Welcome to the first quarter 2010 earnings conference call hosted by BNY Mellon. (Operator Instructions) I will now turn the call over to Mr. Andy Clark. Mr. Clark, you may begin.

Thank you and welcome everyone to the review of the first quarter 2010 financial results for BNY Mellon. This conference call webcast is to be recorded and will consist of copyright material. You may not record reproduce, retransmit or rebroadcast these materials or any portion thereof without BNY Mellon’s express written consent. Before we begin, let me remind you that our remarks may include statements about future expectations, plans, and prospects, which are considered forward-looking statements. The actual results may differ materially from those indicated or implied by the forward-looking statements as a result of various factors. These factors include those identified in the cautionary statement on page 14 of our press release and those identified in our documents filed with the SEC that are available on our website www.bnymellon.com. Forward-looking statements in this call speak only as of today, April 20, 2010. We will not update forward-looking statements. This morning’s press release provides the highlights of our results. We also have the quarterly earnings review document available on our website which provides a quarterly review of the total company and business segments. We will be using the quarterly earnings review to discuss our results. This morning’s call will include comments from Bob Kelly, our Chairman and CEO and Todd Gibbons, our Chief Financial Officer. In addition, several of our Executive Management Team members are available to address questions about the performance of our businesses. Now, I would like to turn the call over to Bob.

Thanks, Andy and good morning everyone and thank you for joining us. Our EPS for the quarter was $0.49 or $601 million. On an operating basis that was $0.59 or $715 million. Earnings were reduced by about 10% mainly due to increased litigation reserves for several existing matters. Overall I would characterize the quarter as an encouraging quarter. Fee revenue was positively impacted by higher market values and we demonstrated superb asset quality in both our loan and security portfolios. Offsetting this was money market fee waivers, lower trading volume and lower volatility quarter-over-quarter. As you know our business model is really levered to rates edging up and financial flows beginning to normalize at higher levels and we have yet to see that at this point. Fee revenue has been unchanged sequentially, mostly due to seasonality in some of our businesses which are somewhat unique and off 6% versus a year ago. Asset and wealth management fees were up 13% over a year ago. We had net positive long-term flows of $16 billion in client assets. Asset servicing fee revenue grew by 17% year-over-year. Security lending spreads and FX volatility levels remain muted. NII is down slightly compared to last year but up 6% sequentially principally reflecting the higher yields related to the restructured assets in our securities portfolio. Operating expenses remain very well controlled. Together with our success in winning new business we achieved another quarter of positive operating leverage. On the new business front in addition to strong inflows and asset management we had new asset servicing wins of over $200 billion in assets under custody cutting across all client segments and geographies whether it is corporate, financial institutions, endowments or international. [Inaudible] a number of mandates which we expect to be able to announcement shortly and wealth…

Thanks Bob. As I get into the numbers my comments will follow the quarterly earnings review that begins on page 3. Our continuing EPS was $0.49 on a reported basis. It was reduced by a total of $0.10 due to an increase in our litigation reserve and M&I expenses. That gives us an operating EPS of $0.59 for the quarter. Let’s look at a few key items on a sequential basis. Net interest revenue was up 6%. Fee revenue was flat but up 6% year-over-year. Non-interest expenses were down 5% and that resulted in 600 basis points of positive operating leverage for the linked quarter. The provision for credit losses declined $39 million and credit quality trends in the investment portfolio showed improvement. As Bob mentioned all of our capital ratios strengthened. To put the quarter in perspective we generated above trend net interest and investment income of approximately $0.05 and I will review those items in more detail shortly. Turning to page 5 of the review you can see during the quarter our asset management business generated $16 billion of positive long-term flows. Also during the quarter equity appreciation was basically offset by the stronger U.S. dollar. Our AUM composition has a better balance than last year which should lead to higher fee realization going forward. Assets under custody which was flat sequentially was helped by increased equity and new business offset by the stronger U.S. dollar as well as our concentration in the fixed income markets. Securities on loan were modestly up at period end. Turning to page 6 of the earnings review we show fee growth. Securities servicing fees excluding securities lending fee revenue was down 3% quarter-over-quarter and down 2% year-over-year. Asset servicing fees were down 2% sequentially due primarily to lower volumes and the stronger…

Thanks very much Todd. Why don’t we open it up for questions now?

