Morgan Stanley : Earnings Document (finsup1q2026)

Published: 2026-04-15 07:28:14 ET MS

Published on 04/15/2026 at 07:28 am EDT

Consolidated Financial Summary 1

Consolidated Financial Metrics, Ratios and Statistical Data 2

Consolidated and U.S. Bank Supplemental Financial Information 3

Consolidated Average Common Equity and Regulatory Capital Information 4

Institutional Securities Income Statement Information, Financial Metrics and Ratios 5

Wealth Management Income Statement Information, Financial Metrics and Ratios 6

Wealth Management Financial Information and Statistical Data 7

Investment Management Income Statement Information, Financial Metrics and Ratios 8

Investment Management Financial Information and Statistical Data 9

Consolidated Loans and Lending Commitments 10

Consolidated Loans and Lending Commitments Allowance for Credit Losses 11

Addendum I 12

Addendum II 13

Addendum III 14

Definition of U.S. GAAP to Non-GAAP Measures 15

Definitions of Performance Metrics and Terms 16 - 17

Supplemental Quantitative Details and Calculations 18 - 20

Legal Notice 21

(unaudited, dollars in millions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Net revenues

Institutional Securities

$ 10,721

$ 7,931

$ 8,983

35%

19%

Wealth Management

8,519

8,429

7,327

16%

Investment Management

1,535

1,720

1,602

(11%)

(4%)

Intersegment Eliminations

(195)

(190)

(173)

(3%)

(13%)

Net revenues (1)

$ 20,580

$ 17,890

$ 17,739

15%

16%

Provision for credit losses

135

(27%)

Non-interest expenses

Institutional Securities

$ 6,468

$ 5,226

$ 5,611

24%

15%

Wealth Management

5,922

5,810

5,332

11%

Investment Management

1,255

1,252

1,279

(2%)

Intersegment Eliminations

(174)

(176)

(162)

(7%)

Non-interest expenses (1)(2)

$ 13,471

$ 12,112

$ 12,060

11%

12%

Income before provision for income taxes

Institutional Securities

$ 4,161

$ 2,663

$ 3,281

56%

27%

Wealth Management

2,591

2,643

1,951

(2%)

33%

Investment Management

280

468

323

(40%)

(13%)

Intersegment Eliminations

(21)

(14)

(11)

(50%)

(91%)

Income before provision for income taxes

$ 7,011

$ 5,760

$ 5,544

22%

26%

Net Income applicable to Morgan Stanley

Institutional Securities

$ 3,294

$ 2,049

$ 2,529

61%

30%

Wealth Management

2,047

2,009

1,532

34%

Investment Management

242

349

262

(31%)

(8%)

Intersegment Eliminations

(16)

(10)

(8)

(60%)

(100%)

Net Income applicable to Morgan Stanley

$ 5,567

$ 4,397

$ 4,315

27%

29%

Earnings applicable to Morgan Stanley common shareholders

$ 5,411

$ 4,250

$ 4,157

27%

30%

Notes:

In prior periods, the Firm presented non-GAAP financial measures to adjust net revenues and compensation expense for mark-to-market gains and losses on deferred cash-based compensation plans (DCP). Firm net revenues excluding DCP, which represents a non-GAAP financial measure, were: 4Q25: $17,895 million, 1Q25: $17,888 million. Firm compensation expenses excluding DCP, which represents a non-GAAP financial measure, were: 4Q25: $6,968 million, 1Q25: $7,523 million.

Beginning in the first quarter of 2026, the Firm utilizes derivatives to hedge certain DCP awards and as a result will no longer present non-GAAP financial measures excluding DCP.

The End Notes are an integral part of this presentation. See pages 15 - 21 for Definition of U.S. GAAP to Non-GAAP Measures, Definitions of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

(unaudited)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Financial Metrics:

Earnings per basic share

$ 3.47

$ 2.72

$ 2.62

28%

32%

Earnings per diluted share

$ 3.43

$ 2.68

$ 2.60

28%

32%

Return on average common equity

21.0%

16.9%

17.4%

Return on average tangible common equity

27.1%

21.8%

23.0%

Book value per common share

$ 66.18

$ 64.37

$ 60.41

Tangible book value per common share

$ 51.58

$ 50.00

$ 46.08

Financial Ratios:

Pre-tax margin

34%

32%

31%

Compensation and benefits as a % of net revenues

42%

39%

42%

Non-compensation expenses as a % of net revenues

24%

28%

26%

Firm expense efficiency ratio (1)

65%

68%

Effective tax rate (2)

19.6%

23.2%

21.2%

Statistical Data:

Period end common shares outstanding (millions)

1,580

1,583

1,607

(2%)

Average common shares outstanding (millions)

Basic

1,561

1,564

1,584

(1%)

Diluted

1,576

1,586

1,600

(1%)

(2%)

Worldwide employees

83,922

82,992

81,023

(unaudited, dollars in millions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Consolidated Balance sheet

Total assets

$ 1,581,418

$ 1,420,270

$ 1,300,296

11%

22%

Loans (1)

$ 306,260

$ 289,038

$ 258,969

18%

Deposits

$ 427,971

$ 415,523

$ 381,563

12%

Long-term debt outstanding

$ 363,009

$ 341,681

$ 296,997

22%

Maturities of long-term debt outstanding (next 12 months)

$ 27,384

$ 26,236

$ 22,963

19%

Average liquidity resources

$ 395,141

$ 385,884

$ 351,740

12%

Common equity

$ 104,536

$ 101,882

$ 97,062

Less: Goodwill and intangible assets

(23,063)

