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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Massachusetts
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04-2456637
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(State or other jurisdiction of incorporation)
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(I.R.S. Employer Identification No.)
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One Lincoln Street
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Boston,
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Massachusetts
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02111
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(Address of principal executive offices)
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(Zip Code)
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(617)
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786-3000
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(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $1 par value per share
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STT
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New York Stock Exchange
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Depositary Shares, each representing a 1/4,000th ownership interest in a share of
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STT.PRC.CL
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New York Stock Exchange
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Non-Cumulative Perpetual Preferred Stock, Series C, without par value per share
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Depositary Shares, each representing a 1/4,000th ownership interest in a share of
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STT.PRD
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New York Stock Exchange
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Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, without par value per share
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Depositary Shares, each representing a 1/4,000th ownership interest in a share of
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STT.PRG
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New York Stock Exchange
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Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series G, without par value per share
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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Page
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PART I
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Item 1
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Business
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Item 1A
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Risk Factors
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Item 1B
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Unresolved Staff Comments
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Item 2
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Properties
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Item 3
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Legal Proceedings
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Item 4
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Mine Safety Disclosures
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Supplemental Item
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Information about our Executive Officers
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PART II
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Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6
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Selected Financial Data
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Item 7
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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General
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Overview of Financial Results
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Consolidated Results of Operations
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Total Revenue
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Net Interest Income
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Provision for Loan Losses
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Expenses
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Acquisition Costs
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Restructuring and Repositioning Charges
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Income Tax Expense
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Line of Business Information
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Investment Servicing
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Investment Management
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Financial Condition
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Investment Securities
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Loans and Leases
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Cross-Border Outstandings
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Risk Management
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Credit Risk Management
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Liquidity Risk Management
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Operational Risk Management
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Information Technology Risk Management
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Market Risk Management
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Model Risk Management
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Strategic Risk Management
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Capital
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Off-Balance Sheet Arrangements
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Significant Accounting Estimates
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Recent Accounting Developments
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Item 7A
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8
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Financial Statements and Supplementary Data
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Consolidated statement of income
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Consolidated statement of comprehensive income
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Consolidated statement of condition
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Consolidated statement of changes in shareholders' equity
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Consolidated statement of cash flows
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Note 1. Summary of Significant Accounting Policies
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Note 2. Fair Value
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Note 3. Investment Securities
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Note 4. Loans
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Note 5. Goodwill and Other Intangible Assets
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Note 6. Other Assets
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Note 7. Deposits
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Note 8. Short-Term Borrowings
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Note 9. Long-Term Debt
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Note 10. Derivative Financial Instruments
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Note 11. Offsetting Arrangements
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Note 12. Commitments and Guarantees
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Note 13. Contingencies
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Note 14. Variable Interest Entities
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Note 15. Shareholders' Equity
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Note 16. Regulatory Capital
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Note 17. Net Interest Income
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Note 18. Equity-Based Compensation
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Note 19. Employee Benefits
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Note 20. Occupancy Expense and Information Systems and Communications Expense
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Note 21. Expenses
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Note 22. Income Taxes
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Note 23. Earnings Per Common Share
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Note 24. Line of Business Information
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Note 25. Revenue From Contracts with customers
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Note 26. Non-U.S. Activities
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Note 27. Parent Company Financial Statements
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Note 28. Subsequent Events
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Item 9
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A
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Controls and Procedures
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Item 9B
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Other Information
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PART III
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Item 10
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Directors, Executive Officers and Corporate Governance
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Item 11
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Executive Compensation
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Item 12
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13
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Certain Relationships and Related Transactions, and Director Independence
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Item 14
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Principal Accounting Fees and Services
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PART IV
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Item 15
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Exhibits, Financial Statement Schedules
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Item 16
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Form 10-K Summary
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EXHIBIT INDEX
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SIGNATURES
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a minimum CET1 risk-based capital ratio of 4.5% and a minimum SLR of 3% for advanced approaches banking organizations;
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a minimum tier 1 risk-based capital ratio of 6%;
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a minimum total capital ratio of 8%;
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the capital conservation and countercyclical capital buffers, referenced below, as well as a G-SIB surcharge included under "Capital" in "Financial Condition" in our Management's Discussion and Analysis in this Form 10-K;
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the previously described standardized approach to replace the calculation of credit RWA under Basel I; and
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the advanced approaches for the calculation of credit RWA.
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Method 1: Assesses systemic importance based upon five equally-weighted components: size, interconnectedness, complexity, cross-jurisdictional activity and substitutability; or
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Method 2: Alters the calculation from Method 1 by factoring in a wholesale funding score in place of substitutability and applying a 2x multiplier to the sum of the five components.
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the financial strength of the counterparties with which we or our clients do business and to which we have investment, credit or financial exposures or to which our clients have such exposures as a result of our acting as agent, including as an asset manager or securities lending agent;
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increases in the volatility of, or declines in the level of, our NII; changes in the composition or valuation of the assets recorded in our consolidated statement of condition (and our ability to measure the fair value of investment securities); and changes in the manner in which we fund those assets;
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the volatility of servicing fee, management fee, trading fee and securities finance revenues due to, among other factors, the value of equity and fixed-income markets, market interest and FX rates, the volume of client transaction activity, competitive pressures in the investment servicing and asset management industries, and the timing of revenue recognition with respect to software and processing fees revenues;
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the liquidity of the U.S. and international securities markets, particularly the markets for fixed-income securities and inter-bank credits; the liquidity of the assets on our balance sheet and changes or volatility in the sources of such funding, particularly the deposits of our clients; and demands upon our liquidity, including the liquidity demands and requirements of our clients;
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the level, volatility and uncertainty of interest rates; the expected discontinuation of Interbank Offered Rates including London Interbank Offered Rate (LIBOR); the valuation of the U.S. dollar relative to other currencies in which we record revenue or
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the credit quality, credit-agency ratings and fair values of the securities in our investment securities portfolio, a deterioration or downgrade of which could lead to OTTI of such securities and the recognition of an impairment loss in our consolidated statement of income;
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our ability to attract and retain deposits and other low-cost, short-term funding; our ability to manage the level and pricing of such deposits and the relative portion of our deposits that are determined to be operational under regulatory guidelines; our ability to deploy deposits in a profitable manner consistent with our liquidity needs, regulatory requirements and risk profile; and the risks associated with the potential liquidity mismatch between short-term deposit funding and longer term investments;
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the manner and timing with which the Federal Reserve and other U.S. and non-U.S. regulators implement or reevaluate the regulatory framework applicable to our operations (as well as changes to that framework), including implementation or modification of the Dodd-Frank Act and related stress testing and resolution planning requirements and implementation of international standards applicable to financial institutions, such as those proposed by the Basel Committee and European legislation (such as Undertakings for Collective Investments in Transferable Securities (UCITS) V, the Money Market Fund Regulation and the Markets in Financial Instruments Directive (MiFID II)/Markets in Financial Instruments Regulation (MiFIR)); among other consequences, these regulatory changes impact the levels of regulatory capital, long-term debt and liquidity we must maintain, acceptable levels of credit exposure to third parties, margin requirements applicable to derivatives, restrictions on banking and financial activities and the manner in which we structure and implement our global operations and servicing relationships. In addition, our regulatory posture and related expenses have been and will continue to be affected by heightened standards and changes in regulatory expectations for global systemically important financial institutions applicable to, among other things, risk management, liquidity and capital planning, cyber-security, resiliency, resolution planning and compliance programs, as well as changes in governmental enforcement approaches to perceived failures to comply with regulatory or legal obligations;
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adverse changes in the regulatory ratios that we are, or will be, required to meet, whether arising under the Dodd-Frank Act or implementation of international standards applicable to financial institutions, such as those proposed by the Basel Committee, or due to changes in regulatory positions, practices or regulations in jurisdictions in which we engage in banking activities, including changes in internal or external data, formulae, models, assumptions or other advanced systems used in the calculation of our capital or liquidity ratios that cause changes in those ratios as they are measured from period to period;
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requirements to obtain the prior approval or non-objection of the Federal Reserve or other U.S. and non-U.S. regulators for the use, allocation or distribution of our capital or other specific capital actions or corporate activities, including, without limitation, acquisitions, investments in subsidiaries, dividends and stock repurchases, without which our growth plans, distributions to shareholders, share repurchase programs or other capital or corporate initiatives may be restricted;
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changes in law or regulation, or the enforcement of law or regulation, that may adversely affect our business activities or those of our clients or our counterparties, and the products or services that we sell, including, without limitation, additional or increased taxes or assessments thereon, capital adequacy requirements, margin requirements and changes that expose us to risks related to our operating model and the adequacy and resiliency of our controls or compliance programs;
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a cyber-security incident, or a failure to protect our systems and our, our clients' and others' information against cyber-attacks, could result in the theft, loss, unauthorized access to, disclosure, use or alteration of information, system failures, or loss of access to information; any such incident or failure could adversely impact our ability to conduct our businesses, damage our reputation and cause losses, potentially materially;
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our ability to expand our use of technology to enhance the efficiency, accuracy and reliability of our operations and our dependencies on information technology; to replace and consolidate systems, particularly those relying upon older technology, and to adequately incorporate cyber-security, resiliency and business continuity into our operations, information technology infrastructure and systems management; to implement robust management processes into our technology development and maintenance programs; and to control risks related to use of technology, including cyber-crime and inadvertent data disclosures;
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our ability to identify and address threats to our
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our ability to control operational and resiliency risks, data security breach risks and outsourcing risks; our ability to protect our intellectual property rights; the possibility of errors in the quantitative models we use to manage our business; and the possibility that our controls will prove insufficient, fail or be circumvented;
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economic or financial market disruptions in the U.S. or internationally, including those which may result from recessions or political instability; for example, the U.K.'s exit from the European Union or actual or potential changes in trade policy, such as tariffs or bilateral and multilateral trade agreements;
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our ability to create cost efficiencies through changes in our operational processes and to further digitize our processes and interfaces with our clients, any failure of which, in whole or in part, may among other things, reduce our competitive position, diminish the cost-effectiveness of our systems and processes or provide an insufficient return on our associated investment;
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our ability to promote a strong culture of risk management, operating controls, compliance oversight, ethical behavior and governance that meets our expectations and those of our clients and our regulators, and the financial, regulatory, reputational and other consequences of our failure to meet such expectations;
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the impact on our compliance and controls enhancement programs associated with the appointment of a monitor under the deferred prosecution agreement with the DOJ and compliance consultant appointed under a settlement with the SEC, including the potential for such monitor and compliance consultant to require changes to our programs or to identify other issues that require substantial expenditures, changes in our operations, payments to clients or reporting to U.S. authorities;
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the results of our review of our billing practices, including additional findings or amounts we may be required to reimburse clients, as well as potential consequences of such review, including damage to our client relationships or our reputation, adverse actions or penalties imposed by governmental authorities and costs associated with remediation of identified deficiencies;
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the results of, and costs associated with, governmental or regulatory inquiries and
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changes or potential changes in the amount of compensation we receive from clients for our services, and the mix of services provided by us that clients choose;
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the large institutional clients on which we focus are often able to exert considerable market influence and have diverse investment activities, and this, combined with strong competitive market forces, subjects us to significant pressure to reduce the fees we charge, to potentially significant changes in our AUC/A or our AUM in the event of the acquisition or loss of a client, in whole or in part, and to potentially significant changes in our revenue in the event a client re-balances or changes its investment approach, re-directs assets to lower- or higher-fee asset classes or changes the mix of products or services that it receives from us;
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the potential for losses arising from our investments in sponsored investment funds;
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the possibility that our clients will incur substantial losses in investment pools for which we act as agent; the possibility of significant reductions in the liquidity or valuation of assets underlying those pools and the potential that clients will seek to hold us liable for such losses; and the possibility that our clients or regulators will assert claims that our fees, with respect to such investment products, are not appropriate;
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our ability to anticipate and manage the level and timing of redemptions and withdrawals from our collateral pools and other collective investment products;
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the credit agency ratings of our debt and depositary obligations and investor and client perceptions of our financial strength;
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adverse publicity, whether specific to us or regarding other industry participants or industry-wide factors, or other reputational harm;
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changes or potential changes to the competitive environment, due to, among other things, regulatory and technological changes, the effects of industry consolidation and perceptions of us, as a suitable service provider or counterparty;
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our ability to complete acquisitions, joint ventures and divestitures, including, without limitation, our ability to obtain regulatory approvals, the ability to arrange financing as required and the ability to satisfy closing conditions;
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the risks that our acquired businesses, including, without limitation, our acquisition of CRD, and joint ventures will not achieve their anticipated financial, operational and product innovation benefits or will not be integrated successfully, or that the integration will take longer than anticipated; that expected synergies will not be achieved or
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our ability to integrate CRD's front office software solutions with our middle and back office capabilities to develop our front-to-middle-to-back office State Street Alpha that is competitive, generates revenues in line with our expectations and meets our clients' requirements; the dependency of State Street Alpha on enhancements to our data management and the risks to our servicing model associated with increased exposure to client data;
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our ability to recognize evolving needs of our clients and to develop products that are responsive to such trends and profitable to us; the performance of and demand for the products and services we offer; and the potential for new products and services to impose additional costs on us and expose us to increased operational risk;
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our ability to grow revenue, manage expenses, attract and retain highly skilled people and raise the capital necessary to achieve our business goals and comply with regulatory requirements and expectations;
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changes in accounting standards and practices; and
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the impact of the U.S. tax legislation enacted in 2017, and changes in tax legislation and in the interpretation of existing tax laws by U.S. and non-U.S. tax authorities that affect the amount of taxes due.
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Short-term credit. The degree of client demand for short-term credit tends to increase during periods of market turbulence, which may expose us to further counterparty-related risks. For example, investors in collective investment vehicles for which we act as custodian may experience significant redemption activity due to adverse market or economic news. Our relationship with our clients and the nature of the settlement process for some types of payments may result in the extension of short-term credit in such circumstances. We also provide committed lines of credit to support such activity. For some types of clients, we provide credit to allow them to leverage their portfolios, which may expose us to potential loss if the client experiences investment losses or other credit difficulties.
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Industry and country risks. In addition to our exposure to financial institutions, we are from time to time exposed to concentrated credit risk at an industry or country level. This concentration risk also applies to groups of unrelated counterparties that may have similar investment strategies involving one or more particular industries, regions, or other characteristics. These unrelated counterparties may concurrently experience adverse effects to their performance, liquidity or reputation due to events or other factors affecting such investment strategies. Though potentially not material individually (relative to any one such counterparty), our credit exposures to such a group of counterparties could expose us to a single market or political event or a correlated set of events that, in the aggregate, could have a material adverse impact on our business.
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Subcustodian risks. Our use of unaffiliated subcustodians exposes us to credit risk, in addition to other risks, such as operational risk, dependencies on credit extensions and risks of the legal systems of the jurisdictions in which the subcustodians operate, each of which may be material. Our operating model exposes us to risk of unaffiliated sub-custodians to a degree greater than some of our competitors who have banking operations in more jurisdictions than us. Our sub-custodians operate in all jurisdictions in which our clients invest, including emerging and other underdeveloped markets that entail heightened risks. These
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Settlement risks. We are exposed to settlement risks, particularly in our payments and foreign exchange activities. Those activities may lead to extension of credit and consequent losses in the event of a counterparty breach or an operational error, including the failure to provide credit. Due to our membership in several industry clearing or settlement exchanges, we may be required to guarantee obligations and liabilities, or provide financial support, in the event that other members do not honor their obligations or default. Moreover, not all of our counterparty exposure is secured, and even when our exposure is secured, the realizable value of the collateral may have declined by the time we exercise our rights against that collateral. This risk may be particularly acute if we are required to sell the collateral into an illiquid or temporarily-impaired market or with respect to clients protected by sovereign immunity. We are exposed to risk of short-term credit or overdraft of our clients in connection with the process to facilitate settlement of trades and related foreign exchange activities, particularly when contractual settlement has been agreed with our clients. The occurrence of overdrafts at peak volatility could create significant credit exposure to our clients depending upon the value of such clients' collateral at the time.
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Securities lending and repurchase agreement indemnification. On behalf of clients enrolled in our securities lending program, we lend securities to banks, broker/dealers and other institutions. In the event of a failure of the borrower to return such securities, we typically agree to indemnify our clients for the amount by which the fair market value of those securities exceeds the proceeds of the disposition of the collateral posted by the borrower in connection with such transaction. We also lend and borrow securities as riskless principal, and in connection with those transactions receive a security interest in securities held by the borrowers in their securities portfolios and advance cash or securities as collateral to securities lenders.
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Stable value arrangements. We enter into stable value wrap derivative contracts with unaffiliated stable value funds that allow a stable value fund to provide book value coverage to its participants. During the financial crisis, the book value of obligations under many of these contracts exceeded the market value of the underlying portfolio holdings. Concerns regarding the portfolio of investments protected by such contracts, or regarding the investment manager overseeing such an investment option, may result in redemption demands from stable value products covered by benefit-responsive contracts at a time when the portfolio's market value is less than its book value, potentially exposing us to risk of loss.
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Private equity subscription finance credit facilities. We provide credit facilities to private equity funds. The portfolio consists of capital call lines of credit, the repayment of which is dependent on the receipt of capital calls from the underlying limited partner investors in the
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U.S. municipal obligations remarketing credit facilities. We provide credit facilities in connection with the remarketing of U.S. municipal obligations, potentially exposing us to credit exposure to the municipalities issuing such bonds and contingent liquidity risk.
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Senior secured bank loans. In recent years, we have increased our investment in senior secured bank loans, both in the U.S. and in Europe. We invest in these loans to non-investment grade borrowers through participation in loan syndications in the non-investment grade lending market. We rate these loans as "speculative" under our internal risk-rating framework, and these loans have significant exposure to credit losses relative to higher-rated loans. We are therefore at a higher risk of default with respect to these investments relative to other of our investments activities. In addition, unlike other financial institutions that may have an active role in managing individual loan compliance, our investment in these loans is generally as a passive investor with limited control. As this portfolio grows and becomes more seasoned, our allowance for loan losses related to these loans may increase through additional provisions for credit losses.
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Commercial Real Estate. We finance commercial and multi-family properties, which serve as collateral for our loans. Although collateralized, these loans may become under-secured if the value of the collateral was over-estimated or changes. Loan payments are dependent on the successful operation and management of the underlying collateral property to generate sufficient cash flow to repay the loan in a timely fashion. A material decline in real estate markets or economic conditions could negatively impact value or property performance, which could adversely impact timely loan repayment, which may result in increased provision for losses on loans, and actual losses, either of which would have an adverse impact on our net income. We seek to minimize these risks by maintaining lending policies and procedures and underwriting standards, however, there can be no assurance that these will protect us from credit-related losses or delinquencies.
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Unavailability of netting. We are generally not able to net exposures across counterparties that are affiliated entities and may not be able in all circumstances to net exposures to the same legal entity across multiple products. As a consequence, we may incur a loss in relation to one entity or product even though our exposure to an entity's affiliates or across
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Asset class concentration. Our investment portfolio continues to have significant concentrations in several classes of securities, including agency residential MBS, commercial MBS and other ABS, and securities with concentrated exposure to consumers. These classes and types of securities experienced significant liquidity, valuation and credit quality deterioration during the financial crisis that began in mid-2007. We also hold non-U.S. government securities, non-U.S. MBS and ABS with exposures to European countries, whose sovereign-debt markets have experienced increased stress at times since 2011 and may continue to experience stress in the future. For further information, refer to the risk factor titled “Our businesses have significant European operations, and disruptions in European economies could have an adverse effect on our consolidated results of operations or financial condition". Further, we hold a portfolio of U.S. state and municipal bonds, the value of which may be affected by the budget deficits that a number of states and municipalities currently face, resulting in risks associated with this portfolio.
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Effects of market conditions. If market conditions deteriorate, our investment portfolio could experience a decline in market value, whether due to a decline in liquidity or an increase in the yield required by investors to hold such securities, regardless of our credit view of our portfolio holdings. In addition, in general, deterioration in credit quality, or changes in management's expectations regarding repayment timing or in management's investment intent to hold securities to maturity, in each case with respect to our portfolio holdings, could result in OTTI. Similarly, if a material portion of our investment portfolio were to experience credit deterioration, our capital ratios as calculated pursuant to the Basel III rule could be adversely affected. This risk is greater with portfolios of investment securities that contain credit risk than with holdings of U.S. Treasury securities.
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Effects of interest rates. Our investment
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meet clients' demands for return of their deposits;
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extend credit to our clients in connection with our investor services businesses; and
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fund the pool of long- and intermediate-term assets that are included in the investment securities and loan portfolio carried in our consolidated statement of condition.
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integrating CRD's business into our own in a manner that permits the combined company to achieve the cost and operating synergies anticipated to result from the acquisition, which could result in the anticipated benefits of the acquisition not being realized partly or wholly in the time frame currently anticipated or at all;
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retaining CRD’s clients, some of which are our competitors;
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retaining key management and technical personnel;
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integrating CRD’s software solutions with our existing products and services and related operations and systems, including performance, risk and compliance analytics, investment manager operations outsourcing, accounting, administration and custody;
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accelerating the development of enhancements to the features and functions of CRD’s software solutions;
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coordinating and integrating our internal operations, compensation programs, policies and procedures, and corporate structures;
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potential unknown liabilities and unforeseen or increased costs and expenses;
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the possibility of faulty assumptions underlying expectations regarding potential synergies and the integration process;
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incurring significant acquisition-related costs and expenses associated with combining our operations; and
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performance shortfalls as a result of the diversion of management’s attention and resources caused by integrating the companies’ operations.
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Principal Properties(1)
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City
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State/
Country
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Owned/
Leased
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U.S. and Canada:
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State Street Financial Center
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Boston
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MA
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Leased
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Channel Center
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Boston
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MA
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Leased
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Summer Street
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Boston
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MA
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Leased
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District Avenue
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Burlington
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MA
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Leased
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Heritage Drive
|
|
Quincy
|
|
MA
|
|
Leased
|
John Adams Building
|
|
Quincy
|
|
MA
|
|
Owned
|
Josiah Quincy Building
|
|
Quincy
|
|
MA
|
|
Leased
|
Grafton Data Center
|
|
Grafton
|
|
MA
|
|
Owned
|
Westborough Data Center
|
|
Westborough
|
|
MA
|
|
Owned
|
Summer Street
|
|
Stamford
|
|
CT
|
|
Leased
|
Pennsylvania Avenue
|
|
Kansas City
|
|
MO
|
|
Leased
|
College Road East
|
|
Princeton
|
|
NJ
|
|
Leased
|
Avenue of the Americas
|
|
New York
|
|
NY
|
|
Leased
|
Adelaide Street East
|
|
Toronto
|
|
Canada
|
|
Leased
|
|
|
|
|
|
|
|
Europe, Middle East and Africa:
|
|
|
||||
Churchill Place
|
|
London
|
|
England
|
|
Leased
|
Brienner Strasse
|
|
Munich
|
|
Germany
|
|
Leased
|
Sir John Rogerson's Quay
|
|
Dublin
|
|
Ireland
|
|
Leased
|
Via Ferrante Aporti
|
|
Milan
|
|
Italy
|
|
Leased
|
Kirchberg
|
|
Luxembourg
|
|
Luxembourg
|
|
Leased
|
Titanium Tower
|
|
Gdansk
|
|
Poland
|
|
Leased
|
BIG
|
|
Krakow
|
|
Poland
|
|
Leased
|
Bonarka
|
|
Krakow
|
|
Poland
|
|
Leased
|
CBK
|
|
Krakow
|
|
Poland
|
|
Leased
|
|
|
|
|
|
|
|
Asia Pacific:
|
|
|
|
|
|
|
George Street
|
|
Sydney
|
|
Australia
|
|
Leased
|
San Dun
|
|
Hangzhou
|
|
China
|
|
Leased
|
Tian Tang
|
|
Hangzhou
|
|
China
|
|
Leased
|
Ecoworld 6B
|
|
Bangalore
|
|
India
|
|
Leased
|
Ecoworld 7
|
|
Bangalore
|
|
India
|
|
Leased
|
Knowledge City Salarpuria
|
|
Hyderabad
|
|
India
|
|
Leased
|
Knowledge City Octave
|
|
Hyderabad
|
|
India
|
|
Leased
|
|
|
|
Name
|
|
Age
|
|
Position
|
Ronald P. O'Hanley
|
|
63
|
|
Chairman, President and Chief Executive Officer
|
Eric W. Aboaf
|
|
55
|
|
Executive Vice President and Chief Financial Officer
|
Ian W. Appleyard
|
|
55
|
|
Executive Vice President, Global Controller and Chief Accounting Officer
|
Jorg Ambrosius
|
|
49
|
|
Executive Vice President and Head of Europe, Middle East and Africa
|
Francisco Aristeguieta
|
|
54
|
|
Executive Vice President and Chief Executive Officer for International Business
|
Tracy Atkinson
|
|
55
|
|
Executive Vice President and Acting Chief Administrative Officer
|
Aunoy Banerjee
|
|
41
|
|
Executive Vice President and Chief Transformation Officer
|
Jeffrey N. Carp
|
|
63
|
|
Executive Vice President, Chief Legal Officer and Secretary
|
Nadine Chakar
|
|
55
|
|
Executive Vice President and Head of Global Markets
|
Andrew J. Erickson
|
|
50
|
|
Executive Vice President and Head of Global Services
|
Brian Franz
|
|
54
|
|
Executive Vice President and Chief Information Officer
|
Hannah M. Grove
|
|
56
|
|
Executive Vice President and Chief Marketing Officer
|
Kathryn M. Horgan
|
|
54
|
|
Executive Vice President and Chief Human Resources and Citizenship Officer
|
Andrew P. Kuritzkes
|
|
59
|
|
Executive Vice President and Chief Risk Officer
|
John Lehner
|
|
54
|
|
Executive Vice President and Head of Global Services, North America
|
Louis D. Maiuri
|
|
55
|
|
Executive Vice President and Chief Operating Officer
|
Ian Martin
|
|
58
|
|
Executive Vice President and Head of Asia Pacific
|
Donna M. Milrod
|
|
52
|
|
Executive Vice President and Head of Global Clients Division
|
Elizabeth Nolan
|
|
57
|
|
Executive Vice President and Head of Global Delivery
|
John Plansky
|
|
55
|
|
Executive Vice President, Head of Global Exchange and Chief Executive Officer of Charles River Development
|
Cyrus Taraporevala
|
|
53
|
|
President and Chief Executive Officer, State Street Global Advisors
|
(Dollars in millions except per share amounts; shares in thousands)
|
Total Number of shares purchased
|
|
Average price per share
|
|
Total number of shares purchased as part of publicly announced program
|
|
Approximate dollar value of shares that may yet be purchased under publicly announced program
|
||||||
Period:
|
|
|
|
|
|
|
|
||||||
October 1 - October 31, 2019
|
609
|
|
|
$
|
66.62
|
|
|
609
|
|
|
$
|
1,459
|
|
November 1 - November 30, 2019
|
2,389
|
|
|
72.82
|
|
|
2,389
|
|
|
1,285
|
|
||
December 1 - December 31, 2019
|
3,651
|
|
|
78.19
|
|
|
3,651
|
|
|
1,000
|
|
||
Total
|
6,649
|
|
|
$
|
75.20
|
|
|
6,649
|
|
|
$
|
1,000
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||
State Street Corporation
|
$
|
100
|
|
|
$
|
86
|
|
|
$
|
103
|
|
|
$
|
132
|
|
|
$
|
87
|
|
|
$
|
113
|
|
S&P 500 Index
|
100
|
|
|
101
|
|
|
113
|
|
|
138
|
|
|
132
|
|
|
174
|
|
||||||
S&P Financial Index
|
100
|
|
|
98
|
|
|
121
|
|
|
148
|
|
|
128
|
|
|
170
|
|
||||||
KBW Bank Index
|
100
|
|
|
100
|
|
|
129
|
|
|
153
|
|
|
126
|
|
|
172
|
|
(Dollars in millions, except per share amounts or where otherwise noted)
|
|
|
|
|
|
|
|
|
|
|||||||||||
YEARS ENDED DECEMBER 31:
|
2019(1)
|
|
2018(1)
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||
Total fee revenue
|
$
|
9,147
|
|
|
$
|
9,454
|
|
|
$
|
9,001
|
|
|
$
|
8,200
|
|
|
$
|
8,351
|
|
|
Net interest income
|
2,566
|
|
|
2,671
|
|
|
2,304
|
|
|
2,084
|
|
|
2,088
|
|
||||||
Total other income
|
43
|
|
|
6
|
|
—
|
|
(39
|
)
|
|
7
|
|
|
(6
|
)
|
|||||
Total revenue
|
11,756
|
|
|
12,131
|
|
|
11,266
|
|
|
10,291
|
|
|
10,433
|
|
||||||
Provision for loan losses
|
10
|
|
|
15
|
|
|
2
|
|
|
10
|
|
|
12
|
|
||||||
Total expenses
|
9,034
|
|
|
9,015
|
|
|
8,269
|
|
|
8,077
|
|
|
8,050
|
|
||||||
Income before income tax expense
|
2,712
|
|
|
3,101
|
|
|
2,995
|
|
|
2,204
|
|
|
2,371
|
|
||||||
Income tax expense (benefit)
|
470
|
|
|
508
|
|
|
839
|
|
|
67
|
|
|
398
|
|
||||||
Net income from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Net income
|
$
|
2,242
|
|
|
$
|
2,593
|
|
|
|
$
|
2,156
|
|
|
$
|
2,138
|
|
|
$
|
1,973
|
|
Adjustments to net income(2)
|
(233
|
)
|
|
(189
|
)
|
|
(184
|
)
|
|
(175
|
)
|
|
(132
|
)
|
||||||
Net income available to common shareholders
|
$
|
2,009
|
|
|
$
|
2,404
|
|
|
$
|
1,972
|
|
|
$
|
1,963
|
|
|
$
|
1,841
|
|
|
PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
$
|
5.43
|
|
|
$
|
6.46
|
|
|
$
|
5.26
|
|
|
$
|
5.01
|
|
|
$
|
4.51
|
|
|
Diluted
|
5.38
|
|
|
6.39
|
|
|
5.19
|
|
|
4.96
|
|
|
4.45
|
|
||||||
Cash dividends declared
|
1.98
|
|
|
1.78
|
|
|
1.60
|
|
|
1.44
|
|
|
1.32
|
|
||||||
Closing market price (at year end)
|
79.10
|
|
|
63.07
|
|
|
97.61
|
|
|
77.72
|
|
|
66.36
|
|
||||||
AS OF DECEMBER 31:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Investment securities
|
$
|
95,597
|
|
|
$
|
87,062
|
|
|
$
|
97,579
|
|
|
$
|
97,167
|
|
|
$
|
100,022
|
|
|
Average total interest-earning assets
|
181,891
|
|
|
185,637
|
|
|
191,235
|
|
|
199,184
|
|
|
220,456
|
|
||||||
Total assets
|
245,610
|
|
|
244,596
|
|
|
238,392
|
|
|
242,689
|
|
|
245,149
|
|
||||||
Deposits
|
181,872
|
|
|
180,360
|
|
|
184,896
|
|
|
187,163
|
|
|
191,627
|
|
||||||
Long-term debt
|
12,509
|
|
|
11,093
|
|
|
11,620
|
|
|
11,430
|
|
|
11,497
|
|
||||||
Total shareholders' equity
|
24,431
|
|
|
24,737
|
|
|
22,270
|
|
|
21,193
|
|
|
21,082
|
|
||||||
Assets under custody and/or administration (in billions)
|
34,358
|
|
|
31,620
|
|
|
33,119
|
|
|
28,771
|
|
|
27,508
|
|
||||||
Assets under management (in billions)
|
3,116
|
|
|
2,511
|
|
|
2,782
|
|
|
2,468
|
|
|
2,245
|
|
||||||
Number of employees
|
39,103
|
|
|
40,142
|
|
|
36,643
|
|
|
33,783
|
|
|
32,356
|
|
||||||
RATIOS:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Return on average common shareholders' equity
|
9.4
|
%
|
|
12.1
|
%
|
|
10.5
|
%
|
|
10.4
|
%
|
|
9.7
|
%
|
||||||
Return on average assets
|
1.0
|
|
|
1.2
|
|
|
1.0
|
|
|
0.9
|
|
|
0.8
|
|
||||||
Common dividend payout
|
36.8
|
|
|
27.6
|
|
|
30.2
|
|
|
28.5
|
|
|
29.1
|
|
||||||
Average common equity to average total assets
|
9.6
|
|
|
8.9
|
|
|
8.6
|
|
|
8.2
|
|
|
7.6
|
|
||||||
Net interest margin, fully taxable-equivalent basis
|
1.42
|
|
|
1.47
|
|
|
1.29
|
|
|
1.13
|
|
|
1.03
|
|
||||||
Common equity tier 1 ratio(3)
|
11.7
|
|
|
12.1
|
|
|
12.3
|
|
|
11.7
|
|
|
12.5
|
|
||||||
Tier 1 capital ratio(3)
|
14.5
|
|
|
16.0
|
|
|
15.5
|
|
|
14.8
|
|
|
15.3
|
|
||||||
Total capital ratio(3)
|
15.6
|
|
|
16.9
|
|
|
16.5
|
|
|
16.0
|
|
|
17.4
|
|
||||||
Tier 1 leverage ratio(4)
|
6.9
|
|
|
7.2
|
|
|
7.3
|
|
|
6.5
|
|
|
6.9
|
|
||||||
Supplementary leverage ratio(5)
|
6.1
|
|
|
6.3
|
|
|
6.5
|
|
|
5.9
|
|
|
6.2
|
|
|
|
|
|
•
|
accounting for fair value measurements;
|
•
|
impairment of goodwill and other intangible assets; and
|
•
|
contingencies.
|
TABLE 1: OVERVIEW OF FINANCIAL RESULTS
|
|||||||||||||
|
Years Ended December 31,
|
||||||||||||
(Dollars in millions, except per share amounts)
|
2019
|
|
2018
|
|
2017
|
||||||||
Total fee revenue(1)(2)
|
$
|
9,147
|
|
|
$
|
9,454
|
|
|
$
|
9,001
|
|
||
Net interest income
|
2,566
|
|
|
2,671
|
|
|
2,304
|
|
|||||
Total other income
|
43
|
|
—
|
|
6
|
|
—
|
|
(39
|
)
|
|||
Total revenue(1)(2)
|
11,756
|
|
|
12,131
|
|
|
11,266
|
|
|||||
Provision for loan losses
|
10
|
|
|
15
|
|
|
2
|
|
|||||
Total expenses(1)(2)
|
9,034
|
|
|
9,015
|
|
|
8,269
|
|
|||||
Income before income tax expense
|
2,712
|
|
|
3,101
|
|
|
2,995
|
|
|||||
Income tax expense
|
470
|
|
|
508
|
|
|
839
|
|
|||||
Net income
|
$
|
2,242
|
|
|
$
|
2,593
|
|
|
$
|
2,156
|
|
||
Adjustments to net income:
|
|
|
|
|
|
||||||||
Dividends on preferred stock(3)
|
$
|
(232
|
)
|
|
$
|
(188
|
)
|
|
$
|
(182
|
)
|
||
Earnings allocated to participating securities(4)
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Net income available to common shareholders
|
$
|
2,009
|
|
|
$
|
2,404
|
|
|
$
|
1,972
|
|
||
Earnings per common share:
|
|
|
|
|
|
||||||||
Basic
|
$
|
5.43
|
|
|
$
|
6.46
|
|
|
$
|
5.26
|
|
||
Diluted
|
5.38
|
|
|
6.39
|
|
|
5.19
|
|
|||||
Average common shares outstanding (in thousands):
|
|
|
|
|
|
||||||||
Basic
|
369,911
|
|
|
371,983
|
|
|
374,793
|
|
|||||
Diluted
|
373,666
|
|
|
376,476
|
|
|
380,213
|
|
|||||
Cash dividends declared per common share
|
$
|
1.98
|
|
|
$
|
1.78
|
|
|
$
|
1.60
|
|
||
Return on average common equity
|
9.4
|
%
|
|
12.1
|
%
|
|
10.5
|
%
|
|||||
Pre-tax margin
|
23.1
|
|
|
25.6
|
|
|
26.6
|
|
|
|
•
|
EPS of $5.38 in 2019 decreased 16% compared to $6.39 in 2018. Both years include the impact of notable items:
|
•
|
2019 notable items included:
|
◦
|
repositioning charges of approximately $110 million;
|
◦
|
acquisition and restructuring costs of approximately $77 million, primarily related to CRD;
|
◦
|
gain of approximately $44 million on the extinguishment of approximately $297 million of our outstanding floating rate junior subordinated debentures due 2047 following a cash tender offer;
|
◦
|
legal and related expenses of approximately $172 million; and
|
◦
|
costs of $22 million due to the redemption of all outstanding Series E non-cumulative perpetual preferred stock representing the difference between the redemption value and the net carrying value of the preferred stock.
