The Bank of New York Company, Inc. Reports Fourth Quarter Net Income of $2.36 Per Share; $0.58 Per Share on an Operating Basis Reflecting Strong Performance Across All Business Lines

NEW YORK, Jan. 18 /PRNewswire-FirstCall/ -- The Bank of New York Company, Inc. reported today fourth quarter net income of $1,789 million and diluted earnings per share of $2.36. On an adjusted basis, excluding merger and integration costs and the gain on the sale of the Retail Business, fourth quarter diluted earnings per share was 58 cents, an increase of 9% from 53 cents in the fourth quarter of 2005, and net income was $435 million, up from $405 million in last year's fourth quarter. See "Supplemental Financial Information."

Full-year 2006 net income was $3,011 million and diluted earnings per share was $3.93. On an adjusted basis, excluding merger and integration costs and the gain on the sale of the Retail Business, full-year 2006 diluted earnings per share was $2.26, an increase of 11% over $2.03 in 2005 and net income was $1,731 million, compared with $1,571 million last year.

FOURTH QUARTER PERFORMANCE HIGHLIGHTS - Outstanding issuer services results, reflecting double-digit revenue growth in the Company's existing corporate trust business over the fourth quarter of 2005 and another excellent quarter for depositary receipts; - Broker-dealer services revenue growth of 16% over the fourth quarter of 2005, driven by collateral management and global clearance activities; - Strong performance in global custody activities, demonstrated by a 10% growth in investor services fees over the fourth quarter of 2005; - Private banking and asset management fees were up 25% sequentially reflecting organic growth and higher performance fees; - Strong net interest margin reflecting robust levels of customer activity; - Continued excellent asset quality.

"Our strong performance in the fourth quarter caps off a watershed year for our Company," stated Thomas A. Renyi, Chairman and Chief Executive Officer. "Throughout the year we delivered on our strategy, achieved our performance objectives and identified significant opportunities to accelerate our growth and increase the value we deliver to shareholders. The agreement to merge with Mellon Financial Corporation, together with the formation of BNY ConvergEx Group and the asset swap that made us the leader in global corporate trust, creates a compelling growth story. These transactions are reshaping the Company, expanding our capacity for growth and profitability, and redefining what it means to be a premier provider of securities servicing and asset management.

"We are very pleased with our financial performance in the fourth quarter as well as our progress on key strategic initiatives. Our results demonstrate the power of our business model, which is built upon an expectation for the increased globalization of financial markets and asset flows. This trend continued to be strong in the fourth quarter, and our performance reflects our ability to capitalize on the heightened market activity. In addition, we closed the asset swap and BNY ConvergEx transactions early in the quarter, and the corporate trust integration remains on schedule and results are on plan. Our demonstrated success in executing on our strategic and financial goals gives us great confidence in our ability to again achieve strong results in the year ahead."

SUPPLEMENTAL FINANCIAL INFORMATION

On October 1, 2006, the Company acquired JPMorgan Chase's corporate trust business ("Acquired Corporate Trust Business") and sold to JPMorgan Chase the Company's retail and regional middle market banking businesses ("Retail Business"). In the second quarter of 2006, the Company adopted discontinued operations accounting for its Retail Business. Therefore, the results from continuing operations through December 31, 2006 exclude the results of the Company's Retail Business but only include the operations of the Acquired Corporate Trust Business for the fourth quarter of 2006. Adjusted financial statements combining continuing and discontinued operations are presented in the Appendix.

The following table shows the impact of the gain on the sale of the Company's Retail Business and merger and integration costs on diluted earnings per share for the three months and twelve months ended December 31, 2006:

Diluted Earnings Per Share ------------------------------------------------------------- Three Months Ended Twelve Months Ended Dec. 31, 2006 Dec. 31, 2006 ---------------------------- ------------------------------- Continuing Discontinued Continuing Discontinued Operations Operations Adjusted Operations Operations Adjusted (1) (1) ---------------------------- ------------------------------- (In dollars) As Reported $0.56 $1.80 $2.36 $1.93 $2.00 $3.93 Merger & Integration Costs (2) 0.02 0.02 0.04 0.09 0.04 0.13 Gain on Sale of Retail Business (3) - (1.82) (1.82) - (1.80) (1.80) ---------------------------- ------------------------------- Operating (4) $0.58 $- $0.58 $2.02 $0.24 $2.26 ============================ =============================== (1) Adjusted results combine continuing and discontinued operations to provide continuity with historical results. (2) Merger and integration costs include investment portfolio restructuring costs, employee-related costs, and other transaction- related expenses. (3) The Company recorded an after-tax gain on the sale of the Retail Business of $1,381 million ($2,159 million pre-tax). (4) Operating excludes merger & integration costs and the gain on the sale of the Retail Business. NONINTEREST INCOME (Continuing Operations) Percent Inc/(Dec) ----------------- Quarter 4Q06 vs. 4Q06 vs. ---------------------- (In millions) 4Q06 3Q06 4Q05 3Q06 4Q05 -------------------------------------------------------------------------- Securities Servicing Fees Execution and Clearing Services $264 $301 $326 (12)% (19)% Issuer Services 341 194 171 76 99 Investor Services 286 279 259 3 10 Broker-Dealer Services 67 65 58 3 16 ---------------------- Securities Servicing Fees 958 839 814 14 18 Global Payment Services 61 66 60 (8) 2 Private Banking and Asset Management Fees 168 134 118 25 42 Service Charges and Fees 51 52 56 (2) (9) Foreign Exchange and Other Trading Activities 97 84 96 15 1 Securities Gains 27 21 18 29 50 Net Economic Value Payments 23 - - NM NM Other 52 63 41 (17) 27 ---------------------- Total Noninterest Income $1,437 $1,259 $1,203 14 19 ====================== Percent Year Inc/ ------------------ (In millions) 2006 2005 (Dec) -------------------------------------------------------------------------- Securities Servicing Fees Execution and Clearing Services $1,245 $1,222 2 % Issuer Services 895 639 40 Investor Services 1,138 1,056 8 Broker-Dealer Services 259 227 14 ------------------- Securities Servicing Fees 3,537 3,144 13 Global Payment Services 252 260 (3) Private Banking and Asset Management Fees 569 452 26 Service Charges and Fees 207 228 (9) Foreign Exchange and Other Trading Activities 425 379 12 Securities Gains 88 68 29 Net Economic Value Payments 23 - NM Other 221 167 32 ------------------- Total Noninterest Income $5,322 $4,698 13 =================== NM - Not meaningful

The increase in noninterest income versus the year-ago quarter reflects growth in securities servicing and private banking and asset management fees, as well as a higher level of securities gains and other income, partially offset by declines in service charges. Most of these same trends explain the year-over-year and sequential increases in noninterest income. The fourth quarter of 2006's results also reflects higher revenue from the new business mix resulting from the Acquired Corporate Trust Business, offset by the BNY ConvergEx transaction.