(22,735)

(23,018)

Tangible common equity

$ 81,473

$ 79,147

$ 74,044

10%

Preferred equity

$ 9,750

U.S. Bank Supplemental Financial Information

Total assets

$ 591,743

$ 598,668

$ 549,594

(1%)

Loans

$ 293,803

$ 278,352

$ 246,221

19%

Investment securities portfolio (2)

$ 129,434

$ 132,611

$ 125,421

(2%)

Deposits

$ 420,104

$ 408,703

$ 375,499

12%

Regional revenues

Americas

$ 14,591

$ 13,784

$ 13,103

11%

EMEA (Europe, Middle East, Africa)

2,641

1,956

2,291

35%

15%

Asia

3,348

2,150

2,345

56%

43%

Consolidated net revenues

$ 20,580

$ 17,890

$ 17,739

15%

16%

Notes:

During the first quarter of 2026, the U.S. Bank implemented a reorganization of its operations, merging certain fixed income businesses and acquiring certain legal entities of Morgan Stanley. As the reorganization involved subsidiaries under the common control of the Firm, assets and liabilities were recognized at their carrying values, and historical financial statements of the U.S. Bank will reflect the reorganization as having occurred at the beginning of 2025.

(unaudited, dollars in billions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Average Common Equity

Institutional Securities

$ 48.2

$ 48.4

Wealth Management

28.7

29.4

(2%)

Investment Management

10.2

10.6

(4%)

Parent Company

15.8

12.5

7.1

26%

123%

Firm

$ 102.9

$ 100.9

$ 95.5

Regulatory Capital (1)

Common Equity Tier 1 capital

$ 84.5

$ 83.2

$ 77.0

10%

Tier 1 capital

$ 94.2

$ 92.7

$ 86.7

Standardized Approach

Risk-weighted assets

$ 559.5

$ 552.5

$ 502.6

11%

Common Equity Tier 1 capital ratio

15.1%

15.0%

15.3%

Tier 1 capital ratio

16.8%

17.2%

Advanced Approach Risk-weighted assets

$ 527.5

$ 514.2

$ 489.3

Common Equity Tier 1 capital ratio

16.0%

16.2%

15.7%

Tier 1 capital ratio

17.9%

18.0%

17.7%

Leverage-based capital

Tier 1 leverage ratio

6.1%

6.7%

6.9%

Supplementary Leverage Ratio

5.0%

5.4%

5.6%

(unaudited, dollars in millions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025 Mar 31, 2025

Revenues:

Advisory

$ 978

$ 1,133

$ 563

(14%)

74%

Equity

396

494

319

(20%)

24%

Fixed income

742

785

677

(5%)

10%

Underwriting

1,138

1,279

996

(11%)

14%

Investment banking

2,116

2,412

1,559

(12%)

36%

Equity

5,148

3,666

4,128

40%

25%

Fixed income

3,358

1,763

2,604

90%

29%

Other

692

10%

(86%)

Net revenues

10,721

7,931

8,983

35%

19%

Provision for credit losses

119%

Compensation and benefits

3,264

2,079

2,854

57%

14%

Non-compensation expenses

3,204

3,147

2,757

16%

Total non-interest expenses

6,468

5,226

5,611

24%

15%

Income before provision for income taxes

4,161

2,663

3,281

56%

27%

Net income applicable to Morgan Stanley

$ 3,294

$ 2,049

$ 2,529

61%

30%

Pre-tax margin

39%

34%

37%

Compensation and benefits as a % of net revenues

30%

26%

32%

Non-compensation expenses as a % of net revenues

30%

40%

31%

Return on Average Common Equity

26%

16%

20%

Return on Average Tangible Common Equity (1)

27%

16%

20%

Trading VaR (Average Daily 95% / One-Day VaR)

$ 53

$ 51

$ 50

(unaudited, dollars in millions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Revenues:

Asset management

$ 5,079

$ 5,031

$ 4,396

16%

Transactional

1,127

1,143

873

(1%)

29%

Net interest income

2,170

2,108

1,902

14%

Other

143

147

156

(3%)

(8%)

Net revenues (1)

8,519

8,429

7,327

16%

Provision for credit losses

(24)

(86%)

Compensation and benefits (1)

4,648

4,416

3,999

16%

Non-compensation expenses

1,274

1,394

1,333

(9%)

(4%)

Total non-interest expenses

5,922

5,810

5,332

11%

Income before provision for income taxes

2,591

2,643

1,951

(2%)

33%

Net income applicable to Morgan Stanley

$ 2,047

$ 2,009

$ 1,532

34%

Pre-tax margin

30%

31%

27%

Compensation and benefits as a % of net revenues

55%

52%

55%

Non-compensation expenses as a % of net revenues

15%

17%

18%

Return on Average Common Equity

28%

27%

20%

Return on Average Tangible Common Equity (2)

52%

48%

37%

Notes:

In prior periods, the Firm presented non-GAAP financial measures to adjust net revenues and compensation expense for mark-to-market gains and losses on DCP. Wealth Management net revenues excluding DCP, which represents a non-GAAP financial measure, were: 4Q25: $8,450 million, 1Q25: $7,458 million. Wealth Management compensation expenses excluding DCP, which represents a non-GAAP financial measure, were: 4Q25: $4,350 million, 1Q25: $4,016 million.

Beginning in the first quarter of 2026, the Firm utilizes derivatives to hedge certain DCP awards and as a result will no longer present non-GAAP financial measures excluding DCP.