|
•
|
2018 notable items included:
|
◦
|
repositioning charges of approximately $300 million;
|
◦
|
legal and related expenses of approximately $50 million; and
|
◦
|
acquisition and restructuring costs primarily related to CRD of approximately $24 million.
|
•
|
CRD was acquired on October 1, 2018. Total revenue contributed by CRD was approximately $385 million and $119 million in 2019 and 2018, respectively. Total expenses contributed by CRD were approximately $201 million and $39 million in 2019 and 2018, respectively. In addition, CRD-related expenses include $65 million and $18 million in amortization of other intangible assets in 2019 and 2018, respectively.
|
•
|
Total expenses were up slightly in 2019 compared to 2018, including the impact of the incremental legal reserve, and reflect our successfully executed previously announced 2019 expense savings program. That program achieved approximately $415 million in gross savings in 2019 through expense savings of approximately $230 million in resource discipline initiatives and $185 million in process re-engineering and automation benefits, exceeding our revised goal of $400 million gross savings in 2019 (itself reflecting an increase from our initial goal of $350 million gross savings).
|
•
|
In 2019, return on equity of 9.4% decreased from 12.1% in 2018, primarily due to a decrease in net income available to common shareholders. Pre-tax margin of 23.1% in 2019 decreased from 25.6% in 2018, primarily due to a decrease in total revenue.
|
•
|
Operating leverage was (3.3)% in 2019. Operating leverage represents the difference between the percentage change in total revenue and the percentage change in total expenses, in each case relative to the prior year period.
|
•
|
We purchased a total of approximately $1.6 billion and $350 million of our common stock in 2019 and 2018, respectively. These purchases were all conducted under share purchase
|
•
|
Total revenue and fee revenue both decreased 3% in 2019 compared to 2018, primarily driven by decreases in servicing fees, management fees, foreign exchange trading services and securities finance revenues and, in the case of total revenue, by NII. These decreases were partially offset by higher software and processing fee revenue in 2019, which includes a full year of revenue from CRD. Total fee revenue in the second half of 2019 was approximately $4.63 billion compared to $4.52 billion in the first half of 2019, representing a 2% increase, primarily driven by higher equity markets as well as moderating fee pressure in the second half of the year.
|
◦
|
Total revenues contributed by CRD in 2019 were approximately $385 million, including $370 million in software and processing fees and $15 million in brokerage and other trading services, within foreign exchange trading services.
|
•
|
Servicing fee revenue decreased 6% in 2019 compared to 2018, primarily due to elevated fee pressure and lower client activity and flows.
|
•
|
Management fee revenue decreased 4% in 2019 compared to 2018, primarily reflecting the run rate impact of late 2018 outflows and mix changes away from higher fee products, partially offset by higher equity market levels.
|
•
|
Foreign exchange trading services decreased 7% in 2019 compared to 2018 primarily due to lower market volatility.
|
•
|
Securities finance revenue decreased 13% in 2019 compared to 2018, reflecting lower securities on loan, enhanced custody balances and spreads, and the impact of balance sheet optimization efforts implemented in the second half of 2018.
|
•
|
Software and processing fees revenue increased 64% in 2019 compared to 2018 primarily due to $370 million from CRD, which we acquired in October 2018.
|
•
|
NII decreased 4% in 2019 compared to 2018, primarily due to lower average non-interest bearing client deposit balances and lower long-end U.S. market rates, partially offset by FICC, investment portfolio and loan growth.
|
•
|
Total expenses were up slightly in 2019 compared to 2018, primarily reflecting the impact of the incremental legal reserve of $140 million, technology infrastructure investments and the impact of the CRD acquisition, partially offset by savings from resource discipline, process re-engineering and automation initiatives and lower repositioning charges in 2019 compared to 2018.
|
◦
|
We recorded a repositioning charge in 2019 of approximately $110 million, consisting of $98 million of compensation and employee benefits expenses and $12 million of occupancy expenses, to further drive process automation, information technology optimizations and organization rationalization in 2020.
|
◦
|
Total expenses contributed by CRD in 2019 and 2018 were approximately $201 million and $39 million, respectively, including $148 million and $28 million in compensation and employee benefits and $53 million and $11 million in other expense lines, respectively. In addition, CRD-related expenses in 2019 and 2018 included $65 million and $18 million, respectively in amortization of other intangible assets.
|
◦
|
We recorded a $140 million increase to our legal accrual for government investigations and civil litigation associated with our invoicing matter first reported in December 2015. The accrual reflects our intention to seek to resolve these matters.
|
•
|
AUC/A increased 9% as of December 31, 2019 compared to December 31, 2018, primarily due to higher end of period market levels and client flows, partially offset by a previously announced client transition. In 2019, newly announced asset servicing mandates totaled approximately $1.84 trillion, in line with a high
|
•
|
AUM increased 24% as of December 31, 2019 compared to December 31, 2018, primarily due to higher end of period market levels and net inflows, driven by institutional, ETF and cash inflows.
|
•
|
In 2019, we returned a total of approximately $2.33 billion to our shareholders in the form of common stock dividends and share purchases.
|
◦
|
We declared aggregate common stock dividends of $1.98 per share, totaling $728 million in 2019, compared to $1.78 per share, totaling $665 million in 2018, representing an increase of approximately 11% on a per share basis.
|
◦
|
In 2019, we acquired 24.9 million shares of common stock at an average per share cost of $64.30 and an aggregate cost of approximately $1.6 billion. In 2018, we acquired 3.3 million shares of common stock at an average per share cost of $105.31 and an aggregate cost of approximately $350 million. These purchases were all conducted under share purchase programs approved by our Board of Directors.
|
•
|
In June 2019, the Federal Reserve issued a non-objection to our capital plan included as part of our 2019 CCAR submission. Pursuant to that plan, our Board authorized the 2019 Program and we increased our quarterly common stock dividend to $0.52 per share in the third quarter of 2019.
|
•
|
Our CET1 capital ratio was 11.7% as of both December 31, 2019 and 2018, and Tier 1 leverage ratio decreased to 6.9% as of December 31, 2019, compared to 7.2% as of December 31, 2018. As of December 31, 2019, advanced approaches capital ratios were binding for the period. As of December 31, 2018, standardized approaches capital ratios were binding for the period.
|
•
|
We redeemed all outstanding Series E non-cumulative perpetual preferred stock as of December 15, 2019 at a redemption price of $750 million ($100,000 per share equivalent to
|
•
|
On February 12, 2020, we announced that we will redeem all 5,000 of our outstanding shares of our non-cumulative perpetual preferred stock, Series C, for cash at a redemption price of $100,000 per share (equivalent to $25.00 per depositary share) plus all declared and unpaid dividends. The redemption price will be payable on March 16, 2020, and this redemption will be reflected in our first quarter 2020 results of operations.
|
•
|
On November 1, 2019, we issued $1 billion aggregate principal amount of fixed-to-floating rate senior notes due 2025 and $500 million aggregate principal amount of fixed-to-floating rate senior subordinated notes due 2034 in a public offering.
|
•
|
On January 24, 2020, we issued $750 million aggregate principal amount of 2.400% Senior Notes due 2030 in a public offering.
|
•
|
In the fourth quarter of 2019, we completed a cash tender offer for approximately $297 million of our $800 million aggregate principal amount of outstanding floating rate junior subordinated debentures due 2047, resulting in a gain of approximately $44 million.
|
•
|
In the fourth quarter of 2019, we redeemed approximately $50 million of our $150 million aggregate principal amount of outstanding floating rate junior subordinated debentures due 2028.
|
|
|
•
|
A 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our servicing fees are calculated, would result in a corresponding change in our total servicing fee revenues, on average and over time, of approximately 3%; and
|
•
|
A 10% increase or decrease in worldwide fixed income valuations, on a weighted average basis, over the relevant periods for which our servicing fees are calculated, would result in a corresponding change in our total servicing fee revenues, on average and over time, of approximately 1%.
|
TABLE 3: DAILY AVERAGES, MONTH-END AVERAGES AND YEAR-END EQUITY INDICES(1)
|
||||||||||||||||||||||||||
|
Daily Averages of Indices
|
|
Month-End Averages of Indices
|
|
Year-End Indices
|
|||||||||||||||||||||
|
Years Ended December 31,
|
|
Years Ended December 31,
|
|
Years Ended December 31,
|
|||||||||||||||||||||
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
|||||||||
S&P 500®
|
2,913
|
|
|
2,746
|
|
|
6
|
%
|
|
2,938
|
|
|
2,738
|
|
|
7
|
%
|
|
3,231
|
|
|
2,507
|
|
|
29
|
%
|
MSCI EAFE®
|
1,892
|
|
|
1,965
|
|
|
(4
|
)
|
|
1,903
|
|
|
1,957
|
|
|
(3
|
)
|
|
2,037
|
|
|
1,720
|
|
|
18
|
|
MSCI® Emerging Markets
|
1,036
|
|
|
1,093
|
|
|
(5
|
)
|
|
1,043
|
|
|
1,090
|
|
|
(4
|
)
|
|
1,115
|
|
|
966
|
|
|
15
|
|
|
|
TABLE 4: YEAR-END DEBT INDICES(1)
|
||||||||
|
As of December 31,
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||
Barclays Capital U.S. Aggregate Bond Index®
|
2,225
|
|
|
2,047
|
|
|
9
|
%
|
Barclays Capital Global Aggregate Bond Index®
|
512
|
|
|
479
|
|
|
7
|
|
|
|
TABLE 5: INDUSTRY ASSET FLOWS
|
|||||||
|
Years Ended December 31,
|
||||||
(In billions)
|
2019
|
|
2018
|
||||
North America - ICI Market Data(1)(2)(3)
|
|
|
|
||||
Long-Term Funds(4)
|
$
|
(95.6
|
)
|
|
$
|
(349.6
|
)
|
Money Market
|
584.4
|
|
|
119.8
|
|
||
Exchange-Traded Fund
|
328.2
|
|
|
310.9
|
|
||
Total ICI Flows
|
$
|
817.0
|
|
|
$
|
81.1
|
|
|
|
|
|
||||
Europe - Broadridge Market Data(1)(5)(6)
|
|
|
|
||||
Long-Term Funds(4)
|
$
|
188.8
|
|
|
$
|
(52.1
|
)
|
Money Market
|
54.9
|
|
|
12.4
|
|
||
Total Broadridge Flows
|
$
|
243.7
|
|
|
$
|
(39.7
|
)
|
|
|
|
•
|
A 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our management fees are calculated, would result in a corresponding change in our total management fee revenues, on average and over time, of approximately 5%; and
|
•
|
A 10% increase or decrease in worldwide fixed-income valuations, on a weighted average basis, over the relevant periods for which our management fees are calculated, would result in a corresponding change in our total management fee revenues, on average and over time, of approximately 4%.
|
TABLE 7: AVERAGE BALANCES AND INTEREST RATES - FULLY TAXABLE-EQUIVALENT BASIS(1)
|
||||||||||||||||||||||||||||||||
|
Years Ended December 31,
|
|||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||
(Dollars in millions; fully taxable-equivalent basis)
|
Average
Balance
|
|
Interest
Revenue/Expense
|
|
Rate
|
|
Average
Balance
|
|
Interest
Revenue/Expense
|
|
Rate
|
|
Average
Balance |
|
Interest
Revenue/ Expense |
|
Rate
|
|||||||||||||||
Interest-bearing deposits with banks
|
$
|
48,500
|
|
|
$
|
416
|
|
|
.86
|
%
|
|
$
|
54,328
|
|
|
$
|
387
|
|
|
.71
|
%
|
|
$
|
47,514
|
|
|
$
|
180
|
|
|
.38
|
%
|
Securities purchased under resale agreements(2)
|
2,506
|
|
|
364
|
|
|
14.54
|
|
|
2,901
|
|
|
335
|
|
|
11.55
|
|
|
2,131
|
|
|
264
|
|
|
12.38
|
|
||||||
Trading account assets
|
884
|
|
|
1
|
|
|
.11
|
|
|
1,051
|
|
|
—
|
|
|
—
|
|
|
1,011
|
|
|
(1
|
)
|
|
(.12
|
)
|
||||||
Investment securities
|
91,768
|
|
|
2,009
|
|
|
2.19
|
|
|
88,070
|
|
|
1,927
|
|
|
2.19
|
|
|
95,779
|
|
|
1,891
|
|
|
1.97
|
|
||||||
Loans and leases
|
24,073
|
|
|
775
|
|
|
3.22
|
|
|
23,573
|
|
|
698
|
|
|
2.96
|
|
|
21,916
|
|
|
519
|
|
|
2.37
|
|
||||||
Other interest-earning assets
|
14,160
|
|
|
395
|
|
|
2.79
|
|
|
15,714
|
|
|
372
|
|
|
2.37
|
|
|
22,884
|
|
|
222
|
|
|
.97
|
|
||||||
Average total interest-earning assets
|
$
|
181,891
|
|
|
$
|
3,960
|
|
|
2.18
|
|
|
$
|
185,637
|
|
|
$
|
3,719
|
|
|
2.00
|
|
|
$
|
191,235
|
|
|
$
|
3,075
|
|
|
1.61
|
|
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S.
|
$
|
67,547
|
|
|
$
|
539
|
|
|
.80
|
%
|
|
$
|
54,953
|
|
|
$
|
256
|
|
|
.47
|
%
|
|
$
|
30,623
|
|
|
$
|
96
|
|
|
.31
|
%
|
Non-U.S.(3)
|
61,301
|
|
|
124
|
|
|
.20
|
|
|
70,623
|
|
|
107
|
|
|
.15
|
|
|
91,937
|
|
|
67
|
|
|
.07
|
|
||||||
Total interest-bearing deposits(3)(4)
|
128,848
|
|
|
663
|
|
|
.51
|
|
|
125,576
|
|
|
363
|
|
|
.29
|
|
|
122,560
|
|
|
163
|
|
|
.13
|
|
||||||
Securities sold under repurchase agreements
|
1,616
|
|
|
31
|
|
|
1.90
|
|
|
2,048
|
|
|
13
|
|
|
.62
|
|
|
3,683
|
|
|
2
|
|
|
.05
|
|
||||||
Other short-term borrowings
|
1,524
|
|
|
21
|
|
|
1.37
|
|
|
1,327
|
|
|
17
|
|
|
1.28
|
|
|
1,313
|
|
|
10
|
|
|
.80
|
|
||||||
Long-term debt
|
11,474
|
|
|
414
|
|
|
3.61
|
|
|
10,686
|
|
|
389
|
|
|
3.64
|
|
|
11,595
|
|
|
308
|
|
|
2.66
|
|
||||||
Other interest-bearing liabilities
|
4,103
|
|
|
246
|
|
|
6.00
|
|
|
4,956
|
|
|
209
|
|
|
4.20
|
|
|
4,607
|
|
|
121
|
|
|
2.63
|
|
||||||
Average total interest-bearing liabilities
|
$
|
147,565
|
|
|
$
|
1,375
|
|
|
.93
|
|
|
$
|
144,593
|
|
|
$
|
991
|
|
|
.68
|
|
|
$
|
143,758
|
|
|
$
|
604
|
|
|
.42
|
|
Interest rate spread
|
|
|
|
|
1.25
|
%
|
|
|
|
|
|
1.32
|
%
|
|
|
|
|
|
|
1.19
|
%
|
|||||||||||
Net interest income, fully taxable-equivalent basis
|
|
|
$
|
2,585
|
|
|
|
|
|
|
$
|
2,728
|
|
|
|
|
|
|
$
|
2,471
|
|
|
|
|||||||||
Net interest margin, fully taxable-equivalent basis
|
|
|
|
|
1.42
|
%
|
|
|
|
|
|
1.47
|
%
|
|
|
|
|
|
1.29
|
%
|
||||||||||||
Tax-equivalent adjustment
|
|
|
(19
|
)
|
|
|
|
|
|
(57
|
)
|
|
|
|
|
|
(167
|
)
|
|
|
||||||||||||
Net interest income, GAAP basis
|
|
|
$
|
2,566
|
|
|
|
|
|
|
$
|
2,671
|
|
|
|
|
|
|
$
|
2,304
|
|
|
|
|
|
TABLE 8: EXPENSES
|
|||||||||||||||||
|
Years Ended December 31,
|
|
% Change 2019 vs. 2018
|
|
% Change 2018 vs. 2017
|
||||||||||||
(Dollars in millions)
|
2019
|
|
2018
|
|
2017
|
|
|
||||||||||
Compensation and employee benefits(1)
|
$
|
4,541
|
|
|
$
|
4,780
|
|
|
$
|
4,394
|
|
|
(5
|
)%
|
|
9
|
%
|
Information systems and communications
|
1,465
|
|
|
1,324
|
|
|
1,167
|
|
|
11
|
|
|
14
|
|
|||
Transaction processing services(2)
|
983
|
|
|
985
|
|
|
838
|
|
|
—
|
|
|
18
|
|
|||
Occupancy
|
470
|
|
|
500
|
|
|
461
|
|
|
(6
|
)
|
|
9
|
|
|||
Acquisition costs
|
79
|
|
|
31
|
|
|
21
|
|
|
155
|
|
|
48
|
|
|||
Restructuring charges, net
|
(2
|
)
|
|
(7
|
)
|
|
245
|
|
|
(71
|
)
|
|
nm
|
|
|||
Amortization of other intangible assets(1)
|
236
|
|
|
226
|
|
|
214
|
|
|
4
|
|
|
6
|
|
|||
Other:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Professional services
|
321
|
|
|
357
|
|
|
340
|
|
|
(10
|
)
|
|
5
|
|
|||
Other(2)
|
941
|
|
|
819
|
|
|
589
|
|
|
15
|
|
|
39
|
|
|||
Total other(2)
|
1,262
|
|
|
1,176
|
|
|
929
|
|
|
7
|
|
|
27
|
|
|||
Total expenses(1)
|
$
|
9,034
|
|
|
$
|
9,015
|
|
|
$
|
8,269
|
|
|
—
|
|
|
9
|
|
Number of employees at year-end
|
39,103
|
|
|
40,142
|
|
|
36,643
|
|
|
(3
|
)
|
|
10
|
|
|
|
TABLE 9: RESTRUCTURING AND REPOSITIONING CHARGES
|
|||||||||||||||
(In millions)
|
Employee
Related Costs |
|
Real Estate
Actions |
|
Asset and Other Write-offs
|
|
Total
|
||||||||
Accrual Balance at December 31, 2016
|
$
|
37
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
56
|
|
Accruals for Beacon
|
186
|
|
|
32
|
|
|
27
|
|
|
245
|
|
||||
Payments and Other Adjustments
|
(57
|
)
|
|
(17
|
)
|
|
(26
|
)
|
|
(100
|
)
|
||||
Accrual Balance at December 31, 2017
|
166
|
|
|
32
|
|
|
3
|
|
|
201
|
|
||||
Accruals for Beacon
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||
Accruals for Repositioning Charges
|
259
|
|
|
41
|
|
|
—
|
|
|
300
|
|
||||
Payments and Other Adjustments
|
(115
|
)
|
|
(36
|
)
|
|
(2
|
)
|
|
(153
|
)
|
||||
Accrual Balance at December 31, 2018
|
303
|
|
|
37
|
|
|
1
|
|
|
341
|
|
||||
Accruals for Beacon
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Accruals for Repositioning Charges
|
98
|
|
|
12
|
|
|
—
|
|
|
110
|
|
||||
Payments and Other Adjustments
|
(209
|
)
|
|
(42
|
)
|
|
—
|
|
|
(251
|
)
|
||||
Accrual Balance at December 31, 2019
|
$
|
190
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
198
|
|
TABLE 10: INVESTMENT SERVICING LINE OF BUSINESS RESULTS
|
|
|
|||||||||||||||
(Dollars in millions, except where otherwise noted)
|
Years Ended December 31,
|
|
% Change 2019 vs. 2018
|
|
% Change 2018 vs. 2017
|
||||||||||||
2019
|
|
2018
|
|
2017
|
|
|
|||||||||||
Servicing fees
|
$
|
5,074
|
|
|
$
|
5,429
|
|
|
$
|
5,365
|
|
|
(7
|
)%
|
|
1
|
%
|
Foreign exchange trading services(1)
|
974
|
|
|
1,071
|
|
|
999
|
|
|
(9
|
)
|
|
7
|
|
|||
Securities finance
|
462
|
|
|
543
|
|
|
606
|
|
|
(15
|
)
|
|
(10
|
)
|
|||
Software and processing fees(1)
|
691
|
|
|
443
|
|
|
336
|
|
|
56
|
|
|
32
|
|
|||
Total fee revenue(1)
|
7,201
|
|
|
7,486
|
|
|
7,306
|
|
|
(4
|
)
|
|
2
|
|
|||
Net interest income
|
2,590
|
|
|
2,691
|
|
|
2,309
|
|
|
(4
|
)
|
|
17
|
|
|||
Total other income
|
43
|
|
|
6
|
|
|
(39
|
)
|
|
nm
|
|
|
nm
|
|
|||
Total revenue(1)
|
9,834
|
|
|
10,183
|
|
|
9,576
|
|
|
(3
|
)
|
|
6
|
|
|||
Provision for loan losses
|
10
|
|
|
15
|
|
|
2
|
|
|
(33
|
)
|
|
650
|
|
|||
Total expenses(1)
|
7,140
|
|
|
7,081
|
|
|
6,717
|
|
|
1
|
|
|
5
|
|
|||
Income before income tax expense
|
$
|
2,684
|
|
|
$
|
3,087
|
|
|
$
|
2,857
|
|
|
(13
|
)
|
|
8
|
|
Pre-tax margin
|
27
|
%
|
|
30
|
%
|
|
30
|
%
|
|
|
|
|
|||||
Average assets (in billions)
|
$
|
220.3
|
|
|
$
|
220.2
|
|
|
$
|
214.0
|
|
|
|
|
|
|
|
|
TABLE 12: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS
|
|||||||||||||||||
(In billions)
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2017
|
|
% Change
2019 vs. 2018 |
|
% Change
2018 vs. 2017 |
||||||||
Equities
|
$
|
19,301
|
|
|
$
|
18,041
|
|
|
$
|
19,214
|
|
|
7
|
%
|
|
(6
|
)%
|
Fixed-income
|
10,766
|
|
|
9,758
|
|
|
10,070
|
|
|
10
|
|
|
(3
|
)
|
|||
Short-term and other investments
|
4,291
|
|
|
3,821
|
|
|
3,835
|
|
|
12
|
|
|
—
|
|
|||
Total
|
$
|
34,358
|
|
|
$
|
31,620
|
|
|
$
|
33,119
|
|
|
9
|
|
|
(5
|
)
|
TABLE 13: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(1)
|
|||||||||||||||||
(In billions)
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2017
|
|
% Change
2019 vs. 2018 |
|
% Change
2018 vs. 2017 |
||||||||
Americas
|
$
|
25,018
|
|
|
$
|
23,203
|
|
|
$
|
24,418
|
|
|
8
|
%
|
|
(5
|
)%
|
Europe/Middle East/Africa
|
7,325
|
|
|
6,699
|
|
|
7,028
|
|
|
9
|
|
|
(5
|
)
|
|||
Asia/Pacific
|
2,015
|
|
|
1,718
|
|
|
1,673
|
|
|
17
|
|
|
3
|
|
|||
Total
|
$
|
34,358
|
|
|
$
|
31,620
|
|
|
$
|
33,119
|
|
|
9
|
|
|
(5
|
)
|
|
|
•
|
Direct sales and trading: Represent FX transactions at negotiated rates with clients and investment managers that contact our trading desk directly. These principal market-making activities include transactions for funds serviced by third party custodians or prime brokers, as well as those funds under custody with us.
|
•
|
Indirect FX trading: Represents FX transactions with clients, for which we are the funds' custodian, or their investment managers, routed to our FX desk through our asset-servicing operation. We execute indirect FX trades as a principal at rates disclosed to our clients.
|
•
|
Electronic FX services: Our clients may choose to execute FX transactions through one of our electronic trading platforms. These transactions generate revenue through a “click” fee.
|
•
|
Other trading, transition management and brokerage revenue: As our clients look to us to
|
TABLE 14: INVESTMENT MANAGEMENT LINE OF BUSINESS RESULTS
|
|
|
|||||||||||||||
(Dollars in millions, except where otherwise noted)
|
Years Ended December 31,
|
|
% Change 2019 vs. 2018
|
|
% Change 2018 vs. 2017
|
||||||||||||
2019
|
|
2018
|
|
2017
|
|
||||||||||||
Management fees
|
$
|
1,771
|
|
|
$
|
1,851
|
|
|
$
|
1,616
|
|
|
(4
|
)%
|
|
15
|
%
|
Foreign exchange trading services(1)
|
137
|
|
|
130
|
|
|
72
|
|
|
5
|
|
|
81
|
|
|||
Securities finance
|
9
|
|
|
—
|
|
|
—
|
|
|
nm
|
|
|
nm
|
|
|||
Software and processing fees(2)
|
29
|
|
|
(5
|
)
|
|
7
|
|
|
nm
|
|
|
(171
|
)
|
|||
Total fee revenue
|
1,946
|
|
|
1,976
|
|
|
1,695
|
|
|
(2
|
)
|
|
17
|
|
|||
Net interest income
|
(24
|
)
|
|
(20
|
)
|
|
(5
|
)
|
|
20
|
|
|
nm
|
|
|||
Total revenue
|
1,922
|
|
|
1,956
|
|
|
1,690
|
|
|
(2
|
)
|
|
16
|
|
|||
Total expenses
|
1,535
|
|
|
1,544
|
|
|
1,286
|
|
|
(1
|
)
|
|
20
|
|
|||
Income before income tax expense
|
$
|
387
|
|
|
$
|
412
|
|
|
$
|
404
|
|
|
(6
|
)
|
|
2
|
|
Pre-tax margin
|
20
|
%
|
|
21
|
%
|
|
24
|
%
|
|
|
|
|
|||||
Average assets (in billions)
|
$
|
3.0
|
|
|
$
|
3.2
|
|
|
$
|
5.4
|
|
|
|
|
|
|
|
|
|
TABLE 16: EXCHANGE-TRADED FUNDS BY ASSET CLASS(1)
|
|
|
|
|
|||||||||||||
(In billions)
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2017
|
|
% Change
2019 vs. 2018 |
|
% Change
2018 vs. 2017 |
||||||||
Alternative Investments(2)
|
$
|
56
|
|
|
$
|
43
|
|
|
$
|
48
|
|
|
30
|
%
|
|
(10
|
)%
|
Cash
|
9
|
|
|
9
|
|
|
2
|
|
|
—
|
|
|
350
|
|
|||
Equity
|
618
|
|
|
482
|
|
|
531
|
|
|
28
|
|
|
(9
|
)
|
|||
Fixed-Income
|
85
|
|
|
66
|
|
|
63
|
|
|
29
|
|
|
5
|
|
|||
Total Exchange-Traded Funds
|
$
|
768
|
|
|
$
|
600
|
|
|
$
|
644
|
|
|
28
|
|
|
(7
|
)
|
|
|
TABLE 17: GEOGRAPHIC MIX OF ASSETS UNDER MANAGEMENT(1)
|
|
|
|
|
|||||||||||||
(In billions)
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2017
|
|
% Change
2019 vs. 2018 |
|
% Change
2018 vs. 2017 |
||||||||
North America
|
$
|
2,115
|
|
|
$
|
1,731
|
|
|
$
|
1,931
|
|
|
22
|
%
|
|
(10
|
)%
|
Europe/Middle East/Africa
|
493
|
|
|
421
|
|
|
521
|
|
|
17
|
|
|
(19
|
)
|
|||
Asia/Pacific
|
508
|
|
|
359
|
|
|
330
|
|
|
42
|
|
|
9
|
|
|||
Total
|
$
|
3,116
|
|
|
$
|
2,511
|
|
|
$
|
2,782
|
|
|
24
|
|
|
(10
|
)
|
|
|
|
|
TABLE 19: AVERAGE STATEMENT OF CONDITION(1)
|
|||||||||||
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Assets:
|
|
|
|
|
|
||||||
Interest-bearing deposits with banks
|
$
|
48,500
|
|
|
$
|
54,328
|
|
|
$
|
47,514
|
|
Securities purchased under resale agreements
|
2,506
|
|
|
2,901
|
|
|
2,131
|
|
|||
Trading account assets
|
884
|
|
|
1,051
|
|
|
1,011
|
|
|||
Investment securities
|
91,768
|
|
|
88,070
|
|
|
95,779
|
|
|||
Loans and leases
|
24,073
|
|
|
23,573
|
|
|
21,916
|
|
|||
Other interest-earning assets
|
14,160
|
|
|
15,714
|
|
|
22,884
|
|
|||
Average total interest-earning assets
|
181,891
|
|
|
185,637
|
|
|
191,235
|
|
|||
Cash and due from banks
|
3,390
|
|
|
3,178
|
|
|
3,097
|
|
|||
Other non-interest-earning assets
|
38,053
|
|
|
34,570
|
|
|
25,118
|
|
|||
Average total assets
|
$
|
223,334
|
|
|
$
|
223,385
|
|
|
$
|
219,450
|
|
Liabilities and shareholders’ equity:
|
|
|
|
|
|
||||||
Interest-bearing deposits:
|
|
|
|
|
|
||||||
U.S.
|
$
|
67,547
|
|
|
$
|
54,953
|
|
|
$
|
30,623
|
|
Non-U.S.
|
61,301
|
|
|
70,623
|
|
|
91,937
|
|
|||
Total interest-bearing deposits(2)
|
128,848
|
|
|
125,576
|
|
|
122,560
|
|
|||
Securities sold under repurchase agreements
|
1,616
|
|
|
2,048
|
|
|
3,683
|
|
|||
Other short-term borrowings
|
1,524
|
|
|
1,327
|
|
|
1,313
|
|
|||
Long-term debt
|
11,474
|
|
|
10,686
|
|
|
11,595
|
|
|||
Other interest-bearing liabilities
|
4,103
|
|
|
4,956
|
|
|
4,607
|
|
|||
Average total interest-bearing liabilities
|
147,565
|
|
|
144,593
|
|
|
143,758
|
|
|||
Non-interest-bearing deposits(2)
|
29,414
|
|
|
35,832
|
|
|
41,248
|
|
|||
Other non-interest-bearing liabilities
|
21,299
|
|
|
19,804
|
|
|
12,379
|
|
|||
Preferred shareholders’ equity
|
3,653
|
|
|
3,327
|
|
|
3,197
|
|
|||
Common shareholders’ equity
|
21,403
|
|
|
19,829
|
|
|
18,868
|
|
|||
Average total liabilities and shareholders’ equity
|
$
|
223,334
|
|
|
$
|
223,385
|
|
|
$
|
219,450
|
|
|
|
TABLE 20: CARRYING VALUES OF INVESTMENT SECURITIES
|
|||||||||||
|
As of December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Available-for-sale:
|
|
|
|
|
|
||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
||||||
Direct obligations
|
$
|
3,487
|
|
|
$
|
1,039
|
|
|
$
|
223
|
|
Mortgage-backed securities
|
17,838
|
|
|
15,968
|
|
|
10,872
|
|
|||
Total U.S. Treasury and federal agencies
|
21,325
|
|
|
17,007
|
|
|
11,095
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
||||||
Student loans(1)
|
531
|
|
|
541
|
|
|
3,358
|
|
|||
Credit cards
|
89
|
|
|
583
|
|
|
1,542
|
|
|||
Collateralized loan obligations
|
1,820
|
|
|
593
|
|
|
1,447
|
|
|||
Total asset-backed securities
|
2,440
|
|
|
1,717
|
|
|
6,347
|
|
|||
Non-U.S. debt securities:
|
|
|
|
|
|
||||||
Mortgage-backed securities
|
1,980
|
|
|
1,682
|
|
|
6,695
|
|
|||
Asset-backed securities
|
2,179
|
|
|
1,574
|
|
|
2,947
|
|
|||
Government securities
|
12,373
|
|
|
12,793
|
|
|
10,721
|
|
|||
Other
|
8,658
|
|
|
6,602
|
|
|
6,108
|
|
|||
Total non-U.S. debt securities
|
25,190
|
|
|
22,651
|
|
|
26,471
|
|
|||
State and political subdivisions
|
1,783
|
|
|
1,918
|
|
|
9,151
|
|
|||
Collateralized mortgage obligations
|
104
|
|
|
197
|
|
|
1,054
|
|
|||
Other U.S. debt securities
|
2,973
|
|
|
1,658
|
|
|
2,560
|
|
|||
U.S. equity securities(2)
|
—
|
|
|
—
|
|
|
46
|
|
|||
U.S. money-market mutual funds(2)
|
—
|
|
|
—
|
|
|
397
|
|
|||
Total
|
$
|
53,815
|
|
|
$
|
45,148
|
|
|
$
|
57,121
|
|
|
|
|
|
|
|
||||||
Held-to-maturity(3):
|
|
|
|
|
|
||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
||||||
Direct obligations
|
$
|
10,311
|
|
|
$
|
14,794
|
|
|
$
|
17,028
|
|
Mortgage-backed securities
|
26,297
|
|
|
21,647
|
|
|
16,651
|
|
|||
Total U.S. Treasury and federal agencies
|
36,608
|
|
|
36,441
|
|
|
33,679
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
||||||
Student loans(1)
|
3,783
|
|
|
3,191
|
|
|
3,047
|
|
|||
Credit cards
|
—
|
|
|
193
|
|
|
798
|
|
|||
Other
|
—
|
|
|
1
|
|
|
1
|
|
|||
Total asset-backed securities
|
3,783
|
|
|
3,385
|
|
|
3,846
|
|
|||
Non-U.S. debt securities:
|
|
|
|
|
|
||||||
Mortgage-backed securities
|
366
|
|
|
638
|
|
|
939
|
|
|||
Asset-backed securities
|
—
|
|
|
223
|
|
|
263
|
|
|||
Government securities
|
328
|
|
|
358
|
|
|
474
|
|
|||
Other
|
—
|
|
|
46
|
|
|
48
|
|
|||
Total non-U.S. debt securities
|
694
|
|
|
1,265
|
|
|
1,724
|
|
|||
Collateralized mortgage obligations
|
697
|
|
|
823
|
|
|
1,209
|
|
|||
Total
|
$
|
41,782
|
|
|
$
|
41,914
|
|
|
$
|
40,458
|
|
|
|
|
TABLE 21: INVESTMENT PORTFOLIO BY EXTERNAL CREDIT RATING
|
|||||
|
December 31, 2019
|
|
December 31, 2018
|
||
AAA(1)
|
77
|
%
|
|
76
|
%
|
AA
|
13
|
|
|
14
|
|
A
|
5
|
|
|
5
|
|
BBB
|
5
|
|
|
5
|
|
Below BBB
|
—
|
|
|
—
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
TABLE 23: NON-U.S. DEBT SECURITIES
|
|||||||
(In millions)
|
December 31, 2019
|
|
December 31, 2018
|
||||
Available-for-sale:
|
|
|
|
||||
Canada
|
$
|
2,611
|
|
|
$
|
2,185
|
|
Australia
|
2,409
|
|
|
2,847
|
|
||
France
|
2,223
|
|
|
1,875
|
|
||
European(1)
|
2,101
|
|
|
1,087
|
|
||
Germany
|
1,944
|
|
|
1,547
|
|
||
United Kingdom
|
1,608
|
|
|
2,580
|
|
||
Spain
|
1,531
|
|
|
1,504
|
|
||
Netherlands
|
1,524
|
|
|
1,116
|
|
||
Austria
|
1,398
|
|
|
1,312
|
|
||
Japan
|
1,363
|
|
|
1,352
|
|
||
Ireland
|
1,235
|
|
|
1,301
|
|
||
Italy
|
1,113
|
|
|
1,010
|
|
||
Belgium
|
977
|
|
|
952
|
|
||
Finland
|
846
|
|
|
789
|
|
||
Hong Kong
|
617
|
|
|
458
|
|
||
Asian(1)
|
581
|
|
|
338
|
|
||
Sweden
|
156
|
|
|
186
|
|
||
Luxembourg
|
124
|
|
|
—
|
|
||
Brazil
|
93
|
|
|
—
|
|
||
Norway
|
51
|
|
|
94
|
|
||
Other(2)
|
685
|
|
|
118
|
|
||
Total
|
$
|
25,190
|
|
|
$
|
22,651
|
|
Held-to-maturity:
|
|
|
|
||||
Singapore
|
$
|
214
|
|
|
$
|
242
|
|
United Kingdom
|
126
|
|
|
363
|
|
||
Germany
|
112
|
|
|
115
|
|
||
Australia
|
109
|
|
|
158
|
|
||
Spain
|
85
|
|
|
92
|
|
||
Netherlands
|
—
|
|
|
187
|
|
||
Other(3)
|
48
|
|
|
108
|
|
||
Total
|
$
|
694
|
|
|
$
|
1,265
|
|
|
|
•
|
a pre-tax net unrealized gain of $195 million, composed of gross unrealized gains of $209 million and gross unrealized losses of $14 million, associated with non-U.S. AFS debt securities; and
|
•
|
a pre-tax net unrealized gain of $76 million, composed of gross unrealized gains of $82 million and gross unrealized losses of $6 million, associated with non-U.S. HTM debt securities.