The decline in execution and clearing fees versus the fourth quarter of 2005 and the third quarter of 2006 reflects the disposition of certain execution businesses in the BNY ConvergEx transaction. These businesses had revenues of $66 million in the third quarter of 2006 and $82 million in the fourth quarter of 2005. At Pershing, revenue was up, compared with both the fourth quarter and full-year 2005 and the previous quarter, reflecting good organic growth in asset-driven fees and retirement products. Comparisons to 2005 periods are impacted by the previously disclosed loss of a significant customer. The execution and clearing businesses currently include electronic trading and, through Pershing, correspondent clearing services such as clearing, execution, financing, and custody for introducing broker-dealers.

Issuer services fees continued to exhibit strong growth for the quarter compared with last year's fourth quarter and full-year 2005. The Acquired Corporate Trust Business had a significant impact on comparisons with all prior periods, as fee revenues for the fourth quarter were $129 million. Existing corporate trust fees had double-digit growth over the fourth quarter of 2005 reflecting continued strong performance in global products and structured finance, notably asset-backed and mortgage-backed securities. The sequential quarter and full-year increases are attributable to the same factors affecting quarterly year-over-year results. The depositary receipts business continues to benefit from both a higher level of net issuance, reflecting the continued growth in cross-border investing activity, as well as increased corporate actions related to dividends and mergers and acquisitions. Issuer services includes corporate trust, depositary receipts, employee investment plan services, and stock transfer.

Investor services fees increased from all prior periods due to increased transaction volumes and organic growth across all business products, especially global custody, mutual funds, exchange-traded funds and hedge fund servicing. The fourth quarter growth in these businesses was partially offset by a decline in securities lending, which was adversely impacted by tight financing spreads. Investor services includes global fund services, global custody, securities lending, global liquidity services, outsourcing, and hedge fund servicing.

Broker-dealer services fees were up significantly from both the fourth quarter and full-year 2005 reflecting continued strong performance in global clearance and collateral management. The performance was driven by both an increase in transaction volumes and strong net new business flows. Broker- dealer services fees increased from the third quarter of 2006 reflecting the same trends impacting year-over-year comparisons.

Global payment services fees increased from the fourth quarter of 2005 reflecting greater funds transfer volume, although fees declined from the third quarter of 2006 and for the full year 2006. While the payments business continues to grow, as evidenced by increases in funds transfer volume and net new business, the level of fees has been impacted by customers paying with a higher value of compensatory balances in lieu of fees. On an invoiced services basis, total revenue was up 3% over the fourth quarter of 2005 and 1% on a sequential-quarter basis. On the same basis, total revenue was up 6% for the full year of 2006.

Private banking and asset management fees increased significantly over the fourth quarter and full-year 2005 primarily due to acquisitions and improved performance fees at Ivy Asset Management. The sequential-quarter increase in fees is attributable to organic growth in assets under management and higher performance fees at Ivy Asset Management and Alcentra, as well as increased fees in the private bank. Total assets under management for private banking and asset management were $131 billion at December 31, 2006, up from $105 billion at December 31, 2005 and $120 billion at September 30, 2006.

Service charges and fees were down from the fourth quarter and full year of 2005 and sequentially principally due to lower capital market fees, in line with the Company's reduced risk appetite.

Foreign exchange and other trading revenues rose from both the fourth quarter of 2005 and the third quarter of 2006 reflecting an increase in fixed income trading activity. Foreign exchange results were down from the fourth quarter of 2005 and up only slightly on a sequential-quarter basis reflecting lower market volatility. Foreign exchange was up significantly for the full year of 2006 reflecting increased cross-border activity, greater business from existing clients, and favorable market conditions in the first half of the year.

Securities gains were up significantly from the fourth quarter of 2005 and the third quarter of 2006. In the fourth quarter, the Company sold one of its sponsor fund investments to a third party for a realized gain of $11 million. The gains in the quarter were also attributable to continued strong returns on investments in the sponsor fund portfolio. The increase in securities gains for the full year reflect favorable market conditions and liquidity in the private equity markets.

Net economic value payments are amounts received from JPMorgan Chase for the economic value of certain deposits that have not yet been transitioned to the Company's balance sheet. The transition is expected to occur during the second quarter of 2007.

Other noninterest income increased versus the fourth quarter and full year of 2005 reflecting higher asset-related gains. The sequential quarter decline reflects fewer asset-related gains partly offset by higher income from equity investments and stable sources. The fourth quarter of 2006's result includes a $6 million loss related to low-income housing investments. The full-year 2006 result includes a pre-tax gain of $35 million related to the conversion of the Company's New York Stock Exchange seats into cash and shares of NYSE Group, Inc. common stock. The full-year 2005 result includes a $17 million gain on the sale of the Company's interest in Financial Models Company, Inc.

NET INTEREST INCOME (Continuing Operations) Percent Inc/(Dec) -------------------- 4Q06 vs. 4Q06 vs. (Dollars in millions) 4Q06 3Q06 4Q05 3Q06 4Q05 --------------------------------------------------------------------- Net Interest Income $450 $351 $344 28 % 31 % Tax Equivalent Adjustment* 2 7 6 --------------------- Net Interest Income on a Tax Equivalent Basis $452 $358 $350 26 29 ===================== Net Interest Margin 2.27 % 1.89 % 1.96 % Year-to-date Percent ---------------- Inc/ (Dollars in millions) 2006 2005 (Dec) --------------------------------------------------------------------- Net Interest Income $1,499 $1,340 12 % Tax Equivalent Adjustment* 22 27 ----------------- Net Interest Income on a Tax Equivalent Basis $1,521 $1,367 11 ================= Net Interest Margin 2.01 % 2.02 %

* A number of amounts related to net interest income are presented on a "tax equivalent basis." The Company believes that this presentation provides comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry standards.

Comparisons with all prior periods are impacted by higher deposit balances associated with the Acquired Corporate Trust Business. Compared to prior year periods, net interest income also benefited from higher amounts of interest- earning assets and interest-free balances as well as the higher value of interest-free balances in a rising rate environment. The sequential increases in net interest income and net interest margin were primarily driven by higher interest-free balances, particularly from the Acquired Corporate Trust Business.

Net interest income does not reflect the impact of certain deposits of the Acquired Corporate Trust Business which are expected to transition to the Company in the second quarter of 2007. Pro forma for the inclusion of these deposits and the associated economic value on these deposits, the net interest margin would have been 2.09%.