(unaudited, dollars in billions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Wealth Management Metrics

Total client assets

$ 7,345

$ 7,381

$ 6,015

22%

Net new assets

$ 118.4

$ 122.3

$ 93.8

(3%)

26%

U.S. Bank loans

$ 186.3

$ 181.2

$ 162.5

15%

Margin and other lending (1)

$ 33.2

$ 31.2

$ 28.3

17%

Deposits (2)

$ 419

$ 408

$ 375

12%

Annualized weighted average cost of deposits

Period end

2.51%

2.77%

Period average

2.53%

2.67%

2.77%

Advisor-led channel

Advisor-led client assets $ 5,784

$ 5,715

$ 4,719

23%

Fee-based client assets $ 2,792

$ 2,753

$ 2,349

19%

Fee-based asset flows $ 53.7

$ 45.6

$ 29.8

18%

80%

Fee-based assets as a % of advisor-led client assets 48% 48% 50%

Self-directed channel

Self-directed client assets $ 1,561 $ 1,667 $ 1,295 (6%) 21%

Daily average revenue trades (000's) 1,128 1,116 1,003 1% 12%

Self-directed households (millions) 8.6 8.5 8.3 1% 4%

Workplace channel

Stock plan unvested public assets

$ 475

$ 534

$ 431

(11%)

10%

Number of stock plan participants (millions) (3)

6.6

6.5

6.7

(1%)

(unaudited, dollars in millions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Revenues:

Asset management and related fees

$ 1,496

$ 1,649

$ 1,451

(9%)

Performance-based income and other

151

(45%)

(74%)

Net revenues

1,535

1,720

1,602

(11%)

(4%)

Compensation and benefits

630

568

668

11%

(6%)

Non-compensation expenses

625

684

611

(9%)

Total non-interest expenses

1,255

1,252

1,279

(2%)

Income before provision for income taxes

280

468

323

(40%)

(13%)

Net income applicable to Morgan Stanley

$ 242

$ 349

$ 262

(31%)

(8%)

Pre-tax margin

18%

27%

20%

Compensation and benefits as a % of net revenues

41%

33%

42%

Non-compensation expenses as a % of net revenues

41%

40%

38%

Return on Average Common Equity

13%

10%

Return on Average Tangible Common Equity (1)

126%

138%

104%

(unaudited, dollars in billions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Assets Under Management or Supervision (AUM)

Net Flows by Asset Class (1)

Equity

$ (11.6)

$ (9.8)

$ (4.0)

(18%)

(190%)

Fixed Income

4.3

7.8

4.1

(45%)

Alternatives and Solutions

10.6

9.4

8.5

13%

25%

Long-Term Net Flows

3.3

7.4

8.6

(55%)

(62%)

Liquidity and Overlay Services

8.3

70.4

(15.4)

(88%)

Total Net Flows

$ 11.6

$ 77.8

$ (6.8)

(85%)

Assets Under Management or Supervision by Asset Class (1)

Equity

$ 221

$ 253

$ 250

(13%)

(12%)

Fixed Income

219

217

186

18%

Alternatives and Solutions

770

776

650

(1%)

18%

Long-Term Assets Under Management or Supervision

1,210

1,246

1,086

(3%)

11%

Liquidity and Overlay Services

658

649

561

17%

Total Assets Under Management or Supervision

$ 1,868

$ 1,895

$ 1,647

(1%)

13%

Notes:

To conform the reporting of Net Flows with the Assets Under Management or Supervision Rollforward presented in Management's Discussion and Analysis of our annual and quarterly reports on SEC Form 10-K and 10-Q, beginning in the first quarter of 2026, distributions, which represents returns of capital or returns on investments, are no longer included in Net flows. Distributions for long-term products were $3 billion, $4 billion and $3 billion, and distributions for Liquidity and Overlay Services were $3 billion, $4 billion and $4 billion for the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively. Additionally, during the first quarter of 2026, certain products were reclassified among asset classes to more closely align reporting with underlying investment strategies, primarily reflecting a reclassification of certain tax-managed solutions from Equity to Alternatives and Solutions. Prior period amounts have been adjusted to conform with the current period presentation.

‌(unaudited, dollars in billions)

Quarter Ended Percentage Change From:

Mar 31, 2026

Dec 31, 2025

Mar 31, 2025

Dec 31, 2025

Mar 31, 2025

Institutional Securities

Loans:

Corporate

$ 23.2

$ 14.2

$ 19.5

63%

19%

Secured lending facilities

72.2

70.8

54.9

32%

Commercial and residential real estate

13.9

12.0

11.9

16%

17%

Securities-based lending and other

10.2

10.7

9.9

(5%)

Total Loans

119.5

107.7

96.2

11%

24%

Lending Commitments

188.4

188.9

160.7

17%

Institutional Securities Loans and Lending Commitments

$ 307.9

$ 296.6

$ 256.9

20%

Wealth Management

Loans:

Securities-based lending and other

$ 112.9

$ 109.0

$ 95.0

19%

Residential real estate

73.4

72.3

67.5

Total Loans

186.3

181.3

162.5

15%

Lending Commitments

20.6

20.3

19.4

Wealth Management Loans and Lending Commitments

$ 206.9

$ 201.6

$ 181.9

14%

Consolidated Loans and Lending Commitments (1)

$ 514.8

$ 498.2

$ 438.8

17%

(unaudited, dollars in millions)

Loans:

Held For Investment (HFI)

Loans and Lending Commitments

(Gross)

ACL (1) ACL % Q1 Provision

Corporate

$ 8,911

$ 240

2.7%

(2)