(Operator Instructions) The first question comes from the line of Betsy Graseck - Morgan Stanley.

On the capital you indicated common Tier 1 of 11.6% was up very strongly in the quarter. I realize you indicated you are going to be going ahead with the capital raise you announced when you acquired the GIS business. Could you give us a sense as to whether or not that is capital you feel you needed to stage or you just have to execute on that capital raise due to the fact that it was part of the previously announced acquisitions?

Clearly the capital ratios were stronger than even we would have expected a quarter ago. Having said that we believe in having a really strong balance sheet and we want to make sure we can continue to invest organically and maybe after March at least some small acquisitions. The way I kind of think about it is this is less than 2% of our market cap. It is like 1.8%. So it is not a lot of money incrementally and we don’t need it until the third quarter and we haven’t been in a rush frankly since the last quarter and our stock is higher. So at the margin it has been helpful for us to wait.

The next question comes from the line of Brian Foran – Goldman Sachs. Brian Foran – Goldman Sachs: Coming back to the assets under management conversation, and I am sorry if I missed it in your remarks, but how much did the strong dollar actually impact it and overall how should we think about a core growth rate on those two sides given the money market outflows and given the different things going on? Ron O’Hanley : Let me talk about asset management. In terms of the stronger dollar, it actually offset market [inaudible] growth almost dollar for dollar. Market effect was $19 billion for the quarter. The stronger dollar eroded assets by about $19 billion. So that was a wash. In terms of AUM flows we had about $16 billion overall across asset and wealth management and positive net long-term flows which was very strong; it’s strongest in certainly the last five years for a quarter coming off the $13 billion we had last quarter. Short-term flows though you are seeing everywhere were negative. For us it was a negative $25 billion. We would expect to see until you get some kind of stabilization in interest rates we certainly wouldn’t expect to see a lot of inflows in the short-term.

On the AUC side on asset servicing, as I think you know and as Todd mentioned earlier, we are more over-weighted on the fixed income side. So we don’t see as dramatic an effect in the AUC when you see the equity markets rising. That is principally the difference in what you are discussing. Brian Foran – Goldman Sachs: In past quarters you have mentioned the earnings suppression from the zero percent rate environment. Is it possible to give us an update on that given some of the comments you made about the accretable yields now maybe acting as a hedge on net interest income?

As we see prepayments we would expect the Grantor Trust to wind down more quickly and then we would see the [same] number of cash flows and yield goes up pretty significantly. There is some rate sensitivity from that perspective. So it is pretty highly levered to the direction of interest rates.

The next question comes from the line of Brian Bedell - ISI Group.

On the NIM guidance I think you mentioned 170-180 basis points. Is that including discount accretion?

That would include the discount accretion.

I am getting about a core NIM rate X discount accretion of 156 for the quarter. What would your outlook be I guess going forward?

I think it is fair to put it in the 160-170 range if you excluded it.

That is for full-year 2010?

Yes.

If you could talk about the litigation reserves; more specifically what areas are those for?

We can’t really comment as you would expect when we are in discussions with any specific litigations. It probably doesn’t surprise you or anybody else that given the environment we are in the violent activity we have had during the financial crisis here there is a little more litigation. We feel where we are at the time we are adequately reserved.

Those are disclosed in your K in terms of legal exposure?

We feel we have pretty good disclosures in our public disclosure section you can take a look at.

On acquisitions is it still around a July 1 for PNC?

That is our target date. Yes.

Since you are thinking about assets going forward I know you mentioned you are still going ahead with roughly a $700 million cap raise. As you integrate PNC which is somewhat of a complex integration do you feel you will have the capacity to do another large deal in the near to medium term if something came up on the asset services side?

There is certainly nothing on the horizon here. Anything I would see I would expect to be fairly small. It would really depend upon the geography firstly and that is the advantage of BHF in Germany versus PNC being in the U.S. so certain teams backed up by basically the same technology so we have to be careful. In other businesses we would still have some opportunity to do things. We don’t worry about it too much but I would think we are more or less done for the year other than perhaps a few things outside of the U.S. perhaps. It is still early.