NONINTEREST EXPENSE AND INCOME TAXES (Continuing Operations) Percent Inc/(Dec) ----------------- Quarter 4Q06 vs. 4Q06 vs. ---------------------- (Dollars in millions) 4Q06 3Q06 4Q05 3Q06 4Q05 -------------------------------------------------------------------------- Salaries and Employee Benefits $736 $644 $587 14 % 25 % Net Occupancy 73 70 66 4 11 Furniture and Equipment 44 46 51 (4) (14) Clearing 33 47 50 (30) (34) Sub-custodian Expenses 34 31 24 10 42 Software 59 53 53 11 11 Communications 23 26 25 (12) (8) Amortization of Intangibles 34 14 12 143 183 Merger and Integration Costs 17 89 - (81) NM Other 228 172 176 33 30 ---------------------- Total Noninterest Expense 1,281 1,192 1,044 7 23 Merger and Integration Costs (17) (89) - NM NM ---------------------- Total Noninterest Expense Excluding Merger and Integration Costs $1,264 $1,103 $1,044 15 21 ====================== Percent Year Inc/ ---------------------- (Dollars in millions) 2006 2005 (Dec) ------------------------------------------------------------------------- Salaries and Employee Benefits $2,640 $2,310 14 % Net Occupancy 279 250 12 Furniture and Equipment 190 199 (5) Clearing 183 187 (2) Sub-custodian Expenses 134 96 40 Software 220 214 3 Communications 97 91 7 Amortization of Intangibles 76 40 90 Merger and Integration Costs 106 - NM Other 746 680 10 ---------------------- Total Noninterest Expense 4,671 4,067 15 Merger and Integration Costs (106) - NM ---------------------- Total Noninterest Expense Excluding Merger and Integration Costs $4,565 $4,067 12 ====================== NM - Not meaningful

Excluding merger and integration costs, noninterest expense was up compared with the fourth quarter and full year of 2005 and on a sequential- quarter basis. Expenses for the fourth quarter and full year of 2006 reflect increases related to the Acquired Corporate Trust Business partially offset by the disposition of certain execution businesses in the BNY ConvergEx transaction.

Relative to the year-ago periods, salaries and benefits increased reflecting higher staff levels tied to new businesses, acquisitions, incentive compensation, and temporary help. Pension expense was also higher on a year- over-year basis. The sequential-quarter increase also reflects a higher level of incentive compensation tied to performance fees and other revenue increases and higher temporary help and medical costs.

The lower level of clearing expenses reflects the BNY ConvergEx transaction. Sub-custodian expenses were higher for the year reflecting increased asset values and transaction volumes of assets under custody, and increased activity in depositary receipts.

The rise in amortization of intangibles in the fourth quarter of 2006 is due to the Acquired Corporate Trust Business and also includes a $6 million impairment charge related to the write-off of customer intangibles in Europe.

Other expense in the fourth quarter of 2006 included a $22 million transition services expense and other costs related to the Acquired Corporate Trust Business.

Merger and integration costs for the full year of 2006 included a loss in connection with the restructuring of the Company's investment portfolio, employee-related costs such as severance and other transaction-related expenses.

The effective tax rate for the fourth quarter of 2006 was 31.2%, compared to 32.2% in the fourth quarter of 2005 and 29.4% in the third quarter of 2006. The effective tax rate for the full year of 2006 was 32.0% compared with 32.1% in 2005. The decrease from the fourth quarter of 2005 primarily reflects the impact of discontinued operations accounting. The sequential quarter increase reflects higher state and local taxes.

CAPITAL

The Company's estimated Tier 1 and Total Capital ratios were 7.80% and 12.07% at December 31, 2006, compared with 8.38% and 12.48% at December 31, 2005 and 8.17% and 12.32% at September 30, 2006. The estimated leverage ratio was 6.40% at December 31, 2006, compared with 6.60% at December 31, 2005 and 6.56% at September 30, 2006. The Company's estimated tangible common equity ratio was 5.14% at December 31, 2006, compared with 5.58% at December 31, 2005 and 5.58% at September 30, 2006. The decline in the capital ratios primarily reflects the impact of the goodwill and intangibles associated with the Acquired Corporate Trust Business and the adoption of a new accounting standard related to pensions which reduced capital by $257 million.

The Company repurchased 12.1 million shares of its common stock on October 3, 2006 in connection with the BNY ConvergEx transaction.

ASSET QUALITY (Continuing Operations)

Asset quality continued to be strong as nonperforming assets remained unchanged at low levels. Nonperforming assets were $38 million at December 31, 2006, essentially flat compared with $39 million at December 31, 2005 and $38 million at September 30, 2006. Net charge-offs were $24 million in the fourth quarter of 2006, compared with $140 million in the fourth quarter of 2005 and zero in the third quarter of 2006. During the fourth quarter of 2006, the Company sold $38 million of leasing exposure to a domestic airline resulting in a charge-off of $23 million. During the fourth quarter of 2005, the Company charged off $140 million of leases with two bankrupt airline customers.

The provision of credit losses for the fourth quarter of 2006 was a credit of $15 million, compared with a provision of $3 million in the fourth quarter of 2005 and a credit of $4 million in the third quarter of 2006. The sequential increase in the credit to the provision is consistent with a continued strong credit environment.

MERGER AGREEMENT WITH MELLON FINANCIAL CORPORATION ("MELLON")

On December 3, 2006, the Company and Mellon entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which the Company and Mellon will each merge with and into a newly formed corporation to be called The Bank of New York Mellon Corporation. The boards of directors of both companies have unanimously approved the Merger Agreement. The board of directors of each company has adopted a resolution recommending the adoption of the Merger Agreement by its respective shareholders, and each party has agreed to put these matters before their respective shareholders for consideration. Subject to the customary closing conditions, the merger is expected to close early in the third quarter of 2007.

It is currently anticipated that the Company and Mellon will file a joint proxy statement/prospectus with the SEC regarding the proposed merger in late February or early March, after each party files its annual report on Form 10-K with the SEC.

CONFERENCE CALL INFORMATION

Thomas A. Renyi, chairman and chief executive officer, Bruce W. Van Saun, vice chairman, and Todd Gibbons, senior executive vice president and chief financial officer, will review the quarterly results in a live conference call and audio webcast today at 8:30 a.m. EST.

The presentation will be accessible: - From the Company's website at http://www.bankofny.com/earnings and - By telephone at (888) 677-2456 within the United States or (517) 623-4161 internationally; the passcode is "The Bank of New York." - A replay of the call will be available through the Company's website and also by telephone at (800) 294-0360 within the United States or (402) 220-9750 internationally.

The Bank of New York Company, Inc. is a global leader in providing a comprehensive array of services that enable institutions and individuals to move and manage their financial assets in more than 100 markets worldwide. The Company has a long tradition of collaborating with clients to deliver innovative solutions through its core competencies: securities servicing, treasury management, asset management, and private banking. The Company's extensive global client base includes a broad range of leading financial institutions, corporations, government entities, endowments and foundations. Its principal subsidiary, The Bank of New York, founded in 1784, is the oldest bank in the United States and has consistently played a prominent role in the evolution of financial markets worldwide. Additional information is available at http://www.bankofny.com/.

FORWARD-LOOKING STATEMENTS

All statements in this press release other than statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon the Company's current beliefs and expectations including, among other things, projections with respect to revenue and earnings and the Company's plans and objectives and as such are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward- looking statements. These include lower than expected performance or higher than expected costs in connection with acquisitions and integration of acquired businesses and the BNY ConvergEx transaction, the completion and timing of potential transactions, the level of capital market and trading activity, changes in customer credit quality, market performance, the effects of capital reallocation, portfolio performance, changes in regulatory expectations and standards, ultimate differences from management projections or market forecasts and the actions that management could take in response to these changes.

