Bank of New York Co. Inc. credited growth in its securities servicing business for a 3% first-quarter profit increase, to $434 million.
Earnings per share of 57 cents matched the average estimate of analysts polled by Thomson Financial. Revenue rose 19%, to $1.9 billion, also matching the analysts' forecast.
Excluding costs associated with deals with Mellon Financial Corp. and JPMorgan Chase & Co., Bank of New York had earnings per share of 59 cents.
Analysts said it was a good first quarter for custody banks in general. On Tuesday, Mellon, Northern Trust Corp. of Chicago, and State Street Corp. of Boston posted strong profit growth: Mellon 14%, Northern Trust 14.5%, and State Street 7.5%.
Todd Gibbons, Bank of New York's chief financial officer, said during Wednesday's earnings conference call that his company has undergone a "significant business-mix change from a year ago."
In the past six months it has transformed itself from a retail-oriented company to one focusing on custody servicing for institutional investors and asset management.
In October, Bank of New York swapped its 338-branch network for JPMorgan Chase's corporate trust business.
In December it announced an agreement to buy Mellon for $16.5 billion (though it and the Pittsburgh banking company are calling the deal a merger of equals).
Bank of New York's servicing fees rose 19%, to $990 million, from a year earlier in the first quarter, and asset servicing revenue rose 17%, to $393 million. Issuer services revenue, including corporate trust and depositary receipts, more than doubled, to $319 million.
Bank of New York said a spinoff of some operations into a new company called BNY ConvergEx Group was behind a 19% drop in fees from execution and clearing services, to $278 million.
Shareholders are set to vote on the Mellon deal in May.
Thomas A. Renyi, Bank of New York's chief executive officer, said on the conference call that the deal is slated to close around July 1.
Mr. Renyi said the companies have been working closely for the past five months to assemble a management team for Bank of New York Mellon Corp.
In December the companies announced that Mr. Renyi would be Bank of New York Mellon's executive chairman for the first 18 months. Robert P. Kelly, the Pittsburgh company's president, chairman, and chief executive, is to be Bank of New York Mellon's chief executive and is to take over from Mr. Renyi as chairman of the board after 18 months.
Gerald L. Hassell, Bank of New York's president, is to be the merged company's president.
Mr. Renyi said during the earnings call that within the next two to three weeks the top executives will have selected the top 400 to 500 managers for Bank of New York Mellon.
"We have fewer than 75 days to go, and we feel good about where we are at this point," he said. "These 75 days will move quickly and I am confident we will hit all of our merger milestones."
Mr. Gibbons said he believes Bank of New York Mellon will be "strong coming out of the gate."
"Attrition has been nonexistent, and we feel good about retention of the customer base," he said.
He continued: "We feel good going into the merger in terms of retaining business. And in terms of revenue synergies, we feel as confident and as positive as ever before."
Bank of New York's assets under management increased 15% year over year, to $130 billion, in the first quarter.
Assets under custody and administration increased 22%, to $13.8 trillion. Asset and wealth management fees rose 20.5% year over year, to $153 million.
Revenue from foreign exchange and trading rose 13% compared with a year earlier, but revenue from global payment services fell 2%.