On the money market spread, obviously for the entire industry we are seeing pretty substantial outflows of money from the low rates and also from the low rates and also from the redeployment into riskier assets. Have you thought of a strategy where you might recapture some of that by shifting clients onto balance sheet? Say your wealth bank clients into bank deposit products? Ron O’Hanley : We think about our cash business quite holistically. If you think about all of the various businesses we are in whether it is our securities services business or wealth business there is a lot of associated cash. Some of it goes onto the balance sheet. Some of it goes into our own proprietary products and some of it we put off to third parties. We have one of the most sophisticated liquidity platforms out there. Our view is this business is quite an important part of our overall business. We have to manage it sensibly. We have to be careful of the risks here but we view ourselves particularly relative to most others as [at scale] player and one that wants to be able to not just survive but thrive through the cycle.

I would add to that deposits in the wealth business were up about 7-8% sequentially. So we have seen deposits come onto the balance sheet and [well put].

The other thing I would say is that this is a pretty core strategy. As you know we are in the business of attracting an awful lot of cash and that is why we have been signaling that if rates come up it would be really profitable for us. We actually think of this business very holistically, i.e. on balance sheet, off balance sheet for our owned businesses and off balance sheet for third-party and we think about it so holistically we actually have our Corporate Treasurer now running all of these businesses.

The next question comes from the line of Tom McCrohan - Janney Montgomery Scott.

I have a question on the trends in issuer services. If you could help us decompose what has contributed to that business, what we can expect going forward, how much were low interest rates driving the sequential decline we keep seeing in that segment of the business?

We actually had client deposits growing, similar to [Dave’s] comments. The core fees were flat but we had some seasonal activity in DRs and the money market fees in corporate trust declining.

That is a pretty big part of your income and money market fee waivers have a pretty big impact on you. I guess the DR business is seasonally slower in the first quarter?

Exactly. So we would expect the DR business to pick up towards the end of the year because of seasonality and we are also seeing a very good pipeline in corporate trust.

Is there anything outside of external factors like interest rates or low volumes that are kind of driving that? Or is it just sort of external factors you are waiting on to improve?

Yes and to keep driving market share gains as well. Overall we are pretty positive about the end of the year.

Good. Pipelines are growing and it is just a matter of things turning your way as far as external environment?

Exactly.

On the high net worth side there was a newspaper reporting there were some [costs] of being closed on the high net worth side? I was wondering if David could talk to that?

What we did decide to do was to close a couple of offices in Pennsylvania which were not necessary we feel to continue to serve our clients. These were legacy offices back when we originally sold the retail bank on the Mellon side. So not significant from our perspective. We still have locations in each of those areas and this was just sort of tidying up as opposed to strategy.

Are you gaining share or losing share during this downturn?

We believe we are gaining share. Share counts are really hard in our business but as you can see as Bob mentioned earlier we have had pretty consistent new asset flows across the country. I would say the pipelines look good although I think you can see across the industry high net worth investors have been a little bit reluctant here over the last couple of quarters to put things to work. We are starting to see that change. A little bit more risk appetite coming into the decisions. We think the second or third quarters actually will pick up from where the first quarter was.

The next question comes from the line of John Stilmar – SunTrust.

Dovetailed on the last point with regard to asset management and talking about positive momentum there, as we kind of look at the revenues as a revenue per assets under management. Obviously since the fourth quarter it has come down a little bit but it is showing at least some signs of stabilization potentially building. On that metric how should we be thinking about it given the fact that as risk appetite increases and the sort of marginal unit of revenue may be increasing can you give me some context towards revenue growth versus asset management growth for the asset management section? Ron O’Hanley : I think you are thinking about it in exactly the right way. As you see our AUM shift and it will shift as money moves out of cash into other assets and as we enjoy positive net long-term flows you will see the realized fee go up. That is obviously something good here. That coupled with, I am not predicting the market here, but as long as we continue to have positive market effects that tends to, as you know, get the higher value assets and the higher fee assets. We would expect to see; all things being equal, realized fee continue to go up.