In addition, with respect to the Mellon transaction, the following risks, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the businesses of The Bank of New York Company, Inc. and Mellon Financial Corporation may not be integrated successfully or the integration may be more difficult, time-consuming or costly than expected; (2) the combined company may not realize, to the extent or at the time expected, revenue synergies and cost savings from the transaction; (3) revenues following the transaction may be lower than expected as a result of losses of customers or other reasons; (4) deposit attrition, operating costs, customer loss and business disruption following the transaction, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected; and (5) governmental or shareholder approvals of the transaction may not be obtained on the proposed terms or expected timeframe or at all.

Additional factors that could cause The Bank of New York Company, Inc.'s and Mellon Financial Corporation's results to differ materially from those described in the forward-looking statements can be found in The Bank of New York Company, Inc.'s and Mellon Financial Corporation's reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date they are made. The Company will not update forward-looking statements to reflect factual assumptions, circumstances or events that have changed after a forward-looking statement was made.

(Financial highlights and detailed financial statements follow.) ADDITIONAL INFORMATION

The proposed transaction between The Bank of New York Company, Inc. and Mellon Financial Corporation will be submitted to The Bank of New York Company, Inc.'s and Mellon Financial Corporation's shareholders for their consideration. Shareholders are urged to read the joint proxy statement/prospectus regarding the proposed transaction between The Bank of New York Company, Inc. and Mellon Financial Corporation because it will contain important information. Shareholders will be able to obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about The Bank of New York Company, Inc. and Mellon Financial Corporation, without charge, at the SEC's Internet site (http://www.sec.gov/). Copies of the joint proxy statement/prospectus and other SEC filings that will be incorporated by reference in the joint proxy statement/prospectus will also be available, without charge, from The Bank of New York Company, Inc., Investor Relations, One Wall Street, 31st Floor, New York, New York 10286 (212-635-1578), or from Mellon Financial Corporation, Secretary of Mellon Financial Corporation, One Mellon Center, Pittsburgh, Pennsylvania 15258-0001 (800-205-7699) .

Directors and executive officers of The Bank of New York Company, Inc. and Mellon Financial Corporation and other persons may be deemed to be participants in the solicitation of proxies from the shareholders of The Bank of New York Company, Inc and/or Mellon Financial Corporation. in respect of the proposed transaction. Information about the directors and executive officers of The Bank of New York Company, Inc. is set forth in the proxy statement for The Bank of New York Company, Inc.'s 2006 annual meeting of shareholders, as filed with the SEC on March 24, 2006. Information about the directors and executive officers of Mellon Financial Corporation is set forth in the proxy statement for Mellon Financial Corporation's 2006 annual meeting of shareholders, as filed with the SEC on March 15, 2006. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus when it becomes available.