Secured lending facilities

70,033

218

0.3%

Commercial and residential real estate

8,300

328

4.0%

Other

4,087

0.6%

Institutional Securities - HFI

$ 91,331

$ 809

0.9%

Wealth Management - HFI

186,523

365

0.2%

Held For Investment

$ 277,854

$ 1,174

0.4%

Held For Sale

17,231

Fair Value

11,884

Total Loans

306,969

1,174

Lending Commitments

208,973

807

0.4%

Consolidated Loans and Lending Commitments

$ 515,942

$ 1,981

During the first quarter of 2026, certain changes were made to the presentation of Investment Management AUM classifications and Net Flows. These changes have had no impact on Total AUM and were made to more closely align reporting with underlying investment strategies and to conform reporting of Net Flows with the relevant presentations in our SEC Forms 10-K and 10-Q. In the following three Addendums, we provide the historical recast of AUM and Net Flows in the Financial Supplement for this quarter only to support historical analysis of these Investment Management metrics.

($ in billions)

Quarter Ended

Mar 31, 2026

Dec 31, 2025

Sep 30, 2025

Jun 30, 2025

Mar 31, 2025

Net Flows by Asset Class (1) (2)

Equity

(11.6) $

(9.8) $

(6.2) $

(2.9) $

(4.0)

Fixed Income

4.3

7.8

7.5

7.0

4.1

Alternatives and Solutions

10.6

9.4

16.6

8.1

8.5

Long-Term Net Flows

3.3

7.4

17.9

12.2

8.6

Liquidity and Overlay Services

8.3

70.4

29.3

(22.7)

(15.4)

Total Net Flows

11.6

77.8

47.2

(10.5)

(6.8)

AUM by Asset Class (1)

Equity

221

253

270

271

250

Fixed Income

219

217

208

198

186

Alternatives and Solutions

770

776

752

700

650

Long-Term AUM

1,210

1,246

1,230

1,169

1,086

Liquidity and Overlay Services

658

649

577

544

561

Total AUM

1,868

1,895

1,807

1,713

1,647

During the first quarter of 2026, certain products were reclassified among asset classes to more closely align reporting with underlying investment strategies, primarily reflecting a reclassification of tax-managed solutions from Equity to Alternatives and Solutions. These changes had no impact on total AUM. Prior period amounts have been adjusted to conform with the current period presentation.

Quarter Ended

Mar 31, 2026

Dec 31, 2025

Sep 30, 2025

Jun 30, 2025

Mar 31, 2025

Average AUM (1)

($ in billions)

Equity

242

262

269

259

260

Fixed Income

220

212

203

190

183

Alternatives and Solutions

783

765

722

669

660

Long-Term AUM

1,245

1,239

1,194

1,118

1,103

Liquidity and Overlay Services

659

614

564

554

566

Total

1,904

1,853

1,758

1,672

1,669

Average Fee Rates (1)(2)

(in bps)

Equity

Fixed Income

Alternatives and Solutions

Long-Term AUM

Liquidity and Overlay Services

Investment Management

During the first quarter of 2026, certain products were reclassified among asset classes to more closely align reporting with underlying investment strategies, primarily reflecting a reclassification of certain tax-managed solutions from Equity to Alternatives and Solutions. These changes had no impact on total AUM but have impacted Average AUM and Average Fee Rates by asset class. Prior period amounts have been adjusted to conform with the current period presentation.

Based on Asset management revenues, net of waivers, excluding performance-based fees and other non-management fees. For certain non-U.S. funds, it includes the portion of advisory fees that the advisor collects on behalf of third-party distributors. The payment of those fees to the distributor is included in Non-compensation expenses in the income statement.

($ in billions)

Note: amounts presented in the tables below may not sum due to rounding.

Beginning Balance Inflows

(2)

Outflows

(3)

Net Flows Distributions

Market Impact and

(4)

Other (5) Ending Balance

Quarter Ended Mar 31, 2026

Equity

253

(20) $

(12) $

- $

(20) $

221

Fixed Income

217

(19)

(1)

219

Alternatives and Solutions (6)

776

(31)

(2)

(15)

770

Long-Term AUM

1,246

(70) $

3 $

(3) $

(36) $

1,210

Liquidity and Overlay Services

649

748

(739)

(3)

658

Total

1,895

821

(809) $

12 $

(6) $

(33) $

1,868

Quarter Ended Dec 31, 2025

Equity

270

(21) $

(10) $

(2) $

(5) $

253

Fixed Income

208

(15)

217

Alternatives and Solutions (6)

752

(30)

(2)

776

Long-Term AUM

1,230

(66) $

7 $

(4) $

13 $

1,246

Liquidity and Overlay Services

577

760

(689)

(4)

649

Total

1,807

833

(755) $

78 $

(8) $

18 $

1,895

Quarter Ended Sep 30, 2025

Equity

271

(16) $

(6) $

- $

5 $

270

Fixed Income

198

(13)

(1)

208

Alternatives and Solutions (6)

700

(27)

(1)

752

Long-Term AUM

1,169

(56) $

18 $

(2) $

45 $

1,230

Liquidity and Overlay Services

544

638

(609)

(4)

577

Total

1,713

712

(665) $

47 $

(6) $

53 $

1,807

Quarter Ended Jun 30, 2025

Equity

250

(12) $

(3) $

- $

24 $

271

Fixed Income

186

(17)

(1)

198

Alternatives and Solutions (6)

650

(25)

(1)

700

Long-Term AUM

1,086

(54) $

12 $

(2) $

73 $

1,169

Liquidity and Overlay Services

561

647

(670)

(23)

(4)

544

Total

1,647

713

(724) $

(11) $

(6) $

83 $

1,713

Quarter Ended Mar 31, 2025

Equity

259

(16) $

(4) $

- $

(5) $

250

Fixed Income

179

(12)

(1)

186

Alternatives and Solutions (6)

654

(26)

(2)

(11)

650

Long-Term AUM

1,092

(54) $

9 $

(3) $

(12) $

1,086

Liquidity and Overlay Services

574

693

(709)

(15)

(4)

561

Total

1,666

756

(763) $

(7) $

(5) $

1,647

During the first quarter of 2026, certain products were reclassified among asset classes to more closely align reporting with underlying investment strategies, primarily reflecting a reclassification of certain tax-managed solutions from Equity to Alternatives and Solutions. These changes had no impact on total AUM. Prior period amounts have been adjusted to conform with the current period presentation.