Is there any guidance you could give me or ways to think about the slope of that? It is obviously going to happen at some point. If we look back to 2008 it was obviously a lot higher than it is today. Is there any sort of data points you may have in looking at your customer base that might help us a little bit more precisely judge the slope of that improvement? Ron O’Hanley : I don’t know that I can give you guidance but what I can do is tell you our pipelines remain strong. Both outside the U.S. has been consistently strong and they have started to strengthen in the U.S. as decisions are being made. These tend to be areas that are non-cash so again there is a higher fee rate. We would continue and expect to see a higher revenue rate and a higher realized fee rate. The other thing that I think you are aware of and I would point you to is the comparison between the fourth and the first quarter is a little bit hard to do because of our performance fees. You have to take that out and I assume you are doing that. Leaving that side, given the pipelines and given the change in investor behavior and given our investment performance we would expect to see these numbers continue to trend up.

Obviously you this quarter with lower discretionary expenses certainly surprised me at least in terms of the operating leverage and potential in the business. You highlighted the 2% merit increase and then the $25 million bonus accrual. How should we be thinking about operating margins going forward? Is this kind of a temporary area or is this something you hope to repeat in future quarters?

Well we continue to look very carefully at our expenses. We have a number of initiatives managing our costs as we move into our growth centers on the expense side but as well on the revenue side. So there is a lot of operating leverage in the business so as we start seeing some revenues come back I think you will see these numbers. We are making some investments in order to kind of manage that cost going forward. We are continuing to invest in some of these transitions. I think each of our businesses is pretty well positioned for some operating leverage. Jim do you want to comment?

When I think about the expense space and asset servicing we are focusing on two things; core process re-engineering and leveraging our global growth centers. I would like to share one statistic with you. Last year we had about 29% of our staff in low cost locations. For this quarter we will be at 33% and we will make continued progress through the year. That affects our total comp base here where we will drop compensation by 6% or $4,000 per person on average. We will continue to focus on leveraging the global growth center and continue to focus on core process re-engineering.

I would add the same thing for Issuer Services and Treasury Services we are particularly looking for places where we have similar processes in different businesses that can be done the same to look for expense reductions.

I think the other thing I would add to that is all of our high margin businesses whether it is net interest revenue, FX or securities lending are at relatively low levels right now because of where we are in the capital markets. So as we see a little bit of volatility or a little bit of rate that drops right to the bottom line.

The next question comes from the line of Betsy Graseck - Morgan Stanley.

On the money market funds business if you don’t mind a couple of detailed questions. One was on the fact you have indicated a 100 basis point increase in Fed funds would lead to a $500 million pre-tax improvement in earnings. Could you give us a sense as to the speed with which that comes through for each 25 bips? If you could also help us understand if your assumption there is no money market funds leave or what size of business you end up having?

It really is coming from two areas. It is coming from the release of the compression on our net interest income and also having a little higher yield on the money market funds maybe means we won’t have to waive so many fees. It is not linear. The first 25 basis points is more valuable to us than the last 25 basis points of that 100. I would say we probably capture close to 50-60% in the first two, we will definitely capture more than 60% in the first two but almost all of that in the first move. Then it kind of slows down. The assumption that we have made assumption we have made, and it is hard for us to do it in any other way because we would just be speculating, is that our deposit levels remain where they are today and that the money market funds remain where they are today. Typically you may see some money exit money market funds if you see a rise in rates but who knows, you might see people actually attracted to that. In order to give you the statistics and give you the sense of really what is driving what we know that is really how we came up with that estimate.

The sensitivity you are describing in terms of that fund is there an incremental impact from other countries freezing interest rates or is that kind of baked in to your $500 million number?

There is. We are assuming it would be kind of a coordinated global effort, primarily dollar related and to a lesser extent the Sterling and Euro.

Can you give us a sense of the money market fund retention relative to what your plans have been for that? How has that been going? Ron O’Hanley : When you say retention are you talking about client retention?

Either client and/or volumes. Ron O’Hanley : What we have historically seen in the past in this kind of rate environment even though we have never seen this kind of a rate environment typically what you should see is as there is an expectation of rising rates you start to see some client erosion. As rates start to go up you see more client erosion particularly the most sophisticated institutions who we think will go direct and not go into a pool like this. The other thing we have seen given our position is we always end up after one of these cycles with more share than what we started. So once this period is over we tend to once this period is over we tend to, if you will, bottom out at a higher level than we did the last time and with slightly more share. If you think about, and that is for a long history of being in this business, if you think about now we are three years into this merger and we have fully integrated and insinuated the money market business with all of our other security services businesses in essence we are serving a lot of our own clients and we would expect to bottom out at a much higher number.