THE BANK OF NEW YORK COMPANY, INC. Consolidated Financial Highlights (Unaudited) -------------------------------------------------------------------------- Quarter ended Twelve months ended ----------------------------- ------------------- (dollar amounts in Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, millions, except per 2006 2006 2005 2006 2005 share amounts and unless otherwise noted) -------------------------------------------------------------------------- Continuing Operations: ---------------------- Key Metrics ----------- Noninterest Income $ 1,437 $ 1,259 $ 1,203 $ 5,322 $ 4,698 Net Interest Income 450 351 344 1,499 1,340 -------- -------- -------- -------- -------- Total Revenue $ 1,887 $ 1,610 $ 1,547 $ 6,821 $ 6,038 Total Expense 1,281 1,192 1,044 4,671 4,067 Pre-tax Operating Margin 33% 26% 32% 32% 33% Net Interest Margin 2.27 1.89 1.96 2.01 2.02 Net Interest Income on Tax Equivalent Basis $ 452 $ 358 $ 350 $ 1,521 $ 1,367 Net Income 427 298 339 1,476 1,343 Basic EPS 0.57 0.40 0.44 1.95 1.75 Diluted EPS 0.56 0.39 0.44 1.93 1.74 Performance Ratios ------------------ Return on Average Common Equity 14.95% 11.61% 13.89% 14.29% 14.18% Return on Average Common Equity Excluding Merger & Integration Costs 15.36 13.95 13.89 14.98 14.18 Return on Average Assets 1.66 1.19 1.40 1.47 1.44 Return on Average Assets Excluding Merger & Integration Costs 1.70 1.43 1.40 1.54 1.44 Return on Average Tangible Common Equity 36.45 22.17 25.70 29.12 26.14 Return on Average Tangible Common Equity Excluding Merger & Integration Costs 37.39 26.49 25.70 30.49 26.14 Return on Average Tangible Assets 1.87 1.29 1.50 1.61 1.54 Return on Average Tangible Assets Excluding Merger & Integration Costs 1.92 1.54 1.50 1.68 1.54 Selected Average Balances ------------------------- Interest-earning Assets $ 79,841 $ 76,088 $ 71,475 $ 75,606 $ 67,715 Total Assets 102,138 95,579 90,526 96,478 86,319 Interest-bearing Deposits 44,344 43,905 39,796 43,143 37,070 Noninterest-bearing Deposits 14,721 10,687 10,577 11,609 10,078 Shareholders' Equity 11,340 10,262 9,699 10,333 9,473 Employees 22,361 20,456 19,944 Credit Loss Provision and Net Charge-Offs --------------------- Total Provision $ (15) $ (4) $ 3 $ (20) $ (7) Total Net (Charge-offs)/ Recoveries (24) - (140) (13) (150) Loans ----- Allowance for Loan Losses As a Percent of Total Loans 0.76% 1.00% 0.99% As a Percent of Non-Margin Loans 0.88 1.16 1.21 Total Allowance for Credit Losses As a Percent of Total Loans 1.16 1.40 1.43 As a Percent of Non-Margin Loans 1.34 1.63 1.75 Nonperforming Assets -------------------- Total Nonperforming Assets $ 38 $ 38 $ 39 Nonperformance Assets Ratio 0.1% 0.1% 0.1% THE BANK OF NEW YORK COMPANY, INC. Consolidated Financial Highlights(Supplemental Information) (Unaudited) -------------------------------------------------------------------------- Quarter ended Twelve months ended --------------------------------- ------------------- (dollar amounts in Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, millions, except 2006 2006 2005 2006 2005 per share amounts and unless otherwise noted) -------------------------------------------------------------------------- Adjusted Results: ----------------- Key Metrics ----------- Noninterest Income $ 3,611 $ 1,325 $ 1,274 $ 7,694 $ 4,956 Net Interest Income 450 506 492 1,956 1,909 -------- -------- -------- -------- -------- Total Revenue $ 4,061 $ 1,831 $ 1,766 $ 9,650 $ 6,865 Total Expense 1,325 1,318 1,148 5,069 4,483 Pre-tax Operating Margin 68% 28% 34% 48% 34% Net Interest Margin 2.27 2.33 2.35 2.32 2.36 Net Interest Income on Tax Equivalent Basis $ 452 $ 514 $ 499 $ 1,981 $ 1,938 Net Income 1,789 352 405 3,011 1,571 Basic EPS 2.39 0.47 0.53 3.98 2.05 Diluted EPS 2.36 0.46 0.53 3.93 2.03 Performance Ratios ------------------ Return on Average Common Equity 62.60% 13.70% 16.57% 29.14% 16.59% Return on Average Common Equity Excluding Merger & Integration Costs & Gain on Sale of Retail Business 15.24 16.56 16.57 16.75 16.59 Return on Average Assets 6.95 1.29 1.53 2.82 1.55 Return on Average Assets Excluding Merger & Integration Costs & Gain on Sale of Retail Business 1.69 1.55 1.53 1.62 1.55 Return on Average Tangible Common Equity 146.46 26.51 31.18 59.25 31.13 Return on Average Tangible Common Equity Excluding Merger & Integration Costs & Gain on Sale of Retail Business 37.02 31.90 31.18 34.47 31.13 Return on Average Tangible Assets 7.51 1.38 1.63 3.01 1.65 Return on Average Tangible Assets Excluding Merger & Integration Costs & Gain on Sale of Retail Business 1.90 1.66 1.63 1.75 1.65 Employees 22,919 23,808 23,451 THE BANK OF NEW YORK COMPANY, INC. Consolidated Financial Highlights (Unaudited) -------------------------------------------------------------------------- Quarter ended Twelve months ended --------------------------------- -------------------- (dollar amounts Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, in millions, 2006 2006 2005 2006 2005 except per share amounts and unless otherwise noted) -------------------------------------------------------------------------- Assets Under Custody (in trillions)(1) -------------------- Assets Under Custody $ 13.0 $ 12.2 $ 10.9 Equity Securities 33% 31% 32% Fixed Income Securities 67 69 68 Cross-Border Assets $ 4.7 $ 4.2 $ 3.4 Assets Under Management (in billions)(1) ---------------- Asset Management Sector Equity Securities $ 39 $ 36 $ 37 Fixed Income Securities 21 20 20 Alternative Investments 33 30 15 Liquid Assets 38 34 33 -------- -------- -------- Asset Management Sector $ 131 $ 120 $ 105 Foreign Exchange Overlay 11 11 10 Securities Lending Short-term Investment Funds 48 48 40 -------- -------- -------- Total Assets Under Management $ 190 $ 179 $ 155 ======== ======== ======== Capital Ratios -------------- Tier 1 Capital Ratio 7.80%(1) 8.17% 8.38% Total Capital Ratio 12.07 (1) 12.32 12.48 Leverage Ratio 6.40 (1) 6.56 6.60 Tangible Common Equity Ratio 5.14 (1) 5.58 5.58 Average Shares Outstanding (in thousands) --------------- Basic 747,550 756,780 762,489 756,067 764,963 Diluted 757,981 766,665 771,091 765,708 772,851 Other ----- Book Value per Common Share $ 15.35 $ 13.70 $ 12.81 Tangible Book Value per Common Share 6.58 7.44 7.06 Period-End Shares Outstanding (in thousands) 755,861 763,993 771,129 Dividends per Share $ 0.22 $ 0.22 $ 0.21 Dividend Yield 2.24% 2.50% 2.64% Closing Common Stock Price per Share $ 39.37 $ 35.26 $ 31.85 Market Capitalization (in billions) 29.8 26.9 24.6 (1) Estimated THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (In millions, except per share amounts) (Unaudited) Quarter Ended Twelve Months Ended ------------------------------------------------- Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, 2006 2006 2005 2006 2005 -------- -------- ------- -------- -------- Interest Income --------------- Loans $ 422 $ 367 $ 297 $ 1,449 $ 1,045 Margin loans 83 85 79 330 267 Securities Taxable 274 282 248 1,101 823 Exempt from Federal Income Taxes 1 10 10 29 38 -------- -------- -------- -------- -------- 275 292 258 1,130 861 Deposits in Banks 166 166 68 538 274 Federal Funds Sold and Securities Purchased Under Resale Agreements 78 22 19 130 70 Trading Assets 32 28 53 163 152 -------- -------- -------- -------- -------- Total Interest Income 1,056 960 774 3,740 2,669 -------- -------- -------- -------- -------- Interest Expense ---------------- Deposits 397 391 270 1,434 839 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 16 34 12 104 35 Other Borrowed Funds 30 27 25 100 58 Customer Payables 43 42 40 167 128 Long-Term Debt 120 115 83 436 269 -------- -------- -------- -------- -------- Total Interest Expense 606 609 430 2,241 1,329 -------- -------- -------- -------- -------- Net Interest Income 450 351 344 1,499 1,340 ------------------- Provision for Credit Losses (15) (4) 3 (20) (7) -------- -------- -------- -------- -------- Net Interest Income After Provision for Credit Losses 465 355 341 1,519 1,347 -------- -------- -------- -------- -------- Noninterest Income ------------------ Securities Servicing Fees Execution and Clearing Services 264 301 326 1,245 1,222 Issuer Services 341 194 171 895 639 Investor Services 286 279 259 1,138 1,056 Broker-Dealer Services 67 65 58 259 227 -------- -------- -------- -------- -------- Securities Servicing Fees 958 839 814 3,537 3,144 Global Payment Services 61 66 60 252 260 Private Banking and Asset Management Fees 168 134 118 569 452 Service Charges and Fees 51 52 56 207 228 Foreign Exchange and Other Trading Activities 97 84 96 425 379 Securities Gains 27 21 18 88 68 Net Economic Value Payments 23 - - 23 - Other 52 63 41 221 167 -------- -------- -------- -------- -------- Total Noninterest Income 1,437 1,259 1,203 5,322 4,698 -------- -------- -------- -------- -------- Noninterest Expense ------------------- Salaries and Employee Benefits 736 644 587 2,640 2,310 Net Occupancy 73 70 66 279 250 Furniture and Equipment 44 46 51 190 199 Clearing 33 47 50 183 187 Sub-custodian Expenses 34 31 24 134 96 Software 59 53 53 220 214 Communications 23 26 25 97 91 Amortization of Intangibles 34 14 12 76 40 Merger and Integration Costs 17 89 - 106 - Other 228 172 176 746 680 -------- -------- -------- -------- -------- Total Noninterest Expense 1,281 1,192 1,044 4,671 4,067 -------- -------- -------- -------- -------- Income from Continuing Operations before Income Taxes 621 422 500 2,170 1,978 Income Taxes 194 124 161 694 635 -------- -------- -------- -------- -------- Income from Continuing Operations 427 298 339 1,476 1,343 -------- -------- -------- -------- -------- THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (In millions, except per share amounts) (Unaudited) Quarter Ended Twelve Months Ended ------------------------------------------------- Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, 2006 2006 2005 2006 2005 -------- -------- -------- -------- -------- Discontinued Operations Income from Discontinued Operations $ 2,130 $ 96 $ 108 $ 2,426 $ 389 Income Taxes 768 42 42 891 161 -------- -------- -------- -------- -------- Discontinued Operations, Net 1,362 54 66 1,535 228 -------- -------- -------- -------- -------- Net