|
TABLE 24: STATE AND MUNICIPAL OBLIGORS(1)
|
||||||||||||||
(Dollars in millions)
|
Total Municipal
Securities |
|
Credit and
Liquidity
Facilities(2)
|
|
Total
|
|
% of Total Municipal
Exposure
|
|||||||
December 31, 2019
|
|
|
|
|
|
|
||||||||
State of Issuer:
|
|
|
|
|
|
|
||||||||
Texas
|
$
|
275
|
|
|
$
|
2,345
|
|
|
$
|
2,620
|
|
|
23
|
%
|
California
|
111
|
|
|
2,114
|
|
|
2,225
|
|
|
20
|
|
|||
New York
|
283
|
|
|
1,531
|
|
|
1,814
|
|
|
16
|
|
|||
Massachusetts
|
442
|
|
|
809
|
|
|
1,251
|
|
|
11
|
|
|||
Total
|
$
|
1,111
|
|
|
$
|
6,799
|
|
|
$
|
7,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2018
|
|
|
|
|
|
|
||||||||
State of Issuer:
|
|
|
|
|
|
|
|
|||||||
Texas
|
$
|
315
|
|
|
$
|
2,467
|
|
|
$
|
2,782
|
|
|
25
|
%
|
California
|
108
|
|
|
1,693
|
|
|
1,801
|
|
|
16
|
|
|||
New York
|
231
|
|
|
1,518
|
|
|
1,749
|
|
|
15
|
|
|||
Massachusetts
|
467
|
|
|
978
|
|
|
1,445
|
|
|
13
|
|
|||
Total
|
$
|
1,121
|
|
|
$
|
6,656
|
|
|
$
|
7,777
|
|
|
|
|
|
|
|
TABLE 25: CONTRACTUAL MATURITIES AND YIELDS
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As of December 31, 2019
|
Under 1 Year
|
|
1 to 5 Years
|
|
6 to 10 Years
|
|
Over 10 Years
|
|
Total
|
||||||||||||||||||||||
(Dollars in millions)
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|
Amount
|
||||||||||||||
Available-for-sale(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Direct obligations
|
$
|
1,058
|
|
|
2.10
|
%
|
|
$
|
1,010
|
|
|
1.50
|
%
|
|
$
|
1,419
|
|
|
1.64
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
3,487
|
|
|
Mortgage-backed securities
|
118
|
|
|
3.71
|
|
|
970
|
|
|
3.30
|
|
|
2,951
|
|
|
2.54
|
|
|
13,799
|
|
|
3.77
|
|
|
17,838
|
|
|||||
Total U.S. treasury and federal agencies
|
1,176
|
|
|
|
|
1,980
|
|
|
|
|
4,370
|
|
|
|
|
13,799
|
|
|
|
|
21,325
|
|
|||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Student loans
|
72
|
|
|
2.72
|
|
|
184
|
|
|
2.42
|
|
|
96
|
|
|
2.10
|
|
|
179
|
|
|
2.77
|
|
|
531
|
|
|||||
Credit cards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
2.51
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|||||
Collateralized loan obligations
|
—
|
|
|
—
|
|
|
745
|
|
|
2.60
|
|
|
958
|
|
|
2.89
|
|
|
117
|
|
|
2.82
|
|
|
1,820
|
|
|||||
Total asset-backed securities
|
72
|
|
|
|
|
929
|
|
|
|
|
1,143
|
|
|
|
|
296
|
|
|
|
|
2,440
|
|
|||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgage-backed securities
|
430
|
|
|
0.65
|
|
|
569
|
|
|
0.87
|
|
|
196
|
|
|
1.12
|
|
|
785
|
|
|
1.85
|
|
|
1,980
|
|
|||||
Asset-backed securities
|
487
|
|
|
1.01
|
|
|
981
|
|
|
0.35
|
|
|
366
|
|
|
0.79
|
|
|
345
|
|
|
0.47
|
|
|
2,179
|
|
|||||
Government securities
|
4,183
|
|
|
0.25
|
|
|
7,381
|
|
|
1.61
|
|
|
809
|
|
|
4.39
|
|
|
—
|
|
|
—
|
|
|
12,373
|
|
|||||
Other
|
884
|
|
|
2.35
|
|
|
6,689
|
|
|
1.29
|
|
|
1,063
|
|
|
1.51
|
|
|
22
|
|
|
3.64
|
|
|
8,658
|
|
|||||
Total non-U.S. debt securities
|
5,984
|
|
|
|
|
15,620
|
|
|
|
|
2,434
|
|
|
|
|
1,152
|
|
|
|
|
25,190
|
|
|||||||||
State and political subdivisions(2)
|
238
|
|
|
5.97
|
|
|
635
|
|
|
5.86
|
|
|
554
|
|
|
4.65
|
|
|
356
|
|
|
5.71
|
|
|
1,783
|
|
|||||
Collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
3.55
|
|
|
104
|
|
|||||
Other U.S. debt securities
|
760
|
|
|
3.00
|
|
|
2,083
|
|
|
2.69
|
|
|
130
|
|
|
2.41
|
|
|
—
|
|
|
—
|
|
|
2,973
|
|
|||||
Total
|
$
|
8,230
|
|
|
|
|
$
|
21,247
|
|
|
|
|
$
|
8,631
|
|
|
|
|
$
|
15,707
|
|
|
|
|
$
|
53,815
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Held-to-maturity(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Direct obligations
|
$
|
4,116
|
|
|
2.27
|
%
|
|
$
|
6,161
|
|
|
2.31
|
%
|
|
$
|
5
|
|
|
2.44
|
%
|
|
$
|
29
|
|
|
2.1
|
%
|
|
$
|
10,311
|
|
Mortgage-backed securities
|
9
|
|
|
2.88
|
|
|
438
|
|
|
2.65
|
|
|
2,515
|
|
|
2.92
|
|
|
23,335
|
|
|
3.39
|
|
|
26,297
|
|
|||||
Total U.S. treasury and federal agencies
|
4,125
|
|
|
|
|
6,599
|
|
|
|
|
2,520
|
|
|
|
|
23,364
|
|
|
|
|
36,608
|
|
|||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Student loans
|
96
|
|
|
2.09
|
|
|
207
|
|
|
2.34
|
|
|
408
|
|
|
2.42
|
|
|
3,072
|
|
|
2.53
|
|
|
3,783
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.79
|
|
|
—
|
|
|||||
Total asset-backed securities
|
96
|
|
|
|
|
207
|
|
|
|
|
408
|
|
|
|
|
3,072
|
|
|
|
|
3,783
|
|
|||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgage-backed securities
|
16
|
|
|
2.97
|
|
|
33
|
|
|
1.93
|
|
|
4
|
|
|
1.80
|
|
|
313
|
|
|
0.92
|
|
|
366
|
|
|||||
Government securities
|
328
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
328
|
|
|||||
Total non-U.S. debt securities
|
344
|
|
|
|
|
33
|
|
|
|
|
4
|
|
|
|
|
313
|
|
|
|
|
694
|
|
|||||||||
Collateralized mortgage obligations
|
2
|
|
|
2.09
|
|
|
283
|
|
|
2.52
|
|
|
13
|
|
|
2.39
|
|
|
399
|
|
|
2.79
|
|
|
697
|
|
|||||
Total
|
$
|
4,567
|
|
|
|
|
$
|
7,122
|
|
|
|
|
$
|
2,945
|
|
|
|
|
$
|
27,148
|
|
|
|
|
$
|
41,782
|
|
|
|
|
|
|
|
TABLE 27: CONTRACTUAL MATURITIES FOR LOANS
|
|||||||||||||||
|
As of December 31, 2019
|
||||||||||||||
(In millions)
|
Under 1 year
|
|
1 to 5 years
|
|
Over 5 years
|
|
Total
|
||||||||
Domestic:
|
|
|
|
|
|
|
|
||||||||
Commercial and financial
|
$
|
10,883
|
|
|
$
|
5,464
|
|
|
$
|
2,415
|
|
|
$
|
18,762
|
|
Commercial real estate
|
—
|
|
|
277
|
|
|
1,489
|
|
|
1,766
|
|
||||
Total domestic
|
10,883
|
|
|
5,741
|
|
|
3,904
|
|
|
20,528
|
|
||||
Foreign:
|
|
|
|
|
|
|
|
||||||||
Commercial and financial
|
3,525
|
|
|
1,569
|
|
|
687
|
|
|
5,781
|
|
||||
Total foreign
|
3,525
|
|
|
1,569
|
|
|
687
|
|
|
5,781
|
|
||||
Total loans
|
$
|
14,408
|
|
|
$
|
7,310
|
|
|
$
|
4,591
|
|
|
$
|
26,309
|
|
TABLE 28: CLASSIFICATION OF LOAN BALANCES DUE AFTER ONE YEAR
|
|||
(In millions)
|
As of December 31, 2019
|
||
Loans with predetermined interest rates
|
$
|
1,971
|
|
Loans with floating or adjustable interest rates
|
9,930
|
|
|
Total
|
$
|
11,901
|
|
TABLE 29: ALLOWANCE FOR LOAN AND LEASE LOSSES
|
|||||||||||||||||||
|
Years Ended December 31,
|
||||||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Allowance for loan and lease losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
$
|
67
|
|
|
$
|
54
|
|
|
$
|
53
|
|
|
$
|
46
|
|
|
$
|
38
|
|
Provision for loan and lease losses(1)
|
10
|
|
|
15
|
|
|
2
|
|
|
10
|
|
|
12
|
|
|||||
Charge-offs(2)
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|||||
Ending balance
|
$
|
74
|
|
|
$
|
67
|
|
|
$
|
54
|
|
|
$
|
53
|
|
|
$
|
46
|
|
|
|
|
TABLE 30: CROSS-BORDER OUTSTANDINGS(1)
|
|||||||||||
(In millions)
|
Investment Securities and Other Assets
|
|
Derivatives and Securities on Loan
|
|
Total Cross-Border Outstandings
|
||||||
December 31, 2019
|
|
|
|
|
|
|
|||||
Germany
|
$
|
20,968
|
|
|
$
|
217
|
|
|
$
|
21,185
|
|
United Kingdom
|
13,764
|
|
|
1,468
|
|
|
15,232
|
|
|||
Japan
|
11,121
|
|
|
555
|
|
|
11,676
|
|
|||
Luxembourg
|
3,399
|
|
|
668
|
|
|
4,067
|
|
|||
Canada
|
2,955
|
|
|
783
|
|
|
3,738
|
|
|||
Australia
|
3,100
|
|
|
597
|
|
|
3,697
|
|
|||
France
|
2,813
|
|
|
240
|
|
|
3,053
|
|
|||
Ireland
|
1,988
|
|
|
641
|
|
|
2,629
|
|
|||
Switzerland
|
1,724
|
|
|
589
|
|
|
2,313
|
|
|||
December 31, 2018
|
|
|
|
|
|
|
|||||
Germany
|
$
|
20,157
|
|
|
$
|
489
|
|
|
$
|
20,646
|
|
Japan
|
13,985
|
|
|
1,084
|
|
|
15,069
|
|
|||
United Kingdom
|
12,623
|
|
|
1,176
|
|
|
13,799
|
|
|||
Australia
|
4,217
|
|
|
1,349
|
|
|
5,566
|
|
|||
Canada
|
3,010
|
|
|
1,507
|
|
|
4,517
|
|
|||
Ireland
|
2,019
|
|
|
809
|
|
|
2,828
|
|
|||
France
|
2,495
|
|
|
294
|
|
|
2,789
|
|
|||
Luxembourg
|
2,033
|
|
|
710
|
|
|
2,743
|
|
|||
December 31, 2017
|
|
|
|
|
|
||||||
Germany
|
$
|
18,201
|
|
|
$
|
295
|
|
|
$
|
18,496
|
|
Japan
|
15,250
|
|
|
549
|
|
|
15,799
|
|
|||
United Kingdom
|
12,051
|
|
|
1,253
|
|
|
13,304
|
|
|||
Australia
|
5,278
|
|
|
390
|
|
|
5,668
|
|
|||
Canada
|
4,215
|
|
|
707
|
|
|
4,922
|
|
|||
France
|
2,684
|
|
|
344
|
|
|
3,028
|
|
|
|
|
•
|
credit and counterparty risk;
|
•
|
liquidity risk, funding and management;
|
•
|
operational risk;
|
•
|
information technology risk;
|
•
|
market risk associated with our trading activities;
|
•
|
market risk associated with our non-trading activities, which we refer to as asset-and-liability management, and which consists primarily of interest rate risk;
|
•
|
strategic risk;
|
•
|
model risk; and
|
•
|
reputational, fiduciary and business conduct risk.
|
•
|
A culture of risk awareness that extends across all of our business activities;
|
•
|
The identification, classification and quantification of our material risks;
|
•
|
The establishment of our risk appetite and associated limits and policies, and our compliance with these limits;
|
•
|
The establishment of a risk management structure at the “top of the house” that enables the control and coordination of risk-taking across the business lines;
|
•
|
The implementation of stress testing practices and a dynamic risk-assessment capability;
|
•
|
A direct link between risk and strategic-decision making processes and incentive compensation practices; and
|
•
|
The overall flexibility to adapt to the ever-changing business and market conditions.
|
•
|
“Vertical” business unit-aligned risk groups that support business managers with risk management, measurement and monitoring activities;
|
•
|
“Horizontal” risk groups that monitor the risks that cross all of our business units (for example, credit and operational risk); and
|
•
|
Risk oversight for international activities, which combines intersecting “Verticals” and “Horizontals” through a hub and spoke model to provide important regional and legal entity perspectives to the global risk framework.
|
•
|
The approval of the policies of our global risk, capital and liquidity management frameworks, including our risk appetite framework;
|
•
|
The monitoring and assessment of our capital adequacy based on internal policies and regulatory requirements;
|
•
|
The oversight of our firm-wide risk identification, model risk governance, stress testing and Recovery and Resolution Plan programs; and
|
•
|
The ongoing monitoring and review of risks undertaken within the businesses, and our senior management oversight and approval of risk strategies and tactics.
|
•
|
ALCO is the senior corporate oversight and decision-making body for balance sheet strategy, Global Treasury business activities and risk management for interest rate risk, liquidity risk and non-trading market risk. ALCO’s roles and responsibilities are designed to be complementary to, and in coordination with the MRAC, which approves the corporate risk appetite and associated balance sheet strategy;
|
•
|
CRPC has primary responsibility for the oversight and review of credit and counterparty risk across business units, as well as oversight, review and approval of the credit risk policies and guidelines; the Committee consists of senior executives within ERM, and reviews policies and guidelines related to all aspects of our business which give rise to credit risk; our business units are also represented on the CRPC; credit risk policies and guidelines are reviewed periodically, but at least annually;
|
•
|
TMRC reviews the effectiveness of, and approves, the market risk framework at least annually; it is the senior oversight and decision-making committee for risk management within our global markets businesses; the TMRC is responsible for the formulation of guidelines, strategies and workflows with respect to the measurement, monitoring and control of our trading market risk, and also approves market risk tolerance limits, collateral and margin policies and trading authorities; the TMRC meets regularly to monitor the management of our trading market risk activities;
|
•
|
BOC provides oversight and governance over Basel related regulatory requirements, assesses compliance with respect to Basel regulations and approves all material methodologies and changes, policies and reporting;
|
•
|
The Recovery and Resolution Planning Executive Review Board oversees the development of recovery and resolution plans as required by banking regulators;
|
•
|
MRC monitors the overall level of model risk and provides oversight of the model governance process pertaining to financial models, including the validation of key models and the ongoing monitoring of model performance. The MRC may also, as appropriate, mandate remedial actions and compensating controls to be applied to models to address modeling deficiencies as well as other issues identified;
|
•
|
The CCAR Steering Committee provides primary supervision of the stress tests performed in conformity with the Federal Reserve's CCAR process and the Dodd-Frank Act, and is responsible for the overall management, review, and approval of all material assumptions, methodologies, and results of each stress scenario;
|
•
|
The State Street Global Advisors Risk Committee is the most senior oversight and decision making committee for risk management within State Street Global Advisors; the committee is responsible for overseeing the alignment of State Street Global Advisors' strategy, and risk appetite, as well as alignment with our corporate-wide strategies and risk management standards; and
|
•
|
The Country Risk Committee oversees the identification, assessment, monitoring, reporting and mitigation, where necessary, of country risks.
|
•
|
The Regulatory Reporting Oversight Committee is responsible for providing oversight of regulatory reporting and related report governance processes and accountabilities.
|
•
|
The Fiduciary Review Committee reviews and assesses the fiduciary risk management programs of those units in which we serve in a fiduciary capacity;
|
•
|
The New Business and Product Approval Committee provides oversight of the evaluation of the risk inherent in proposed new products or services and new business, and extensions
|
•
|
The Compliance and Ethics Committee provides review and oversight of our compliance programs, including our culture of compliance and high standards of ethical behavior;
|
•
|
The Legal Entity Oversight Committee establishes standards with respect to the governance of our legal entities, monitors adherence to those standards, and oversees the ongoing evaluation of our legal entity structure, including the formation, maintenance and dissolution of legal entities; and
|
•
|
The Conduct Standards Committee provides oversight of our enforcement of employee conduct standards.
|
•
|
The Operational Risk Committee, along with the support of regional business or entity-specific working groups and committees, is responsible for oversight of our operational risk programs, including determining that the implementation of those programs is designed to identify, manage and control operational risk in an effective and consistent manner across the firm;
|
•
|
The Technology Risk Committee is responsible for the global oversight, review and monitoring of operational, legal and regulatory compliance and reputational risk that may result in a significant change to our Information Technology risk profile or a material financial loss or reputational impact to global technology services. The Committee serves as a forum to provide regular reporting to TORC and escalate technology risk and control issues to TORC, as appropriate; and
|
•
|
The Executive Information Security Committee provides direction for the Enterprise Information Security posture and program, including cyber-security protections, provides enterprise-wide oversight and assessment of the effectiveness of all Information Security Programs to promote that controls are measured and managed, and serves as an escalation point for cyber-security issues.
|
•
|
Default risk - the risk that a counterparty fails to meet its contractual payment obligations;
|
•
|
Country risk - the risk that we may suffer a loss, in any given country, due to any of the following reasons: deterioration of economic conditions, political and social upheaval, nationalization and appropriation of assets, government repudiation of indebtedness, exchange controls and disruptive currency depreciation or devaluation; and
|
•
|
Settlement risk - the risk that the settlement or clearance of transactions will fail, which arises whenever the exchange of cash, securities and/or other assets is not simultaneous.
|
•
|
We measure and consolidate credit risks to each counterparty, or group of counterparties, in accordance with a “one-obligor” principle that aggregates risks across our business units;
|
•
|
ERM reviews and approves all extensions of credit, or material changes to extensions of credit (such as changes in term, collateral structure or covenants), in accordance with assigned credit-approval authorities;
|
•
|
Credit-approval authorities are assigned to individuals according to their qualifications, experience and training, and these authorities are periodically reviewed. Our largest exposures require approval by the Credit Committee, a sub-committee of the CRPC.
|
•
|
We seek to avoid or limit undue concentrations of risk. Counterparty (or groups of counterparties), industry, country and product-specific concentrations of risk are subject to frequent review and approval in accordance with our risk appetite;
|
•
|
We determine the creditworthiness of counterparties through a risk assessment, including the use of internal risk-rating methodologies;
|
•
|
We seek to review all extensions of credit and the creditworthiness of counterparties at least annually. The nature and extent of these reviews are determined by the size, nature and term of the extensions of credit and the creditworthiness of the counterparty; and
|
•
|
We subject all corporate policies and guidelines to annual review as an integral part of our periodic assessment of our risk appetite.
|
•
|
The assessment of the creditworthiness of new counterparties and, in conjunction with our risk appetite statement, the development of appropriate credit limits for our products and services, including loans, foreign exchange, securities finance, placements and repurchase agreements;
|
•
|
The use of an automated process for limit approvals for certain low-risk counterparties, as defined in our credit risk guidelines, based on the counterparty’s probability-of-default, or PD, rating class;
|
•
|
The development of approval authority matrices based on PD; riskier counterparties with higher ratings require higher levels of approval for a comparable PD and limit size compared to less risky counterparties with lower ratings;
|
•
|
The analysis of risk concentration trends using historical PD and exposure-at-default, or EAD, data;
|
•
|
The standardization of rating integrity testing by GCR using rating parameters;
|
•
|
The determination of the level of management review of short-duration advances depending on PD; riskier counterparties with higher rating class values generally trigger higher levels of management escalation for comparable short-duration advances compared to less risky counterparties with lower rating-class values;
|
•
|
The monitoring of credit facility utilization levels using EAD values and the identification of instances where counterparties have exceeded limits;
|
•
|
The aggregation and comparison of counterparty exposures with risk appetite levels to determine if businesses are maintaining appropriate risk levels; and
|
•
|
The determination of our regulatory capital requirements for the AIRB provided in the Basel framework.
|
•
|
Annual Reviews. A formal review of counterparties is conducted at least annually and includes a thorough review of operating performance, primary risk factors and our internal credit risk rating. This annual review also includes a review of current and proposed credit limits, an assessment of our ongoing risk appetite and verification that supporting legal documentation remains effective.
|
•
|
Interim Monitoring. Periodic monitoring of our largest and riskiest counterparties is undertaken more frequently, utilizing financial information, market indicators and other relevant credit and performance measures. The nature and extent of this interim monitoring is individually tailored to certain counterparties and/or industry sectors to identify material changes to the risk profile of a counterparty (or group of counterparties) and assign an updated internal risk rating in a timely manner.
|
•
|
Perform separate and objective assessments of our credit and counterparty exposures to determine the nature and extent of risk undertaken by the business units;
|
•
|
Execute periodic credit process and credit product reviews to assess the quality of credit analysis, compliance with policies, guidelines and relevant regulation, transaction structures and underwriting standards, and risk-rating integrity;
|
•
|
Identify and monitor developing counterparty, market and/or industry sector trends to limit risk of loss and protect capital;
|
•
|
Deliver regular and formal reporting to stakeholders, including exam results, identified issues and the status of requisite actions to remedy identified deficiencies;
|
•
|
Allocate resources for specialized risk assessments (on an as-needed basis); and
|
•
|
Liaise with assurance partners and regulatory personnel on matters relating to risk rating, reporting and measurement.
|
•
|
Structural liquidity management addresses liquidity by monitoring and directing the composition of our consolidated statement of condition. Structural liquidity is measured by metrics such as the percentage of total wholesale funds to consolidated total assets, and the percentage of non-government investment securities to client deposits. In addition, on a regular basis and as described below, our structural liquidity is evaluated under various stress scenarios.
|
•
|
Tactical liquidity management addresses our day-to-day funding requirements and is largely driven by changes in our primary source of funding, which are client deposits. Fluctuations in client deposits may be supplemented with short-term borrowings, repurchase agreements, FHLB products and certificates of deposit.
|
•
|
Stress testing and contingent funding planning are longer-term strategic liquidity risk management practices. Regular and ad hoc liquidity stress testing are performed under various severe but plausible scenarios at the consolidated level and at significant subsidiaries, including State Street Bank. These tests contemplate severe market and events specific to us under various time horizons and severities. Tests contemplate the impact of material changes in key funding sources, credit ratings, additional collateral requirements, contingent uses of funding, systemic shocks to the financial markets and operational failures based on market and assumptions specific to us. The stress tests evaluate the required level of funding versus available sources in an adverse environment. As stress testing contemplates potential forward-looking scenarios, results also serve
|
•
|
diverse and stable core earnings;
|
•
|
relative market position;
|
•
|
strong risk management;
|
•
|
strong capital ratios;
|
•
|
diverse liquidity sources, including the global capital markets and client deposits;
|
•
|
strong liquidity monitoring procedures; and
|
•
|
preparedness for current or future regulatory developments.
|
•
|
providing assurance for unsecured funding and depositors;
|
•
|
increasing the potential market for our debt and improving our ability to offer products;
|
•
|
serving markets; and
|
•
|
engaging in transactions in which clients value high credit ratings.
|
TABLE 31: CREDIT RATINGS
|
|||||
|
As of December 31, 2019
|
||||
|
Standard & Poor’s
|
|
Moody’s Investors Service
|
|
Fitch
|
State Street:
|
|
|
|
|
|
Senior debt
|
A
|
|
A1
|
|
AA-
|
Subordinated debt
|
A-
|
|
A2
|
|
A+
|
Junior subordinated debt
|
BBB
|
|
A3
|
|
NR
|
Preferred stock
|
BBB
|
|
Baa1
|
|
BBB
|
Outlook
|
Stable
|
|
Stable
|
|
Stable
|
State Street Bank:
|
|
|
|
|
|
Short-term deposits
|
A-1+
|
|
P-1
|
|
F1+
|
Long-term deposits
|
AA-
|
|
Aa1
|
|
AA+
|
Senior debt/Long-term issuer
|
AA-
|
|
Aa3
|
|
AA
|
Subordinated debt
|
A
|
|
Aa3
|
|
A+
|
Outlook
|
Stable
|
|
Stable
|
|
Stable
|
TABLE 32: LONG-TERM CONTRACTUAL CASH OBLIGATIONS
|
|
|
|||||||||||||||||
December 31, 2019
|
Payments Due by Period
|
||||||||||||||||||
(In millions)
|
Less than 1
year
|
|
1-3
years
|
|
4-5
years
|
|
Over 5
years
|
|
Total
|
||||||||||
Long-term debt(1)(2)
|
$
|
1,691
|
|
|
$
|
1,492
|
|
|
$
|
4,340
|
|
|
$
|
4,850
|
|
|
$
|
12,373
|
|
Operating leases
|
183
|
|
|
344
|
|
|
251
|
|
|
356
|
|
|
1,134
|
|
|||||
Finance lease obligations(2)
|
41
|
|
|
82
|
|
|
31
|
|
|
—
|
|
|
154
|
|
|||||
Tax liability
|
—
|
|
|
—
|
|
|
23
|
|
|
24
|
|
|
47
|
|
|||||
Total contractual cash obligations
|
$
|
1,915
|
|
|
$
|
1,918
|
|
|
$
|
4,645
|
|
|
$
|
5,230
|
|
|
$
|
13,708
|
|
|
|
|
|
•
|
Obligations which will be settled in cash, primarily in less than one year, such as client deposits, federal funds purchased, securities sold under repurchase agreements and other short-term borrowings. Additional information about deposits, federal funds purchased, securities sold under repurchase agreements and other short-term borrowings is provided in Note 8 to the consolidated financial statements in this Form 10-K.
|
•
|
Obligations related to derivative instruments because the derivative-related amounts recorded in our consolidated statement of condition as of December 31, 2019 did not represent the amounts that may ultimately be paid under the contracts upon settlement. Additional information about our derivative instruments is provided in Note 10 to the consolidated financial statements in this Form 10-K. We have obligations under pension and other post-retirement benefit plans, with additional information provided in Note 19 to the consolidated financial statements in this Form 10-K, which are not included in Table 32: Long-Term Contractual Cash Obligations.
|
TABLE 33: OTHER COMMERCIAL COMMITMENTS
|
|
|
|
|
|
|
|||||||||||||
|
Duration of Commitment as of December 31, 2019
|
||||||||||||||||||
(In millions)
|
Less than
1 year
|
|
1-3
years
|
|
4-5
years
|
|
Over 5
years
|
|
Total amounts
committed(1)
|
||||||||||
Indemnified securities financing
|
$
|
367,901
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
367,901
|
|
Unfunded credit facilities
|
18,737
|
|
|
6,221
|
|
|
4,312
|
|
|
427
|
|
|
29,697
|
|
|||||
Standby letters of credit
|
326
|
|
|
1,920
|
|
|
1,065
|
|
|
13
|
|
|
3,324
|
|
|||||
Purchase obligations(2)
|
90
|
|
|
162
|
|
|
19
|
|
|
20
|
|
|
291
|
|
|||||
Total commercial commitments
|
$
|
387,054
|
|
|
$
|
8,303
|
|
|
$
|
5,396
|
|
|
$
|
460
|
|
|
$
|
401,213
|
|
|
|
|
|
•
|
A common understanding of operational risk management and its supporting processes;
|
•
|
The clarification of responsibilities for the management of operational risk across our business;
|
•
|
The alignment of business priorities with risk management objectives;
|
•
|
The active management of risk and early identification of emerging risks;
|
•
|
The consistent application of policies and the collection of data for risk management and measurement; and
|
•
|
The estimation of our operational risk capital requirement.
|
•
|
The global head of Operational Risk, a member of the CRO’s executive management team, leads ERM’s corporate ORM group. ORM is responsible for the strategy, evolution and consistent implementation of our operational risk guidelines, framework and supporting tools across our business. ORM reviews and analyzes operational key risk information, events, metrics and indicators at the business unit and corporate level for purposes of risk management, reporting and escalation to the CRO, senior management and governance committees;
|
•
|
ERM’s Corporate Risk Analytics group develops and maintains operational risk capital estimation models, and ORM's Capital Analysis group calculates our required capital for operational risk;
|
•
|
ERM’s MVG independently validates the quantitative models used to measure operational risk, and ORM performs validation checks on the output of the model;
|
•
|
CIS establishes the framework, policies and related programs to measure, monitor and report on information security risks, including the effectiveness of cyber-security program protections. CIS defines and manages the enterprise-wide information security program. CIS coordinates with Information Technology, control functions and business units to support the confidentiality, integrity and availability of corporate information assets. CIS identifies and employs a risk-based methodology consistent with applicable regulatory cyber-security requirements and monitors the compliance of our systems with information security policies; and
|
•
|
Corporate Audit performs separate reviews of the application of operational risk management practices and methodologies utilized across our business.
|
•
|
The risk and control assessment program seeks to understand the risks associated with day-to-day activities, and the effectiveness of controls intended to manage potential exposures arising from these activities. These risks are typically frequent in nature but generally not severe in terms of exposure;
|
•
|
The Material Risk Identification process utilizes a bottom-up approach to identify our most significant risk exposures across all on- and off-balance sheet risk-taking activities. The program is specifically designed to consider risks that could have a material impact irrespective of their likelihood or frequency. This can include risks that may have an impact
|
•
|
The Scenario Analysis program focuses on the set of risks with the highest severity and most relevance from a capital perspective. These are generally referred to as “tail risks," and serve as important benchmarks for our loss distribution approach model (see below); they also provide inputs into stress testing; and
|
•
|
Business-specific programs to identify, assess and measure risk, including new business and product review and approval, new client screening, and, as deemed appropriate, targeted risk assessments.
|
•
|
Internal loss event data is collected from across our business in conformity with our operating loss policy that establishes the requirements for collecting and reporting individual loss events. We categorize the data into seven Basel-defined event types and further subdivide the data by business unit, as deemed appropriate. Each of these loss events are represented in a UOM which is used to estimate a specific amount of capital required for the types of loss events that fall into each specific category. Some UOMs are measured at the corporate level because they are not “business specific,” such as damage to physical assets, where the cause of an event is not primarily driven by the behavior of a single business unit. Internal losses of $500 or greater are captured, analyzed and included in the modeling approach. Loss event data is collected using a corporate-wide data collection tool, which stores the data in a Loss Event Data Repository (LEDR) to support processes related to analysis, management reporting and the calculation of required capital. Internal loss event data provides our frequency and severity information to our capital calculation process for historical loss events experienced by us.
|
•
|
External loss event data provides information with respect to loss event severity from other financial institutions to inform our capital estimation process of events in similar business units at other banking organizations. This information supplements the data pool available for use in our LDA model. Assessments of the sufficiency of internal data and the relevance of external data are completed before pooling the two data sources for use in our LDA model;
|
•
|
Scenario analysis workshops are conducted across our business to inform management of the less frequent but most severe, or “tail,” risks that the organization faces. The workshops are attended by senior business unit managers, other support and control partners and business-aligned risk management staff. The workshops are designed to capture information about the significant risks and to estimate potential exposures for individual risks should a loss event occur. The results of these workshops are used to make a comparison to our LDA model results to determine that our calculation of required capital considers relevant risk-related information; and
|
•
|
Business environment and internal control factors are gathered as part of our scenario analysis program to inform the scenario analysis workshop participants of internal loss event data and business-relevant metrics, such as risk assessment program results, along with industry loss event data and case studies where appropriate. Business environment and internal control factors are those characteristics of a bank’s internal and external operating environment that bear an exposure to operational risk. The use of this information indirectly influences our calculation of required capital by providing additional relevant data to workshop participants when reviewing specific UOM risks.
|
•
|
Third party vendor risk;
|
•
|
Business disruption and technology resiliency risk;
|
•
|
Cyber and information security risk;
|
•
|
Technology asset and configuration risk; and
|
•
|
Technology obsolescence risk.
|
•
|
Coordinating various risk assessment and risk management activities, including ERM operational risk programs;
|
•
|
Establishing, through TORC and TOPS of the Board, the enterprise level technology risk and cyber risk appetite and limits;
|
•
|
Producing enterprise level risk reporting, aggregation, dashboards, profiles and risk appetite statements;
|
•
|
Validating appropriateness of reporting of information technology risks and risk acceptance to senior management risk committees and the Board;
|
•
|
Promoting a strong technology risk culture through communication;
|
•
|
Serving as an escalation and challenge point for technology risk policy guidance, expectations and clarifications;
|
•
|
Assessing effectiveness of key enterprise information technology risk and internal control remediation programs; and
|
•
|
Providing risk oversight, challenge and monitoring for the Global Continuity and Third Party Vendor Management Program, including the collection of risk appetite, metrics and KRIs, and reviewing issue management processes and consistent program adoption.
|
•
|
A trading market risk management process led by ERM, separate from the business units' discrete activities;
|
•
|
Clearly defined responsibilities and authorities for the primary groups involved in trading market risk management;
|
•
|
A trading market risk measurement methodology that captures correlation effects and allows aggregation of market risk across risk types, markets and business lines;
|
•
|
Daily monitoring, analysis and reporting of market risk exposures associated with trading activities against market risk limits;
|
•
|
A defined limit structure and escalation process in the event of a market risk limit excess;
|
•
|
Use of VaR models to measure the one-day market risk exposure of trading positions;
|
•
|
Use of VaR as a ten-day-based regulatory capital measure of the market risk exposure of trading positions;
|
•
|
Use of non-VaR-based limits and other controls;
|
•
|
Use of stressed-VaR models, stress-testing analysis and scenario analysis to support the trading market risk measurement and management process by assessing how portfolios and global business lines perform under extreme market conditions;
|
•
|
Use of back-testing as a diagnostic tool to assess the accuracy of VaR models and other risk management techniques; and
|
•
|
A new product approval process that requires market risk teams to assess trading-related market risks and apply risk tolerance limits to proposed new products and business activities.
|
•
|
Compared to a shorter observation period, a two-year observation period is slower to reflect increases in market volatility (although temporary increases in market volatility will affect the calculation of VaR for a longer period); consequently, in periods of sudden increases in volatility or increasing volatility, in each case relative to the prior two-year period, the calculation of VaR may understate current risk;
|
•
|
Compared to a longer observation period, a two-year observation period may not reflect as many past periods of volatility in the markets, because such past volatility is no longer in the observation period; consequently, historical market scenarios of high volatility, even if similar to current or likely future market circumstances, may fall outside the two-year observation period, resulting in a potential understatement of current risk;
|
•
|
The VaR-based measure is calibrated to a specified level of confidence and does not indicate the potential magnitude of losses beyond this confidence level;
|
•
|
In certain cases, VaR-based measures approximate the impact of changes in risk factors on the values of positions and portfolios; this may happen because the number of inputs
|
•
|
The use of historical market information may not be predictive of future events, particularly those that are extreme in nature; this “backward-looking” limitation can cause VaR to understate or overstate risk;
|
•
|
The effect of extreme and rare market movements is difficult to estimate; this may result from non-linear risk sensitivities as well as the potential for actual volatility and correlation levels to differ from assumptions implicit in the VaR calculations; and
|
•
|
Intra-day risk is not captured.