Inflows represents investments or commitments from new and existing clients in new or existing investment products, including client reinvestments. Inflows exclude the gross impact of exchanges, whereby a client changes positions within the same asset class.

Outflows represents redemptions from clients' funds. Outflows exclude the gross impact of exchanges, whereby a client changes positions within the same asset class.

Distributions represents returns of capital or returns on investments. To conform the reporting of Net Flows with the Assets Under Management or Supervision Rollforward presented in Management's Discussion and Analysis of our annual and quarterly reports on SEC Form 10-K and 10-Q, beginning in the first quarter of 2026, distributions are no longer included in Net flows. This change had no impact on total AUM. Prior period amounts have been adjusted to conform with the current period presentation.

Market Impact and Other includes realized and unrealized gains and losses on portfolio investments and the impact of foreign currency changes for non-U.S. dollar denominated funds, and excludes any funds where market impact does not impact management fees.

As of March 31, 2026, December 31, 2025, September 30, 2025, June 30, 2025 and March 31, 2025, Alternatives and Solutions includes Parametric Long-Term period-end AUM of $524 billion, $528 billion, $509 billion, $466 billion and $424 billion, respectively. Parametric Long-Term products generally have lower average fee rates than other Alternatives and Solutions products.

‌We prepare our financial statements using U.S. GAAP. From time to time, we may disclose certain "non-GAAP financial measures" in this document or in the course of our earnings releases, earnings and other conference calls, financial presentations, definitive proxy statements and other public disclosures. A "non-GAAP financial measure" excludes, or includes, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. We consider the non-GAAP financial measures we disclose to be useful to us, investors, analysts and other stakeholders by providing further transparency about, or an alternate means of assessing or comparing our financial condition, operating results and capital adequacy. These measures are not in accordance with, or a substitute for, U.S. GAAP and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, we will also generally define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the U.S. GAAP financial measure and the non-GAAP financial measure. In the periods prior to 2026, we present certain non-GAAP financial measures that exclude the impact of mark-to-market gains and losses on DCP investments from net revenues and compensation expenses. The impact of DCP is primarily reflected in our Wealth Management business segment results. These measures allow for better comparability of period-to-period underlying operating performance and revenue trends, especially in our Wealth Management business segment. By excluding the impact of these items, we are better able to describe the business drivers and resulting impact to net revenues and corresponding change to the associated compensation expenses. For more information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Executive Summary" in the 2025 Form 10-K.

The following are considered non-GAAP financial measures:

Tangible common equity represents common shareholders' equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction. In addition, we believe that certain ratios that utilize tangible common equity, such as return on average tangible common equity ("ROTCE") and tangible book value per common share, also non-GAAP financial measures, are useful for evaluating the operating performance and capital adequacy of the business period-to-period, respectively.

ROTCE represents annualized earnings applicable to Morgan Stanley common shareholders as a percentage of average tangible common equity.

Tangible book value per common share represents tangible common equity divided by common shares outstanding.

Segment return on average common equity and return on average tangible common equity represent net income applicable to Morgan Stanley by segment less preferred dividends allocated to each segment, annualized as a percentage of average common equity and average tangible common equity, respectively, allocated to each segment. The amount of capital allocated to the business segments is generally set at the beginning of each year and remains fixed throughout the year until the next annual reset unless a significant business change occurs (e.g., acquisition or disposition).

Net revenues excluding DCP represents net revenues adjusted for the impact of mark-to-market gains and losses on economic hedges associated with certain employee deferred cash-based compensation plans.

Compensation expense excluding DCP represents compensation adjusted for the impact related to certain employee deferred cash-based compensation plans linked to investment performance.

‌Our earnings releases, earnings conference calls, financial presentations and other communications may also include certain metrics that we believe to be useful to us, investors, analysts and other stakeholders by providing further transparency about, or an additional means of assessing, our financial condition and operating results.

Page 1:

Provision for credit losses represents the provision for credit losses on loans held for investment and unfunded lending commitments.

Net income applicable to Morgan Stanley represents net income less net income applicable to nonredeemable noncontrolling interests.

Earnings applicable to Morgan Stanley common shareholders represents net income applicable to Morgan Stanley reduced by preferred stock dividends.

Page 2:

Return on average common equity represents annualized earnings applicable to Morgan Stanley common shareholders as a percentage of average common equity.

Return on average tangible common equity represents a non-GAAP financial measure.

Book value per common share represents common equity divided by period end common shares outstanding.

Tangible book value per common share represents a non-GAAP financial measure.

Pre-tax margin represents income before provision for income taxes as a percentage of net revenues.

The Firm expense efficiency ratio represents total non-interest expenses as a percentage of net revenues.