Income $ 1,789 $ 352 $ 405 $ 3,011 $ 1,571 ---------- ======== ======== ======== ======== ======== Per Common Share Data: ---------------------- Basic Earnings Income from Continuing Operations $ 0.57 $ 0.40 $ 0.44 $ 1.95 $ 1.75 Income from Discontinued Operations, Net 1.82 0.07 0.09 2.03 0.30 Net Income 2.39 0.47 0.53 3.98 2.05 Diluted Earnings Income from Continuing Operations $ 0.56 $ 0.39 $ 0.44 $ 1.93 $ 1.74 Income from Discontinued Operations, Net 1.80 0.07 0.09 2.00 0.29 Net Income 2.36 0.46 0.53 3.93 2.03 Cash Dividends Paid 0.22 0.22 0.21 0.86 0.82 Diluted Shares Outstanding 758 767 771 766 773 THE BANK OF NEW YORK COMPANY, INC. Consolidated Balance Sheets (Dollars in millions, except per share amounts) (Unaudited) December 31, 2006 September 30, 2006 December 31, 2005 ----------------- ------------------ ----------------- Assets ------ Cash and Due from Banks $ 2,840 $ 2,072 $ 2,882 Interest-Bearing Deposits in Banks 13,172 16,753 8,644 Securities Held-to-Maturity (fair value of $1,710 at 12/31/06 $1,716 at 09/30/06 and $1,847 at 12/31/05) 1,729 1,737 1,872 Available- for-Sale 19,377 20,278 25,346 ---------------- ---------------- ---------------- Total Securities 21,106 22,015 27,218 Trading Assets at Fair Value 5,544 3,266 5,930 Federal Funds Sold and Securities Purchased Under Resale Agreements 5,114 5,139 2,425 Loans (less allowance for loan losses of $287 at 12/31/06, $339 at 09/30/06 and $326 at 12/31/05) 37,510 33,619 32,601 Premises and Equipment 974 1,009 960 Due from Customers on Acceptances 213 311 212 Accrued Interest Receivable 422 406 363 Goodwill 5,172 3,801 3,510 Intangible Assets 1,453 872 811 Other Assets 9,929 8,545 7,710 Assets of Discontinued Operations Held for Sale 18 8,828 8,808 ---------------- ---------------- ---------------- Total Assets $ 103,467 $ 106,636 $ 102,074 ================ ================ ================ Liabilities and Shareholders' Equity ----------------- Deposits Noninterest- Bearing (principally domestic offices) $ 19,554 $ 11,451 $ 12,706 Interest-Bearing Domestic Offices 10,041 9,785 10,415 Foreign Offices 32,551 33,717 26,666 ---------------- ---------------- ---------------- Total Deposits 62,146 54,953 49,787 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 790 1,040 834 Trading Liabilities 2,507 2,102 2,401 Payables to Customers and Broker-Dealers 7,266 6,673 8,623 Other Borrowed Funds 1,593 1,121 860 Acceptances Outstanding 215 318 212 Accrued Taxes and Other Expenses 5,152 4,140 4,123 Accrued Interest Payable 200 201 163 Other Liabilities (including allowance for lending-related commitments of $150 at 12/31/06, $137 at 09/30/06 and $144 at 12/31/05) 3,162 4,152 2,697 Long-Term Debt 8,773 8,434 7,817 Liabilities of Discontinued Operations Held for Sale 64 13,035 14,681 ---------------- ---------------- ---------------- Total Liabilities 91,868 96,169 92,198 ---------------- ---------------- ---------------- Shareholders' Equity Common Stock-par value $7.50 per share, authorized 2,400,000,000 shares, issued 1,053,752,916 shares at 12/31/06, 1,049,888,635 shares at 09/30/06 and 1,044,994,517 shares at 12/31/05 7,903 7,874 7,838 Additional Capital 2,142 2,015 1,826 Retained Earnings 9,444 7,820 7,089 Accumulated Other Comprehensive Income (311) (66) (134) ---------------- ---------------- ---------------- 19,178 17,643 16,619 Less: Treasury Stock (297,790,159 shares at 12/31/06, 285,692,282 shares at 09/30/06 and 273,662,218 shares at 12/31/05), at cost 7,576 7,169 6,736 Loan to ESOP (101,753 shares at 12/31/06 and 203,507 shares at 09/30/06 and 12/31/05), at cost 3 7 7 ---------------- ---------------- ---------------- Total Shareholders' Equity 11,599 10,467 9,876 ---------------- ---------------- ---------------- Total Liabilities and Shareholders' Equity $ 103,467 $ 106,636 $ 102,074 ================ ================ ================ Note: The balance sheet at December 31, 2005 has been derived from the audited financial statements at that date. THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Preliminary) (Dollars in millions) For the three months For the three months ended December 31, 2006 ended December 31, 2005 ---------------------------- ---------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate --------- ---------- -------- --------- ---------- -------- ASSETS ------ Interest-Bearing Deposits in Banks (primarily foreign) $ 15,157 $ 166 4.35% $ 8,369 $ 68 3.20% Federal Funds Sold and Securities Purchased Under Resale Agreements 5,965 78 5.14 2,170 19 3.48 Margin Loans 5,177 83 6.36 6,470 79 4.87 Non-Margin Loans Domestic Offices 19,117 260 5.42 15,599 165 4.19 Foreign Offices 11,041 162 5.80 10,885 132 4.81 --------- -------- --------- -------- Total Non-Margin Loans 30,158 422 5.56 26,484 297 4.45 --------- -------- --------- -------- Securities U.S. Government Obligations 121 1 4.76 226 2 4.17 U.S. Government Agency Obligations 2,882 36 5.03 3,992 43 4.27 Obligations of States and Political Subdivisions 93 2 8.59 123 3 8.40 Other Securities 17,643 237 5.36 18,712 215 4.61 Trading Securities 2,645 33 4.98 4,929 54 4.44 --------- -------- --------- -------- Total Securities 23,384 309 5.29 27,982 317 4.54 --------- -------- --------- ------- Total Interest- Earning Assets 79,841 1,058 5.27 71,475 780 4.35 -------- ------- Allowance for Credit Losses (337) (476) Cash and Due from Banks 2,085 2,831 Other Assets 20,549 16,696 Assets of Discontinued Operations Held for Sale - - 14,542 182 4.99 --------- -------- --------- ------- TOTAL ASSETS $ 102,138 $ 1,058 $ 105,068 $ 962 ========= ======== ========= ======= LIABILITIES AND SHAREHOLDERS' EQUITY ---------------- Interest-Bearing Deposits Money Market Rate Accounts $ 6,100 $ 44 2.87% $ 6,488 $ 36 2.18% Savings 423 2 1.61 517 1 0.95 Certificates of Deposit of $100,000 & Over 3,796 52 5.42 3,567 37 4.16 Other Time Deposits 320 4 4.87 688 7 3.83 Foreign Offices 33,705 295 3.48 28,536 189 2.62 --------- -------- --------- -------- Total Interest- Bearing Deposits 44,344 397 3.55 39,796 270 2.68 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 1,360 16 4.64 1,348 12 3.55 Other Borrowed Funds 2,229 30 5.38 1,966 25 4.95 Payables to Customers and Broker-Dealers 4,683 43 3.60 5,979 40 2.65 Long-Term Debt 8,677 120 5.45 7,577 83 4.36 --------- -------- --------- -------- Total Interest- Bearing Liabilities 61,293 606 3.92 56,666 430 3.00 -------- -------- Noninterest- Bearing Deposits 14,721 10,577 Other Liabilities 14,784 13,584 Common Shareholders' Equity 11,340 9,699 Liabilities of Discontinued Operations Held for Sale - - 14,542 34 0.96 --------- -------- --------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 102,138 $ 606 $ 105,068 $ 464 ========= ======== ========= ======= Interest Earnings and Interest Rate Spread (Continuing) $ 452 1.35% $ 350 1.35% ======== ======= ======== ======= Net Interest Margin (Continuing) 2.27% 1.96% ======= ======= (1) Average balances and rates have been impacted by allocations made to match assets of discontinued operations held for sale with liabilities of discontinued operations held for sale. THE BANK OF NEW YORK COMPANY, INC. Average Balances and Rates on a Taxable Equivalent Basis (Preliminary) (Dollars in millions) For the twelve months For the twelve months ended December 31, 2006 ended December 31, 2005 ---------------------------- ---------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ------- ------- ------- ------- ------- ------- ASSETS ------ Interest-Bearing Deposits in Banks (primarily foreign) $ 13,327 $ 538 4.04% $ 8,996 $ 274 3.04% Federal Funds Sold and Securities Purchased Under Resale Agreements 2,791 130 4.67 2,399 70 2.90 Margin Loans 5,372 330 6.15 6,403 267 4.17 Non-Margin Loans Domestic Offices 17,125 820 4.79 15,192 591 3.89 Foreign Offices 11,115 629 5.66 10,474 454 4.33 --------- -------- --------- -------- Total Non- Margin Loans 28,240 1,449 5.13 25,666 1,045 4.07 --------- -------- --------- -------- Securities U.S. Government Obligations 190 8 4.32 273 9 3.43 U.S. Government Agency Obligations 3,565 169 4.73 3,766 153 4.05 Obligations of States and Political Subdivisions 105 9 8.34 141 12 8.39 Other Securities 18,448 964 5.23 16,522 713 4.32 Trading Securities 3,568 165 4.63 3,549 153 4.34 --------- -------- --------- ------- Total Securities 25,876 1,315 5.09 24,251 1,040 4.29 --------- -------- --------- ------- Total Interest- Earning Assets 75,606 3,762 4.98 67,715 2,696 3.98 -------- ------- Allowance for Credit Losses (340) (474) Cash and Due from Banks 2,910 2,772 Other Assets 18,302 16,306 Assets of Discontinued Operations Held for Sale 10,364 568 5.48 15,116 687 4.55 --------- -------- --------- ------- TOTAL ASSETS $ 106,842 $ 4,330 $ 101,435 $ 3,383 ========= ======== ========= ======= LIABILITIES AND SHAREHOLDERS' EQUITY --------------- Interest-Bearing Deposits Money Market Rate Accounts $ 5,465 $ 145 2.66% $ 6,320 $ 109 1.73% Savings 452 6 1.36 597 5 0.87 Certificates of Deposit of $100,000 & Over 4,114 210 5.12 3,155 107 3.40 Other Time Deposits 551 26 4.70 437 16 3.38 Foreign Offices 32,561 1,047 3.22 26,561 602 2.26 --------- -------- --------- -------- Total Interest- Bearing Deposits 43,143 1,434 3.33 37,070 839 2.26 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 2,237 104 4.65 1,284 35 2.73 Other Borrowed Funds 2,091 100 4.77 1,865 58 3.10 Payables to Customers and Broker-Dealers 4,899 167 3.40 6,014 128 2.12 Long-Term Debt 8,295 436 5.26 7,312 269 3.68 --------- -------- --------- -------- Total Interest- Bearing Liabilities 60,665 2,241 3.69 53,545 1,329 2.48 -------- -------- Noninterest- Bearing Deposits 11,609 10,078 Other Liabilities 13,871 13,223 Common Shareholders' Equity 10,333 9,473 Liabilities of Discontinued Operations Held for Sale 10,364 111 1.07 15,116 118 0.78 --------- -------- --------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 106,842 $ 2,352 $ 101,435 $ 1,447 ========= ======== ========= ======= Interest Earnings and Interest Rate Spread (Continuing) $ 1,521 1.29% $ 1,367 1.50% ======== ======= ======== ======= Net Interest Margin (Continuing) 2.01% 2.02% ======= =======