|
TABLE 34: TEN-DAY VALUE-AT-RISK ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS
|
|||||||||||||||||||||||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
||||||||||||||||||||||||||||
(In thousands)
|
Year Ended
|
|
Average
|
|
Maximum
|
|
Minimum
|
|
Year Ended
|
|
Average
|
|
Maximum
|
|
Minimum
|
||||||||||||||||
Global Markets
|
$
|
9,954
|
|
|
$
|
10,235
|
|
|
$
|
26,419
|
|
|
$
|
5,880
|
|
|
$
|
10,588
|
|
|
$
|
7,354
|
|
|
$
|
19,160
|
|
|
$
|
2,967
|
|
Global Treasury
|
987
|
|
|
733
|
|
|
2,326
|
|
|
123
|
|
|
1,354
|
|
|
750
|
|
|
3,579
|
|
|
91
|
|
||||||||
Diversification
|
(1,082
|
)
|
|
(864
|
)
|
|
(4,812
|
)
|
|
(67
|
)
|
|
(1,435
|
)
|
|
(634
|
)
|
|
(3,348
|
)
|
|
205
|
|
||||||||
Total VaR
|
$
|
9,859
|
|
|
$
|
10,104
|
|
|
$
|
23,933
|
|
|
$
|
5,936
|
|
|
$
|
10,507
|
|
|
$
|
7,470
|
|
|
$
|
19,391
|
|
|
$
|
3,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
TABLE 35: TEN-DAY STRESSED VALUE-AT-RISK ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS
|
|||||||||||||||||||||||||||||||
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
||||||||||||||||||||||||||||
(In thousands)
|
Year Ended
|
|
Average
|
|
Maximum
|
|
Minimum
|
|
Year Ended
|
|
Average
|
|
Maximum
|
|
Minimum
|
||||||||||||||||
Global Markets
|
$
|
48,089
|
|
|
$
|
34,574
|
|
|
$
|
55,751
|
|
|
$
|
17,492
|
|
|
$
|
26,512
|
|
|
$
|
32,744
|
|
|
$
|
58,221
|
|
|
$
|
14,811
|
|
Global Treasury
|
5,898
|
|
|
3,454
|
|
|
8,376
|
|
|
842
|
|
|
7,683
|
|
|
3,659
|
|
|
10,177
|
|
|
342
|
|
||||||||
Diversification
|
(8,289
|
)
|
|
(3,459
|
)
|
|
(5,962
|
)
|
|
(1,734
|
)
|
|
(7,919
|
)
|
|
(4,101
|
)
|
|
(10,179
|
)
|
|
(325
|
)
|
||||||||
Total Stressed VaR
|
$
|
45,698
|
|
|
$
|
34,569
|
|
|
$
|
58,165
|
|
|
$
|
16,600
|
|
|
$
|
26,276
|
|
|
$
|
32,302
|
|
|
$
|
58,219
|
|
|
$
|
14,828
|
|
TABLE 36: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1)
|
|||||||||||||||
|
As of December 31, 2019(2)
|
|
As of December 31, 2018
|
||||||||||||
(In thousands)
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
||||||||
By component:
|
|
|
|
|
|
|
|
||||||||
Global Markets
|
$
|
5,447
|
|
|
$
|
6,266
|
|
|
$
|
2,679
|
|
|
$
|
11,850
|
|
Global Treasury
|
24
|
|
|
966
|
|
|
53
|
|
|
1,377
|
|
||||
Diversification
|
(23
|
)
|
|
(995
|
)
|
|
(39
|
)
|
|
(1,436
|
)
|
||||
Total VaR
|
$
|
5,448
|
|
|
$
|
6,237
|
|
|
$
|
2,693
|
|
|
$
|
11,791
|
|
TABLE 37: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1)
|
|||||||||||||||
|
As of December 31, 2019(2)
|
|
As of December 31, 2018
|
||||||||||||
(In thousands)
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
||||||||
By component:
|
|
|
|
|
|
|
|
||||||||
Global Markets
|
$
|
8,427
|
|
|
$
|
61,792
|
|
|
$
|
10,465
|
|
|
$
|
23,324
|
|
Global Treasury
|
59
|
|
|
6,258
|
|
|
74
|
|
|
8,202
|
|
||||
Diversification
|
(61
|
)
|
|
(8,681
|
)
|
|
(132
|
)
|
|
(7,835
|
)
|
||||
Total Stressed VaR
|
$
|
8,425
|
|
|
$
|
59,369
|
|
|
$
|
10,407
|
|
|
$
|
23,691
|
|
|
|
|
TABLE 38: KEY INTEREST RATES FOR BASELINE FORECASTS
|
|||||||||||
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
|
Fed Funds Target
|
|
10-Year Treasury
|
|
Fed Funds Target
|
|
10-Year Treasury
|
||||
Spot rates
|
1.75
|
%
|
|
1.92
|
%
|
|
2.50
|
%
|
|
2.68
|
%
|
12-month forward rates
|
1.50
|
|
|
1.95
|
|
|
3.00
|
|
|
2.99
|
|
TABLE 39: NET INTEREST INCOME SENSITIVITY
|
|||||||||||||||||||||||
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
(In millions)
|
U.S. Dollar
|
|
All Other Currencies
|
|
Total
|
|
U.S. Dollar
|
|
All Other Currencies
|
|
Total
|
||||||||||||
Rate change:
|
Benefit (Exposure)
|
|
Benefit (Exposure)
|
||||||||||||||||||||
Parallel shifts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
+100 bps shock
|
$
|
67
|
|
|
$
|
175
|
|
|
$
|
242
|
|
|
$
|
136
|
|
|
$
|
235
|
|
|
$
|
371
|
|
–100 bps shock
|
(214
|
)
|
|
81
|
|
|
(133
|
)
|
|
(210
|
)
|
|
27
|
|
|
(183
|
)
|
||||||
Steeper yield curve:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
+100 bps shift in long-end rates
|
176
|
|
|
6
|
|
|
182
|
|
|
108
|
|
|
19
|
|
|
127
|
|
||||||
-100 bps shift in short-end rates
|
(16
|
)
|
|
86
|
|
|
70
|
|
|
(68
|
)
|
|
44
|
|
|
(24
|
)
|
||||||
Flatter yield curve:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
+100 bps shift in short-end rates
|
(97
|
)
|
|
170
|
|
|
73
|
|
|
31
|
|
|
218
|
|
|
249
|
|
||||||
-100 bps shift in long-end rates
|
(184
|
)
|
|
(6
|
)
|
|
(190
|
)
|
|
(135
|
)
|
|
(18
|
)
|
|
(153
|
)
|
TABLE 40: ECONOMIC VALUE OF EQUITY SENSITIVITY
|
|||||||
|
As of December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Rate change:
|
Benefit (Exposure)
|
||||||
+200 bps shock
|
$
|
(1,966
|
)
|
|
$
|
(1,603
|
)
|
–200 bps shock
|
1,292
|
|
|
796
|
|
•
|
A model risk governance program that defines roles and responsibilities, including the authority to restrict model usage, provides policies and guidance, monitors compliance and reports regularly to the Board on the overall degree of model risk across the corporation;
|
•
|
A model development process that focuses on sound design and computational accuracy, and includes activities designed to test for robustness, stability and sensitivity to assumptions; and
|
•
|
An independent model validation function designed to verify that models are conceptually sound, computationally accurate, are performing as expected, and are in line with their design objectives.
|
•
|
Risk Management - identification, measurement, monitoring and forecasting of different types of risk and their combined impact on capital adequacy;
|
•
|
Capital management - determination of optimal capital levels; and
|
•
|
Business Management - strategic planning, budgeting, forecasting and performance management.
|
TABLE 41: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS
|
|||||||||||||||||||||||||||||||||||
|
State Street Corporation
|
|
State Street Bank
|
||||||||||||||||||||||||||||||||
(Dollars in millions)
|
Basel III Advanced Approaches December 31, 2019(1)
|
|
Basel III Standardized Approach December 31, 2019(1)
|
|
Basel III Advanced Approaches December 31, 2018(1)
|
|
Basel III Standardized Approach December 31, 2018(1)
|
|
Basel III Advanced Approaches December 31, 2019(1)
|
|
Basel III Standardized Approach December 31, 2019(1)
|
|
Basel III Advanced Approaches December 31, 2018(1)
|
|
Basel III Standardized Approach December 31, 2018(1)
|
||||||||||||||||||||
Common shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Common stock and related surplus
|
$
|
10,636
|
|
|
$
|
10,636
|
|
|
$
|
10,565
|
|
|
$
|
10,565
|
|
|
$
|
12,893
|
|
|
$
|
12,893
|
|
|
$
|
12,894
|
|
|
$
|
12,894
|
|
||||
Retained earnings
|
21,918
|
|
|
21,918
|
|
|
20,606
|
|
|
20,606
|
|
|
13,218
|
|
|
13,218
|
|
|
14,261
|
|
|
14,261
|
|
||||||||||||
Accumulated other comprehensive income (loss)
|
(870
|
)
|
|
(870
|
)
|
|
(1,332
|
)
|
|
(1,332
|
)
|
|
(654
|
)
|
|
(654
|
)
|
|
(1,112
|
)
|
|
(1,112
|
)
|
||||||||||||
Treasury stock, at cost
|
(10,209
|
)
|
|
(10,209
|
)
|
|
(8,715
|
)
|
|
(8,715
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total
|
21,475
|
|
|
21,475
|
|
|
21,124
|
|
|
21,124
|
|
|
25,457
|
|
|
25,457
|
|
|
26,043
|
|
|
26,043
|
|
||||||||||||
Regulatory capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
|
(9,112
|
)
|
|
(9,112
|
)
|
|
(9,350
|
)
|
|
(9,350
|
)
|
|
(8,839
|
)
|
|
(8,839
|
)
|
|
(9,073
|
)
|
|
(9,073
|
)
|
||||||||||||
Other adjustments(2)
|
(150
|
)
|
|
(150
|
)
|
|
(194
|
)
|
|
(194
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(29
|
)
|
|
(29
|
)
|
||||||||||||
Common equity tier 1 capital
|
12,213
|
|
|
12,213
|
|
|
11,580
|
|
|
11,580
|
|
|
16,617
|
|
|
16,617
|
|
|
16,941
|
|
|
16,941
|
|
||||||||||||
Preferred stock
|
2,962
|
|
|
2,962
|
|
|
3,690
|
|
|
3,690
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Tier 1 capital
|
15,175
|
|
|
15,175
|
|
|
15,270
|
|
|
15,270
|
|
|
16,617
|
|
|
16,617
|
|
|
16,941
|
|
|
16,941
|
|
||||||||||||
Qualifying subordinated long-term debt
|
1,095
|
|
|
1,095
|
|
|
778
|
|
|
778
|
|
|
1,099
|
|
|
1,099
|
|
|
776
|
|
|
776
|
|
||||||||||||
Allowance for loan losses
|
5
|
|
|
90
|
|
|
14
|
|
|
83
|
|
|
3
|
|
|
90
|
|
|
11
|
|
|
83
|
|
||||||||||||
Total capital
|
$
|
16,275
|
|
|
$
|
16,360
|
|
|
$
|
16,062
|
|
|
$
|
16,131
|
|
|
$
|
17,719
|
|
|
$
|
17,806
|
|
|
$
|
17,728
|
|
|
$
|
17,800
|
|
||||
Risk-weighted assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Credit risk(3)
|
$
|
54,763
|
|
|
$
|
102,367
|
|
|
$
|
47,738
|
|
|
$
|
97,303
|
|
|
$
|
51,610
|
|
|
$
|
98,979
|
|
|
$
|
45,565
|
|
|
$
|
94,776
|
|
||||
Operational risk(4)
|
47,963
|
|
|
NA
|
|
|
46,060
|
|
|
NA
|
|
|
44,138
|
|
|
NA
|
|
|
44,494
|
|
|
NA
|
|
||||||||||||
Market risk
|
1,638
|
|
|
1,638
|
|
|
1,517
|
|
|
1,517
|
|
|
1,638
|
|
|
1,638
|
|
|
1,517
|
|
|
1,517
|
|
||||||||||||
Total risk-weighted assets
|
$
|
104,364
|
|
|
$
|
104,005
|
|
|
$
|
95,315
|
|
|
$
|
98,820
|
|
|
$
|
97,386
|
|
|
$
|
100,617
|
|
|
$
|
91,576
|
|
|
$
|
96,293
|
|
||||
Adjusted quarterly average assets
|
$
|
219,624
|
|
|
$
|
219,624
|
|
|
$
|
211,924
|
|
|
$
|
211,924
|
|
|
$
|
216,397
|
|
|
$
|
216,397
|
|
|
$
|
209,413
|
|
|
$
|
209,413
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Capital Ratios:
|
Minimum Requirement 2019 (including G-SIB and CCB)(5)
|
Minimum Requirement 2018 (including G-SIB and CCB)(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common equity tier 1 capital
|
8.5
|
%
|
7.5
|
%
|
11.7
|
%
|
|
11.7
|
%
|
|
12.1
|
%
|
|
11.7
|
%
|
|
17.1
|
%
|
|
16.5
|
%
|
|
18.5
|
%
|
|
17.6
|
%
|
||||||||
Tier 1 capital
|
10.0
|
|
9.0
|
|
14.5
|
|
|
14.6
|
|
|
16.0
|
|
|
15.5
|
|
|
17.1
|
|
|
16.5
|
|
|
18.5
|
|
|
17.6
|
|
||||||||
Total capital
|
12.0
|
|
11.0
|
|
15.6
|
|
|
15.7
|
|
|
16.9
|
|
|
16.3
|
|
|
18.2
|
|
|
17.7
|
|
|
19.4
|
|
|
18.5
|
|
|
|
|
|
TABLE 42: CAPITAL ROLL-FORWARD
|
|||||||||||||||
(In millions)
|
Basel III Advanced Approaches December 31, 2019
|
|
Basel III Standardized Approach December, 31, 2019
|
|
Basel III Advanced Approaches December 31, 2018(1)
|
|
Basel III Standardized Approach December 31, 2018(1)
|
||||||||
Common equity tier 1 capital:
|
|
|
|
|
|
|
|
||||||||
Common equity tier 1 capital balance, beginning of period
|
$
|
11,580
|
|
|
$
|
11,580
|
|
|
$
|
12,204
|
|
|
$
|
12,204
|
|
Net income
|
2,242
|
|
|
2,242
|
|
|
2,599
|
|
|
2,599
|
|
||||
Changes in treasury stock, at cost
|
(1,494
|
)
|
|
(1,494
|
)
|
|
314
|
|
|
314
|
|
||||
Dividends declared
|
(939
|
)
|
|
(939
|
)
|
|
(853
|
)
|
|
(853
|
)
|
||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
|
238
|
|
|
238
|
|
|
(2,473
|
)
|
|
(2,473
|
)
|
||||
Effect of certain items in accumulated other comprehensive income (loss)
|
462
|
|
|
462
|
|
|
(360
|
)
|
|
(360
|
)
|
||||
Other adjustments
|
124
|
|
|
124
|
|
|
149
|
|
|
149
|
|
||||
Changes in common equity tier 1 capital
|
633
|
|
|
633
|
|
|
(624
|
)
|
|
(624
|
)
|
||||
Common equity tier 1 capital balance, end of period
|
12,213
|
|
|
12,213
|
|
|
11,580
|
|
|
11,580
|
|
||||
Additional tier 1 capital:
|
|
|
|
|
|
|
|
||||||||
Tier 1 capital balance, beginning of period
|
15,270
|
|
|
15,270
|
|
|
15,382
|
|
|
15,382
|
|
||||
Change in common equity tier 1 capital
|
633
|
|
|
633
|
|
|
(624
|
)
|
|
(624
|
)
|
||||
Net issuance of preferred stock
|
(728
|
)
|
|
(728
|
)
|
|
494
|
|
|
494
|
|
||||
Other adjustments
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
||||
Changes in tier 1 capital
|
(95
|
)
|
|
(95
|
)
|
|
(112
|
)
|
|
(112
|
)
|
||||
Tier 1 capital balance, end of period
|
15,175
|
|
|
15,175
|
|
|
15,270
|
|
|
15,270
|
|
||||
Tier 2 capital:
|
|
|
|
|
|
|
|
||||||||
Tier 2 capital balance, beginning of period
|
792
|
|
|
861
|
|
|
985
|
|
|
1,053
|
|
||||
Net issuance and changes in long-term debt qualifying as tier 2
|
317
|
|
|
317
|
|
|
(202
|
)
|
|
(202
|
)
|
||||
Changes in Allowance for loan losses and other
|
(9
|
)
|
|
7
|
|
|
10
|
|
|
11
|
|
||||
Change in other adjustments
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Changes in tier 2 capital
|
308
|
|
|
324
|
|
|
(193
|
)
|
|
(192
|
)
|
||||
Tier 2 capital balance, end of period
|
1,100
|
|
|
1,185
|
|
|
792
|
|
|
861
|
|
||||
Total capital:
|
|
|
|
|
|
|
|
||||||||
Total capital balance, beginning of period
|
16,062
|
|
|
16,131
|
|
|
16,367
|
|
|
16,435
|
|
||||
Changes in tier 1 capital
|
(95
|
)
|
|
(95
|
)
|
|
(112
|
)
|
|
(112
|
)
|
||||
Changes in tier 2 capital
|
308
|
|
|
324
|
|
|
(193
|
)
|
|
(192
|
)
|
||||
Total capital balance, end of period
|
$
|
16,275
|
|
|
$
|
16,360
|
|
|
$
|
16,062
|
|
|
$
|
16,131
|
|
|
|
|
|
TABLE 43: ADVANCED & STANDARDIZED APPROACHES RISK-WEIGHTED ASSETS ROLL-FORWARD
|
|||||||||||||||
(In millions)
|
Basel III
Advanced Approaches December 31, 2019 |
|
Basel III
Advanced Approaches December 31, 2018 |
|
Basel III Standardized Approach December 31, 2019
|
|
Basel III Standardized Approach December 31, 2018
|
||||||||
Total risk-weighted assets, beginning of period(1)
|
$
|
95,315
|
|
|
$
|
99,156
|
|
|
$
|
98,820
|
|
|
$
|
102,683
|
|
Changes in credit risk-weighted assets:
|
|
|
|
|
|
|
|
||||||||
Net increase (decrease) in investment securities-wholesale
|
3,470
|
|
|
(940
|
)
|
|
3,882
|
|
|
(2,887
|
)
|
||||
Net increase (decrease) in loans
|
2,586
|
|
|
(12
|
)
|
|
809
|
|
|
3,104
|
|
||||
Net increase (decrease) in securitization exposures
|
(140
|
)
|
|
(3,666
|
)
|
|
(140
|
)
|
|
(3,666
|
)
|
||||
Net increase (decrease) in repo-style transaction exposures
|
(45
|
)
|
|
(19
|
)
|
|
365
|
|
|
(3,156
|
)
|
||||
Net increase (decrease) in over-the-counter derivatives exposures
|
26
|
|
|
(1,170
|
)
|
|
(1,124
|
)
|
|
(46
|
)
|
||||
Net increase (decrease) in all other(2)(3)
|
1,128
|
|
|
1,545
|
|
|
1,272
|
|
|
2,605
|
|
||||
Net increase (decrease) in credit risk-weighted assets
|
7,025
|
|
|
(4,262
|
)
|
|
5,064
|
|
|
(4,046
|
)
|
||||
Net increase (decrease) in market risk-weighted assets
|
121
|
|
|
183
|
|
|
121
|
|
|
183
|
|
||||
Net increase (decrease) in operational risk-weighted assets
|
1,903
|
|
|
238
|
|
|
N/A
|
|
|
N/A
|
|
||||
Total risk-weighted assets, end of period
|
$
|
104,364
|
|
|
$
|
95,315
|
|
|
$
|
104,005
|
|
|
$
|
98,820
|
|
|
|
|
TABLE 44: TIER 1 AND SUPPLEMENTARY LEVERAGE RATIOS
|
|||||||
(Dollars in millions)
|
December 31, 2019
|
|
December 31, 2018
|
||||
State Street:
|
|
|
|
||||
Tier 1 capital
|
$
|
15,175
|
|
|
$
|
15,270
|
|
Average assets
|
228,886
|
|
|
221,350
|
|
||
Less: adjustments for deductions from tier 1 capital
|
(9,262
|
)
|
|
(9,426
|
)
|
||
Adjusted average assets
|
219,624
|
|
|
211,924
|
|
||
Off-balance sheet exposures
|
28,238
|
|
|
29,279
|
|
||
Total assets for SLR
|
$
|
247,862
|
|
|
$
|
241,203
|
|
Tier 1 leverage ratio(1)
|
6.9
|
%
|
|
7.2
|
%
|
||
Supplementary leverage ratio
|
6.1
|
|
|
6.3
|
|
||
|
|
|
|
||||
State Street Bank:
|
|
|
|
||||
Tier 1 capital
|
$
|
16,617
|
|
|
$
|
16,941
|
|
Average assets
|
225,234
|
|
|
218,402
|
|
||
Less: adjustments for deductions from tier 1 capital
|
(8,837
|
)
|
|
(8,989
|
)
|
||
Adjusted average assets
|
216,397
|
|
|
209,413
|
|
||
Off-balance sheet exposures
|
28,266
|
|
|
29,368
|
|
||
Total assets for SLR
|
$
|
244,663
|
|
|
$
|
238,781
|
|
Tier 1 leverage ratio (1)
|
7.7
|
%
|
|
8.1
|
%
|
||
Supplementary leverage ratio
|
6.8
|
|
|
7.1
|
|
|
|
|
TABLE 45: TOTAL LOSS-ABSORBING CAPACITY
|
||||||||||||||
|
As of December 31, 2019
|
|||||||||||||
(Dollars in millions)
|
Actual
|
|
Requirement(1)
|
|||||||||||
Total loss-absorbing capacity (eligible Tier 1 regulatory capacity and long term debt):
|
|
|
|
|
|
|
|
|||||||
Risk-weighted assets
|
$
|
25,857
|
|
|
24.8
|
%
|
|
$
|
22,438
|
|
|
21.5
|
%
|
|
Supplemental leverage ratio
|
25,857
|
|
|
10.4
|
|
|
23,547
|
|
|
9.5
|
|
|||
Long term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Risk-weighted assets
|
9,936
|
|
|
9.5
|
|
|
7,827
|
|
|
7.5
|
|
|||
Supplemental leverage ratio
|
9,936
|
|
|
4.0
|
|
|
11,154
|
|
|
4.5
|
|
|
|
|
|
TABLE 46: PREFERRED STOCK ISSUED AND OUTSTANDING
|
|||||||||||||||||||||||||||
Preferred Stock(2):
|
Issuance Date
|
|
Depositary Shares Issued
|
|
Amount outstanding (in millions)
|
|
Ownership Interest Per Depositary Share
|
|
Liquidation Preference Per Share
|
|
Liquidation Preference Per Depositary Share
|
|
Per Annum Dividend Rate
|
|
Dividend Payment Frequency
|
|
Carrying Value as of December 31, 2019
(In millions) |
|
Redemption Date(1)
|
||||||||
Series C
|
August 2012
|
|
20,000,000
|
|
$
|
500
|
|
|
1/4,000th
|
|
$
|
100,000
|
|
|
$
|
25
|
|
|
5.25%
|
|
Quarterly: March, June, September and December
|
|
$
|
491
|
|
|
September 15, 2017
|
Series D
|
February 2014
|
|
30,000,000
|
|
750
|
|
|
1/4,000th
|
|
100,000
|
|
|
25
|
|
|
5.90% to but excluding March 15, 2024, then a floating rate equal to the three-month LIBOR plus 3.108%
|
|
Quarterly: March, June, September and December
|
|
742
|
|
|
March 15, 2024
|
||||
Series F
|
May 2015
|
|
750,000
|
|
750
|
|
|
1/100th
|
|
100,000
|
|
|
1,000
|
|
|
5.25% to but excluding September 15, 2020, then a floating rate equal to the three-month LIBOR plus 3.597%
|
|
Semi-annually: March and September
|
|
742
|
|
|
September 15, 2020
|
||||
Series G
|
April 2016
|
|
20,000,000
|
|
500
|
|
|
1/4,000th
|
|
100,000
|
|
|
25
|
|
|
5.35% to but excluding March 15, 2026, then a floating rate equal to the three-month LIBOR plus 3.709%
|
|
Quarterly: March, June, September and December
|
|
493
|
|
|
March 15, 2026
|
||||
Series H
|
September 2018
|
|
500,000
|
|
500
|
|
|
1/100th
|
|
100,000
|
|
|
1,000
|
|
|
5.625% to but excluding December 15, 2023, then a floating rate equal to the three-month LIBOR plus 2.539%
|
|
Semi-annually: June and December
|
|
494
|
|
|
December 15, 2023
|
|
|
|
|
TABLE 47: PREFERRED STOCK DIVIDENDS
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
(Dollars in millions, except per share amounts)
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
|
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
|
||||||||||||
Preferred Stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series C
|
$
|
5,250
|
|
|
$
|
1.32
|
|
|
$
|
26
|
|
|
$
|
5,250
|
|
|
$
|
1.32
|
|
|
$
|
26
|
|
Series D
|
5,900
|
|
|
1.48
|
|
|
44
|
|
|
5,900
|
|
|
1.48
|
|
|
44
|
|
||||||
Series E
|
6,000
|
|
|
1.52
|
|
|
45
|
|
|
6,000
|
|
|
1.52
|
|
|
45
|
|
||||||
Series F
|
5,250
|
|
|
52.50
|
|
|
40
|
|
|
5,250
|
|
|
52.50
|
|
|
40
|
|
||||||
Series G
|
5,352
|
|
|
1.32
|
|
|
27
|
|
|
5,352
|
|
|
1.32
|
|
|
27
|
|
||||||
Series H
|
5,625
|
|
|
56.25
|
|
|
28
|
|
|
1,219
|
|
|
12.18
|
|
|
6
|
|
||||||
Total
|
|
|
|
|
$
|
210
|
|
|
|
|
|
|
$
|
188
|
|
TABLE 48: SHARES REPURCHASED
|
||||||||||
|
Year Ended December 31, 2019
|
|||||||||
|
Shares Acquired
(In millions) |
|
Average Cost per Share
|
|
Total Acquired
(In millions) |
|||||
2018 Program
|
8.8
|
|
|
$
|
67.97
|
|
|
$
|
600
|
|
2019 Program
|
16.1
|
|
|
62.28
|
|
|
1,000
|
|
||
Total
|
24.9
|
|
|
64.30
|
|
|
$
|
1,600
|
|
TABLE 49: COMMON STOCK DIVIDENDS
|
|||||||||||||||
|
Years Ended December 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Dividends Declared per Share
|
|
Total
(In millions) |
|
Dividends Declared per Share
|
|
Total
(In millions) |
||||||||
Common Stock
|
$
|
1.98
|
|
|
$
|
728
|
|
|
$
|
1.78
|
|
|
$
|
665
|
|
|
Servicing Fee Revenue
|
Description of the Matter
|
Revenue recognized by the Corporation as servicing fees was $5.1 billion for the year ended December 31, 2019. As disclosed in Notes 24 and 25 of the consolidated financial statements, servicing fee revenue involves revenue streams from various products which include custody, product and participant level accounting, transfer agency, daily pricing and administration, master trust and master custody, depotbank services (a fund oversight role created by non-US regulation), record-keeping, cash management, and investment manager operations outsourcing. The Corporation’s servicing fee revenue involves a significant volume of contracts and transactions and is sourced from multiple systems and processes across different business teams and geographies.
Auditing servicing fee revenue was complex and involved significant audit effort due to the non-standard nature of the Corporation’s contracts, the volume of contracts, the impact of contract renegotiations on accrued servicing fees, and the number of different processes used to recognize revenue.
|
How We Addressed the Matter in Our Audit
|
We identified and obtained an understanding of the processes used by the Corporation to recognize revenue transactions. We evaluated the design and tested the operating effectiveness of controls over the Corporation’s processes for recognizing servicing fee revenue, including, among others, controls over the review of client contracts, the calculations of the key drivers of revenue (e.g., assets under custody) and the flow of this information from the business teams negotiating contract amendments to the department accruing revenue.
Among other procedures, to test servicing fee revenue, we selected a sample of client contracts and analyzed the contracts to determine whether terms that may have an impact on revenue recognition, including performance obligations and specified fees, were identified and properly considered in the evaluation of the accounting for the contracts and reperformed the calculation of revenue for a sample of revenue transactions. We also agreed the amounts recognized to source documents and tested the mathematical accuracy of the recorded revenue. We inquired of the business teams involved in contract negotiations for a selection of clients to assess the state of those negotiations and any effect on accrued servicing fees. We obtained third party confirmation of the client balance due for a sample of servicing fees receivable.
|
|
Years Ended December 31,
|
||||||||||||
(Dollars in millions, except per share amounts)
|
2019
|
|
2018
|
|
2017
|
||||||||
Fee revenue:
|
|
|
|
|
|
||||||||
Servicing fees
|
$
|
5,074
|
|
|
$
|
5,421
|
|
|
$
|
5,365
|
|
||
Management fees
|
1,771
|
|
|
1,851
|
|
|
1,616
|
|
|||||
Foreign exchange trading services
|
1,111
|
|
|
1,201
|
|
|
1,071
|
|
|||||
Securities finance
|
471
|
|
|
543
|
|
|
606
|
|
|||||
Software and processing fees
|
720
|
|
|
438
|
|
|
343
|
|
|||||
Total fee revenue
|
9,147
|
|
|
9,454
|
|
|
9,001
|
|
|||||
Net interest income:
|
|
|
|
|
|
||||||||
Interest income
|
3,941
|
|
|
3,662
|
|
|
2,908
|
|
|||||
Interest expense
|
1,375
|
|
|
991
|
|
|
604
|
|
|||||
Net interest income
|
2,566
|
|
|
2,671
|
|
|
2,304
|
|
|||||
Other income:
|
|
|
|
|
|
||||||||
Gains (losses) from sales of available-for-sale securities, net
|
(1
|
)
|
|
9
|
|
|
(39
|
)
|
|||||
Other income
|
44
|
|
|
(3
|
)
|
|
—
|
|
|||||
Total other income
|
43
|
|
—
|
|
6
|
|
—
|
|
(39
|
)
|
|||
Total revenue
|
11,756
|
|
|
12,131
|
|
|
11,266
|
|
|||||
Provision for loan losses
|
10
|
|
|
15
|
|
|
2
|
|
|||||
Expenses:
|
|
|
|
|
|
||||||||
Compensation and employee benefits
|
4,541
|
|
|
4,780
|
|
|
4,394
|
|
|||||
Information systems and communications
|
1,465
|
|
|
1,324
|
|
|
1,167
|
|
|||||
Transaction processing services
|
983
|
|
|
985
|
|
|
838
|
|
|||||
Occupancy
|
470
|
|
|
500
|
|
|
461
|
|
|||||
Acquisition and restructuring costs
|
77
|
|
|
24
|
|
|
266
|
|
|||||
Amortization of other intangible assets
|
236
|
|
|
226
|
|
|
214
|
|
|||||
Other
|
1,262
|
|
|
1,176
|
|
|
929
|
|
|||||
Total expenses
|
9,034
|
|
|
9,015
|
|
|
8,269
|
|
|||||
Income before income tax expense
|
2,712
|
|
|
3,101
|
|
|
2,995
|
|
|||||
Income tax expense
|
470
|
|
|
508
|
|
|
839
|
|
|||||
Net income
|
$
|
2,242
|
|
|
$
|
2,593
|
|
|
$
|
2,156
|
|
||
Net income available to common shareholders
|
$
|
2,009
|
|
|
$
|
2,404
|
|
|
$
|
1,972
|
|
||
Earnings per common share:
|
|
|
|
|
|
||||||||
Basic
|
$
|
5.43
|
|
|
$
|
6.46
|
|
|
$
|
5.26
|
|
||
Diluted
|
5.38
|
|
|
6.39
|
|
|
5.19
|
|
|||||
Average common shares outstanding (in thousands):
|
|
|
|
|
|
||||||||
Basic
|
369,911
|
|
|
371,983
|
|
|
374,793
|
|
|||||
Diluted
|
373,666
|
|
|
376,476
|
|
|
380,213
|
|
|||||
Cash dividends declared per common share
|
$
|
1.98
|
|
|
$
|
1.78
|
|
|
$
|
1.60
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
2,242
|
|
|
$
|
2,593
|
|
|
$
|
2,156
|
|
Other comprehensive income (loss), net of related taxes:
|
|
|
|
|
|
||||||
Foreign currency translation, net of related taxes of $2, ($8) and $21, respectively
|
(9
|
)
|
|
(67
|
)
|
|
900
|
|
|||
Net unrealized gains (losses) on available-for-sale securities, net of reclassification adjustment and net of related taxes of $212, ($134) and $272, respectively
|
545
|
|
|
(302
|
)
|
|
367
|
|
|||
Net unrealized gains (losses) on available-for-sale securities designated in fair value hedges, net of related taxes of $6, $9 and $16, respectively
|
18
|
|
|
24
|
|
|
22
|
|
|||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of $1, $2 and $3, respectively
|
1
|
|
|
4
|
|
|
3
|
|
|||
Net unrealized gains (losses) on cash flow hedges, net of related taxes of $9, ($17) and ($181), respectively
|
25
|
|
|
(33
|
)
|
|
(285
|
)
|
|||
Net unrealized gains (losses) on retirement plans, net of related taxes of ($8), $8 and $8, respectively
|
(16
|
)
|
|
27
|
|
|
24
|
|
|||
Other comprehensive income (loss)
|
564
|
|
|
(347
|
)
|
|
1,031
|
|
|||
Total comprehensive income
|
$
|
2,806
|
|
|
$
|
2,246
|
|
|
$
|
3,187
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
(Dollars in millions, except per share amounts)
|
|
|
|
||||
Assets:
|
|
|
|
||||
Cash and due from banks
|
$
|
3,302
|
|
|
$
|
3,212
|
|
Interest-bearing deposits with banks
|
68,965
|
|
|
73,040
|
|
||
Securities purchased under resale agreements
|
1,487
|
|
|
4,679
|
|
||
Trading account assets
|
914
|
|
|
860
|
|
||
Investment securities available-for-sale
|
53,815
|
|
|
45,148
|
|
||
Investment securities held-to-maturity (fair value of $42,157 and $41,351)
|
41,782
|
|
|
41,914
|
|
||
Loans (less allowance for losses of $74 and $67)
|
26,235
|
|
|
25,722
|
|
||
Premises and equipment (net of accumulated depreciation of $4,367 and $4,152)
|
2,282
|
|
|
2,214
|
|
||
Accrued interest and fees receivable
|
3,231
|
|
|
3,203
|
|
||
Goodwill
|
7,556
|
|
|
7,446
|
|
||
Other intangible assets
|
2,030
|
|
|
2,369
|
|
||
Other assets
|
34,011
|
|
|
34,789
|
|
||
Total assets
|
$
|
245,610
|
|
|
$
|
244,596
|
|
Liabilities:
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Non-interest-bearing
|
$
|
34,031
|
|
|
$
|
44,804
|
|
Interest-bearing - U.S.
|
77,504
|
|
|
66,235
|
|
||
Interest-bearing - non-U.S.
