The Bank of New York Mellon Corporation (NYSE:BK) Q4 2014 Earnings Conference Call - Final Transcript

Jan 23, 2015 • 08:00 am ET


The Bank of New York Mellon Corporation (NYSE:BK) Q4 2014 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Good morning, ladies and gentlemen, and welcome to the Fourth Quarter 2014 Earnings Conference Call hosted by BNY Mellon. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session.Please note that this conference call and webcast will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without BNY Mellon's consent.I will now turn the call over to Ms. Valerie Haertel. Ms. Haertel, you may begin.

Valerie Haertel

Good morning and welcome everyone to the BNY Mellon fourth quarter 2014 earnings conference call. With us today are Gerald Hassell, our Chairman and CEO; Todd Gibbons, our CFO; as well as our executive management team.The fourth quarter earnings materials include a financial highlights presentation that will be referred to in our discussion of results and can be found on the Investor Relations section of our website.

(Cautionary Forward-Looking Statements)

Now I would like to turn the call over to Gerald Hassell. Gerald?

Gerald Hassell

Thanks, Valerie, and good morning, everybody, and thanks for joining us today. Our performance in the quarter caps a solid year of delivering for our shareholders.Throughout 2014 we demonstrated our focus on and commitment to controlling expenses to create positive operating leverage. We were disciplined in our efforts to continue to drive profitable revenue growth.We maintained our strong capital position and executed on our capital plan. And we created value added solutions for our clients and good returns for our shareholders.

So looking at the full year, earnings per share were up 5% on an adjusted basis. We generated significant positive operating leverage even while absorbing elevated regulatory compliance costs and investing in our business to support future growth. Approximately 79% of our earnings were returned to our shareholders in the form of dividends and share repurchases. If you exclude a couple of the sizable gains that we had, our payout ratio was 94%, which is in line with our targeted payout ratio objective of 80% to 100%. And from a total shareholder return perspective, we outperformed the trust banks, the S&P 500 financials

Gerald Hassell

and a median of our 11 member peer group in 2014.We also achieved that same feat over a three-year period, which is really nice to see.So all in all a good year. We got a lot done.Now focusing on the fourth quarter in comparison to the same quarter a year ago, I'll provide you with some high-level overview and Todd will take you through the financial details. Earnings per share were $0.70, which included $0.12 per share primarily for a previously disclosed tax benefit net of litigation and restructuring charges.Importantly, on an adjusted EPS basis, we were up 7% year-over-year.We believe we did an excellent job in demonstrating our expense discipline and we are confident that it is sustainable.

Now just as a reminder, some of the actions that we've taken include rationalizing staffing levels, insourcing application development, reducing our real estate portfolio, simplifying our operating environment and focusing on all of those little items