(1) Average balances and rates have been impacted by allocations made to match assets of discontinued operations held for sale with liabilities of discontinued operations held for sale.

APPENDIX -------- Supplemental Information (Page 1 of 4)

On October 1, 2006, the Company acquired JPMorgan Chase's corporate trust business and sold to JPMorgan Chase the Company's Retail Business. The transaction further increased the Company's focus on the securities services and asset management businesses that are at the core of its long-term business strategy.

For the quarters ended December 31, 2006, September 30, 2006, and December 31, 2005 and twelve-month periods ended December 31, 2006 and 2005, the Company has prepared supplemental financial information as follows:

-- Full income statements for the Retail Business, which is reflected as discontinued operations -- Adjusted results, which combine continuing and discontinued operations to provide continuity with historical results -- Continuing operations and adjusted results including and excluding merger and integration costs and the gain on the sale of the Retail Business.

The Company believes that providing supplemental adjusted non-GAAP financial information is useful to investors in understanding the underlying operating performance of the Company and its businesses and performance trends, particularly in view of the materiality and strategic significance of the JPMorgan Chase transaction. By combining the results of continuing and discontinued operations and excluding merger and integration costs and the gain on the sale of the Retail Business, the Company believes investors can gain greater insight into the operating performance of the Company in relation to historic results. Although the Company believes that the non-GAAP financial measures presented in this report enhance investors' understanding of the Company's business and performance, these non-GAAP measures should not be considered an alternative to GAAP.

