29 billion as on December 31, 2016. Total deposits were $221.29 billion as on March 31, 2017, compared to $221.49 billion recorded as on December 31, 2016.

The bank's non-performing assets stood at $107 million as on March 31, 2017, compared to $292 million as on March 31, 2016. Non-performing assets ratio also improved to 0.18% at the end of Q1 FY17 from 0.48% at the end of prior year's same quarter.

Dividend and Share Repurchase

In its earnings press release, BNY Mellon's Board of Directors declared a quarterly common stock dividend of $0.19 per common share. This cash dividend is payable on May 12, 2017, to shareholders of record as of the close of business on May 02, 2017.

In Q1 FY17, the Company repurchased 19 million common shares costing $879 million and paid dividends to its common shareholders amounting to $201 million.

Stock Performance

Bank of New York Mellon's share price finished yesterday's trading session at $47.55, rising 1.71% from its previous close of $46.75. A total volume of 4.98 million shares exchanged hands, which was higher than the 3 months average volume of 4.87 million shares. The stock has advanced 13.52% and 17.86% in the last six months and past twelve months, respectively. The stock is trading at a PE ratio of 15.10 and has a dividend yield of 1.60%. At Monday's closing price, the stock's net capitalization stands at $49.47 billion.

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SOURCE: Active Wall Street