|
70,337
|
|
|
69,321
|
|
||
Total deposits
|
181,872
|
|
|
180,360
|
|
||
Securities sold under repurchase agreements
|
1,102
|
|
|
1,082
|
|
||
Other short-term borrowings
|
839
|
|
|
3,092
|
|
||
Accrued expenses and other liabilities
|
24,857
|
|
|
24,232
|
|
||
Long-term debt
|
12,509
|
|
|
11,093
|
|
||
Total liabilities
|
221,179
|
|
|
219,859
|
|
||
Commitments, guarantees and contingencies (Notes 12 and 13)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, no par, 3,500,000 shares authorized:
|
|
|
|
||||
Series C, 5,000 shares issued and outstanding
|
491
|
|
|
491
|
|
||
Series D, 7,500 shares issued and outstanding
|
742
|
|
|
742
|
|
||
Series E, 7,500 shares issued and outstanding
|
—
|
|
|
728
|
|
||
Series F, 7,500 shares issued and outstanding
|
742
|
|
|
742
|
|
||
Series G, 5,000 shares issued and outstanding
|
493
|
|
|
493
|
|
||
Series H, 5,000 shares issued and outstanding
|
494
|
|
|
494
|
|
||
Common stock, $1 par, 750,000,000 shares authorized:
|
|
|
|
||||
503,879,642 and 503,879,642 shares issued, and 357,389,416 and 379,946,724 shares outstanding
|
504
|
|
|
504
|
|
||
Surplus
|
10,132
|
|
|
10,061
|
|
||
Retained earnings
|
21,918
|
|
|
20,553
|
|
||
Accumulated other comprehensive income (loss)
|
(876
|
)
|
|
(1,356
|
)
|
||
Treasury stock, at cost (146,490,226 and 123,932,918 shares)
|
(10,209
|
)
|
|
(8,715
|
)
|
||
Total shareholders’ equity
|
24,431
|
|
|
24,737
|
|
||
Total liabilities and shareholders' equity
|
$
|
245,610
|
|
|
$
|
244,596
|
|
(Dollars in millions, except per share amounts, shares in thousands)
|
Preferred
Stock
|
|
Common Stock
|
|
Surplus
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury Stock
|
|
Total
|
||||||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||
Balance at December 31, 2016
|
$
|
3,196
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
9,782
|
|
|
$
|
17,433
|
|
|
$
|
(2,040
|
)
|
|
121,941
|
|
|
$
|
(7,682
|
)
|
|
$
|
21,193
|
|
Net income
|
|
|
|
|
|
|
|
|
2,156
|
|
|
|
|
|
|
|
|
2,156
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
1,031
|
|
|
|
|
|
|
1,031
|
|
||||||||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Common stock - $1.60 per share
|
|
|
|
|
|
|
|
|
(596
|
)
|
|
|
|
|
|
|
|
(596
|
)
|
||||||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
(182
|
)
|
|
|
|
|
|
|
|
(182
|
)
|
||||||||||||||
Common stock acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
16,788
|
|
|
(1,450
|
)
|
|
(1,450
|
)
|
|||||||||||||
Common stock awards exercised
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
(2,503
|
)
|
|
104
|
|
|
120
|
|
||||||||||||
Other
|
|
|
|
|
|
|
1
|
|
|
(2
|
)
|
|
|
|
4
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||||||||
Balance at December 31, 2017
|
$
|
3,196
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
9,799
|
|
|
$
|
18,809
|
|
|
$
|
(1,009
|
)
|
|
136,230
|
|
|
$
|
(9,029
|
)
|
|
$
|
22,270
|
|
Net income
|
|
|
|
|
|
|
|
|
2,593
|
|
|
|
|
|
|
|
|
2,593
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
(347
|
)
|
|
|
|
|
|
(347
|
)
|
||||||||||||||
Preferred stock issued
|
494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
494
|
|
||||||||||||||
Common stock issued
|
|
|
|
|
|
|
586
|
|
|
|
|
|
|
(13,244
|
)
|
|
564
|
|
|
1,150
|
|
||||||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Common stock - $1.78 per share
|
|
|
|
|
|
|
|
|
(665
|
)
|
|
|
|
|
|
|
|
(665
|
)
|
||||||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
(188
|
)
|
|
|
|
|
|
|
|
(188
|
)
|
||||||||||||||
Common stock acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
3,324
|
|
|
(350
|
)
|
|
(350
|
)
|
|||||||||||||
Common stock awards exercised
|
|
|
|
|
|
|
44
|
|
|
|
|
|
|
(2,389
|
)
|
|
101
|
|
|
145
|
|
||||||||||||
Other
|
|
|
|
|
|
|
(368
|
)
|
|
4
|
|
|
|
|
12
|
|
|
(1
|
)
|
|
(365
|
)
|
|||||||||||
Balance at December 31, 2018
|
$
|
3,690
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
10,061
|
|
|
$
|
20,553
|
|
|
$
|
(1,356
|
)
|
|
123,933
|
|
|
$
|
(8,715
|
)
|
|
$
|
24,737
|
|
Reclassification of certain tax effects(1)
|
|
|
|
|
|
|
|
|
84
|
|
|
(84
|
)
|
|
|
|
|
|
—
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
|
|
2,242
|
|
|
|
|
|
|
|
|
2,242
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
564
|
|
|
|
|
|
|
564
|
|
||||||||||||||
Preferred stock redeemed
|
(728
|
)
|
|
|
|
|
|
|
|
(22
|
)
|
|
|
|
|
|
|
|
(750
|
)
|
|||||||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Common stock - $1.98 per share
|
|
|
|
|
|
|
|
|
(728
|
)
|
|
|
|
|
|
|
|
(728
|
)
|
||||||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
(210
|
)
|
|
|
|
|
|
|
|
(210
|
)
|
||||||||||||||
Common stock acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
24,884
|
|
|
(1,600
|
)
|
|
(1,600
|
)
|
|||||||||||||
Common stock awards exercised
|
|
|
|
|
|
|
95
|
|
|
|
|
|
|
(2,295
|
)
|
|
103
|
|
|
198
|
|
||||||||||||
Other
|
|
|
|
|
|
|
(24
|
)
|
|
(1
|
)
|
|
|
|
(32
|
)
|
|
3
|
|
|
(22
|
)
|
|||||||||||
Balance at December 31, 2019
|
$
|
2,962
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
10,132
|
|
|
$
|
21,918
|
|
|
$
|
(876
|
)
|
|
146,490
|
|
|
$
|
(10,209
|
)
|
|
$
|
24,431
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,242
|
|
|
$
|
2,593
|
|
|
$
|
2,156
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Deferred income tax expense (benefit)
|
(130
|
)
|
|
(136
|
)
|
|
92
|
|
|||
Amortization of other intangible assets
|
236
|
|
|
226
|
|
|
214
|
|
|||
Other non-cash adjustments for depreciation, amortization and accretion, net
|
1,101
|
|
|
977
|
|
|
871
|
|
|||
Losses (gains) related to investment securities, net
|
1
|
|
|
(6
|
)
|
|
39
|
|
|||
Change in trading account assets, net
|
(54
|
)
|
|
233
|
|
|
(69
|
)
|
|||
Change in accrued interest and fees receivable, net
|
(28
|
)
|
|
26
|
|
|
(455
|
)
|
|||
Change in collateral deposits, net
|
287
|
|
|
7,326
|
|
|
1,819
|
|
|||
Change in unrealized losses (gains) on foreign exchange derivatives, net
|
2,034
|
|
|
(1,836
|
)
|
|
3,267
|
|
|||
Change in other assets, net
|
(713
|
)
|
|
(22
|
)
|
|
(1,334
|
)
|
|||
Change in accrued expenses and other liabilities, net
|
294
|
|
|
394
|
|
|
33
|
|
|||
Other, net
|
420
|
|
|
400
|
|
|
307
|
|
|||
Net cash provided by operating activities
|
5,690
|
|
|
10,175
|
|
|
6,940
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Net decrease (increase) in interest-bearing deposits with banks
|
4,075
|
|
|
(5,813
|
)
|
|
3,708
|
|
|||
Net decrease (increase) in securities purchased under resale agreements
|
3,192
|
|
|
(1,438
|
)
|
|
(1,285
|
)
|
|||
Proceeds from sales of available-for-sale securities
|
5,642
|
|
|
26,082
|
|
|
12,439
|
|
|||
Proceeds from maturities of available-for-sale securities
|
20,407
|
|
|
14,645
|
|
|
28,878
|
|
|||
Purchases of available-for-sale securities
|
(38,164
|
)
|
|
(31,814
|
)
|
|
(34,841
|
)
|
|||
Proceeds from maturities of held-to-maturity securities
|
10,390
|
|
|
6,296
|
|
|
4,028
|
|
|||
Purchases of held-to-maturity securities
|
(6,938
|
)
|
|
(6,539
|
)
|
|
(8,772
|
)
|
|||
Net (increase) in loans and leases
|
(519
|
)
|
|
(2,461
|
)
|
|
(3,511
|
)
|
|||
Business acquisitions, net of cash acquired
|
(54
|
)
|
|
(2,595
|
)
|
|
—
|
|
|||
Purchases of equity investments and other long-term assets
|
(647
|
)
|
|
(326
|
)
|
|
(233
|
)
|
|||
Purchases of premises and equipment, net
|
(730
|
)
|
|
(609
|
)
|
|
(637
|
)
|
|||
Proceeds from sale of joint venture investment
|
—
|
|
|
—
|
|
|
172
|
|
|||
Other, net
|
720
|
|
|
76
|
|
|
102
|
|
|||
Net cash (used in) provided by investing activities
|
(2,626
|
)
|
|
(4,496
|
)
|
|
48
|
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Net (decrease) increase in time deposits
|
(11,255
|
)
|
|
6,673
|
|
|
(15,306
|
)
|
|||
Net increase (decrease) in all other deposits
|
12,767
|
|
|
(11,209
|
)
|
|
13,040
|
|
|||
Net (decrease) increase in other short-term borrowings
|
(2,233
|
)
|
|
188
|
|
|
(1,999
|
)
|
|||
Proceeds from issuance of long-term debt, net of issuance costs
|
1,495
|
|
|
995
|
|
|
747
|
|
|||
Payments for long-term debt and obligations under finance leases
|
(402
|
)
|
|
(1,461
|
)
|
|
(493
|
)
|
|||
Payments for redemption of preferred stock
|
(750
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of preferred stock, net of issuance costs
|
—
|
|
|
495
|
|
|
—
|
|
|||
Proceeds from issuance of common stock, net of issuance costs
|
—
|
|
|
1,150
|
|
|
—
|
|
|||
Repurchases of common stock
|
(1,585
|
)
|
|
(350
|
)
|
|
(1,292
|
)
|
|||
Excess tax benefit related to stock-based compensation
|
—
|
|
|
—
|
|
|
|
|
|||
Repurchases of common stock for employee tax withholding
|
(81
|
)
|
|
(124
|
)
|
|
(126
|
)
|
|||
Payments for cash dividends
|
(930
|
)
|
|
(828
|
)
|
|
(768
|
)
|
|||
Other, net
|
—
|
|
|
—
|
|
|
9
|
|
|||
Net cash (used in) financing activities
|
(2,974
|
)
|
|
(4,471
|
)
|
|
(6,188
|
)
|
|||
Net increase
|
90
|
|
|
1,208
|
|
|
800
|
|
|||
Cash and due from banks at beginning of period
|
3,212
|
|
|
2,004
|
|
|
1,204
|
|
|||
Cash and due from banks at end of period
|
$
|
3,302
|
|
|
$
|
3,212
|
|
|
$
|
2,004
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
1,382
|
|
|
$
|
981
|
|
|
$
|
593
|
|
Income taxes paid, net
|
510
|
|
|
549
|
|
|
345
|
|
Relevant standards that were recently issued but not yet adopted as of December 31, 2019:
|
|||
Standard
|
Description
|
Date of Adoption
|
Effects on the financial statements or other significant matters
|
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
The standard, and its related amendments, replaces the existing incurred loss impairment guidance and requires immediate recognition of expected credit losses for financial assets carried at amortized cost, including trade and other receivables, loans and commitments, held-to-maturity debt securities and other financial assets, held at the reporting date to be measured based on historical experience, current conditions and reasonable supportable forecasts. The standard also amends existing impairment guidance for available-for-sale securities, and credit losses will be recorded as an allowance versus a write-down of the amortized cost basis of the security and will allow for a reversal of impairment loss when the credit of the issuer improves. The guidance requires a cumulative effect of initial application to be recognized in retained earnings at the date of initial application.
|
January 1, 2020
|
We have assessed the impact of the standard on our consolidated financial statements. We established a steering committee which provided cross-functional governance over the project plan and key decisions. Key accounting policies were enhanced and we refined the credit loss models, processes and the associated data requirements needed to meet the standard. The majority of our exposures utilize a probability-of-default and loss-given-default methodology to estimate the credit loss reserve. Our senior secured loan portfolio remains a major driver of the allowance for credit loss, along with off-balance sheet commitments. There was no material allowance upon implementation for held-to-maturity exposures given the nature of our portfolio. Our credit loss models were approved for use by our Model Validation Group in 2019. We executed our new processes in parallel with the existing processes during 2019 to ensure that we have an appropriate control environment over the allowance for credit losses upon adoption in 2020. Upon adoption of the new guidance on January 1, 2020, no material adjustment to retained earnings was required.
|
ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
The standard simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The ASU requires an entity to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying value exceeds the fair value of the reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss.
|
January 1, 2020
|
We have adopted the new standard as of January 1, 2020 prospectively. There are no material impacts as a result of the adoption.
|
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement
|
The standard eliminates, amends and adds disclosure requirements for fair value measurements.
|
January 1, 2020
|
We have elected to early adopt the provisions of the new standard that eliminate or amend disclosures as of December 31, 2018 and our disclosures were modified accordingly. The remaining provisions of the standard that add disclosures have been adopted from January 1, 2020 and applied prospectively.
|
ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement. That Is a Service Contract (a consensus of the Financial Accounting Standards Board Emerging Issues Task Force)
|
This standard addresses accounting for fees paid by a customer for implementation, set-up and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor, i.e., a service contract. The new guidance aligns treatment for capitalization of implementation costs with guidance on internal-use software.
|
January 1, 2020
|
We have adopted the new standard prospectively as of January 1, 2020. There are no material impacts as a result of the adoption.
|
•
|
Quoted prices for similar assets or liabilities in active markets;
|
•
|
Quoted prices for identical or similar assets or liabilities in non-active markets;
|
•
|
Pricing models whose inputs are observable for substantially the full term of the asset or liability; and
|
•
|
Pricing models whose inputs are derived principally from, or corroborated by, observable market information through correlation or other means for substantially the full term of the asset or liability.
|
•
|
The fair value of our investment securities categorized in level 3 is measured using information obtained from third-party sources, typically non-binding broker/dealer quotes, or through the use of internally-developed pricing models. Management has evaluated its methodologies used to measure fair value and has considered the level of observable market information to be insufficient to categorize the securities in level 2.
|
•
|
The fair value of certain foreign exchange contracts, primarily options, is measured using an option-pricing model. Because of a limited number of observable transactions, certain model inputs are not observable, such as implied volatility surface, but are derived from observable market information.
|
|
Fair Value Measurements on a Recurring Basis
|
||||||||||||||||||
|
As of December 31, 2019
|
||||||||||||||||||
(In millions)
|
Quoted Market
Prices in Active
Markets
(Level 1)
|
|
Pricing Methods
with Significant
Observable
Market Inputs
(Level 2)
|
|
Pricing Methods
with Significant
Unobservable
Market Inputs
(Level 3)
|
|
Impact of Netting(1)
|
|
Total Net
Carrying Value
in Consolidated
Statement of
Condition
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
34
|
|
||
Non-U.S. government securities
|
146
|
|
|
173
|
|
|
—
|
|
|
|
|
319
|
|
||||||
Other
|
21
|
|
|
540
|
|
|
—
|
|
|
|
|
561
|
|
||||||
Total trading account assets
|
201
|
|
|
713
|
|
|
—
|
|
|
|
|
914
|
|
||||||
Available-for-sale investment securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct obligations
|
3,487
|
|
|
—
|
|
|
—
|
|
|
|
|
3,487
|
|
||||||
Mortgage-backed securities
|
—
|
|
|
17,838
|
|
|
—
|
|
|
|
|
17,838
|
|
||||||
Total U.S. Treasury and federal agencies
|
3,487
|
|
|
17,838
|
|
|
—
|
|
|
|
|
21,325
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
—
|
|
|
531
|
|
|
—
|
|
|
|
|
531
|
|
||||||
Credit cards
|
—
|
|
|
89
|
|
|
—
|
|
|
|
|
89
|
|
||||||
Collateralized loan obligations
|
—
|
|
|
—
|
|
|
1,820
|
|
|
|
|
1,820
|
|
||||||
Total asset-backed securities
|
—
|
|
|
620
|
|
|
1,820
|
|
|
|
|
2,440
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
—
|
|
|
1,980
|
|
|
—
|
|
|
|
|
1,980
|
|
||||||
Asset-backed securities
|
—
|
|
|
1,292
|
|
|
887
|
|
|
|
|
2,179
|
|
||||||
Government securities
|
—
|
|
|
12,373
|
|
|
—
|
|
|
|
|
12,373
|
|
||||||
Other(2)
|
—
|
|
|
8,613
|
|
|
45
|
|
|
|
|
8,658
|
|
||||||
Total non-U.S. debt securities
|
—
|
|
|
24,258
|
|
|
932
|
|
|
|
|
25,190
|
|
||||||
State and political subdivisions
|
—
|
|
|
1,783
|
|
|
—
|
|
|
|
|
1,783
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
104
|
|
|
—
|
|
|
|
|
104
|
|
||||||
Other U.S. debt securities
|
—
|
|
|
2,973
|
|
|
—
|
|
|
|
|
2,973
|
|
||||||
Total available-for-sale investment securities
|
3,487
|
|
|
47,576
|
|
|
2,752
|
|
|
|
|
53,815
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
—
|
|
|
15,136
|
|
|
4
|
|
|
$
|
(10,391
|
)
|
|
4,749
|
|
||||
Interest rate contracts
|
—
|
|
|
8
|
|
|
—
|
|
|
(4
|
)
|
|
4
|
|
|||||
Total derivative instruments
|
—
|
|
|
15,144
|
|
|
4
|
|
|
(10,395
|
)
|
|
4,753
|
|
|||||
Other
|
—
|
|
|
504
|
|
|
—
|
|
|
—
|
|
|
504
|
|
|||||
Total assets carried at fair value
|
$
|
3,688
|
|
|
$
|
63,937
|
|
|
$
|
2,756
|
|
|
$
|
(10,395
|
)
|
|
$
|
59,986
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued expenses and other liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading account liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
$
|
3
|
|
|
$
|
15,144
|
|
|
$
|
3
|
|
|
$
|
(8,918
|
)
|
|
6,232
|
|
|
Interest rate contracts
|
6
|
|
|
43
|
|
|
—
|
|
|
(4
|
)
|
|
45
|
|
|||||
Other derivative contracts
|
—
|
|
|
182
|
|
|
—
|
|
|
—
|
|
|
182
|
|
|||||
Total derivative instruments
|
9
|
|
|
15,369
|
|
|
3
|
|
|
(8,922
|
)
|
|
6,459
|
|
|||||
Total liabilities carried at fair value
|
$
|
14
|
|
|
$
|
15,369
|
|
|
$
|
3
|
|
|
$
|
(8,922
|
)
|
|
$
|
6,464
|
|
|
|
|
|
|
Fair Value Measurements on a Recurring Basis
|
||||||||||||||||||
|
As of December 31, 2018
|
||||||||||||||||||
(In millions)
|
Quoted Market
Prices in Active
Markets
(Level 1)
|
|
Pricing Methods
with Significant
Observable
Market Inputs
(Level 2)
|
|
Pricing Methods
with Significant
Unobservable
Market Inputs
(Level 3)
|
|
Impact of Netting(1)
|
|
Total Net
Carrying Value
in Consolidated
Statement of
Condition
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading account assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
34
|
|
||
Non-U.S. government securities
|
146
|
|
|
179
|
|
|
—
|
|
|
|
|
325
|
|
||||||
Other
|
—
|
|
|
501
|
|
|
—
|
|
|
|
|
501
|
|
||||||
Total trading account assets
|
180
|
|
|
680
|
|
|
—
|
|
|
|
|
860
|
|
||||||
Available-for-sale investment securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct obligations
|
1,039
|
|
|
—
|
|
|
—
|
|
|
|
|
1,039
|
|
||||||
Mortgage-backed securities
|
—
|
|
|
15,968
|
|
|
—
|
|
|
|
|
15,968
|
|
||||||
Total U.S. Treasury and federal agencies
|
1,039
|
|
|
15,968
|
|
|
—
|
|
|
|
|
17,007
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
—
|
|
|
541
|
|
|
—
|
|
|
|
|
541
|
|
||||||
Credit cards
|
—
|
|
|
583
|
|
|
—
|
|
|
|
|
583
|
|
||||||
Collateralized loan obligations
|
—
|
|
|
—
|
|
|
593
|
|
|
|
|
593
|
|
||||||
Total asset-backed securities
|
—
|
|
|
1,124
|
|
|
593
|
|
|
|
|
1,717
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Mortgage-backed securities
|
—
|
|
|
1,682
|
|
|
—
|
|
|
|
|
1,682
|
|
||||||
Asset-backed securities
|
—
|
|
|
943
|
|
|
631
|
|
|
|
|
1,574
|
|
||||||
Government securities
|
—
|
|
|
12,793
|
|
|
—
|
|
|
|
|
12,793
|
|
||||||
Other(2)
|
—
|
|
|
6,544
|
|
|
58
|
|
|
|
|
6,602
|
|
||||||
Total non-U.S. debt securities
|
—
|
|
|
21,962
|
|
|
689
|
|
|
|
|
22,651
|
|
||||||
State and political subdivisions
|
—
|
|
|
1,918
|
|
|
—
|
|
|
|
|
1,918
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
195
|
|
|
2
|
|
|
|
|
197
|
|
||||||
Other U.S. debt securities
|
—
|
|
|
1,658
|
|
|
—
|
|
|
|
|
1,658
|
|
||||||
Total available-for-sale investment securities
|
1,039
|
|
|
42,825
|
|
|
1,284
|
|
|
|
|
45,148
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
—
|
|
|
16,382
|
|
|
4
|
|
|
$
|
(11,210
|
)
|
|
5,176
|
|
||||
Interest rate contracts
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Total derivative instruments
|
13
|
|
|
16,382
|
|
|
4
|
|
|
(11,210
|
)
|
|
5,189
|
|
|||||
Other
|
—
|
|
|
395
|
|
|
—
|
|
|
—
|
|
|
395
|
|
|||||
Total assets carried at fair value
|
$
|
1,232
|
|
|
$
|
60,282
|
|
|
$
|
1,288
|
|
|
$
|
(11,210
|
)
|
|
$
|
51,592
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued expenses and other liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
16,518
|
|
|
$
|
4
|
|
|
$
|
(11,564
|
)
|
|
$
|
4,958
|
|
Interest rate contracts
|
—
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|||||
Other derivative contracts
|
—
|
|
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||
Total derivative instruments
|
—
|
|
|
16,803
|
|
|
4
|
|
|
(11,564
|
)
|
|
5,243
|
|
|||||
Total liabilities carried at fair value
|
$
|
—
|
|
|
$
|
16,803
|
|
|
$
|
4
|
|
|
$
|
(11,564
|
)
|
|
$
|
5,243
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs
|
||||||||||||||||||||||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||||||||||||||||||||||
|
Fair Value
as of
December 31,
2017
|
|
Total Realized and
Unrealized Gains (Losses) |
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Fair Value
as of December 31, 2018(1)
|
|
Change in Unrealized Gains (Losses) Related to Financial Instruments
Held as of
December 31, 2018
|
||||||||||||||||||||||
(In millions)
|
|
Recorded
in Revenue(1) |
|
Recorded
in Other Comprehensive Income(1) |
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Available-for-sale Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Collateralized loan obligations
|
$
|
1,358
|
|
|
$
|
4
|
|
|
$
|
(7
|
)
|
|
$
|
351
|
|
|
$
|
(636
|
)
|
|
$
|
(268
|
)
|
|
$
|
—
|
|
|
$
|
(209
|
)
|
|
$
|
593
|
|
|
|
||
Total asset-backed securities
|
1,358
|
|
|
4
|
|
|
(7
|
)
|
|
351
|
|
|
(636
|
)
|
|
(268
|
)
|
|
—
|
|
|
(209
|
)
|
|
593
|
|
|
|
|||||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mortgage-backed securities
|
119
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|
—
|
|
|
|
|||||||||||
Asset-backed securities
|
402
|
|
|
—
|
|
|
(14
|
)
|
|
495
|
|
|
(310
|
)
|
|
(56
|
)
|
|
114
|
|
|
—
|
|
|
631
|
|
|
|
|||||||||||
Other
|
204
|
|
|
—
|
|
|
(6
|
)
|
|
13
|
|
|
(59
|
)
|
|
(30
|
)
|
|
—
|
|
|
(64
|
)
|
|
58
|
|
|
|
|||||||||||
Total non-U.S. debt securities
|
725
|
|
|
—
|
|
|
(20
|
)
|
|
508
|
|
|
(369
|
)
|
|
(86
|
)
|
|
114
|
|
|
(183
|
)
|
|
689
|
|
|
|
|||||||||||
State and political subdivisions
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
|
|||||||||||
Collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
8
|
|
|
—
|
|
|
2
|
|
|
|
|||||||||||
Total Available-for-sale investment securities
|
2,126
|
|
|
4
|
|
|
(27
|
)
|
|
859
|
|
|
(1,042
|
)
|
|
(361
|
)
|
|
122
|
|
|
(397
|
)
|
|
1,284
|
|
|
|
|||||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Foreign exchange contracts
|
1
|
|
|
(3
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
$
|
(3
|
)
|
|||||||||
Total derivative instruments
|
1
|
|
|
(3
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(3
|
)
|
||||||||||
Total assets carried at fair value
|
$
|
2,127
|
|
|
$
|
1
|
|
|
$
|
(27
|
)
|
|
$
|
865
|
|
|
$
|
(1,042
|
)
|
|
$
|
(361
|
)
|
|
$
|
122
|
|
|
$
|
(397
|
)
|
|
$
|
1,288
|
|
|
$
|
(3
|
)
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||||||||
|
Fair Value
|
|
|
|
|
|
Weighted-Average
|
||||||||||
(Dollars in millions)
|
As of December 31, 2019
|
|
As of December 31, 2018
|
|
Valuation Technique
|
|
Significant Unobservable Input(1)
|
|
As of December 31, 2019
|
|
As of December 31, 2018
|
||||||
Significant unobservable inputs readily available to State Street:
|
|||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative Instruments, foreign exchange contracts
|
$
|
4
|
|
|
$
|
4
|
|
|
Option model
|
|
Volatility
|
|
8.2
|
%
|
|
11.4
|
%
|
Total
|
$
|
4
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative instruments, foreign exchange contracts
|
$
|
3
|
|
|
$
|
4
|
|
|
Option model
|
|
Volatility
|
|
7.0
|
%
|
|
11.4
|
%
|
Total
|
$
|
3
|
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
For financial instruments that have quoted market prices, those quoted prices are used to estimate fair value;
|
•
|
For financial instruments that have no defined maturity, have a remaining maturity of 180 days or less, or reprice frequently to a market rate, we assume that the fair value of these instruments approximates their reported value, after taking into consideration any applicable credit risk; and
|
•
|
For financial instruments for which no quoted market prices are available, fair value is estimated using information obtained from independent third parties, or by discounting the expected cash flows using an estimated current market interest rate for the financial instrument.
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
(In millions)
|
Reported Amount
|
|
Estimated Fair Value
|
|
Quoted Market Prices in Active Markets (Level 1)
|
|
Pricing Methods with Significant Observable Market Inputs (Level 2)
|
|
Pricing Methods with Significant Unobservable Market Inputs (Level 3)
|
||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and due from banks
|
$
|
3,302
|
|
|
$
|
3,302
|
|
|
$
|
3,302
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits with banks
|
68,965
|
|
|
68,965
|
|
|
—
|
|
|
68,965
|
|
|
—
|
|
|||||
Securities purchased under resale agreements
|
1,487
|
|
|
1,487
|
|
|
—
|
|
|
1,487
|
|
|
—
|
|
|||||
Investment securities held-to-maturity
|
41,782
|
|
|
42,157
|
|
|
10,299
|
|
|
31,682
|
|
|
176
|
|
|||||
Net loans(1)
|
26,235
|
|
|
26,292
|
|
|
—
|
|
|
24,432
|
|
|
1,860
|
|
|||||
Other(2)
|
7,500
|
|
|
7,500
|
|
|
—
|
|
|
7,500
|
|
|
—
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-interest-bearing
|
$
|
34,031
|
|
|
$
|
34,031
|
|
|
$
|
—
|
|
|
$
|
34,031
|
|
|
$
|
—
|
|
Interest-bearing - U.S.
|
77,504
|
|
|
77,504
|
|
|
—
|
|
|
77,504
|
|
|
—
|
|
|||||
Interest-bearing - non-U.S.
|
70,337
|
|
|
70,337
|
|
|
—
|
|
|
70,337
|
|
|
—
|
|
|||||
Securities sold under repurchase agreements
|
1,102
|
|
|
1,102
|
|
|
—
|
|
|
1,102
|
|
|
—
|
|
|||||
Other short-term borrowings
|
839
|
|
|
839
|
|
|
—
|
|
|
839
|
|
|
—
|
|
|||||
Long-term debt
|
12,509
|
|
|
12,770
|
|
|
—
|
|
|
12,621
|
|
|
149
|
|
|||||
Other(2)
|
7,500
|
|
|
7,500
|
|
|
—
|
|
|
7,500
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
(In millions)
|
Reported Amount
|
|
Estimated Fair Value
|
|
Quoted Market Prices in Active Markets (Level 1)
|
|
Pricing Methods with Significant Observable Market Inputs (Level 2)
|
|
Pricing Methods with Significant Unobservable Market Inputs (Level 3)
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
$
|
3,212
|
|
|
$
|
3,212
|
|
|
$
|
3,212
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits with banks
|
73,040
|
|
|
73,040
|
|
|
—
|
|
|
73,040
|
|
|
—
|
|
|||||
Securities purchased under resale agreements
|
4,679
|
|
|
4,679
|
|
|
—
|
|
|
4,679
|
|
|
—
|
|
|||||
Investment securities held-to-maturity
|
41,914
|
|
|
41,351
|
|
|
14,541
|
|
|
26,688
|
|
|
122
|
|
|||||
Net loans (excluding leases)(1)
|
25,722
|
|
|
25,561
|
|
|
—
|
|
|
24,648
|
|
|
913
|
|
|||||
Other(2)
|
8,500
|
|
|
8,500
|
|
|
—
|
|
|
8,500
|
|
|
—
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-interest-bearing
|
$
|
44,804
|
|
|
$
|
44,804
|
|
|
$
|
—
|
|
|
$
|
44,804
|
|
|
$
|
—
|
|
Interest-bearing - U.S.
|
66,235
|
|
|
66,235
|
|
|
—
|
|
|
66,235
|
|
|
—
|
|
|||||
Interest-bearing - non-U.S.