Page 3:

Liquidity Resources, which are primarily held within the Parent Company and its major operating subsidiaries, are comprised of high quality liquid assets (HQLA) and cash deposits with banks. The total amount of Liquidity Resources is actively managed by us considering the following components: unsecured debt maturity profile; balance sheet size and composition; funding needs in a stressed environment, inclusive of contingent cash outflows; legal entity, regional and segment liquidity requirements; regulatory requirements; and collateral requirements. Average Liquidity Resources represents the average daily balance for the three months ended March 31, 2026, December 31, 2025 and March 31, 2025.

Our goodwill and intangible balances utilized in the calculation of tangible common equity are net of allowable mortgage servicing rights deduction.

Tangible common equity represents a non-GAAP financial measure.

U.S. Bank refers to our U.S. Bank Subsidiaries, Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Association, and excludes transactions between the bank subsidiaries, as well as deposits from the Parent Company and affiliates.

Firmwide regional revenues reflect our consolidated net revenues on a managed basis. Further discussion regarding the geographic methodology for net revenues is disclosed in Note 22 to the consolidated financial statements included in the 2025 Form 10-K.

Page 4:

Our attribution of average common equity to the business segments is based on the Required Capital framework, an internal capital adequacy measure. This framework is a risk-based and leverage-based capital measure, which is compared with our regulatory capital to ensure that we maintain an amount of going concern capital after absorbing potential losses from stress events, where applicable, at a point in time. The amount of capital allocated to the business segments is generally set at the beginning of each year and remains fixed throughout the year until the next annual reset unless a significant business change occurs (e.g., acquisition or disposition). We define the difference between our total average common equity and the sum of the average common equity amounts allocated to our business segments as Parent Company common equity. The Required Capital framework is based on our regulatory capital requirements. We continue to evaluate our Required Capital framework with respect to the impact of evolving regulatory requirements, as appropriate. For further discussion of the framework, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Regulatory Requirements" in the 2025 Form 10-K.

Our risk-based capital ratios are computed under each of (i) the standardized approaches for calculating credit risk and market risk risk-weighted assets (RWAs) ("Standardized Approach") and (ii) the applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs ("Advanced Approach"). For information on the calculation of regulatory capital and ratios, and associated regulatory requirements, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Regulatory Requirements" in the 2025 Form 10-K.

Supplementary leverage ratio represents Tier 1 capital divided by the total supplementary leverage exposure.

Page 5:

Institutional Securities Equity and Fixed income net revenues include trading, net interest income (interest income less interest expense), asset management, commissions and fees, investments, and other revenues which are directly attributable to those businesses.

Pre-tax margin represents income before provision for income taxes as a percentage of net revenues.

VaR represents the unrealized loss in portfolio value that, based on historically observed market risk factor movements, would have been exceeded with a frequency of 5%, or five times in every 100 trading days, if the portfolio were held constant for one day. Further discussion of the calculation of VaR and the limitations of our VaR methodology, is disclosed in "Quantitative and Qualitative Disclosures about Risk" included in the 2025 Form 10-K.

Page 6:

Transactional revenues for the Wealth Management segment includes investment banking, trading, and commissions and fees revenues.

Net interest income represents interest income less interest expense.

Other revenues for the Wealth Management segment includes investments and other revenues.

Pre-tax margin represents income before provision for income taxes as a percentage of net revenues.

Page 7:

Client assets represent those for which Wealth Management is providing services including financial advisor-led brokerage, investment advisory, custody, cash management, and administrative services; self-directed brokerage and investment advisory services; financial and wealth planning services; workplace services, including stock plan administration, and retirement plan services.

Net new assets represent client asset inflows, including interest, dividends and asset acquisitions, less client asset outflows, and excluding the impact of business combinations/divestitures and the impact of fees and commissions.

Margin and other lending represents margin lending arrangements, which allow customers to borrow against the value of qualifying securities and other lending which includes non-purpose securities-based lending on non-bank entities.

Deposits reflect liabilities sourced from Wealth Management clients and other sources of funding on our U.S. Bank Subsidiaries. Deposits include sweep deposit programs, savings and other deposits, and time deposits.

Annualized weighted average cost of deposits represents the total annualized weighted average cost of the various deposit products, including the effect of related hedging derivatives. The period end cost of deposits is based upon balances and rates as of March 31, 2026, December 31, 2025 and March 31, 2025. The period average is based on daily balances and rates for the period.

Advisor-led client assets represent client assets in accounts that have a Wealth Management representative assigned.

Fee-based client assets represent the amount of client assets where the basis of payment for services is a fee calculated on those assets.

Fee-based asset flows include net new fee-based assets (including asset acquisitions), net account transfers, dividends, interest and client fees, and exclude institutional cash management related activity. For a description of the Inflows and Outflows included in Fee-based asset flows, see Fee-based client assets rollforwards in the 2025 Form 10-K.

Self-directed client assets represent active accounts which are not advisor-led. Active accounts are defined as having at least $25 in assets.

Daily average revenue trades (DARTs) represent the total self-directed trades in a period divided by the number of trading days during that period.

Self-directed households represent the total number of households that include at least one active account with self-directed assets. Individual households or participants that are engaged in one or more of our Wealth Management channels are included in each of the respective channel counts.

Stock plan unvested public assets represent the market value of public company securities at the end of the period, and excludes vested and unvested private company securities.

Stock plan participants represent total accounts with vested and/or unvested stock plan assets in the workplace channel. Individuals with accounts in multiple plans are counted as participants in each plan.

Page 8:

Asset management and related fees represents management and administrative fees, distribution fees, and performance-based fees not in the form of carried interest. Asset management and related fees represents Asset management as reported on our consolidated income statement.

