<table><tr><th>From:</th><th>Richard Kahn O.</th></tr><tr><td>Sent:</td><td>Thursday, April 20, 2017 12:04 PM</td></tr><tr><td>To:</td><td>Jeffrey Epstein</td></tr><tr><td>Subject:</td><td>Fwd: BNY Mellon: 1417 First Pass: Tax Beat with Disappointing Expenses</td></tr></table>

Richard Kahn
HBRK Associates Inc.
575 =exington Avenue, 4th Floor
New =ork, NY 10022
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Begin forwarded message:

From: =/b>"Morgan Stanley" <███████████████████████████████

Subject: =/b>BNY Mellon: 1Q17 =irst Pass: Tax Beat with Disappointing Expenses

Date: =/b>April 20, 2017 at 8:01:08 AM =DT

To: =/b>████████████████████████

Reply-To: =/b███████████████████████████████████

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Wealth =anagement

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BNY Mellon: 1Q17 =irst Pass: Tax Beat with Disappointing =xpenses
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## Betsy L. Graseck, =FA — Morgan Stanley

## April =0, 2017 11:59 AM GMT

Beat on Revenues and Taxes, =artially Offset by Expense Miss BK reported operating EPS of $0.82, =eat consensus' and our estimates of $0.80 on higher fees (4c), lower =axes (2c), lower provision (lc), partially offset by higher expenses =4c) and lower NIl (1c). Expense miss disappointing as BK had been an =xpense-save story. Expenses up <1% y/y and gig v. our estimates of =% down q/q and y/y. Management has attributed such increase to =egulatory and compliance costs. We look to the call for more color. =xpense ratio stood at 69.0%, 80bps lower than our estimate of 68.2%; =till an improvement from prior quarters: 47bps improvement q/q, and =30bps improvement y/y. NIM in line with our estimate at 1.13%, up 3bps =/q on an adjusted basis (4Q16 had a few one-offs). Earning assets =hrank faster than we expected at -2%q/q (v. MSe of flat q/q).Higher =ees primarily driven by clearing services fees (2c beat), asset =anagement fees (lc beat) and others (2c), partially offset by FX =rading (lc miss)Tax rate lower at 23.4% v. MSe of 25.0%, primarily =riven by new accounting guidance (ASU 2016-09) on stock awards.Volume: =ixed with AUC miss and AUM beat: AUC up 2.3% q/q (MSe +3.0%) and up =.2% y/y (MSe +5.8%) AUM up 4.8% gig (MSe +3.5%) and up 5.4% y/y (MSe =4.1%)Key Questions for the Call:Expense miss, fee pressure, NEXEN =onetization, asset management boutique model, NIM outlook, excess =eposit runoff, duration extension opportunities, implications of tax =epatriationCall Details:Today at Sam eastern. (800) 390-5696; Passcode: =45371

This alert is sent from:

Andrew Atlas,

You received this because you requested =hat you receive content and reports from: THE BANK OF =EW YORK MELLON CORPORATION Please =ontact your FA if you want to unsubscribe from the alerts.

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Please see =he full report for risks, disclosures and other important =nformation.

Important disclosures regarding the =elationship between the companies that are referenced in Morgan Stanley =esearch and Morgan Stanley Wealth Management research are available on =he Morgan Stanley Wealth Management disclosure website at https://www.morganstanley.com/online/researchdisclosures.

Morgan Stanley Wealth Management Not Acting as Municipal =dvisor Morgan Stanley Wealth Management is not acting as a municipal =dvisor to any municipal entity or obligated person within the meaning =f Section 158 of the Securities Exchange Act (the "Municipal Advisor =ule") and the opinions or views contained herein are not intended to =e, and do not constitute, advice within the meaning of the Municipal =dvisor Rule.

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