|
69,321
|
|
|
69,321
|
|
|
—
|
|
|
69,321
|
|
|
—
|
|
|||||
Securities sold under repurchase agreements
|
1,082
|
|
|
1,082
|
|
|
—
|
|
|
1,082
|
|
|
—
|
|
|||||
Other short-term borrowings
|
3,092
|
|
|
3,092
|
|
|
—
|
|
|
3,092
|
|
|
—
|
|
|||||
Long-term debt
|
11,093
|
|
|
11,048
|
|
|
—
|
|
|
10,865
|
|
|
183
|
|
|||||
Other(2)
|
8,500
|
|
|
8,500
|
|
|
—
|
|
|
8,500
|
|
|
—
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Gross
Unrealized
|
|
Fair
Value
|
||||||||||||||||||||
(In millions)
|
Gains
|
|
Losses
|
|
Gains
|
|
Losses
|
|
|||||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct obligations
|
$
|
3,506
|
|
|
$
|
9
|
|
|
$
|
28
|
|
|
$
|
3,487
|
|
|
$
|
1,035
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
1,039
|
|
Mortgage-backed securities
|
17,599
|
|
|
264
|
|
|
25
|
|
|
17,838
|
|
|
16,112
|
|
|
37
|
|
|
181
|
|
|
15,968
|
|
||||||||
Total U.S. Treasury and federal agencies
|
21,105
|
|
|
273
|
|
|
53
|
|
|
21,325
|
|
|
17,147
|
|
|
41
|
|
|
181
|
|
|
17,007
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Student loans(1)
|
532
|
|
|
1
|
|
|
2
|
|
|
531
|
|
|
538
|
|
|
4
|
|
|
1
|
|
|
541
|
|
||||||||
Credit cards
|
90
|
|
|
—
|
|
|
1
|
|
|
89
|
|
|
609
|
|
|
—
|
|
|
26
|
|
|
583
|
|
||||||||
Collateralized loan obligations
|
1,822
|
|
|
1
|
|
|
3
|
|
|
1,820
|
|
|
594
|
|
|
1
|
|
|
2
|
|
|
593
|
|
||||||||
Total asset-backed securities
|
2,444
|
|
|
2
|
|
|
6
|
|
|
2,440
|
|
|
1,741
|
|
|
5
|
|
|
29
|
|
|
1,717
|
|
||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
1,978
|
|
|
3
|
|
|
1
|
|
|
1,980
|
|
|
1,687
|
|
|
—
|
|
|
5
|
|
|
1,682
|
|
||||||||
Asset-backed securities
|
2,179
|
|
|
2
|
|
|
2
|
|
|
2,179
|
|
|
1,580
|
|
|
—
|
|
|
6
|
|
|
1,574
|
|
||||||||
Government securities
|
12,243
|
|
|
131
|
|
|
1
|
|
|
12,373
|
|
|
12,816
|
|
|
22
|
|
|
45
|
|
|
12,793
|
|
||||||||
Other(2)
|
8,595
|
|
|
73
|
|
|
10
|
|
|
8,658
|
|
|
6,600
|
|
|
18
|
|
|
16
|
|
|
6,602
|
|
||||||||
Total non-U.S. debt securities
|
24,995
|
|
|
209
|
|
|
14
|
|
|
25,190
|
|
|
22,683
|
|
|
40
|
|
|
72
|
|
|
22,651
|
|
||||||||
State and political subdivisions(3)
|
1,725
|
|
|
59
|
|
|
1
|
|
|
1,783
|
|
|
1,905
|
|
|
20
|
|
|
7
|
|
|
1,918
|
|
||||||||
Collateralized mortgage obligations
|
104
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
200
|
|
|
—
|
|
|
3
|
|
|
197
|
|
||||||||
Other U.S. debt securities
|
2,941
|
|
|
32
|
|
|
—
|
|
|
2,973
|
|
|
1,683
|
|
|
1
|
|
|
26
|
|
|
1,658
|
|
||||||||
Total
|
$
|
53,314
|
|
|
$
|
575
|
|
|
$
|
74
|
|
|
$
|
53,815
|
|
|
$
|
45,359
|
|
|
$
|
107
|
|
|
$
|
318
|
|
|
$
|
45,148
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct obligations
|
$
|
10,311
|
|
|
$
|
24
|
|
|
$
|
3
|
|
|
$
|
10,332
|
|
|
$
|
14,794
|
|
|
$
|
—
|
|
|
$
|
199
|
|
|
$
|
14,595
|
|
Mortgage-backed securities
|
26,297
|
|
|
316
|
|
|
44
|
|
|
26,569
|
|
|
21,647
|
|
|
24
|
|
|
518
|
|
|
21,153
|
|
||||||||
Total U.S. Treasury and federal agencies
|
36,608
|
|
|
340
|
|
|
47
|
|
|
36,901
|
|
|
36,441
|
|
|
24
|
|
|
717
|
|
|
35,748
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans(1)
|
3,783
|
|
|
10
|
|
|
41
|
|
|
3,752
|
|
|
3,191
|
|
|
35
|
|
|
10
|
|
|
3,216
|
|
||||||||
Credit cards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
193
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Total asset-backed securities
|
3,783
|
|
|
10
|
|
|
41
|
|
|
3,752
|
|
|
3,385
|
|
|
35
|
|
|
10
|
|
|
3,410
|
|
||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
366
|
|
|
82
|
|
|
6
|
|
|
442
|
|
|
638
|
|
|
77
|
|
|
9
|
|
|
706
|
|
||||||||
Asset-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
223
|
|
|
—
|
|
|
—
|
|
|
223
|
|
||||||||
Government securities
|
328
|
|
|
—
|
|
|
—
|
|
|
328
|
|
|
358
|
|
|
1
|
|
|
—
|
|
|
359
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
||||||||
Total non-U.S. debt securities
|
694
|
|
|
82
|
|
|
6
|
|
|
770
|
|
|
1,265
|
|
|
78
|
|
|
9
|
|
|
1,334
|
|
||||||||
Collateralized mortgage obligations
|
697
|
|
|
38
|
|
|
1
|
|
|
734
|
|
|
823
|
|
|
38
|
|
|
2
|
|
|
859
|
|
||||||||
Total
|
$
|
41,782
|
|
|
$
|
470
|
|
|
$
|
95
|
|
|
$
|
42,157
|
|
|
$
|
41,914
|
|
|
$
|
175
|
|
|
$
|
738
|
|
|
$
|
41,351
|
|
|
|
|
|
|
As of December 31, 2019
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
(In millions)
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct obligations
|
$
|
1,430
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,430
|
|
|
$
|
28
|
|
Mortgage-backed securities
|
2,499
|
|
|
7
|
|
|
1,665
|
|
|
18
|
|
|
4,164
|
|
|
25
|
|
||||||
Total U.S. Treasury and federal agencies
|
3,929
|
|
|
35
|
|
|
1,665
|
|
|
18
|
|
|
5,594
|
|
|
53
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
271
|
|
|
1
|
|
|
127
|
|
|
1
|
|
|
398
|
|
|
2
|
|
||||||
Credit cards
|
89
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
1
|
|
||||||
Collateralized loan obligations
|
862
|
|
|
2
|
|
|
278
|
|
|
1
|
|
|
1,140
|
|
|
3
|
|
||||||
Total asset-backed securities
|
1,222
|
|
|
4
|
|
|
405
|
|
|
2
|
|
|
1,627
|
|
|
6
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
228
|
|
|
—
|
|
|
220
|
|
|
1
|
|
|
448
|
|
|
1
|
|
||||||
Asset-backed securities
|
672
|
|
|
1
|
|
|
109
|
|
|
1
|
|
|
781
|
|
|
2
|
|
||||||
Government securities
|
3,246
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
3,246
|
|
|
1
|
|
||||||
Other
|
2,736
|
|
|
9
|
|
|
187
|
|
|
1
|
|
|
2,923
|
|
|
10
|
|
||||||
Total non-U.S. debt securities
|
6,882
|
|
|
11
|
|
|
516
|
|
|
3
|
|
|
7,398
|
|
|
14
|
|
||||||
State and political subdivisions
|
163
|
|
|
—
|
|
|
22
|
|
|
1
|
|
|
185
|
|
|
1
|
|
||||||
Collateralized mortgage obligations
|
13
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||||
Other U.S. debt securities
|
219
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
233
|
|
|
—
|
|
||||||
Total
|
$
|
12,428
|
|
|
$
|
50
|
|
|
$
|
2,626
|
|
|
$
|
24
|
|
|
$
|
15,054
|
|
|
$
|
74
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct obligations
|
$
|
604
|
|
|
$
|
—
|
|
|
$
|
2,262
|
|
|
$
|
3
|
|
|
$
|
2,866
|
|
|
$
|
3
|
|
Mortgage-backed securities
|
6,056
|
|
|
31
|
|
|
1,606
|
|
|
13
|
|
|
7,662
|
|
|
44
|
|
||||||
Total U.S. Treasury and federal agencies
|
6,660
|
|
|
31
|
|
|
3,868
|
|
|
16
|
|
|
10,528
|
|
|
47
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
2,003
|
|
|
22
|
|
|
778
|
|
|
19
|
|
|
2,781
|
|
|
41
|
|
||||||
Total asset-backed securities
|
2,003
|
|
|
22
|
|
|
778
|
|
|
19
|
|
|
2,781
|
|
|
41
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
138
|
|
|
6
|
|
|
138
|
|
|
6
|
|
||||||
Total non-U.S. debt securities
|
—
|
|
|
—
|
|
|
138
|
|
|
6
|
|
|
138
|
|
|
6
|
|
||||||
Collateralized mortgage obligations
|
13
|
|
|
—
|
|
|
110
|
|
|
1
|
|
|
123
|
|
|
1
|
|
||||||
Total
|
$
|
8,676
|
|
|
$
|
53
|
|
|
$
|
4,894
|
|
|
$
|
42
|
|
|
$
|
13,570
|
|
|
$
|
95
|
|
|
As of December 31, 2018
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
(In millions)
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
$
|
5,058
|
|
|
$
|
21
|
|
|
$
|
5,089
|
|
|
$
|
160
|
|
|
$
|
10,147
|
|
|
$
|
181
|
|
Total U.S. Treasury and federal agencies
|
5,058
|
|
|
21
|
|
|
5,089
|
|
|
160
|
|
|
10,147
|
|
|
181
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
106
|
|
|
—
|
|
|
218
|
|
|
1
|
|
|
324
|
|
|
1
|
|
||||||
Credit cards
|
90
|
|
|
—
|
|
|
493
|
|
|
26
|
|
|
583
|
|
|
26
|
|
||||||
Collateralized loan obligations
|
548
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
548
|
|
|
2
|
|
||||||
Total asset-backed securities
|
744
|
|
|
2
|
|
|
711
|
|
|
27
|
|
|
1,455
|
|
|
29
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
1,407
|
|
|
4
|
|
|
118
|
|
|
1
|
|
|
1,525
|
|
|
5
|
|
||||||
Asset-backed securities
|
1,479
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
1,479
|
|
|
6
|
|
||||||
Government securities
|
5,478
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
5,478
|
|
|
45
|
|
||||||
Other
|
2,167
|
|
|
12
|
|
|
226
|
|
|
4
|
|
|
2,393
|
|
|
16
|
|
||||||
Total non-U.S. debt securities
|
10,531
|
|
|
67
|
|
|
344
|
|
|
5
|
|
|
10,875
|
|
|
72
|
|
||||||
State and political subdivisions
|
365
|
|
|
3
|
|
|
244
|
|
|
4
|
|
|
609
|
|
|
7
|
|
||||||
Collateralized mortgage obligations
|
181
|
|
|
3
|
|
|
14
|
|
|
—
|
|
|
195
|
|
|
3
|
|
||||||
Other U.S. debt securities
|
861
|
|
|
14
|
|
|
484
|
|
|
12
|
|
|
1,345
|
|
|
26
|
|
||||||
Total
|
$
|
17,740
|
|
|
$
|
110
|
|
|
$
|
6,886
|
|
|
$
|
208
|
|
|
$
|
24,626
|
|
|
$
|
318
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct obligations
|
$
|
2,192
|
|
|
$
|
45
|
|
|
$
|
12,403
|
|
|
$
|
154
|
|
|
$
|
14,595
|
|
|
$
|
199
|
|
Mortgage-backed securities
|
6,502
|
|
|
103
|
|
|
10,648
|
|
|
415
|
|
|
17,150
|
|
|
518
|
|
||||||
Total U.S. Treasury and federal agencies
|
8,694
|
|
|
148
|
|
|
23,051
|
|
|
569
|
|
|
31,745
|
|
|
717
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
481
|
|
|
4
|
|
|
536
|
|
|
6
|
|
|
1,017
|
|
|
10
|
|
||||||
Total asset-backed securities
|
481
|
|
|
4
|
|
|
536
|
|
|
6
|
|
|
1,017
|
|
|
10
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
184
|
|
|
2
|
|
|
119
|
|
|
7
|
|
|
303
|
|
|
9
|
|
||||||
Total non-U.S. debt securities
|
184
|
|
|
2
|
|
|
119
|
|
|
7
|
|
|
303
|
|
|
9
|
|
||||||
Collateralized mortgage obligations
|
102
|
|
|
1
|
|
|
51
|
|
|
1
|
|
|
153
|
|
|
2
|
|
||||||
Total
|
$
|
9,461
|
|
|
$
|
155
|
|
|
$
|
23,757
|
|
|
$
|
583
|
|
|
$
|
33,218
|
|
|
$
|
738
|
|
|
As of December 31, 2019
|
||||||||||||||||||||||||||||||||||||||
(In millions)
|
Under 1 Year
|
|
1 to 5 Years
|
|
6 to 10 Years
|
|
Over 10 Years
|
|
Total
|
||||||||||||||||||||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Direct obligations
|
$
|
1,050
|
|
|
$
|
1,058
|
|
|
$
|
1,009
|
|
|
$
|
1,010
|
|
|
$
|
1,448
|
|
|
$
|
1,419
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,507
|
|
|
$
|
3,487
|
|
Mortgage-backed securities
|
116
|
|
|
118
|
|
|
971
|
|
|
970
|
|
|
2,954
|
|
|
2,951
|
|
|
13,558
|
|
|
13,799
|
|
|
17,599
|
|
|
17,838
|
|
||||||||||
Total U.S. Treasury and federal agencies
|
1,166
|
|
|
1,176
|
|
|
1,980
|
|
|
1,980
|
|
|
4,402
|
|
|
4,370
|
|
|
13,558
|
|
|
13,799
|
|
|
21,106
|
|
|
21,325
|
|
||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Student loans
|
72
|
|
|
72
|
|
|
185
|
|
|
184
|
|
|
96
|
|
|
96
|
|
|
180
|
|
|
179
|
|
|
533
|
|
|
531
|
|
||||||||||
Credit cards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
89
|
|
||||||||||
Collateralized loan obligations
|
—
|
|
|
—
|
|
|
745
|
|
|
745
|
|
|
959
|
|
|
958
|
|
|
117
|
|
|
117
|
|
|
1,821
|
|
|
1,820
|
|
||||||||||
Total asset-backed securities
|
72
|
|
|
72
|
|
|
930
|
|
|
929
|
|
|
1,145
|
|
|
1,143
|
|
|
297
|
|
|
296
|
|
|
2,444
|
|
|
2,440
|
|
||||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mortgage-backed securities
|
430
|
|
|
430
|
|
|
568
|
|
|
569
|
|
|
196
|
|
|
196
|
|
|
784
|
|
|
785
|
|
|
1,978
|
|
|
1,980
|
|
||||||||||
Asset-backed securities
|
487
|
|
|
487
|
|
|
981
|
|
|
981
|
|
|
366
|
|
|
366
|
|
|
345
|
|
|
345
|
|
|
2,179
|
|
|
2,179
|
|
||||||||||
Government securities
|
4,183
|
|
|
4,183
|
|
|
7,270
|
|
|
7,381
|
|
|
791
|
|
|
809
|
|
|
—
|
|
|
—
|
|
|
12,244
|
|
|
12,373
|
|
||||||||||
Other
|
883
|
|
|
884
|
|
|
6,634
|
|
|
6,689
|
|
|
1,057
|
|
|
1,063
|
|
|
19
|
|
|
22
|
|
|
8,593
|
|
|
8,658
|
|
||||||||||
Total non-U.S. debt securities
|
5,983
|
|
|
5,984
|
|
|
15,453
|
|
|
15,620
|
|
|
2,410
|
|
|
2,434
|
|
|
1,148
|
|
|
1,152
|
|
|
24,994
|
|
|
25,190
|
|
||||||||||
State and political subdivisions
|
236
|
|
|
238
|
|
|
622
|
|
|
635
|
|
|
526
|
|
|
554
|
|
|
341
|
|
|
356
|
|
|
1,725
|
|
|
1,783
|
|
||||||||||
Collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
104
|
|
|
104
|
|
|
104
|
|
||||||||||
Other U.S. debt securities
|
759
|
|
|
760
|
|
|
2,056
|
|
|
2,083
|
|
|
126
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
2,941
|
|
|
2,973
|
|
||||||||||
Total
|
$
|
8,216
|
|
|
$
|
8,230
|
|
|
$
|
21,041
|
|
|
$
|
21,247
|
|
|
$
|
8,609
|
|
|
$
|
8,631
|
|
|
$
|
15,448
|
|
|
$
|
15,707
|
|
|
$
|
53,314
|
|
|
$
|
53,815
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Direct obligations
|
$
|
4,116
|
|
|
$
|
4,114
|
|
|
$
|
6,161
|
|
|
$
|
6,185
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
29
|
|
|
$
|
29
|
|
|
$
|
10,311
|
|
|
$
|
10,333
|
|
Mortgage-backed securities
|
9
|
|
|
9
|
|
|
438
|
|
|
439
|
|
|
2,515
|
|
|
2,539
|
|
|
23,335
|
|
|
23,581
|
|
|
26,297
|
|
|
26,568
|
|
||||||||||
Total U.S. Treasury and federal agencies
|
4,125
|
|
|
4,123
|
|
|
6,599
|
|
|
6,624
|
|
|
2,520
|
|
|
2,544
|
|
|
23,364
|
|
|
23,610
|
|
|
36,608
|
|
|
36,901
|
|
||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Student loans
|
96
|
|
|
92
|
|
|
207
|
|
|
206
|
|
|
408
|
|
|
402
|
|
|
3,072
|
|
|
3,051
|
|
|
3,783
|
|
|
3,751
|
|
||||||||||
Total asset-backed securities
|
96
|
|
|
92
|
|
|
207
|
|
|
206
|
|
|
408
|
|
|
402
|
|
|
3,072
|
|
|
3,051
|
|
|
3,783
|
|
|
3,751
|
|
||||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mortgage-backed securities
|
16
|
|
|
16
|
|
|
33
|
|
|
33
|
|
|
4
|
|
|
4
|
|
|
313
|
|
|
390
|
|
|
366
|
|
|
443
|
|
||||||||||
Government securities
|
328
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
328
|
|
|
328
|
|
||||||||||
Total non-U.S. debt securities
|
344
|
|
|
344
|
|
|
33
|
|
|
33
|
|
|
4
|
|
|
4
|
|
|
313
|
|
|
390
|
|
|
694
|
|
|
771
|
|
||||||||||
Collateralized mortgage obligations
|
2
|
|
|
3
|
|
|
283
|
|
|
287
|
|
|
13
|
|
|
13
|
|
|
399
|
|
|
431
|
|
|
697
|
|
|
734
|
|
||||||||||
Total
|
$
|
4,567
|
|
|
$
|
4,562
|
|
|
$
|
7,122
|
|
|
$
|
7,150
|
|
|
$
|
2,945
|
|
|
$
|
2,963
|
|
|
$
|
27,148
|
|
|
$
|
27,482
|
|
|
$
|
41,782
|
|
|
$
|
42,157
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Gross realized gains from sales of AFS investment securities
|
$
|
31
|
|
|
$
|
205
|
|
|
$
|
74
|
|
Gross realized losses from sales of AFS investment securities
|
(32
|
)
|
|
(196
|
)
|
|
(113
|
)
|
|||
Net impairment losses:
|
|
|
|
|
|
||||||
Gross losses from OTTI
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||
Net impairment losses
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||
Gains (losses) related to investment securities, net
|
(1
|
)
|
|
6
|
|
|
(39
|
)
|
|||
Net impairment losses, recognized in our consolidated statement of income, were composed of the following:
|
|
|
|
|
|
||||||
Impairment associated with adverse changes in timing of expected future cash flows
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||
Net impairment losses
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Balance, beginning of period
|
$
|
78
|
|
|
$
|
77
|
|
|
$
|
79
|
|
Additions(1):
|
|
|
|
|
|
||||||
Other-than-temporary-impairment recognized
|
—
|
|
|
3
|
|
|
—
|
|
|||
Deductions(2):
|
|
|
|
|
|
||||||
Realized losses on securities sold or matured
|
(8
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
Balance, end of period
|
$
|
70
|
|
|
$
|
78
|
|
|
$
|
77
|
|
|
|
•
|
the identification and evaluation of securities that have indications of potential OTTI, such as issuer-specific concerns, including deteriorating financial condition or bankruptcy;
|
•
|
the analysis of expected future cash flows of securities, based on quantitative and qualitative factors;
|
•
|
the analysis of the collectability of those future cash flows, including information about past events, current conditions, and reasonable and supportable forecasts;
|
•
|
the analysis of the underlying collateral for MBS and ABS;
|
•
|
the analysis of individual impaired securities, including consideration of the length of time the security has been in an unrealized loss position, the anticipated recovery period, and the magnitude of the overall price decline;
|
•
|
evaluation of factors or triggers that could cause individual securities to be deemed OTTI and those that would not support OTTI; and
|
•
|
documentation of the results of these analyses.
|
•
|
certain macroeconomic drivers;
|
•
|
certain industry-specific drivers;
|
•
|
the length of time the security has been impaired;
|
•
|
the severity of the impairment;
|
•
|
the cause of the impairment and the financial condition and near-term prospects of the issuer;
|
•
|
activity in the market with respect to the issuer's securities, which may indicate adverse credit conditions; and
|
•
|
our intention not to sell, and the likelihood that we will not be required to sell, the security for a period of time sufficient to allow for its recovery in value.
|
(In millions)
|
December 31, 2019
|
|
December 31, 2018
|
||||
Domestic(1):
|
|
|
|
||||
Commercial and financial:
|
|
|
|
||||
Loans to investment funds
|
$
|
14,546
|
|
|
$
|
15,050
|
|
Senior secured bank loans
|
3,342
|
|
|
3,490
|
|
||
Loans to municipalities
|
848
|
|
|
902
|
|
||
Other
|
26
|
|
|
37
|
|
||
Commercial real estate
|
1,766
|
|
|
874
|
|
||
Total domestic
|
20,528
|
|
|
20,353
|
|
||
Foreign(1):
|
|
|
|
||||
Commercial and financial:
|
|
|
|
||||
Loans to investment funds
|
4,662
|
|
|
4,505
|
|
||
Senior secured bank loans
|
1,119
|
|
|
931
|
|
||
Total foreign
|
5,781
|
|
|
5,436
|
|
||
Total loans(2)
|
26,309
|
|
|
25,789
|
|
||
Allowance for loan losses
|
(74
|
)
|
|
(67
|
)
|
||
Loans, net of allowance
|
$
|
26,235
|
|
|
$
|
25,722
|
|
|
|
December 31, 2019
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Total Loans
|
||||||
(In millions)
|
|||||||||||
Investment grade(1)
|
$
|
19,501
|
|
|
$
|
1,766
|
|
|
$
|
21,267
|
|
Speculative(2)
|
5,008
|
|
|
—
|
|
|
5,008
|
|
|||
Special mention(3)
|
25
|
|
|
—
|
|
|
25
|
|
|||
Substandard(4)
|
9
|
|
|
—
|
|
|
9
|
|
|||
Total
|
$
|
24,543
|
|
|
$
|
1,766
|
|
|
$
|
26,309
|
|
December 31, 2018
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Total Loans
|
||||||
(In millions)
|
|||||||||||
Investment grade(1)
|
$
|
19,599
|
|
|
$
|
874
|
|
|
$
|
20,473
|
|
Speculative(2)
|
5,308
|
|
|
—
|
|
|
5,308
|
|
|||
Substandard(4)
|
8
|
|
|
—
|
|
|
8
|
|
|||
Total
|
$
|
24,915
|
|
|
$
|
874
|
|
|
$
|
25,789
|
|
|
|
December 31, 2019
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Total Loans
|
||||||
(In millions)
|
|||||||||||
Loans:
|
|
|
|
|
|
||||||
Individually evaluated for impairment(1)
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
Collectively evaluated for impairment
|
24,518
|
|
|
1,766
|
|
|
26,284
|
|
|||
Total
|
$
|
24,543
|
|
|
$
|
1,766
|
|
|
$
|
26,309
|
|
|
|
|
|
|
|
||||||
December 31, 2018
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Total Loans
|
||||||
(In millions)
|
|||||||||||
Loans:
|
|
|
|
|
|
||||||
Individually evaluated for impairment(1)
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Collectively evaluated for impairment
|
24,907
|
|
|
874
|
|
|
25,781
|
|
|||
Total
|
$
|
24,915
|
|
|
$
|
874
|
|
|
$
|
25,789
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Allowance for loan losses:
|
|||||||||||
Beginning balance
|
$
|
67
|
|
|
$
|
54
|
|
|
$
|
53
|
|
Provision for loan losses(1)
|
10
|
|
|
15
|
|
|
2
|
|
|||
Charge-offs(1)
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|||
Ending balance
|
$
|
74
|
|
|
$
|
67
|
|
|
$
|
54
|
|
|
|
(In millions)
|
Investment
Servicing(1)
|
|
Investment
Management
|
|
Total
|
||||||
Goodwill:
|
|
|
|
|
|
||||||
Ending balance December 31, 2017
|
$
|
5,752
|
|
|
$
|
270
|
|
|
$
|
6,022
|
|
Acquisitions(1)
|
1,512
|
|
|
—
|
|
|
1,512
|
|
|||
Foreign currency translation
|
(84
|
)
|
|
(4
|
)
|
|
(88
|
)
|
|||
Ending balance December 31, 2018
|
7,180
|
|
|
266
|
|
|
7,446
|
|
|||
Acquisitions(2)
|
122
|
|
|
—
|
|
|
122
|
|
|||
Foreign currency translation
|
(13
|
)
|
|
1
|
|
|
(12
|
)
|
|||
Ending balance December 31, 2019
|
$
|
7,289
|
|
|
$
|
267
|
|
|
$
|
7,556
|
|
|
|
(In millions)
|
Investment
Servicing(1)
|
|
Investment
Management
|
|
Total
|
||||||
Other intangible assets:
|
|
|
|
|
|
||||||
Ending balance December 31, 2017
|
$
|
1,432
|
|
|
$
|
181
|
|
|
$
|
1,613
|
|
Acquisitions(1)
|
1,007
|
|
|
—
|
|
|
1,007
|
|
|||
Amortization
|
(196
|
)
|
|
(30
|
)
|
|
(226
|
)
|
|||
Foreign currency translation
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|||
Ending balance December 31, 2018
|
$
|
2,218
|
|
|
$
|
151
|
|
|
$
|
2,369
|
|
Acquisitions(2)
|
(93
|
)
|
|
—
|
|
|
(93
|
)
|
|||
Amortization
|
(207
|
)
|
|
(29
|
)
|
|
(236
|
)
|
|||
Foreign currency translation
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||
Ending balance December 31, 2019
|
$
|
1,908
|
|
|
$
|
122
|
|
|
$
|
2,030
|
|
|
|
December 31, 2019
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||
(In millions)
|
|
|
|||||||||
Other intangible assets:
|
|
|
|
|
|
||||||
Client relationships
|
$
|
3,104
|
|
|
$
|
(1,718
|
)
|
|
$
|
1,386
|
|
Technology
|
403
|
|
|
(87
|
)
|
|
316
|
|
|||
Core deposits
|
673
|
|
|
(381
|
)
|
|
292
|
|
|||
Other
|
100
|
|
|
(64
|
)
|
|
36
|
|
|||
Total
|
$
|
4,280
|
|
|
$
|
(2,250
|
)
|
|
$
|
2,030
|
|
|
|
|
|
|
|
||||||
December 31, 2018
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||
(In millions)
|
|
|
|||||||||
Other intangible assets:
|
|
|
|
|
|
||||||
Client relationships
|
$
|
3,262
|
|
|
$
|
(1,605
|
)
|
|
$
|
1,657
|
|
Technology
|
389
|
|
|
(49
|
)
|
|
340
|
|
|||
Core deposits
|
676
|
|
|
(350
|
)
|
|
326
|
|
|||
Other
|
103
|
|
|
(57
|
)
|
|
46
|
|
|||
Total
|
$
|
4,430
|
|
|
$
|
(2,061
|
)
|
|
$
|
2,369
|
|
(In millions)
|
Future Amortization
|
||
Years Ended December 31,
|
|
||
2020
|
$
|
240
|
|
2021
|
230
|
|
|
2022
|
227
|
|
|
2023
|
226
|
|
|
2024
|
220
|
|
(In millions)
|
December 31, 2019
|
|
December 31, 2018
|
||||
Securities borrowed(1)
|
$
|
18,524
|
|
|
$
|
19,575
|
|
Derivative instruments, net
|
4,753
|
|
|
5,189
|
|
||
Bank-owned life insurance
|
3,395
|
|
|
3,323
|
|
||
Investments in joint ventures and other unconsolidated entities
|
2,899
|
|
|
2,882
|
|
||
Collateral, net
|
874
|
|
|
1,354
|
|
||
Right-of-use assets(2)
|
858
|
|
|
—
|
|
||
Accounts receivable
|
432
|
|
|
308
|
|
||
Prepaid expenses
|
395
|
|
|
493
|
|
||
Receivable for securities settlement
|
336
|
|
|
531
|
|
||
Income taxes receivable
|
309
|
|
|
129
|
|
||
Deferred tax assets, net of valuation allowance(3)
|
216
|
|
|
113
|
|
||
Deposits with clearing organizations
|
58
|
|
|
58
|
|
||
Other
|
962
|
|
|
834
|
|
||
Total
|
$
|
34,011
|
|
|
$
|
34,789
|
|
|
|
(Dollars in millions)
|
Securities Sold Under
Repurchase Agreements
|
|
Tax-Exempt
Investment Program
|
|
Other
|
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
Balance as of December 31
|
$
|
1,102
|
|
|
$
|
1,082
|
|
|
$
|
2,842
|
|
|
$
|
823
|
|
|
$
|
931
|
|
|
$
|
1,078
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
|
$
|
—
|
|
Maximum outstanding as of any month-end
|
4,125
|
|
|
3,441
|
|
|
4,302
|
|
|
931
|
|
|
1,078
|
|
|
1,158
|
|
|
—
|
|
|
2,000
|
|
|
—
|
|
|||||||||
Average outstanding during the year
|
1,616
|
|
|
2,048
|
|
|
3,683
|
|
|
898
|
|
|
1,023
|
|
|
1,127
|
|
|
3
|
|
|
nm
|
|
|
1
|
|
|||||||||
Weighted-average interest rate as of year-end
|
.00
|
%
|
|
1.38
|
%
|
|
.03
|
%
|
|
1.75
|
%
|
|
1.74
|
%
|
|
1.45
|
%
|
|
.00
|
%
|
|
2.68
|
%
|
|
.00
|
%
|
|||||||||
Weighted-average interest rate during the year
|
1.90
|
|
|
.62
|
|
|
.05
|
|
|
1.51
|
|
|
1.46
|
|
|
.79
|
|
|
.01
|
|
|
nm
|
|
|
.00
|
|
|
|
|
U.S. Government
Securities Sold
|
|
Repurchase
Agreements(1)
|
||||||||
(In millions)
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
||||||
Overnight maturity
|
$
|
3,891
|
|
|
$
|
4,112
|
|
|
$
|
1,102
|
|
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|||||||
Issuance Date
|
|
Maturity Date
|
|
Coupon Rate
|
|
Seniority
|
|
Interest Due Dates
|
|
2019
|
|
2018
|
|||||
Parent Company And Non-Banking Subsidiary Issuances
|
|
|
|
|
|||||||||||||
August 18, 2015
|
|
August 18, 2025
|
|
3.55
|
%
|
|
Senior notes
|
|
2/18; 8/18(1)
|
|
$
|
1,331
|
|
|
$
|
1,268
|
|
August 18, 2015
|
|
August 18, 2020
|
|
2.55
|
%
|
|
Senior notes
|
|
2/18; 8/18
|
|
1,191
|
|
|
1,177
|
|
||
November 19, 2013
|
|
November 20, 2023
|
|
3.7
|
%
|
|
Senior notes
|
|
5/20; 11/20(1)
|
|
1,037
|
|
|
1,006
|
|
||
December 15, 2014
|
|
December 16, 2024
|
|
3.3
|
%
|
|
Senior notes
|
|
6/16; 12/16(1)
|
|
1,022
|
|
|
979
|
|
||
May 15, 2013
|
|
May 15, 2023(2)
|
|
3.1
|
%
|
|
Subordinated notes
|
|
5/15; 11/15(1)
|
|
1,006
|
|
|
972
|
|
||
November 1, 2019
|
|
November 1, 2025
|
|
2.354
|
%
|
|
Fixed-to-floating rate senior notes
|
|
5/1; 11/1
|
|
991
|
|
|
—
|
|
||
May 15, 2017
|
|
May 15, 2023
|
|
2.653
|
%
|
|
Fixed-to-floating rate senior notes
|
|
5/15; 11/15(1)
|
|
753
|
|
|
734
|
|
||
March 7, 2011
|
|
March 7, 2021
|
|
4.375
|
%
|
|
Senior notes
|
|
3/7; 9/7(1)
|
|
748
|
|
|
731
|
|
||
May 19, 2016
|
|
May 19, 2021
|
|
1.95
|
%
|
|
Senior notes
|
|
5/19; 11/19(1)
|
|
744
|
|
|
725
|
|
||
May 19, 2016
|
|
May 19, 2026
|
|
2.65
|
%
|
|
Senior notes
|
|
5/19; 11/19(1)
|
|
741
|
|
|
698
|
|
||
December 3, 2018
|
|
December 3, 2029
|
|
4.141
|
%
|
|
Fixed-to-floating rate senior notes
|
|
6/3; 12/3(1)
|
|
546
|
|
|
513
|
|
||
December 3, 2018
|
|
December 3, 2024
|
|
3.776
|
%
|
|
Fixed-to-floating rate senior notes
|
|
6/3; 12/3(1)
|
|
522
|
|
|
507
|
|
||
August 18, 2015
|
|
August 18, 2020
|
|
Floating-rate
|
|
|
Senior notes
|
|
2/18; 5/18; 8/18; 11/18
|
|
500
|
|
|
499
|
|
||
April 30, 2007
|
|
June 15, 2047
|
|
Floating-rate
|
|
|
Junior subordinated debentures
|
|
3/15; 6/15; 9/15; 12/15
|
|
499
|
|
|
794
|
|
||
November 1, 2019
|
|
November 1, 2034
|
|
3.031
|
%
|
|
Fixed-to-floating rate senior subordinated notes
|
|
5/1; 11/1(2)
|
|
492
|
|
|
—
|
|
||
May 15, 1998
|
|
May 15, 2028
|
|
Floating-rate
|
|
|
Junior subordinated debentures
|
|
2/15; 5/15; 8/15; 11/15
|
|
100
|
|
|
150
|
|
||
June 21, 1996
|
|
June 15, 2026(3)
|
|
7.35
|
%
|
|
Senior notes
|
|
6/15; 12/15
|
|
150
|
|
|
150
|
|
||
Parent Company
|
|
|
|||||||||||||||
Long-term finance leases
|
|
136
|
|
|
190
|
|
|||||||||||
|
|
|
|||||||||||||||
Total long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
12,509
|
|
|
$
|
11,093
|
|
|
|
|
|
(1)
|
We have entered into interest rate swap agreements, recorded as fair value hedges, to modify our interest expense on these senior and subordinated notes from a fixed rate to a floating rate. As of both December 31, 2019 and 2018, the carrying value of long-term debt associated with these fair value hedges was $157 million. Refer to Note 10 for additional information about fair value hedges.
|
(2)
|
The subordinated notes qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.
|
(3)
|
We may not redeem notes prior to their maturity.
|
(In millions)
|
December 31, 2019
|
|
December 31, 2018
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
||||
Interest rate contracts:
|
|
|
|
||||
Futures
|
$
|
4,368
|
|
|
$
|
2,348
|
|
Foreign exchange contracts:
|
|
|
|
||||
Forward, swap and spot
|
2,378,808
|
|
|
2,238,819
|
|
||
Options purchased
|
1,581
|
|
|
578
|
|
||
Options written
|
1,110
|
|
|
576
|
|
||
Futures
|
1,040
|
|
|
49
|
|
||
Other:
|
|
|
|
||||
Stable value contracts(1)
|
26,895
|
|
|
26,634
|
|
||
Deferred value awards(2)
|
389
|
|
|
434
|
|
||
Derivatives designated as hedging instruments:
|
|
|
|
||||
Interest rate contracts:
|
|
|
|
||||
Swap agreements
|
15,196
|
|
|
10,596
|
|
||
Foreign exchange contracts:
|
|
|
|
||||
Forward and swap
|
3,176
|
|
|
3,412
|
|
|
|
|
Derivative Assets(1)
|
|
Derivative Liabilities(2)
|
||||||||||||
(In millions)
|
December 31, 2019
|
|
December 31, 2018
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
15,140
|
|
|
$
|
16,369
|
|
|
$
|
15,054
|
|
|
$
|
16,434
|
|
Other derivative contracts
|
—
|
|
|
—
|
|
|
182
|
|
|
214
|
|
||||
Total
|
$
|
15,140
|
|
|
$
|
16,369
|
|
|
$
|
15,236
|
|
|
$
|
16,648
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
96
|
|
|
$
|
88
|
|
Interest rate contracts
|
8
|
|
|
13
|
|
|
49
|
|
|
71
|
|
||||
Total
|
$
|
8
|
|
|
$
|
30
|
|
|
$
|
145
|
|
|
$
|
159
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
(In millions)
|
Location of Gain (Loss) on
Derivative in Consolidated
Statement of Income
|
Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income
|
||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Foreign exchange trading services revenue
|
$
|
630
|
|
|
$
|
723
|
|
|
$
|
632
|
|
Foreign exchange contracts
|
Software and processing fees(1)
|
—
|
|
|
—
|
|
|
(23
|
)
|
|||
Foreign exchange contracts
|
Interest expense(1)
|
(153
|
)
|
|
(41
|
)
|
|
—
|
|
|||
Interest rate contracts
|
Foreign exchange trading services revenue
|
(3
|
)
|
|
(6
|
)
|
|
8
|
|
|||
Interest rate contracts
|
Software and processing fees(1)
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Other derivative contracts
|
Foreign exchange trading services revenue
|
—
|
|
|
5
|
|
|
—
|
|
|||
Other derivative contracts
|
Compensation and employee benefits
|
(205
|
)
|
|
(171
|
)
|
|
(143
|
)
|
|||
Total
|
|
$
|
269
|
|
|
$
|
509
|
|
|
$
|
474
|
|
|
|
|
|
|
|
|
||||||
(1) 2018 includes approximately $15 million of swap costs related to the first quarter of 2018 that were reclassified from software and processing fees to NII.