Performance-based income and other includes performance-based fees in the form of carried interest, gains and losses from investments, gains and losses from hedges on seed capital and certain employee deferred compensation plans, net interest, and other revenues. Performance-based income and other represents investments, trading, net interest, and other revenues as reported on our consolidated income statement.

Pre-tax margin represents income before provision for income taxes as a percentage of net revenues.

Page 9:

Investment Management Alternatives and Solutions asset class includes products in fund of funds, real estate, infrastructure, private equity and credit strategies, multi-asset portfolios, and tax-managed solutions, as well as systematic strategies that create custom investment solutions, including those offered by Parametric.

Investment Management net flows represent investments or commitments from new and existing clients in new or existing investment products, including reinvestments, and redemptions from clients' funds. Net flows exclude both the gross impact of exchanges, whereby a client changes positions within the same asset class, and distributions, which represent returns of capital or returns on investments.

Overlay Services represents investment strategies that use passive exposure instruments to obtain, offset or substitute specific portfolio exposures, beyond those provided by the underlying holdings of the fund.

Total assets under management or supervision excludes shares of minority stake assets which represent the Investment Management business segment's proportional share of assets managed by third-party asset managers in which we hold investments accounted for under the equity method.

Page 10 and 11:

Corporate loans include relationship and event-driven loans and typically consist of revolving lines of credit, term loans and bridge loans.

Secured lending facilities include loans provided to clients, which are collateralized by various assets, including residential and commercial real estate mortgage loans, investor commitments for capital calls, corporate loans and other assets.

Securities-based lending and other includes financing extended to sales and trading customers and corporate loans purchased in the secondary market.

Institutional Securities Lending Commitments principally include Corporate lending activity.

‌The following sets forth the Firm net revenue impact of mark-to-market gains and losses on investments associated with DCP and compensation expense impact related to DCP in prior year periods:

4Q25

3Q25

2Q25

1Q25

4Q25 YTD

Net revenues

17,890

18,224

16,792

17,739

70,645

Adjustment for mark-to-market on DCP

(248)

(377)

149

(471)

Adjusted Net revenues - non-GAAP

17,895

17,976

16,415

17,888

70,174

Compensation expense

7,063

7,442

7,190

7,521

29,216

Adjustment for mark-to-market on DCP

(95)

(300)

(371)

(764)

Adjusted Compensation expense - non-GAAP

6,968

7,142

6,819

7,523

28,452

Compensation expense for deferred cash-based compensation plans awards is calculated based on the notional value of the award granted, adjusted for changes in the fair value of the referenced investments that employees select. Compensation expense is recognized over the vesting period relevant to each separately vesting portion of deferred awards.

Beginning in the first quarter of 2026, hedges for Wealth Management DCP awards were primarily transitioned to derivative instruments. For certain unvested DCP awards, the Firm designates derivatives in cash flow hedges with changes in fair value recorded in other comprehensive income and later reclassified to compensation expense in line with the vesting period of the DCP awards. For other awards, including vested awards, the Firm uses economic hedging derivatives, with changes in fair value recorded in compensation expense. As a result, the Firm will no longer present non-GAAP measures of net revenues and compensation expense excluding DCP.

Prior to the current quarter, we hedged DCP award obligations primarily with cash instruments and recorded the changes in the fair value, net of financing costs, within Transactional revenues in the Wealth Management business segment. Although changes in compensation expense resulting from changes in the fair value of the referenced investments were generally offset by changes in the fair value of investments recognized in net revenues, there was typically a timing difference between the immediate recognition of gains and losses on our investments and the deferred recognition of the related compensation expense over the vesting period.

The use of derivatives as cash flow hedges of DCP awards is expected to substantially mitigate timing differences between the recognition of changes in the fair value of the hedging instruments and the deferred recognition of related DCP compensation expense over the vesting period. The expected mitigation of these timing differences, alongside the associated income statement changes described above, enables us to better present the operating performance and revenue trends without the need for non-GAAP financial measures.

The tables above for the prior periods present non-GAAP adjusted Net revenues which excludes amounts recognized in Net revenues related to fair value gains and losses, net of financing costs, on investments associated with certain cash-based deferred compensation plans and non-GAAP adjusted Compensation expense for 2025 which excludes amounts recognized in Compensation expense associated with certain cash-based deferred compensation plans.

(2)

The Firm non-interest expenses by category are as follows:

1Q26

4Q25

1Q25

Compensation and benefits (a)

Non-compensation expenses:

8,542

7,063

7,521

Brokerage, clearing and exchange fees (b)

1,256

1,128

1,222

Information processing and communications

1,148

1,160

1,050

Professional services

602

769

674

Occupancy and equipment

483

491

449

Marketing and business development

310

358

238

Other (b)(c)

1,130

1,143

906

Total non-compensation expenses

4,929

5,049

4,539

Total non-interest expenses

13,471

12,112

12,060

During the quarters ended March 31, 2026 and 2025, as a result of March workforce management actions, were recognized severance costs of $178 million and $144 million, respectively, in Compensation and benefits expenses.The workforce management action was related to an effort to improve operational efficiency and manage performance, rather than a change in strategy or exit of businesses. The workforce management action occurred across our business segments and geographic regions and impacted approximately 2% of our global workforce at that time. We recorded severance costs of $94 million and $78 million in the Institutional Securities business segment, $61 million and $50 million in the Wealth Management business segment, and $23 million and $16 million in the Investment Management business segment for the quarters ended March 31, 2026 and 2025, respectively. These costs were incurred across all regions, with the majority in the Americas.

