Mellon Financial reported a dip in assets under management during the second quarter and net income of $0.25 per share after the creation of a special loss reserve of $0.23 per share. Analysts had expected the bank to earn $0.47 per share.

Mellon is the parent of mutual fund firm Dreyfus. Total assets under management fell to $588 billion at June 30, down from $610 billion at the start of the quarter. Still, assets at the firm remain above year ago levels of $546 billion.

Revenues generated by the bank's Dreyfus and Founders mutual funds were flat with the first quarter at $143 million. Meanwhile, net earnings in the unit fell to $57 million from $59 million in the first quarter and $56 million a year ago. Net margins in the unit declined to 34 percent from 36 percent in the first quarter.

The average net assets of proprietary mutual funds managed in the second quarter of 2002 were $199 billion, the bank reported. That is up $4 billion, or 2 percent from $195 billion in the first quarter of 2002, and up $40 billion, or 25 percent, from $159 billion in the second quarter of 2001.

Equity fund assets dipped to $43 billion from $48 billion during the quarter. The decline was partially offset by a $2 billion increase in assets held in lower-fee money funds. 

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