|
|
December 31, 2019
|
||||||||||||||
|
Hedged Items Currently Designated
|
|
Hedged Items No Longer Designated(1)
|
||||||||||||
(In millions)
|
Carrying Amount of Assets and Liabilities(2)
|
|
Cumulative Hedge Accounting Basis Adjustments
|
|
Carrying Amount of Assets and Liabilities
|
|
Cumulative Hedge Accounting Basis Adjustments
|
||||||||
Long-term debt
|
$
|
9,769
|
|
|
$
|
164
|
|
|
$
|
1,199
|
|
|
$
|
(8
|
)
|
Available-for-sale securities
|
940
|
|
|
49
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
10,709
|
|
|
$
|
213
|
|
|
$
|
1,199
|
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2018
|
||||||||||||||
|
Hedged Items Currently Designated
|
|
Hedged Items No Longer Designated(1)
|
||||||||||||
(In millions)
|
Carrying Amount of Assets and Liabilities(2)
|
|
Cumulative Hedge Accounting Basis Adjustments
|
|
Carrying Amount of Assets and Liabilities
|
|
Cumulative Hedge Accounting Basis Adjustments
|
||||||||
Long-term debt
|
$
|
8,270
|
|
|
$
|
(137
|
)
|
|
$
|
1,197
|
|
|
$
|
(20
|
)
|
Available-for-sale securities
|
1,496
|
|
|
72
|
|
|
50
|
|
|
1
|
|
||||
Total
|
$
|
9,766
|
|
|
$
|
(65
|
)
|
|
$
|
1,247
|
|
|
$
|
(19
|
)
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||
(In millions)
|
Location of Gain (Loss) on Derivative in Consolidated Statement of Income
|
|
Amount of Gain
(Loss) on Derivative Recognized in Consolidated Statement of Income |
|
Hedged Item in Fair Value Hedging Relationship
|
|
Location of Gain (Loss) on Hedged Item in Consolidated Statement of Income
|
|
Amount of Gain
(Loss) on Hedged Item Recognized in Consolidated Statement of Income |
||||||||||||||||||||||
Derivatives designated as fair value hedges:
|
|||||||||||||||||||||||||||||||
Foreign exchange contracts
|
Software and processing fees
|
|
$
|
—
|
|
|
$
|
(74
|
)
|
|
$
|
18
|
|
|
Investment securities
|
|
Software and processing fees
|
|
$
|
—
|
|
|
$
|
74
|
|
|
$
|
(18
|
)
|
||
Foreign exchange contracts
|
Software and processing fees
|
|
—
|
|
|
(328
|
)
|
|
626
|
|
|
|
Foreign exchange deposit
|
|
Software and processing fees
|
|
—
|
|
|
328
|
|
|
(626
|
)
|
|||||||
Interest rate contracts
|
Net interest income
|
|
(4
|
)
|
|
31
|
|
|
—
|
|
|
|
Available-for-sale securities(1)
|
|
Net interest income
|
|
2
|
|
|
(32
|
)
|
|
—
|
|
|||||||
Interest rate contracts
|
Net interest income
|
|
266
|
|
|
(58
|
)
|
|
—
|
|
|
|
Long-term debt
|
|
Net interest income
|
|
(255
|
)
|
|
49
|
|
|
—
|
|
|||||||
Interest rate contracts
|
Software and processing fees
|
|
—
|
|
|
—
|
|
|
39
|
|
—
|
|
Available-for-sale securities(1)
|
|
Software and processing fees
|
|
—
|
|
—
|
|
—
|
|
|
(37
|
)
|
||||||
Interest rate contracts
|
Software and processing fees
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
—
|
|
Long-term debt
|
|
Software and processing fees
|
|
—
|
|
—
|
|
—
|
|
|
39
|
|
||||||
Total
|
|
|
$
|
262
|
|
|
$
|
(429
|
)
|
|
$
|
645
|
|
|
|
|
|
|
$
|
(253
|
)
|
|
|
$
|
419
|
|
|
$
|
(642
|
)
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
(In millions)
|
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative
|
|
|
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
|
|||||||||||||||||||||
Derivatives designated as cash flow hedges:
|
|
|
|||||||||||||||||||||||
Interest rate contracts
|
$
|
8
|
|
|
$
|
(12
|
)
|
|
$
|
(14
|
)
|
|
Net interest income
|
|
$
|
(10
|
)
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
Foreign exchange contracts
|
43
|
|
|
(12
|
)
|
|
(104
|
)
|
|
Net interest income
|
|
27
|
|
|
27
|
|
|
24
|
|
||||||
Total derivatives designated as cash flow hedges
|
$
|
51
|
|
|
$
|
(24
|
)
|
|
$
|
(118
|
)
|
|
|
|
$
|
17
|
|
|
$
|
26
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives designated as net investment hedges:
|
|
|
|||||||||||||||||||||||
Foreign exchange contracts
|
$
|
30
|
|
|
$
|
81
|
|
|
$
|
(160
|
)
|
|
Gains (Losses) related to investment securities, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivatives designated as net investment hedges
|
30
|
|
|
81
|
|
|
(160
|
)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
81
|
|
|
$
|
57
|
|
|
$
|
(278
|
)
|
|
|
|
$
|
17
|
|
|
$
|
26
|
|
|
$
|
26
|
|
Assets:
|
December 31, 2019
|
||||||||||||||||||
|
Gross Amounts of Recognized
Assets(1)(2)
|
|
Gross Amounts Offset in Statement of Condition(3)
|
|
Net Amounts of Assets Presented in Statement of Condition
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(In millions)
|
|
|
|
Cash and Securities Received(4)
|
|
Net Amount(5)
|
|||||||||||||
Derivatives:
|
|
|
|
|
|
|
|||||||||||||
Foreign exchange contracts
|
$
|
15,140
|
|
|
$
|
(8,081
|
)
|
|
$
|
7,059
|
|
|
$
|
—
|
|
|
$
|
7,059
|
|
Interest rate contracts(6)
|
8
|
|
|
(4
|
)
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Cash collateral and securities netting
|
NA
|
|
|
(2,310
|
)
|
|
(2,310
|
)
|
|
(685
|
)
|
|
(2,995
|
)
|
|||||
Total derivatives
|
15,148
|
|
|
(10,395
|
)
|
|
4,753
|
|
|
(685
|
)
|
|
4,068
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Resale agreements and securities borrowing(7)(8)
|
179,989
|
|
|
(159,978
|
)
|
|
20,011
|
|
|
(19,572
|
)
|
|
439
|
|
|||||
Total derivatives and other financial instruments
|
$
|
195,137
|
|
|
$
|
(170,373
|
)
|
|
$
|
24,764
|
|
|
$
|
(20,257
|
)
|
|
$
|
4,507
|
|
Assets:
|
December 31, 2018
|
||||||||||||||||||
|
Gross Amounts of Recognized
Assets(1)(2)
|
|
Gross Amounts Offset in Statement of Condition(3)
|
|
Net Amounts of Assets Presented in Statement of Condition
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(In millions)
|
|
|
|
Cash and Securities Received(4)
|
|
Net Amount(5)
|
|||||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
$
|
16,386
|
|
|
$
|
(10,223
|
)
|
|
$
|
6,163
|
|
|
$
|
—
|
|
|
$
|
6,163
|
|
Interest rate contracts(6)
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Cash collateral and securities netting
|
NA
|
|
|
(987
|
)
|
|
(987
|
)
|
|
(220
|
)
|
|
(1,207
|
)
|
|||||
Total derivatives
|
16,399
|
|
|
(11,210
|
)
|
|
5,189
|
|
|
(220
|
)
|
|
4,969
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Resale agreements and securities borrowing(7)(8)
|
116,143
|
|
|
(91,889
|
)
|
|
24,254
|
|
|
(22,872
|
)
|
|
1,382
|
|
|||||
Total derivatives and other financial instruments
|
$
|
132,542
|
|
|
$
|
(103,099
|
)
|
|
$
|
29,443
|
|
|
$
|
(23,092
|
)
|
|
$
|
6,351
|
|
|
|
|
|
|
Liabilities:
|
December 31, 2019
|
||||||||||||||||||
|
Gross Amounts of Recognized Liabilities(1)(2)
|
|
Gross Amounts Offset in Statement of Condition(3)
|
|
Net Amounts of Liabilities Presented in Statement of Condition
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(In millions)
|
|
|
|
Cash and Securities Received(4)
|
|
Net Amount(5)
|
|||||||||||||
Derivatives:
|
|
|
|
|
|
|
|||||||||||||
Foreign exchange contracts
|
$
|
15,150
|
|
|
$
|
(8,081
|
)
|
|
$
|
7,069
|
|
|
$
|
—
|
|
|
$
|
7,069
|
|
Interest rate contracts(6)
|
49
|
|
|
(4
|
)
|
|
45
|
|
|
—
|
|
|
45
|
|
|||||
Other derivative contracts
|
182
|
|
|
—
|
|
|
182
|
|
|
—
|
|
|
182
|
|
|||||
Cash collateral and securities netting
|
NA
|
|
|
(837
|
)
|
|
(837
|
)
|
|
(557
|
)
|
|
(1,394
|
)
|
|||||
Total derivatives
|
15,381
|
|
|
(8,922
|
)
|
|
6,459
|
|
|
(557
|
)
|
|
5,902
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase agreements and securities lending(7)(8)
|
171,853
|
|
|
(159,977
|
)
|
|
11,876
|
|
|
(10,793
|
)
|
|
1,083
|
|
|||||
Total derivatives and other financial instruments
|
$
|
187,234
|
|
|
$
|
(168,899
|
)
|
|
$
|
18,335
|
|
|
$
|
(11,350
|
)
|
|
$
|
6,985
|
|
Liabilities:
|
December 31, 2018
|
||||||||||||||||||
|
Gross Amounts of Recognized Liabilities(1)(2)
|
|
Gross Amounts Offset in Statement of Condition(3)
|
|
Net Amounts of Liabilities Presented in Statement of Condition
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(In millions)
|
|
|
|
Cash and Securities Received(4)
|
|
Net Amount(5)
|
|||||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
$
|
16,522
|
|
|
$
|
(10,223
|
)
|
|
$
|
6,299
|
|
|
$
|
—
|
|
|
$
|
6,299
|
|
Interest rate contracts(6)
|
71
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
|||||
Other derivative contracts
|
214
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
214
|
|
|||||
Cash collateral and securities netting
|
NA
|
|
|
(1,341
|
)
|
|
(1,341
|
)
|
|
(215
|
)
|
|
(1,556
|
)
|
|||||
Total derivatives
|
16,807
|
|
|
(11,564
|
)
|
|
5,243
|
|
|
(215
|
)
|
|
5,028
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repurchase agreements and securities lending(7)(8)
|
104,494
|
|
|
(91,889
|
)
|
|
12,605
|
|
|
(11,543
|
)
|
|
1,062
|
|
|||||
Total derivatives and other financial instruments
|
$
|
121,301
|
|
|
$
|
(103,453
|
)
|
|
$
|
17,848
|
|
|
$
|
(11,758
|
)
|
|
$
|
6,090
|
|
|
|
|
|
|
|
As of December 31, 2019
|
|
As of December 31, 2018
|
||||||||||||||||||||||||||||
(In millions)
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
Greater than 90 Days
|
|
Total
|
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||||||||
Repurchase agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and agency securities
|
$
|
156,465
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
156,465
|
|
|
$
|
88,904
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
88,904
|
|
Total
|
156,465
|
|
|
—
|
|
|
—
|
|
|
156,465
|
|
|
88,904
|
|
|
—
|
|
|
—
|
|
|
88,904
|
|
||||||||
Securities lending transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
US Treasury and agency securities
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
249
|
|
|
—
|
|
|
—
|
|
|
249
|
|
||||||||
Corporate debt securities
|
354
|
|
|
—
|
|
|
—
|
|
|
354
|
|
|
278
|
|
|
—
|
|
|
—
|
|
|
278
|
|
||||||||
Equity securities
|
7,389
|
|
|
—
|
|
|
130
|
|
|
7,519
|
|
|
6,426
|
|
|
137
|
|
|
—
|
|
|
6,563
|
|
||||||||
Other(1)
|
7,500
|
|
|
—
|
|
|
—
|
|
|
7,500
|
|
|
8,500
|
|
|
—
|
|
|
—
|
|
|
8,500
|
|
||||||||
Total
|
15,258
|
|
|
—
|
|
|
130
|
|
|
15,388
|
|
|
15,453
|
|
|
137
|
|
|
—
|
|
|
15,590
|
|
||||||||
Gross amount of recognized liabilities for repurchase agreements and securities lending
|
$
|
171,723
|
|
|
$
|
—
|
|
|
$
|
130
|
|
|
$
|
171,853
|
|
|
$
|
104,357
|
|
|
$
|
137
|
|
|
$
|
—
|
|
|
$
|
104,494
|
|
|
|
|
|
|
(In millions)
|
December 31, 2019
|
|
December 31, 2018
|
||||
Commitments:
|
|
|
|
||||
Unfunded credit facilities
|
$
|
29,697
|
|
|
$
|
28,951
|
|
Guarantees(1):
|
|
|
|
||||
Indemnified securities financing
|
$
|
367,901
|
|
|
$
|
342,337
|
|
Standby letters of credit
|
3,324
|
|
|
2,985
|
|
|
|
(In millions)
|
December 31, 2019
|
|
December 31, 2018
|
||||
Fair value of indemnified securities financing
|
$
|
367,901
|
|
|
$
|
342,337
|
|
Fair value of cash and securities held by us, as agent, as collateral for indemnified securities financing
|
385,428
|
|
|
357,893
|
|
||
Fair value of collateral for indemnified securities financing invested in indemnified repurchase agreements
|
45,658
|
|
|
42,610
|
|
||
Fair value of cash and securities held by us or our agents as collateral for investments in indemnified repurchase agreements
|
48,887
|
|
|
45,064
|
|
Preferred Stock(2):
|
Issuance Date
|
|
Depositary Shares Issued
|
|
Ownership Interest Per Depositary Share
|
|
Liquidation Preference Per Share
|
|
Liquidation Preference Per Depositary Share
|
|
Per Annum Dividend Rate
|
|
Dividend Payment Frequency
|
|
Carrying Value as of December 31, 2019
(In millions) |
|
Redemption Date(1)
|
||||||
Series C
|
August 2012
|
|
20,000,000
|
|
1/4,000th
|
|
$
|
100,000
|
|
|
$
|
25
|
|
|
5.25%
|
|
Quarterly
|
|
$
|
491
|
|
|
September 15, 2017
|
Series D
|
February 2014
|
|
30,000,000
|
|
1/4,000th
|
|
100,000
|
|
|
25
|
|
|
5.90% to but excluding March 15, 2024, then a floating rate equal to the three-month LIBOR plus 3.108%
|
|
Quarterly
|
|
742
|
|
|
March 15, 2024
|
|||
Series F
|
May 2015
|
|
750,000
|
|
1/100th
|
|
100,000
|
|
|
1,000
|
|
|
5.25% to but excluding September 15, 2020, then a floating rate equal to the three-month LIBOR plus 3.597%
|
|
Semi-annually
|
|
742
|
|
|
September 15, 2020
|
|||
Series G
|
April 2016
|
|
20,000,000
|
|
1/4,000th
|
|
100,000
|
|
|
25
|
|
|
5.35% to but excluding March 15, 2026, then a floating rate equal to the three-month LIBOR plus 3.709%
|
|
Quarterly
|
|
493
|
|
|
March 15, 2026
|
|||
Series H
|
September 2018
|
|
500,000
|
|
1/100th
|
|
100,000
|
|
|
1,000
|
|
|
5.625% to but excluding December 15, 2023, then a floating rate equal to the three-month LIBOR plus 2.539%
|
|
Semi-annually
|
|
494
|
|
|
December 15, 2023
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
(Dollars in millions, except per share amounts)
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
|
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
|
||||||||||||
Preferred Stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series C
|
$
|
5,250
|
|
|
$
|
1.32
|
|
|
$
|
26
|
|
|
$
|
5,250
|
|
|
$
|
1.32
|
|
|
$
|
26
|
|
Series D
|
5,900
|
|
|
1.48
|
|
|
44
|
|
|
5,900
|
|
|
1.48
|
|
|
44
|
|
||||||
Series E
|
6,000
|
|
|
1.52
|
|
|
45
|
|
|
6,000
|
|
|
1.52
|
|
|
45
|
|
||||||
Series F
|
5,250
|
|
|
52.50
|
|
|
40
|
|
|
5,250
|
|
|
52.50
|
|
|
40
|
|
||||||
Series G
|
5,352
|
|
|
1.32
|
|
|
27
|
|
|
5,352
|
|
|
1.32
|
|
|
27
|
|
||||||
Series H
|
5,625
|
|
|
56.25
|
|
|
28
|
|
|
1,219
|
|
|
12.18
|
|
|
6
|
|
||||||
Total
|
|
|
|
|
$
|
210
|
|
|
|
|
|
|
$
|
188
|
|
|
Year Ended December 31, 2019
|
|||||||||
|
Shares Acquired
(In millions) |
|
Average Cost per Share
|
|
Total Acquired
(In millions) |
|||||
2018 Program
|
8.8
|
|
|
$
|
67.97
|
|
|
$
|
600
|
|
2019 Program
|
16.1
|
|
|
62.28
|
|
|
1,000
|
|
||
Total
|
24.9
|
|
|
64.30
|
|
|
$
|
1,600
|
|
|
Years Ended December 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Dividends Declared per Share
|
|
Total
(In millions)
|
|
Dividends Declared per Share
|
|
Total
(In millions)
|
||||||||
Common Stock
|
$
|
1.98
|
|
|
$
|
728
|
|
|
$
|
1.78
|
|
|
$
|
665
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net unrealized (losses) on cash flow hedges
|
$
|
(70
|
)
|
|
$
|
(89
|
)
|
|
$
|
(56
|
)
|
Net unrealized gains (losses) on available-for-sale securities portfolio
|
426
|
|
|
(193
|
)
|
|
148
|
|
|||
Net unrealized gains related to reclassified available-for-sale securities
|
19
|
|
|
58
|
|
|
19
|
|
|||
Net unrealized gains (losses) on available-for-sale securities
|
445
|
|
|
(135
|
)
|
|
167
|
|
|||
Net unrealized (losses) on available-for-sale securities designated in fair value hedges
|
(36
|
)
|
|
(40
|
)
|
|
(64
|
)
|
|||
Net unrealized gains on hedges of net investments in non-U.S. subsidiaries
|
46
|
|
|
16
|
|
|
(65
|
)
|
|||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit
|
(2
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|||
Net unrealized (losses) on retirement plans
|
(187
|
)
|
|
(143
|
)
|
|
(170
|
)
|
|||
Foreign currency translation
|
(1,072
|
)
|
|
(963
|
)
|
|
(815
|
)
|
|||
Total
|
$
|
(876
|
)
|
|
$
|
(1,356
|
)
|
|
$
|
(1,009
|
)
|
(In millions)
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Net Unrealized Gains (Losses) on Available-for-Sale Securities
|
|
Net Unrealized Gains (Losses) on Hedges of Net Investments in Non-U.S. Subsidiaries
|
|
Other-Than-Temporary Impairment on Held-to-Maturity Securities
|
|
Net Unrealized Losses on Retirement Plans
|
|
Foreign Currency Translation
|
|
Total
|
||||||||||||||
Balance as of December 31, 2017
|
$
|
(56
|
)
|
|
$
|
103
|
|
|
$
|
(65
|
)
|
|
$
|
(6
|
)
|
|
$
|
(170
|
)
|
|
$
|
(815
|
)
|
|
$
|
(1,009
|
)
|
Other comprehensive income (loss) before reclassifications
|
(52
|
)
|
|
(285
|
)
|
|
81
|
|
|
6
|
|
|
—
|
|
|
(148
|
)
|
|
(398
|
)
|
|||||||
Amounts reclassified into (out of) earnings
|
19
|
|
|
7
|
|
|
—
|
|
|
(2
|
)
|
|
27
|
|
|
—
|
|
|
51
|
|
|||||||
Other comprehensive income (loss)
|
(33
|
)
|
|
(278
|
)
|
|
81
|
|
|
4
|
|
|
27
|
|
|
(148
|
)
|
|
(347
|
)
|
|||||||
Balance as of December 31, 2018
|
$
|
(89
|
)
|
|
$
|
(175
|
)
|
|
$
|
16
|
|
|
$
|
(2
|
)
|
|
$
|
(143
|
)
|
|
$
|
(963
|
)
|
|
$
|
(1,356
|
)
|
Other comprehensive income (loss) before reclassifications
|
13
|
|
|
563
|
|
|
33
|
|
|
2
|
|
|
—
|
|
|
(42
|
)
|
|
569
|
|
|||||||
Reclassification of certain tax effects(1)
|
(6
|
)
|
|
21
|
|
|
(3
|
)
|
|
(1
|
)
|
|
(28
|
)
|
|
(67
|
)
|
|
(84
|
)
|
|||||||
Amounts reclassified into (out of) earnings
|
12
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(16
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||
Other comprehensive income (loss)
|
19
|
|
|
584
|
|
|
30
|
|
|
—
|
|
|
(44
|
)
|
|
(109
|
)
|
|
480
|
|
|||||||
Balance as of December 31, 2019
|
$
|
(70
|
)
|
|
$
|
409
|
|
|
$
|
46
|
|
|
$
|
(2
|
)
|
|
$
|
(187
|
)
|
|
$
|
(1,072
|
)
|
|
$
|
(876
|
)
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
||||||
|
2019
|
|
2018
|
|
|
||||
(In millions)
|
Amounts Reclassified into
(out of) Earnings |
|
Affected Line Item in Consolidated Statement of Income
|
||||||
Available-for-sale securities:
|
|
|
|
|
|
||||
Net realized gains (losses) from sales of available-for-sale securities, net of related taxes of zero and ($2), respectively
|
$
|
—
|
|
|
$
|
7
|
|
|
Net gains (losses) from sales of available-for-sale securities
|
Held-to-maturity securities:
|
|
|
|
|
|
||||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of zero and $1, respectively
|
(1
|
)
|
|
(2
|
)
|
|
Losses reclassified (from) to other comprehensive income
|
||
Cash flow hedges:
|
|
|
|
|
|
||||
Gain reclassified from accumulated other comprehensive income into Income, net of related taxes of $5 and $7
|
12
|
|
|
19
|
|
|
Net interest income reclassified from other comprehensive income
|
||
Retirement plans:
|
|
|
|
|
|
||||
Amortization of actuarial losses, net of related taxes of ($8) and $8, respectively
|
(16
|
)
|
|
27
|
|
|
Compensation and employee benefits expenses
|
||
Total reclassifications (into) out of Accumulated other comprehensive loss
|
$
|
(5
|
)
|
|
$
|
51
|
|
|
|
|
State Street Corporation
|
|
State Street Bank
|
||||||||||||||||||||||||||||||||
(Dollars in millions)
|
Basel III Advanced Approaches December 31, 2019(1)
|
|
Basel III Standardized Approach December 31, 2019(1)
|
|
Basel III Advanced Approaches December 31, 2018(1)
|
|
Basel III Standardized Approach December 31, 2018(1)
|
|
Basel III Advanced Approaches December 31, 2019(1)
|
|
Basel III Standardized Approach December 31, 2019(1)
|
|
Basel III Advanced Approaches December 31, 2018(1)
|
|
Basel III Standardized Approach December 31, 2018(1)
|
||||||||||||||||||||
Common shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Common stock and related surplus
|
$
|
10,636
|
|
|
$
|
10,636
|
|
|
$
|
10,565
|
|
|
$
|
10,565
|
|
|
$
|
12,893
|
|
|
$
|
12,893
|
|
|
$
|
12,894
|
|
|
$
|
12,894
|
|
||||
Retained earnings
|
21,918
|
|
|
21,918
|
|
|
20,606
|
|
|
20,606
|
|
|
13,218
|
|
|
13,218
|
|
|
14,261
|
|
|
14,261
|
|
||||||||||||
Accumulated other comprehensive income (loss)
|
(870
|
)
|
|
(870
|
)
|
|
(1,332
|
)
|
|
(1,332
|
)
|
|
(654
|
)
|
|
(654
|
)
|
|
(1,112
|
)
|
|
(1,112
|
)
|
||||||||||||
Treasury stock, at cost
|
(10,209
|
)
|
|
(10,209
|
)
|
|
(8,715
|
)
|
|
(8,715
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total
|
21,475
|
|
|
21,475
|
|
|
21,124
|
|
|
21,124
|
|
|
25,457
|
|
|
25,457
|
|
|
26,043
|
|
|
26,043
|
|
||||||||||||
Regulatory capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
|
(9,112
|
)
|
|
(9,112
|
)
|
|
(9,350
|
)
|
|
(9,350
|
)
|
|
(8,839
|
)
|
|
(8,839
|
)
|
|
(9,073
|
)
|
|
(9,073
|
)
|
||||||||||||
Other adjustments
|
(150
|
)
|
|
(150
|
)
|
|
(194
|
)
|
|
(194
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(29
|
)
|
|
(29
|
)
|
||||||||||||
Common equity tier 1 capital
|
12,213
|
|
|
12,213
|
|
|
11,580
|
|
|
11,580
|
|
|
16,617
|
|
|
16,617
|
|
|
16,941
|
|
|
16,941
|
|
||||||||||||
Preferred stock
|
2,962
|
|
|
2,962
|
|
|
3,690
|
|
|
3,690
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Tier 1 capital
|
15,175
|
|
|
15,175
|
|
|
15,270
|
|
|
15,270
|
|
|
16,617
|
|
|
16,617
|
|
|
16,941
|
|
|
16,941
|
|
||||||||||||
Qualifying subordinated long-term debt
|
1,095
|
|
|
1,095
|
|
|
778
|
|
|
778
|
|
|
1,099
|
|
|
1,099
|
|
|
776
|
|
|
776
|
|
||||||||||||
Allowance for loan losses and other
|
5
|
|
|
90
|
|
|
14
|
|
|
83
|
|
|
3
|
|
|
90
|
|
|
11
|
|
|
83
|
|
||||||||||||
Total capital
|
$
|
16,275
|
|
|
$
|
16,360
|
|
|
$
|
16,062
|
|
|
$
|
16,131
|
|
|
$
|
17,719
|
|
|
$
|
17,806
|
|
|
$
|
17,728
|
|
|
$
|
17,800
|
|
||||
Risk-weighted assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Credit risk(2)
|
$
|
54,763
|
|
|
$
|
102,367
|
|
|
$
|
47,738
|
|
|
$
|
97,303
|
|
|
$
|
51,610
|
|
|
$
|
98,979
|
|
|
$
|
45,565
|
|
|
$
|
94,776
|
|
||||
Operational risk(3)
|
47,963
|
|
|
NA
|
|
|
46,060
|
|
|
NA
|
|
|
44,138
|
|
|
NA
|
|
|
44,494
|
|
|
NA
|
|
||||||||||||
Market risk
|
1,638
|
|
|
1,638
|
|
|
1,517
|
|
|
1,517
|
|
|
1,638
|
|
|
1,638
|
|
|
1,517
|
|
|
1,517
|
|
||||||||||||
Total risk-weighted assets
|
$
|
104,364
|
|
|
$
|
104,005
|
|
|
$
|
95,315
|
|
|
$
|
98,820
|
|
|
$
|
97,386
|
|
|
$
|
100,617
|
|
|
$
|
91,576
|
|
|
$
|
96,293
|
|
||||
Adjusted quarterly average assets
|
$
|
219,624
|
|
|
$
|
219,624
|
|
|
$
|
211,924
|
|
|
$
|
211,924
|
|
|
$
|
216,397
|
|
|
$
|
216,397
|
|
|
$
|
209,413
|
|
|
$
|
209,413
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Capital Ratios:
|
2019 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(4)
|
2018 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common equity tier 1 capital
|
8.5
|
%
|
7.5
|
%
|
11.7
|
%
|
|
11.7
|
%
|
|
12.1
|
%
|
|
11.7
|
%
|
|
17.1
|
%
|
|
16.5
|
%
|
|
18.5
|
%
|
|
17.6
|
%
|
||||||||
Tier 1 capital
|
10.0
|
|
9.0
|
|
14.5
|
|
|
14.6
|
|
|
16.0
|
|
|
15.5
|
|
|
17.1
|
|
|
16.5
|
|
|
18.5
|
|
|
17.6
|
|
||||||||
Total capital
|
12.0
|
|
11.0
|
|
15.6
|
|
|
15.7
|
|
|
16.9
|
|
|
16.3
|
|
|
18.2
|
|
|
17.7
|
|
|
19.4
|
|
|
18.5
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Interest income:
|
|
|
|
|
|
||||||
Interest-bearing deposits with banks
|
$
|
416
|
|
|
$
|
387
|
|
|
$
|
180
|
|
Investment securities:
|
|
|
|
|
|
||||||
U.S. Treasury and federal agencies
|
1,443
|
|
|
1,178
|
|
|
854
|
|
|||
State and political subdivisions
|
49
|
|
|
143
|
|
|
226
|
|
|||
Other investments
|
505
|
|
|
560
|
|
|
658
|
|
|||
Securities purchased under resale agreements
|
364
|
|
|
335
|
|
|
264
|
|
|||
Loans and leases
|
769
|
|
|
687
|
|
|
504
|
|
|||
Other interest-earning assets
|
395
|
|
|
372
|
|
|
222
|
|
|||
Total interest income
|
3,941
|
|
|
3,662
|
|
|
2,908
|
|
|||
Interest expense:
|
|
|
|
|
|
||||||
Interest-bearing deposits
|
663
|
|
|
363
|
|
|
163
|
|
|||
Securities sold under repurchase agreements
|
31
|
|
|
13
|
|
|
2
|
|
|||
Other short-term borrowings
|
21
|
|
|
17
|
|
|
10
|
|
|||
Long-term debt
|
414
|
|
|
389
|
|
|
308
|
|
|||
Other interest-bearing liabilities
|
246
|
|
|
209
|
|
|
121
|
|
|||
Total interest expense
|
1,375
|
|
|
991
|
|
|
604
|
|
|||
Net interest income
|
$
|
2,566
|
|
|
$
|
2,671
|
|
|
$
|
2,304
|
|
|
As of December 31,
|
|||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|||
Total number of shares awarded under the 2006 Plan
|
68.9
|
|
|
68.9
|
|
|
68.9
|
|
Total number of shares awarded under the 2017 Plan
|
7.6
|
|
|
3.9
|
|
|
0.4
|
|
|
Shares
(In thousands)
|
|
Weighted-Average
Grant Date Fair
Value
|
|||
Deferred Stock Awards:
|
||||||
Outstanding as of December 31, 2017
|
6,848
|
|
|
$
|
65.44
|
|
Granted
|
2,500
|
|
|
101.25
|
|
|
Vested
|
(3,235
|
)
|
|
70.98
|
|
|
Forfeited
|
(138
|
)
|
|
80.60
|
|
|
Outstanding as of December 31, 2018
|
5,975
|
|
|
77.07
|
|
|
Granted
|
3,168
|
|
|
66.68
|
|
|
Vested
|
(3,089
|
)
|
|
71.20
|
|
|
Forfeited
|
(220
|
)
|
|
75.85
|
|
|
Outstanding as of December 31, 2019
|
5,834
|
|
|
74.33
|
|
|
Shares
(In thousands)
|
|
Weighted-Average
Grant Date Fair Value
|
|||
Performance Awards:
|
||||||
Outstanding as of December 31, 2017
|
1,548
|
|
|
$
|
66.09
|
|
Granted
|
1,067
|
|
|
74.68
|
|
|
Forfeited
|
(1
|
)
|
|
101.26
|
|
|
Paid out
|
(457
|
)
|
|
70.58
|
|
|
Outstanding as of December 31, 2018
|
2,157
|
|
|
69.36
|
|
|
Granted
|
510
|
|
|
66.04
|
|
|
Forfeited
|
(96
|
)
|
|
74.82
|
|
|
Paid out
|
(432
|
)
|
|
51.01
|
|
|
Outstanding as of December 31, 2019
|
2,139
|
|
|
71.82
|
|
(In millions)
|
Year End December 31, 2019
|
||
Finance lease:
|
|
||
Amortization of right-of-use assets
|
$
|
21
|
|
Interest on lease liabilities
|
11
|
|
|
Total finance lease expense
|
32
|
|
|
Sublease income
|
(9
|
)
|
|
Net finance lease expense
|
23
|
|
|
Operating lease:
|
|
||
Operating lease expense
|
179
|
|
|
Sublease income
|
(6
|
)
|
|
Net operating lease expense
|
173
|
|
|
Net lease expense
|
$
|
196
|
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from finance leases
|
$
|
11
|
|
Operating cash flows from operating leases
|
201
|
|
|
Financing cash flows from finance leases
|
54
|
|
|
Right-of-use assets obtained in exchange for new lease obligations:
|
|
||
Operating leases
|
$
|
120
|
|
Finance leases
|
—
|
|
(In millions)
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
2020
|
$
|
183
|
|
|
$
|
41
|
|
|
$
|
224
|
|
2021
|
180
|
|
|
41
|
|
|
221
|
|
|||
2022
|
164
|
|
|
41
|
|
|
205
|
|
|||
2023
|
143
|
|
|
31
|
|
|
174
|
|
|||
2024
|
108
|
|
|
—
|
|
|
108
|
|
|||
Thereafter
|
356
|
|
|
—
|
|
|
356
|
|
|||
Total future minimum lease payments
|
1,134
|
|
|
154
|
|
|
1,288
|
|
|||
Less imputed interest
|
(114
|
)
|
|
(18
|
)
|
|
(132
|
)
|
|||
Total
|
$
|
1,020
|
|
|
$
|
136
|
|
|
$
|
1,156
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Professional services
|
$
|
321
|
|
|
$
|
357
|
|
|
$
|
340
|
|
Sales advertising public relations
|
114
|
|
|
115
|
|
|
67
|
|
|||
Securities processing
|
75
|
|
|
52
|
|
|
10
|
|
|||
Regulatory fees and assessments
|
73
|
|
|
91
|
|
|
108
|
|
|||
Bank operations
|
43
|
|
|
70
|
|
|
80
|
|
|||
Donations
|
51
|
|
|
12
|
|
|
17
|
|
|||
Insurance
|
19
|
|
|
18
|
|
|
20
|
|
|||
Other
|
566
|
|
|
461
|
|
|
287
|
|
|||
Total other expenses
|
$
|
1,262
|
|
|
$
|
1,176
|
|
|
$
|
929
|
|
(In millions)
|
Employee
Related Costs |
|
Real Estate
Actions |
|
Asset and Other Write-offs
|
|
Total
|
||||||||
Accrual Balance at December 31, 2016
|
$
|
37
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
56
|
|
Accruals for Beacon
|
186
|
|
|
32
|
|
|
27
|
|
|
245
|
|
||||
Payments and Other Adjustments
|
(57
|
)
|
|
(17
|
)
|
|
(26
|
)
|
|
(100
|
)
|
||||
Accrual Balance at December 31, 2017
|
166
|
|
|
32
|
|
|
3
|
|
|
201
|
|
||||
Accruals for Beacon
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||
Accruals for Repositioning Charges
|
259
|
|
|
41
|
|
|
—
|
|
|
300
|
|
||||
Payments and Other Adjustments
|
(115
|
)
|
|
(36
|
)
|
|
(2
|
)
|
|
(153
|
)
|
||||
Accrual Balance at December 31, 2018
|
303
|
|
|
37
|
|
|
1
|
|
|
341
|
|
||||
Accruals for Beacon
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Accruals for Repositioning Charges
|
98
|
|
|
12
|
|
|
—
|
|
|
110
|
|
||||
Payments and Other Adjustments
|
(209
|
)
|
|
(42
|
)
|
|
—
|
|
|
(251
|
)
|
||||
Accrual Balance at December 31, 2019
|
$
|
190
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
198
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
157
|
|
|
$
|
122
|
|
|
$
|
343
|
|
State
|
86
|
|
|
148
|
|
|
24
|
|
|||
Non-U.S.
|
357
|
|
|
374
|
|
|
380
|
|
|||
Total current expense
|
600
|
|
|
644
|
|
|
747
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(6
|
)
|
|
(128
|
)
|
|
45
|
|
|||
State
|
33
|
|
|
(22
|
)
|
|
66
|
|
|||
Non-U.S.
|
(157
|
)
|
|
14
|
|
|
(19
|
)
|
|||
Total deferred expense (benefit)
|
(130
|
)
|
|
(136
|
)
|
|
92
|
|
|||
Total income tax expense (benefit)
|
$
|
470
|
|
|
$
|
508
|
|
|
$
|
839
|
|
|
Years Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
U.S. federal income tax rate
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
Changes from statutory rate:
|
|
|
|
|
|
|||
State taxes, net of federal benefit
|
3.4
|
|
|
3.1
|
|
|
2.0
|
|
Tax-exempt income
|
(1.5
|
)
|
|
(2.0
|
)
|
|
(4.3
|
)
|
Business tax credits(1)
|
(5.4
|
)
|
|
(4.1
|
)
|
|
(3.7
|
)
|
Foreign tax differential
|
(0.1
|
)
|
|
(0.6
|
)
|
|
(7.2
|
)
|
Foreign legal entity restructuring
|
(4.3
|
)
|
|
—
|
|
|
—
|
|
Foreign tax credit limitations
|
2.2
|
|
|
0.2
|
|
|
—
|
|
Transition tax
|
—
|
|
|
—
|
|
|
15.2
|
|
Deferred tax revaluation
|
—
|
|
|
(1.0
|
)
|
|
(6.8
|
)
|
Foreign designated earnings
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
Litigation expense
|
1.6
|
|
|
0.3
|
|
|
—
|
|
Other, net
|
0.4
|
|
|
(0.6
|
)
|
|
(1.6
|
)
|
Effective tax rate
|
17.3
|
%
|
|
16.3
|
%
|
|
27.9
|
%
|
|
|
|
December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Other amortizable assets
|
$
|
394
|
|
|
$
|
49
|
|
Tax credit carryforwards
|
387
|
|
|
274
|
|
||
Lease obligations
|
254
|
|
|
—
|
|
||
Deferred compensation
|
120
|
|
|
134
|
|
||
Restructuring charges and other reserves
|
104
|
|
|
156
|
|
||
NOL and other carryforwards
|
73
|
|
|
104
|
|
||
Pension plan
|
66
|
|
|
55
|
|
||
Foreign currency translation
|
57
|
|
|
50
|
|
||
Unrealized losses on investment securities, net
|
—
|
|
|
146
|
|
||
Total deferred tax assets
|
1,455
|
|
|
968
|
|
||
Valuation allowance for deferred tax assets
|
(330
|
)
|
|
(138
|
)
|
||
Deferred tax assets, net of valuation allowance
|
$
|
1,125
|
|
|
$
|
830
|
|
Deferred tax liabilities:
|
|
|
|
||||
Fixed and intangible assets
|
$
|
763
|
|
|
$
|
744
|
|
Investment basis differences
|
258
|
|
|
229
|
|
||
Right-of-use Assets
|
223
|
|
|
—
|
|
||
Unrealized gains on investment securities, net
|
86
|
|
|
—
|
|
||
Other
|
32
|
|
|
11
|
|
||
Total deferred tax liabilities
|
$
|
1,362
|
|
|
$
|
984
|
|
(In millions)
|
Deferred Tax Asset
|
|
Valuation Allowance
|
|
Expiration
|
||||
Other amortizable assets
|
$
|
394
|
|
|
$
|
(243
|
)
|
|
__
|
Tax credits
|
387
|
|
|
(29
|
)
|
|
2029-2039
|
||
NOLs - Non-U.S.
|
33
|
|
|
(18
|
)
|
|
2020-2028, None
|
||
Other carryforwards
|
27
|
|
|
(27
|
)
|
|
None
|
||
NOLs - State
|
13
|
|
|
(13
|
)
|
|
2020-2039
|
|
December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
$
|
108
|
|
|
$
|
94
|
|
|
$
|
71
|
|
Decrease related to agreements with tax authorities
|
(17
|
)
|
|
(40
|
)
|
|
(14
|
)
|
|||
Increase related to tax positions taken during current year
|
13
|
|
|
12
|
|
|
26
|
|
|||
Increase related to tax positions taken during prior years
|
49
|
|
|
44
|
|
|
11
|
|
|||
Decreases related to a lapse of the applicable statute of limitations
|
(4
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Ending balance
|
$
|
149
|
|
|
$
|
108
|
|
|
$
|
94
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
2,242
|
|
|
$
|
2,593
|
|
|
$
|
2,156
|
|
Less:
|
|
|
|
|
|
||||||
Preferred stock dividends
|
(232
|
)
|
|
(188
|
)
|
|
(182
|
)
|
|||
Dividends and undistributed earnings allocated to participating securities(1)
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Net income available to common shareholders
|
$
|
2,009
|
|
|
$
|
2,404
|
|
|
$
|
1,972
|
|
Average common shares outstanding (In thousands):
|
|
|
|
|
|
||||||
Basic average common shares
|
369,911
|
|
|
371,983
|
|
|
374,793
|
|
|||
Effect of dilutive securities: equity-based awards
|
3,755
|
|
|
4,493
|
|
|
5,420
|
|
|||
Diluted average common shares
|
373,666
|
|
|
376,476
|
|
|
380,213
|
|
|||
Anti-dilutive securities(2)
|
2,052
|
|
|
1,011
|
|
|
188
|
|
|||
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.43
|
|
|
$
|
6.46
|
|
|
$
|
5.26
|
|
Diluted(3)
|
5.38
|
|
|
6.39
|
|
|
5.19
|
|
|
|
•
|
Net acquisition and restructuring costs of $77 million;
|
•
|
Net repositioning charges of $110 million; and
|
•
|
Legal and related expenses of $172 million.