Execution-related expenses represent Brokerage, Clearing and exchange fees and certain expenses reported in the Other expense category such as Regulatory fees, Transaction taxes and other fees which are directly associated with revenue-generating activities.

For the quarters ended December 31, 2025 and March 31, 2025, Firm results included an FDIC Special Assessment of $(32) million and $3 million, respectively. This FDIC Special Assessment was reported in the business segments' results as follows: Institutional Securities: 4Q25: $(14) million, 1Q25: $1 million; Wealth Management: 4Q25: $(18) million, 1Q25: $2 million.

Page 2:

Refer to page 1(2) End Notes from above.

The income tax consequences related to employee share-based compensation payments are recognized in Provision for income taxes in the consolidated income statement, and may be either a benefit or a provision. The impacts of recognizing excess tax benefits upon conversion of awards are $327 million and $208 million for the first quarter of 2026 and 2025, respectively.

Page 3:

Includes loans held for investment (net of allowance), loans held for sale and also includes loans at fair value which are included in Trading assets on the balance sheet.

As of March 31, 2026, December 31, 2025 and March 31, 2025, the U.S. Bank investment securities portfolio included held to maturity investment securities of $43.2 billion, $44.2 billion and $47.2 billion, respectively.

Page 4:

Capital ratios are estimates as of the press release date, April 15, 2026.

‌Institutional Securities average tangible common equity represents average common equity adjusted to exclude goodwill and intangible assets net of allowable mortgage servicing rights deduction. The adjustments are as follows: 1Q26:

$455mm; 4Q25: 457mm; 1Q25: $457mm.

Page 6:

The following sets forth the Wealth Management segment net revenue impact of mark-to-market gains and losses on investments associated with DCP and compensation expense impact related to DCP in prior year periods:

Net revenues

4Q25

8,429

3Q25

8,234

2Q25

7,764

1Q25

7,327

4Q25 YTD

31,754

Adjustment for mark-to-market on DCP

(206)

(294)

131

(348)

Adjusted Net revenues - non-GAAP

8,450

8,028

7,470

7,458

31,406

Compensation expense

4,416

4,388

4,147

3,999

16,950

Adjustment for mark-to-market on DCP

(66)

(222)

(264)

(535)

Adjusted Compensation expense - non-GAAP

4,350

4,166

3,883

4,016

16,415

Wealth Management average tangible common equity represents average common equity adjusted to exclude goodwill and intangible assets net of allowable mortgage servicing rights deduction. The adjustments are as follows: 1Q26:

$13,220mm; 4Q25: 13,088mm; 1Q25: $13,088mm.

Page 7:

Wealth Management other lending included $2 billion of non-purpose securities based lending on non-bank entities in each period ended March 31, 2026, December 31, 2025 and March 31, 2025.

Details of deposits sourced from Wealth Management clients and other sources of funding on our U.S. Bank Subsidiaries for the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025, are as follows:

Brokerage sweep deposits

1Q26

144

4Q25

142

1Q25

136

Other deposits

275

266

239

Total deposits

419

408

375

The number of stock plan participants declined slightly in the second half of 2025, primarily as a result of the previously announced dispositions of the Firm's EMEA stock plan business.

Page 8:

Investment Management average tangible common equity represents average common equity adjusted to exclude goodwill and intangible assets net of allowable mortgage servicing rights deduction. The adjustments are as follows: 1Q26:

$9,467mm; 4Q25: $9,557mm; 1Q25: $9,557mm.

Page 9:

To conform the reporting of Net Flows with the Assets Under Management or Supervision Rollforward presented in Management's Discussion and Analysis of our annual and quarterly reports on SEC Form 10-K and 10-Q, beginning in the first quarter of 2026, distributions, which represent returns of capital or returns on investments, are no longer included in Net flows. Distributions for long-term products were $3 billion, $4 billion and $3 billion, and distributions for Liquidity and Overlay Services were $3 billion, $4 billion and $4 billion for the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively. Additionally, during the first quarter of 2026, certain products were reclassified among asset classes to more closely align reporting with underlying investment strategies, primarily reflecting a reclassification of certain tax-managed solutions from Equity to Alternatives and Solutions. These changes had no impact on total AUM. Prior period amounts have been adjusted to conform with the current period presentation.

Page 10:

For the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025, Investment Management reflected loan balances of $465 million, $94 million and $255 million, respectively.

‌For the quarter ended March 31, 2026, the Allowance Rollforward for Loans and Lending Commitments is as follows:

Loans

Allowance for Credit Losses (ACL)

Institutional Securities

Wealth Management

Total

Beginning Balance - December 31, 2025

764

368

1,132

Net Charge Offs

(27)

(10)

(37)

Provision

Other

(4)

(3)

Ending Balance - March 31, 2026

809

365

1,174

Lending Commitments

Allowance for Credit Losses (ACL)

Beginning Balance - December 31, 2025

Net Charge Offs Provision

780

- 16

798

- 16

Other

(7)

Ending Balance - March 31, 2026

789

807

Loans and Lending Commitments

Allowance for Credit Losses (ACL)

Beginning Balance - December 31, 2025

1,544

386

1,930

Net Charge Offs

(27)

(10)

(37)

Provision

Other

(11)

(10)

Ending Balance - March 31, 2026

1,598

383

1,981

This Financial Supplement contains financial, statistical and business-related information, as well as business and segment trends.

The information should be read in conjunction with the Firm's first quarter earnings press release issued April 15, 2026.

Disclaimer

Morgan Stanley published this content on April 15, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 15, 2026 at 11:27 UTC.