On the MMF there has been some question with regard to what kind of product will end up being offered. The [NAB] of a floater and the capital required against those two different product sets. Could you speak a little bit about how you are managing for those changes? Ron O’Hanley : We are actually coming out with, it is in SEC registration now, but we are actually coming out with a floating product. I think it is up in the air of what the demand will be but it certainly will have a higher yield so it could be at least for some clients quite attractive. We are prepared for this. Again our client tends to be sophisticated institutions so we want to have a full range of products and we expect to be one of the first out with one of those kinds of products.

The capital associated with the MMF business?

We do currently include in our economic capital the risk of the MMF business and it really depends on the implicit [report] of it might be embedded in it. It is a retail 287 fund and that attracts a pretty significant amount of our economic capital.

The next question comes from the line of Gerard Cassidy – RBC Capital Markets. Gerard Cassidy – RBC Capital Markets : The question has to do with Basel 3. Now that the input and commentary that all of the banks were committed to Basel through last Friday, what is your outlook on what you see happening there? Do you think there will be major changes to the proposal?

We do. The feedback we are getting as we have talked to the regulators is the initial consultative paper is out there for discussion. It has a few issues as you would expect in the first cut of a whole new capital regime. We would expect it to change quite a bit from where it currently stands. At least that is the feedback that we are hearing. I think there is a good dialogue between the regulators in the U.S. have had a couple of sessions in New York and in Washington where they are getting the industry feedback and I think they are listening.

What I would add to that is I would say most of the U.S. banks haven’t been heavily focused on it although they are starting to focus more on it. People have been more focused on U.S. regulatory reform. The Europeans have been all over this for about a year and they are frankly ahead of us in terms of their thinking of it and various position papers in terms of pro’s and con’s and various approaches. It is all about quality of capital it seems globally and the Europeans have a bit of a competitive disadvantage vis a vie the American banks at this point in that we have more capital and we have had more consolidation as well. The key to it is that we have a level playing field globally. I don’t think this is going to be implemented very quickly. I also suspect there are going to be a lot of changes between now and the end of the year if they can even get there by the end of the year. Gerard Cassidy – RBC Capital Markets : A clarification, on the compensation increase you mentioned in the call starting April 1 was that 1% or 2%?

That is a 2% merit increase on salaries. Gerard Cassidy – RBC Capital Markets : The U.K. bonus tax of $25 million is that being entirely absorbed by the company or do the employees have to absorb some of that as well?

We are absorbing that. Gerard Cassidy – RBC Capital Markets : On the labor and fees on money market funds is there any possibility that once rates start to go higher you can recapture these waivers in the future or are they forever gone?

No, we would expect to recapture them immediately with the first move in rates. In fact, oh, past ones. I’m sorry. We hadn’t thought about them before. We would love to but there is no way that is going to happen. Gerard Cassidy – RBC Capital Markets : So the past ones you would not be able to recapture?

That is correct. Gerard Cassidy – RBC Capital Markets : Finally on the litigation reserve is there any chance you are going to need to add to that going forward?

Like I would say in this environment we think we are adequately reserved for what we know now but it is a tough environment and I would expect both legal expenses and litigation costs run a little hot right now.

Hopefully you will find over time we have a fairly low market share compared to others. It is a current issue that you will probably continue to see in the industry here for some time. It is an actual outcome of the stresses we have seen in the financial markets over the last two years. Gerard Cassidy – RBC Capital Markets : On the Grantor Trust portfolio what did you see or what are you seeing that has pushed these values up a fair amount to enable you to have a higher mark now or accretable yield coming into this year?

We actually run four different cash flow models against; two of our own and two external. We are starting to see severities finally peak and we are starting to see some modest improvements in various components. Sub-prime is actually doing a little bit better than what we had. We had been pretty severe in our assumptions around the accretions. So we do a projected cash flow it has been positive. In addition the market value of the underlying assets have risen quite nicely. It is not directly correlated where we expect the projected cash flows but it is nice to see the market is also supporting our own assessment.

Thanks everyone. I think that was the last call of people who were dialed in. We very much appreciate your support and the level of questions. On to Q2. Thank you.

If there are any additional questions or comments you may contact Mr. Andy Clark at 212-635-1803. Thank you ladies and gentlemen this concludes today’s conference call. Thank you for participating.