APPENDIX -------- Supplemental Information (Page 2 of 4) THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (Dollars in millions, except per share amounts) (Unaudited) Quarter Ended December 31, 2006 Quarter Ended December 31, 2005 ---------------------------------- --------------------------------- Continuing Discontinued Adjusted Continuing Discontinued Adjusted Operations Operations Results(1) Operations Operations Results(1) ---------- ------------ ---------- ---------- ------------ --------- Net Interest Income $ 450 $ - $ 450 $ 344 $ 148 $ 492 --------- Provision for Credit Losses (15) - (15) 3 7 10 ----- ----- ----- ----- ----- ----- Net Interest Income After Provision for Credit Losses 465 - 465 341 141 482 ----- ----- ----- ----- ----- ----- Noninterest Income ------------------ Securities Servicing Fees 958 - 958 814 - 814 Global Payment Services 61 - 61 60 8 68 Private Banking and Asset Management Fees 168 1 169 118 10 128 Service Charges and Fees 51 - 51 56 38 94 Foreign Exchange and Other Trading Activ- ities 97 - 97 96 3 99 Securities Gains 27 - 27 18 - 18 Net Economic Value Payments 23 - 23 - - - Other 52 2,173 2,225 41 12 53 ----- ----- ----- ----- ----- ----- Total Non- interest Income 1,437 2,174 3,611 1,203 71 1,274 ----- ----- ----- ----- ----- ----- Noninterest Expense ------------------- Salaries and Employee Benefits 736 14 750 587 60 647 Net Occupancy 73 1 74 66 18 84 Furniture and Equipment 44 1 45 51 2 53 Clearing 33 - 33 50 - 50 Sub- custodian Expenses 34 - 34 24 - 24 Software 59 - 59 53 - 53 Commun- ications 23 - 23 25 1 26 Amorti- zation of Intan- gibles 34 - 34 12 - 12 Merger and Inte- gration Costs 17 24 41 - - - Other 228 4 232 176 23 199 ----- ----- ----- ----- ----- ----- Total Non- interest Ex- pense 1,281 44 1,325 1,044 104 1,148 ----- ----- ----- ----- ----- ----- Income Before Income Taxes 621 2,130 2,751 500 108 608 Income Taxes 194 768 962 161 42 203 ----- ----- ----- ----- ----- ----- Net Income 427 1,362 1,789 339 66 405 Merger & Integration Costs, Net of Taxes 12 15 27 - - - Gain on Sale of Retail Business, Net of Taxes - (1,381) (1,381) - - - ----- ------ ------ ----- ----- ----- Net Income Excluding Merger & Integration Costs and Gain on Sale of Retail Busi- ness $ 439 $ (4) $ 435 $ 339 $ 66 $ 405 ===== ====== ====== ===== ===== ===== Diluted Earnings Per Share $0.56 $1.80 $ 2.36 $0.44 $0.09 $0.53 Diluted Earnings Per Share Excluding Merger & Integration Costs and Gain on Sale of Retail Busi- ness 0.58 - 0.58 0.44 0.09 0.53 Note: (1) Adjusted results combine continuing and discontinued operations to provide continuity with historical results. APPENDIX -------- Supplemental Information (Page 3 of 4) THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (Dollars in millions, except per share amounts) (Unaudited) Quarter Ended September 30, 2006 -------------------------------------------- Continuing Discontinued Adjusted Operations Operations Results(1) ---------- -------------- ------------ Net Interest Income $ 351 $ 155 $ 506 ------------------- Provision for Credit Losses (4) (1) (5) ----- ----- ----- Net Interest Income After Provision for Credit Losses 355 156 511 ----- ----- ----- Noninterest Income ------------------ Securities Servicing Fees 839 - 839 Global Payment Services 66 8 74 Private Banking and Asset Management Fees 134 11 145 Service Charges and Fees 52 38 90 Foreign Exchange and Other Trading Activities 84 2 86 Securities Gains 21 - 21 Other 63 7 70 ----- ----- ----- Total Noninterest Income 1,259 66 1,325 ----- ----- ----- Noninterest Expense ------------------- Salaries and Employee Benefits 644 62 706 Net Occupancy 70 18 88 Furniture and Equipment 46 2 48 Clearing 47 - 47 Sub-custodian Expenses 31 - 31 Software 53 1 54 Communications 26 1 27 Amortization of Intangibles 14 - 14 Merger and Integration Costs 89 21 110 Other 172 21 193 ----- ----- ----- Total Noninterest Expense 1,192 126 1,318 ----- ----- ----- Income Before Income Taxes 422 96 518 Income Taxes 124 42 166 ----- ----- ----- Net Income 298 54 352 Merger and Integration Costs, Net of Taxes 62 12 74 ----- ----- ----- Net Income Excluding Merger and Integration Costs $ 360 $ 66 $ 426 ===== ===== ===== Diluted Earnings Per Share $ 0.39 $ 0.07 $ 0.46 Diluted Earnings Per Share Excluding Merger and Integration Costs 0.47 0.09 0.56 Note: (1) Adjusted results combine continuing and discontinued operations to provide continuity with historical results. APPENDIX -------- Supplemental Information (Page 4 of 4) THE BANK OF NEW YORK COMPANY, INC. Consolidated Statements of Income (Dollars in millions, except per share amounts) (Unaudited) Year Ended December 31, 2006 Year Ended December 31, 2005 ---------------------------------- --------------------------------- Continuing Discontinued Adjusted Continuing Discontinued Adjusted Operations Operations Results(1) Operations Operations Results(1) ---------- ------------ ---------- ---------- ------------ --------- Net Interest Income $1,499 $ 457 $1,956 $1,340 $ 569 $1,909 --------- Provision for Credit Losses (20) 5 (15) (7) 22 15 ----- ----- ----- ------ ----- ----- Net Interest Income After Provision for Credit Losses 1,519 452 1,971 1,347 547 1,894 ----- ----- ----- ------ ----- ----- Noninterest Income ------------------ Securities Servicing Fees 3,537 - 3,537 3,144 - 3,144 Global Payment Services 252 24 276 260 34 294 Private Banking and Asset Management Fees 569 35 604 452 42 494 Service Charges and Fees 207 113 320 228 154 382 Foreign Exchange and Other Trading Activ- ities 425 6 431 379 12 391 Securities Gains 88 - 88 68 - 68 Net Economic Value Payments 23 - 23 - - - Other 221 2,194 2,415 167 16 183 ----- ----- ----- ----- ----- ----- Total Non- interest Income 5,322 2,372 7,694 4,698 258 4,956 ----- ----- ----- ----- ----- ----- Noninterest Expense ------------------- Salaries and Employee Bene- fits 2,640 208 2,848 2,310 239 2,549 Net Occupancy 279 56 335 250 73 323 Furniture and Equipment 190 7 197 199 9 208 Clearing 183 - 183 187 - 187 Sub- custodian Expenses 134 - 134 96 - 96 Software 220 2 222 214 1 215 Commun- ications 97 3 100 91 4 95 Amort- ization of Intang- ibles 76 - 76 40 - 40 Merger and Inte- gration Costs 106 45 151 - - - Other 746 77 823 680 90 770 ----- ----- ----- ----- ----- ----- Total Non- nterest Ex- pense 4,671 398 5,069 4,067 416 4,483 ----- ----- ----- ----- ----- ----- Income Before Income Taxes 2,170 2,426 4,596 1,978 389 2,367 Income Taxes 694 891 1,585 635 161 796 ----- ----- ----- ----- ---- ----- Net Income 1,476 1,535 3,011 1,343 228 1,571 Merger & Inte- gration Costs, Net of Taxes 72 29 101 - - - Gain on Sale of Retail Business, Net of Taxes - (1,381) (1,381) - - - ------ ------ ------ ------ ----- ------ Net Income Excluding Merger & Inte- gration Costs and Gain on Sale of Retail Busi- ness $1,548 $ 183 $1,731 $1,343 $ 228 $1,571 ====== ====== ====== ====== ====== ====== Diluted Earnings Per Share $ 1.93 $ 2.00 $ 3.93 $ 1.74 $ 0.29 $ 2.03 Diluted Earnings Per Share Excluding Merger & Integration Costs and Gain on Sale of Retail Business 2.02 0.24 2.26 1.74 0.29 2.03 Note: (1) Adjusted results combine continuing and discontinued operations to provide continuity with historical results.