|
•
|
Net repositioning charges related to organizational changes and management streamlining of $300 million;
|
•
|
Business exit costs of $24 million;
|
•
|
Legal and related expenses of $50 million; and
|
•
|
Net acquisition and restructuring costs of $24 million.
|
|
Years Ended December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Investment
Servicing |
|
Investment
Management |
|
Other
|
|
Total
|
||||||||||||||||||||||||||||||||||||||||
(Dollars in millions)
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
Servicing fees
|
$
|
5,074
|
|
|
$
|
5,429
|
|
|
$
|
5,365
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
5,074
|
|
|
$
|
5,421
|
|
|
$
|
5,365
|
|
Management fees
|
—
|
|
|
—
|
|
|
—
|
|
|
1,771
|
|
|
1,851
|
|
|
1,616
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,771
|
|
|
1,851
|
|
|
1,616
|
|
||||||||||||
Foreign exchange trading services
|
974
|
|
|
1,071
|
|
|
999
|
|
|
137
|
|
|
130
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,111
|
|
|
1,201
|
|
|
1,071
|
|
||||||||||||
Securities finance
|
462
|
|
|
543
|
|
|
606
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
471
|
|
|
543
|
|
|
606
|
|
||||||||||||
Software and processing fees(1)(2)
|
691
|
|
|
443
|
|
|
336
|
|
|
29
|
|
|
(5
|
)
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
720
|
|
|
438
|
|
|
343
|
|
||||||||||||
Total fee revenue(1)
|
7,201
|
|
|
7,486
|
|
|
7,306
|
|
|
1,946
|
|
|
1,976
|
|
|
1,695
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
9,147
|
|
|
9,454
|
|
|
9,001
|
|
||||||||||||
Net interest income
|
2,590
|
|
|
2,691
|
|
|
2,309
|
|
|
(24
|
)
|
|
(20
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,566
|
|
|
2,671
|
|
|
2,304
|
|
||||||||||||
Total other income
|
43
|
|
|
6
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
6
|
|
|
(39
|
)
|
||||||||||||
Total revenue(1)
|
9,834
|
|
|
10,183
|
|
|
9,576
|
|
|
1,922
|
|
|
1,956
|
|
|
1,690
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
11,756
|
|
|
12,131
|
|
|
11,266
|
|
||||||||||||
Provision for loan losses
|
10
|
|
|
15
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
15
|
|
|
2
|
|
||||||||||||
Total expenses(1)
|
7,140
|
|
|
7,081
|
|
|
6,717
|
|
|
1,535
|
|
|
1,544
|
|
|
1,286
|
|
|
359
|
|
|
390
|
|
|
266
|
|
|
9,034
|
|
|
9,015
|
|
|
8,269
|
|
||||||||||||
Income before income tax expense
|
$
|
2,684
|
|
|
$
|
3,087
|
|
|
$
|
2,857
|
|
|
$
|
387
|
|
|
$
|
412
|
|
|
$
|
404
|
|
|
$
|
(359
|
)
|
|
$
|
(398
|
)
|
|
$
|
(266
|
)
|
|
$
|
2,712
|
|
|
$
|
3,101
|
|
|
$
|
2,995
|
|
Pre-tax margin
|
27
|
%
|
|
30
|
%
|
|
30
|
%
|
|
20
|
%
|
|
21
|
%
|
|
24
|
%
|
|
|
|
|
|
|
|
23
|
%
|
|
26
|
%
|
|
27
|
%
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Average assets (in billions)
|
$
|
220.3
|
|
|
$
|
220.2
|
|
|
$
|
214.0
|
|
|
$
|
3.0
|
|
|
$
|
3.2
|
|
|
$
|
5.4
|
|
|
|
|
|
|
|
|
$
|
223.3
|
|
|
$
|
223.4
|
|
|
$
|
219.4
|
|
|
|
|
|
|
Year Ended December 31, 2019
|
||||||||||||||||||||||||||||||||||||||
|
Investment Servicing
|
|
Investment Management
|
|
Other
|
|
Total
|
||||||||||||||||||||||||||||||||
(Dollars in millions)
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
2019
|
||||||||||||||||||||
Servicing fees
|
$
|
5,074
|
|
|
$
|
—
|
|
|
$
|
5,074
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,074
|
|
Management fees
|
—
|
|
|
—
|
|
|
—
|
|
|
1,771
|
|
|
—
|
|
|
1,771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,771
|
|
||||||||||
Foreign exchange trading services
|
346
|
|
|
628
|
|
|
974
|
|
|
137
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,111
|
|
||||||||||
Securities finance
|
259
|
|
|
203
|
|
|
462
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
471
|
|
||||||||||
Software and processing fees
|
456
|
|
|
235
|
|
|
691
|
|
|
—
|
|
|
29
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
720
|
|
||||||||||
Total fee revenue
|
6,135
|
|
|
1,066
|
|
|
7,201
|
|
|
1,908
|
|
|
38
|
|
|
1,946
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,147
|
|
||||||||||
Net interest income
|
—
|
|
|
2,590
|
|
|
2,590
|
|
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,566
|
|
||||||||||
Total other income
|
—
|
|
|
43
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
||||||||||
Total revenue
|
$
|
6,135
|
|
|
$
|
3,699
|
|
|
$
|
9,834
|
|
|
$
|
1,908
|
|
|
$
|
14
|
|
|
$
|
1,922
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||||||||||||||||||||||
|
Investment Servicing
|
|
Investment Management
|
|
Other
|
|
Total
|
||||||||||||||||||||||||||||||||
(Dollars in millions)
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
2018
|
||||||||||||||||||||
Servicing fees
|
$
|
5,429
|
|
|
$
|
—
|
|
|
$
|
5,429
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
5,421
|
|
Management fees
|
—
|
|
|
—
|
|
|
—
|
|
|
1,851
|
|
|
—
|
|
|
1,851
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,851
|
|
||||||||||
Foreign exchange trading services
|
361
|
|
|
710
|
|
|
1,071
|
|
|
130
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,201
|
|
||||||||||
Securities finance
|
308
|
|
|
235
|
|
|
543
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
543
|
|
||||||||||
Software and processing fees
|
209
|
|
|
234
|
|
|
443
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
438
|
|
||||||||||
Total fee revenue
|
6,307
|
|
|
1,179
|
|
|
7,486
|
|
|
1,981
|
|
|
(5
|
)
|
|
1,976
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
9,454
|
|
||||||||||
Net interest income
|
—
|
|
|
2,691
|
|
|
2,691
|
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,671
|
|
||||||||||
Total other income
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||||||
Total revenue
|
$
|
6,307
|
|
|
$
|
3,876
|
|
|
$
|
10,183
|
|
|
$
|
1,981
|
|
|
$
|
(25
|
)
|
|
$
|
1,956
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
12,131
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||||
(In millions)
|
Non-U.S.(1)
|
|
U.S.
|
|
Total
|
|
Non-U.S.(1)
|
|
U.S.
|
|
Total
|
|
Non-U.S.(1)
|
|
U.S.
|
|
Total
|
||||||||||||||||||
Total revenue
|
$
|
4,974
|
|
|
$
|
6,782
|
|
|
$
|
11,756
|
|
|
$
|
5,190
|
|
|
$
|
6,941
|
|
|
$
|
12,131
|
|
|
$
|
4,734
|
|
|
$
|
6,532
|
|
|
$
|
11,266
|
|
Income before income tax expense
|
1,159
|
|
|
1,553
|
|
|
2,712
|
|
|
1,294
|
|
|
1,807
|
|
|
3,101
|
|
|
1,230
|
|
|
1,765
|
|
|
2,995
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash dividends from consolidated banking subsidiary
|
$
|
3,300
|
|
|
$
|
785
|
|
|
$
|
2,224
|
|
Cash dividends from consolidated non-banking subsidiaries and unconsolidated entities
|
285
|
|
|
41
|
|
|
12
|
|
|||
Other, net
|
149
|
|
|
58
|
|
|
127
|
|
|||
Total revenue
|
3,734
|
|
|
884
|
|
|
2,363
|
|
|||
Interest expense
|
415
|
|
|
381
|
|
|
297
|
|
|||
Other expenses
|
108
|
|
|
162
|
|
|
94
|
|
|||
Total expenses
|
523
|
|
|
543
|
|
|
391
|
|
|||
Income tax (benefit)
|
(91
|
)
|
|
(127
|
)
|
|
(86
|
)
|
|||
Income before equity in undistributed income of consolidated subsidiaries and unconsolidated entities
|
3,302
|
|
|
468
|
|
|
2,058
|
|
|||
Equity in undistributed income of consolidated subsidiaries and unconsolidated entities:
|
|
|
|
|
|
||||||
Consolidated banking subsidiary
|
(1,070
|
)
|
|
1,944
|
|
|
(1
|
)
|
|||
Consolidated non-banking subsidiaries and unconsolidated entities
|
10
|
|
|
181
|
|
|
99
|
|
|||
Net income
|
$
|
2,242
|
|
|
$
|
2,593
|
|
|
$
|
2,156
|
|
|
As of December 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Assets:
|
|
|
|
||||
Interest-bearing deposits with consolidated banking subsidiary
|
$
|
428
|
|
|
$
|
486
|
|
Trading account assets
|
393
|
|
|
357
|
|
||
Investment securities available-for-sale
|
250
|
|
|
224
|
|
||
Investments in subsidiaries:
|
|
|
|
||||
Consolidated banking subsidiary
|
25,451
|
|
|
25,966
|
|
||
Consolidated non-banking subsidiaries
|
7,240
|
|
|
6,726
|
|
||
Unconsolidated entities
|
117
|
|
|
106
|
|
||
Notes and other receivables from:
|
|
|
|
||||
Consolidated banking subsidiary
|
—
|
|
|
64
|
|
||
Consolidated non-banking subsidiaries and unconsolidated entities
|
3,361
|
|
|
2,337
|
|
||
Other assets
|
270
|
|
|
96
|
|
||
Total assets
|
$
|
37,510
|
|
|
$
|
36,362
|
|
Liabilities:
|
|
|
|
||||
Accrued expenses and other liabilities
|
$
|
696
|
|
|
$
|
685
|
|
Long-term debt
|
12,383
|
|
|
10,940
|
|
||
Total liabilities
|
13,079
|
|
|
11,625
|
|
||
Shareholders’ equity
|
24,431
|
|
|
24,737
|
|
||
Total liabilities and shareholders’ equity
|
$
|
37,510
|
|
|
$
|
36,362
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided by operating activities
|
$
|
2,684
|
|
|
$
|
2,250
|
|
|
$
|
2,047
|
|
Investing Activities:
|
|
|
|
|
|
||||||
Net decrease (increase) in interest-bearing deposits with consolidated banking subsidiary
|
58
|
|
|
46
|
|
|
3,103
|
|
|||
Proceeds from sales and maturities of available-for-sale securities
|
900
|
|
|
—
|
|
|
—
|
|
|||
Purchases of available-for-sale securities
|
(921
|
)
|
|
(224
|
)
|
|
—
|
|
|||
Investments in consolidated banking and non-banking subsidiaries
|
(6,165
|
)
|
|
(4,883
|
)
|
|
(7,672
|
)
|
|||
Sale or repayment of investment in consolidated banking and non-banking subsidiaries
|
5,345
|
|
|
2,472
|
|
|
4,216
|
|
|||
Net increase in investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
172
|
|
|||
Net cash (used in) provided by investing activities
|
(783
|
)
|
|
(2,589
|
)
|
|
(181
|
)
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt, net of issuance costs
|
1,495
|
|
|
996
|
|
|
748
|
|
|||
Payments for long-term debt
|
(50
|
)
|
|
(1,000
|
)
|
|
(450
|
)
|
|||
Proceeds from issuance of preferred stock, net of issuance costs
|
—
|
|
|
495
|
|
|
—
|
|
|||
Proceeds from issuance of common stock, net of issuance costs
|
—
|
|
|
1,150
|
|
|
—
|
|
|||
Payments for redemption of preferred stock
|
(750
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchases of common stock
|
(1,585
|
)
|
|
(350
|
)
|
|
(1,292
|
)
|
|||
Repurchases of common stock for employee tax withholding
|
(81
|
)
|
|
(124
|
)
|
|
(104
|
)
|
|||
Payments for cash dividends
|
(930
|
)
|
|
(828
|
)
|
|
(768
|
)
|
|||
Net cash provided (used in) financing activities
|
(1,901
|
)
|
|
339
|
|
|
(1,866
|
)
|
|||
Net change
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and due from banks at beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and due from banks at end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Years Ended December 31,
|
|||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||
(Dollars in millions; fully
taxable-equivalent basis) |
Average
Balance
|
|
Interest
|
|
Average
Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Rate
|
|||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits with U.S. banks
|
$
|
16,815
|
|
|
$
|
360
|
|
|
2.14
|
%
|
|
$
|
18,081
|
|
|
$
|
345
|
|
|
1.91
|
%
|
|
$
|
16,790
|
|
|
$
|
184
|
|
|
1.10
|
%
|
Interest-bearing deposits with non-U.S. banks
|
31,685
|
|
|
56
|
|
|
.18
|
|
|
36,247
|
|
|
42
|
|
|
.12
|
|
|
30,724
|
|
|
(4
|
)
|
|
(.01
|
)
|
||||||
Securities purchased under resale agreements
|
2,506
|
|
|
364
|
|
|
14.54
|
|
|
2,901
|
|
|
335
|
|
|
11.55
|
|
|
2,131
|
|
|
264
|
|
|
12.38
|
|
||||||
Trading account assets
|
884
|
|
|
1
|
|
|
.11
|
|
|
1,051
|
|
|
—
|
|
|
—
|
|
|
1,011
|
|
|
(1
|
)
|
|
(.12
|
)
|
||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Treasury and federal agencies(1)
|
56,639
|
|
|
1,443
|
|
|
2.55
|
|
|
48,449
|
|
|
1,178
|
|
|
2.43
|
|
|
43,273
|
|
|
854
|
|
|
1.97
|
|
||||||
State and political subdivisions(1)
|
1,869
|
|
|
62
|
|
|
3.31
|
|
|
5,481
|
|
|
189
|
|
|
3.45
|
|
|
9,928
|
|
|
378
|
|
|
3.80
|
|
||||||
Other investments
|
33,260
|
|
|
504
|
|
|
1.51
|
|
|
34,140
|
|
|
560
|
|
|
1.64
|
|
|
42,578
|
|
|
659
|
|
|
1.55
|
|
||||||
Loans
|
24,073
|
|
|
775
|
|
|
3.22
|
|
|
23,147
|
|
|
687
|
|
|
2.97
|
|
|
21,149
|
|
|
498
|
|
|
2.36
|
|
||||||
Lease financing(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
426
|
|
|
11
|
|
|
2.53
|
|
|
767
|
|
|
21
|
|
|
2.67
|
|
||||||
Other interest-earning assets
|
14,160
|
|
|
395
|
|
|
2.79
|
|
|
15,714
|
|
|
372
|
|
|
2.37
|
|
|
22,884
|
|
|
222
|
|
|
.97
|
|
||||||
Total interest-earning assets(1)
|
181,891
|
|
|
3,960
|
|
|
2.18
|
|
|
185,637
|
|
|
3,719
|
|
|
2.00
|
|
|
191,235
|
|
|
3,075
|
|
|
1.61
|
|
||||||
Cash and due from banks
|
3,390
|
|
|
|
|
|
|
3,178
|
|
|
|
|
|
|
3,097
|
|
|
|
|
|
||||||||||||
Other assets
|
38,053
|
|
|
|
|
|
|
34,570
|
|
|
|
|
|
|
25,118
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
223,334
|
|
|
|
|
|
|
$
|
223,385
|
|
|
|
|
|
|
$
|
219,450
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities and shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Time
|
$
|
20,443
|
|
|
$
|
222
|
|
|
1.08
|
%
|
|
$
|
17,081
|
|
|
$
|
121
|
|
|
.71
|
%
|
|
$
|
12,020
|
|
|
$
|
72
|
|
|
.61
|
%
|
Savings
|
47,104
|
|
|
317
|
|
|
.67
|
|
|
37,872
|
|
|
135
|
|
|
.36
|
|
|
18,603
|
|
|
24
|
|
|
.13
|
|
||||||
Non-U.S.
|
61,301
|
|
|
124
|
|
|
.20
|
|
|
70,623
|
|
|
107
|
|
|
.15
|
|
|
91,937
|
|
|
67
|
|
|
.07
|
|
||||||
Total interest-bearing deposits
|
128,848
|
|
|
663
|
|
|
.51
|
|
|
125,576
|
|
|
363
|
|
|
.29
|
|
|
122,560
|
|
|
163
|
|
|
.13
|
|
||||||
Securities sold under repurchase agreements
|
1,616
|
|
|
31
|
|
|
1.90
|
|
|
2,048
|
|
|
13
|
|
|
.62
|
|
|
3,683
|
|
|
2
|
|
|
.05
|
|
||||||
Other short-term borrowings
|
1,524
|
|
|
21
|
|
|
1.37
|
|
|
1,327
|
|
|
17
|
|
|
1.28
|
|
|
1,313
|
|
|
10
|
|
|
.80
|
|
||||||
Long-term debt
|
11,474
|
|
|
414
|
|
|
3.61
|
|
|
10,686
|
|
|
389
|
|
|
3.64
|
|
|
11,595
|
|
|
308
|
|
|
2.66
|
|
||||||
Other interest-bearing liabilities
|
4,103
|
|
|
246
|
|
|
6.00
|
|
|
4,956
|
|
|
209
|
|
|
4.20
|
|
|
4,607
|
|
|
121
|
|
|
2.63
|
|
||||||
Total interest-bearing liabilities
|
147,565
|
|
|
1,375
|
|
|
.93
|
|
|
144,593
|
|
|
991
|
|
|
.68
|
|
|
143,758
|
|
|
604
|
|
|
.42
|
|
||||||
Non-interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Special time
|
15,338
|
|
|
|
|
|
|
19,187
|
|
|
|
|
|
|
27,402
|
|
|
|
|
|
||||||||||||
Demand
|
13,552
|
|
|
|
|
|
|
16,260
|
|
|
|
|
|
|
13,556
|
|
|
|
|
|
||||||||||||
Non-U.S.(2)
|
524
|
|
|
|
|
|
|
385
|
|
|
|
|
|
|
290
|
|
|
|
|
|
||||||||||||
Other liabilities
|
21,299
|
|
|
|
|
|
|
19,804
|
|
|
|
|
|
|
12,379
|
|
|
|
|
|
||||||||||||
Shareholders’ equity
|
25,056
|
|
|
|
|
|
|
23,156
|
|
|
|
|
|
|
22,065
|
|
|
|
|
|
||||||||||||
Total liabilities and shareholders’ equity
|
$
|
223,334
|
|
|
|
|
|
|
$
|
223,385
|
|
|
|
|
|
|
$
|
219,450
|
|
|
|
|
|
|||||||||
Net interest income, fully taxable-equivalent basis
|
|
|
$
|
2,585
|
|
|
|
|
|
|
$
|
2,728
|
|
|
|
|
|
|
$
|
2,471
|
|
|
|
|||||||||
Excess of rate earned over rate paid
|
|
|
|
|
1.25
|
%
|
|
|
|
|
|
1.32
|
%
|
|
|
|
|
|
1.19
|
%
|
||||||||||||
Net interest margin(3)
|
|
|
|
|
1.42
|
|
|
|
|
|
|
1.47
|
|
|
|
|
|
|
1.29
|
|
|
|
|
|
(1)
|
Fully taxable-equivalent revenue is a method of presentation in which the tax savings achieved by investing in tax-exempt investment securities and certain leases are included in interest income with a corresponding charge to income tax expense. This method facilitates the comparison of the performance of these assets. The adjustments are computed using a federal income tax rate of 35% for the period ending in 2017, and a tax rate of 21% for periods ending in 2018 and 2019, adjusted for applicable state income taxes, net of the related federal tax benefit. The fully taxable-equivalent adjustments included in interest income presented above were $19 million, $57 million and $167 million for the years ended December 31, 2019, 2018 and 2017, respectively, and were substantially related to tax-exempt securities (state and political subdivisions).
|
(2)
|
Non-U.S. non-interest-bearing deposits were $820 million, $1,165 million and $762 million as of December 31, 2019, 2018 and 2017, respectively.
|
(3)
|
NIM is calculated by dividing fully taxable-equivalent NII by average total interest-earning assets.
|
Years Ended December 31,
|
2019 Compared to 2018
|
|
2018 Compared to 2017
|
||||||||||||||||||||
(Dollars in millions; fully
taxable-equivalent basis) |
Change in
Volume |
|
Change in
Rate |
|
Net (Decrease)
Increase |
|
Change in
Volume
|
|
Change in
Rate
|
|
Net (Decrease)
Increase
|
||||||||||||
Interest income related to:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing deposits with U.S. banks
|
$
|
(24
|
)
|
|
$
|
39
|
|
|
$
|
15
|
|
|
$
|
14
|
|
|
$
|
147
|
|
|
$
|
161
|
|
Interest-bearing deposits with non-U.S. banks
|
(5
|
)
|
|
19
|
|
|
14
|
|
|
(1
|
)
|
|
47
|
|
|
46
|
|
||||||
Securities purchased under resale agreements
|
(46
|
)
|
|
75
|
|
|
29
|
|
|
95
|
|
|
(24
|
)
|
|
71
|
|
||||||
Trading account assets
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies
|
199
|
|
|
66
|
|
|
265
|
|
|
102
|
|
|
222
|
|
|
324
|
|
||||||
State and political subdivisions
|
(125
|
)
|
|
(2
|
)
|
|
(127
|
)
|
|
(169
|
)
|
|
(20
|
)
|
|
(189
|
)
|
||||||
Other investments
|
(14
|
)
|
|
(42
|
)
|
|
(56
|
)
|
|
(131
|
)
|
|
32
|
|
|
(99
|
)
|
||||||
Loans
|
27
|
|
|
61
|
|
|
88
|
|
|
47
|
|
|
142
|
|
|
189
|
|
||||||
Lease financing
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|
(9
|
)
|
|
(1
|
)
|
|
(10
|
)
|
||||||
Other interest-earning assets
|
(37
|
)
|
|
60
|
|
|
23
|
|
|
(70
|
)
|
|
220
|
|
|
150
|
|
||||||
Total interest-earning assets
|
(36
|
)
|
|
277
|
|
|
241
|
|
|
(122
|
)
|
|
766
|
|
|
644
|
|
||||||
Interest expense related to:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Time
|
24
|
|
|
77
|
|
|
101
|
|
|
30
|
|
|
19
|
|
|
49
|
|
||||||
Savings
|
33
|
|
|
149
|
|
|
182
|
|
|
24
|
|
|
87
|
|
|
111
|
|
||||||
Non-U.S.
|
(14
|
)
|
|
31
|
|
|
17
|
|
|
(15
|
)
|
|
55
|
|
|
40
|
|
||||||
Securities sold under repurchase agreements
|
(3
|
)
|
|
21
|
|
|
18
|
|
|
(1
|
)
|
|
12
|
|
|
11
|
|
||||||
Other short-term borrowings
|
3
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||||
Long-term debt
|
29
|
|
|
(4
|
)
|
|
25
|
|
|
(24
|
)
|
|
105
|
|
|
81
|
|
||||||
Other interest-bearing liabilities
|
(36
|
)
|
|
73
|
|
|
37
|
|
|
9
|
|
|
79
|
|
|
88
|
|
||||||
Total interest-bearing liabilities
|
36
|
|
|
348
|
|
|
384
|
|
|
23
|
|
|
364
|
|
|
387
|
|
||||||
Net interest income
|
$
|
(72
|
)
|
|
$
|
(71
|
)
|
|
$
|
(143
|
)
|
|
$
|
(145
|
)
|
|
$
|
402
|
|
|
$
|
257
|
|
(Dollars in millions,
except per share amounts; shares in thousands)
|
4Q19
|
|
3Q19
|
|
2Q19
|
|
1Q19
|
|
4Q18(1)
|
|
3Q18(1)
|
|
2Q18(1)
|
|
1Q18(1)
|
||||||||||||||||||
Total fee revenue
|
$
|
2,368
|
|
|
$
|
2,259
|
|
|
$
|
2,260
|
|
|
$
|
2,260
|
|
|
$
|
2,326
|
|
|
$
|
2,318
|
|
|
$
|
2,395
|
|
|
$
|
2,415
|
|
||
Interest income
|
906
|
|
|
1,001
|
|
|
1,007
|
|
|
1,027
|
|
|
982
|
|
|
916
|
|
|
907
|
|
|
857
|
|
||||||||||
Interest expense
|
270
|
|
|
357
|
|
|
394
|
|
|
354
|
|
|
285
|
|
|
244
|
|
|
248
|
|
|
214
|
|
||||||||||
Net interest income
|
636
|
|
|
644
|
|
|
613
|
|
|
673
|
|
|
697
|
|
|
672
|
|
|
659
|
|
|
643
|
|
||||||||||
Total other income
|
44
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
9
|
|
|
(2
|
)
|
||||||||
Total revenue
|
3,048
|
|
|
2,903
|
|
|
2,873
|
|
|
2,932
|
|
|
3,023
|
|
|
2,989
|
|
|
3,063
|
|
|
3,056
|
|
||||||||||
Provision for loan losses
|
3
|
|
|
2
|
|
|
1
|
|
|
4
|
|
|
8
|
|
|
5
|
|
|
2
|
|
|
—
|
|
||||||||||
Total expenses
|
2,407
|
|
|
2,180
|
|
|
2,154
|
|
|
2,293
|
|
|
2,486
|
|
|
2,091
|
|
|
2,170
|
|
|
2,268
|
|
||||||||||
Income before income tax expense
|
638
|
|
|
721
|
|
|
718
|
|
|
635
|
|
|
529
|
|
|
893
|
|
|
891
|
|
|
788
|
|
||||||||||
Income tax expense (benefit)
|
74
|
|
|
138
|
|
|
131
|
|
|
127
|
|
|
92
|
|
|
129
|
|
|
158
|
|
|
129
|
|
||||||||||
Net income
|
$
|
564
|
|
|
$
|
583
|
|
|
$
|
587
|
|
|
$
|
508
|
|
|
$
|
437
|
|
|
$
|
764
|
|
|
$
|
733
|
|
|
$
|
659
|
|
||
Net income available to common shareholders
|
$
|
492
|
|
|
$
|
528
|
|
|
$
|
537
|
|
|
$
|
452
|
|
|
$
|
396
|
|
|
$
|
708
|
|
|
$
|
697
|
|
|
$
|
603
|
|
||
Earnings per common share(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Basic
|
$
|
1.36
|
|
|
$
|
1.44
|
|
|
$
|
1.44
|
|
|
$
|
1.20
|
|
|
$
|
1.04
|
|
|
$
|
1.89
|
|
|
$
|
1.91
|
|
|
$
|
1.64
|
|
||
Diluted
|
1.35
|
|
|
1.42
|
|
|
1.42
|
|
|
1.18
|
|
|
1.03
|
|
|
1.87
|
|
|
1.88
|
|
|
1.62
|
|
||||||||||
Average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Basic
|
361,439
|
|
|
366,732
|
|
|
373,773
|
|
|
377,915
|
|
|
379,741
|
|
|
374,963
|
|
|
365,619
|
|
|
367,439
|
|
||||||||||
Diluted
|
365,851
|
|
|
370,595
|
|
|
377,577
|
|
|
381,703
|
|
|
383,651
|
|
|
379,383
|
|
|
370,410
|
|
|
372,619
|
|
||||||||||
Dividends per common share
|
$
|
.52
|
|
|
$
|
.52
|
|
|
$
|
.47
|
|
|
$
|
.47
|
|
|
$
|
.47
|
|
|
$
|
.47
|
|
|
$
|
.42
|
|
|
$
|
.42
|
|
|
|
|
|
(1)
|
The amounts for 2018 were updated from previously reported amounts due to the change in accounting method that we made during the first quarter of 2019. We voluntarily changed our accounting method under the FASB ASC 323, Investments - Equity Method and Joint Ventures, for investments in low income housing tax credit (LIHTC) from the equity method of accounting to the proportional amortization method of accounting. Additional information about the effect of the changes on the financial statement line items for prior periods is provided by Exhibit 99.2 to our Current Report on Form 8-K filed with the SEC on May 2, 2019.
|
(2)
|
Basic and diluted earnings per common share for full-year 2019 and basic earnings per common share for full-year 2018 do not equal the sum of the four quarters for the year.
|
ACRONYMS
|
|||
|
|
|
|
ABS
|
Asset-backed securities
|
LCR(1)
|
Liquidity coverage ratio
|
AFS
|
Available-for-sale
|
LIHTC
|
Low income housing tax credits
|
AML
|
Anti-money laundering
|
LDA model
|
Loss distribution approach model
|
AOCI
|
Accumulated other comprehensive income (loss)
|
LIBOR
|
London Interbank Offered Rate
|
ASU
|
Accounting Standards Update
|
LTD
|
Long-term debt
|
AUC/A
|
Assets under custody and/or administration
|
MBS
|
Mortgage-backed securities
|
AUM
|
Assets under management
|
MRAC
|
Management Risk and Capital Committee
|
BCRC
|
Business Conduct Risk Committee
|
MRC
|
Model Risk Committee
|
bps
|
Basis points
|
MRM
|
Model Risk Management
|
CAP
|
Capital adequacy process
|
MVG
|
Model Validation Group
|
CCAR
|
Comprehensive Capital Analysis and Review
|
NII
|
Net interest income
|
CRD
|
Charles River Development
|
NIM
|
Net interest margin
|
CET1(1)
|
Common equity tier 1
|
NOL
|
Net Operating Loss
|
CFTC
|
Commodity Futures Trading Commission
|
NSFR(1)
|
Net stable funding ratio
|
CIS
|
Corporate Information Security
|
ORM
|
Operational risk management
|
COSO
|
Committee of Sponsoring Organizations of the Treadway Commission
|
OTC
|
Over-the-counter
|
CRO
|
Chief Risk Officer
|
OTTI
|
Other-than-temporary-impairment
|
CRPC
|
Credit Risk & Policy Committee
|
PCA
|
Prompt corrective action
|
CVA
|
Credit valuation adjustment
|
PCAOB
|
Public Company Accounting Oversight Board
|
DOJ
|
Department of Justice
|
PD(1)
|
Probability-of-default
|
DOL
|
Department of Labor
|
P&L
|
Profit-and-loss
|
E&A Committee
|
Examining and Audit Committee
|
RC
|
Risk Committee
|
ECB
|
European Central Bank
|
RWA(1)
|
Risk-weighted asset
|
EGRRCPA
|
Economic Growth, Regulatory Relief, and Consumer Protection Act
|
SCB
|
Stress Capital Buffer
|
EMEA
|
Europe, Middle East, and Africa
|
SEC
|
Securities and Exchange Commission
|
EPS
|
Earnings per share
|
SIFI
|
Systemically important financial institutions
|
ERM
|
Enterprise Risk Management
|
SLB
|
Stress Leverage Buffer
|
eSLR
|
Enhanced supplementary leverage ratio
|
SLR(1)
|
Supplementary leverage ratio
|
ETF
|
Exchange-Traded Fund
|
SOX
|
Sarbanes-Oxley Act of 2002
|
EVE
|
Economic value of equity
|
SPDR
|
Spider; Standard and Poor's depository receipt
|
FDIC
|
Federal Deposit Insurance Corporation
|
SPOE Strategy
|
Single Point of Entry Strategy
|
FFELP
|
Federal Family Education Loan Program
|
SSIF
|
State Street Intermediate Funding, LLC
|
FHLB
|
Federal Home Loan Bank of Boston
|
TCJA
|
Tax Cuts and Jobs Act
|
FICC
|
Fixed Income Clearing Corporation
|
TLAC(1)
|
Total loss-absorbing capacity
|
FTE
|
Fully taxable-equivalent
|
TMRC
|
Trading and Markets Risk Committee
|
FSOC
|
Financial Stability Oversight Council
|
TOPS
|
Technology and Operations Committee
|
FX
|
Foreign exchange
|
TORC
|
Technology and Operational Risk Committee
|
GAAP
|
Generally accepted accounting principles
|
UCITS
|
Undertakings for Collective Investments in Transferable Securities
|
GCR
|
Global credit review
|
UOM
|
Unit of measure
|
G-SIB
|
Global systemically important bank
|
VaR
|
Value-at-Risk
|
HQLA(1)
|
High-quality liquid assets
|
VIE
|
Variable interest entity
|
HRC
|
Human Resources Committee
|
WD
|
Withdrawn
|
HTM
|
Held-to-maturity
|
|
|
|
|
|
(Shares in thousands)
|
(a)
Number of securities
to be issued
upon exercise of
outstanding
options,
warrants and rights
|
|
(b)
Weighted-average
exercise price of
outstanding
options,
warrants and rights(1)
|
|
(c)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in column (a))
|
||||
Plan category:
|
|
|
|
|
|
||||
Equity compensation plans approved by shareholders
|
7,973
|
|
(2)
|
$
|
—
|
|
|
21,343
|
|
Equity compensation plans not approved by shareholders
|
18
|
|
(3)
|
—
|
|
|
—
|
|
|
Total
|
7,991
|
|
|
—
|
|
|
21,343
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
(Note: None of the instruments defining the rights of holders of State Street’s outstanding long-term debt are in respect of indebtedness in excess of 10% of the total assets of State Street and its subsidiaries on a consolidated basis. State Street hereby agrees to furnish to the SEC upon request a copy of any other instrument with respect to long-term debt of State Street and its subsidiaries.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
101.INS
|
|
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
|
|
|
|
|
*
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
*
|
101.CAL
|
|
Inline XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
|
*
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
*
|
101.LAB
|
|
Inline XBRL Taxonomy Label Linkbase Document
|
|
|
|
|
*
|
101.PRE
|
|
Inline XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
*
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and included within the Exhibit 101 attachments)
|
|
|
|
|
†
|
|
Denotes management contract or compensatory plan or arrangement
|
*
|
|
Submitted electronically herewith
|
|
STATE STREET CORPORATION
|
|
|
|
|
|
By
|
/s/ ERIC W. ABOAF
|
|
|
ERIC W. ABOAF,
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
By
|
/s/ IAN W. APPLEYARD
|
|
|
IAN W. APPLEYARD,
|
|
|
Executive Vice President, Global Controller and
Chief Accounting Officer
|
/s/ RONALD P. O'HANLEY
|
|
|
/s/ ERIC W. ABOAF
|
RONALD P. O'HANLEY,
|
|
|
ERIC W. ABOAF,
|
Chairman, President and Chief Executive Officer
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
|
|
/s/ IAN W. APPLEYARD
|
|
|
|
IAN W. APPLEYARD,
|
|
|
|
Executive Vice President, Global Controller and
Chief Accounting Officer
|
|
|
|
|
/s/ KENNETT F. BURNES
|
|
|
/s/ RONALD P. O'HANLEY
|
KENNETT F. BURNES
|
|
|
RONALD P. O'HANLEY
|
|
|
|
|
/s/ MARIE A. CHANDOHA
|
|
|
/s/ SARA MATHEW
|
MARIE A. CHANDOHA
|
|
|
SARA MATHEW
|
|
|
|
|
/s/ PATRICK de SAINT-AIGNAN
|
|
|
/s/ WILLIAM L. MEANEY
|
PATRICK de SAINT-AIGNAN
|
|
|
WILLIAM L. MEANEY
|
|
|
|
|
/s/ LYNN A. DUGLE
|
|
|
/s/ SEAN O'SULLIVAN
|
LYNN A. DUGLE
|
|
|
SEAN O'SULLIVAN
|
|
|
|
|
/s/ AMELIA C. FAWCETT
|
|
|
/s/ RICHARD P. SERGEL
|
AMELIA C. FAWCETT
|
|
|
RICHARD P. SERGEL
|
|
|
|
|
/s/ WILLIAM C. FREDA
|
|
|
/s/ GREGORY L. SUMME
|
WILLIAM C. FREDA
|
|
|
GREGORY L. SUMME
|
|
|
|
|