State Street Corporation today announced third-quarter 2010
earnings per common share of $1.08, an increase of 64% compared to
$0.66 in the third quarter of 2009. Revenue in the third quarter of
2010 was $2.310 billion, up 3% from $2.236 billion in the third
quarter of 2009. Expenses of $1.527 billion in the third quarter
declined 12% from $1.733 billion in the third quarter of 2009.
Return on shareholders’ equity was 12.9%, up from 10.2% in the
third quarter of 2009.
Compared to the second quarter of 2010, third quarter 2010
earnings per share increased 24% from $0.87 per share and revenue
was up slightly from $2.304 billion. Expenses in the second quarter
of 2010 were $1.944 billion including the previously disclosed
securities finance charge. For the second quarter of 2010, return
on shareholders’ equity was 11.0%.
In addition to presenting State Street’s financial results in
conformity with U.S. generally accepted accounting principles
(GAAP), management also presents results on an “operating basis” in
order to highlight comparable financial trends and other
characteristics with respect to State Street’s ongoing business
operations from period to period. Reconciliations of GAAP-basis
results to operating-basis results are provided in the addendum at
the end of this news release. Also see “Additional Information.”
Operating-basis net interest revenue for all periods is presented
on a fully taxable-equivalent basis and excludes discount accretion
related to former conduit assets.
Operating-basis earnings per share in the third quarter of 2010
were $0.86 compared to $0.71 in the third quarter of 2009 and $0.93
in the second quarter of 2010. Operating-basis revenue in the third
quarter of 2010 was $2.154 billion, up 8.4% from $1.988 billion in
the third quarter of 2009 and down 0.4% from $2.163 billion in the
second quarter of 2010. Operating-basis expenses increased to
$1.518 billion in the third quarter of 2010, up 3.1% from $1.472
billion in the third quarter of 2009 and up 3.4% from $1.468
billion in the second quarter of 2010. On an operating basis,
return on equity of 10.2% in the third quarter of 2010 compared
with 11.0% in the third quarter of 2009 and 11.8% in the second
quarter of 2010.
Joseph L. Hooley, State Street's president and chief executive
officer, said, “In the third quarter, our overall results were
driven by strength in our servicing fee revenue, and our ability to
maintain our focus on cost control. During the third quarter, we
won $477 billion in assets to be serviced. State Street Global
Advisors continues to perform well although management fees were
down slightly, due primarily to the change in business mix as shown
in assets under management. The integrations of the Intesa and
Mourant businesses are progressing well and are on track to meet
the outlook we previously provided. The weak, low-volume trading
environment continues to be challenging for our trading services
business. Although the low level of interest rates worldwide
continues to create headwinds, we achieved a net interest margin of
177 basis points, excluding discount accretion. On a year-over-year
operating basis, we achieved 530 basis points of positive operating
leverage and continued to manage expenses very carefully. Our
capital levels remain strong and are well in excess of the current
regulatory well capitalized requirements.”
Hooley continued, “With the support of the two acquisitions, as
well as strong year-to-date wins in servicing and growth in passive
strategies and ETFs in asset management, we continue to expect that
our operating-basis earnings per share, which exclude discount
accretion, will be slightly above the adjusted operating-basis
$3.32 per share recorded last year.”
Hooley concluded, “We are well positioned to take advantage of
global growth opportunities and, as the economy normalizes, we are
committed to our long-term financial goals for operating-basis
revenue, earnings per share and return on equity.”
The table below provides a summary of selected financial
information and key ratios for the indicated periods, presented on
an operating basis where noted. Unless otherwise specified, all
capital ratios referenced in this news release refer to State
Street Corporation and not State Street Bank and Trust Company. See
“Additional Information” for a further description of these ratios
and the addendum at the end of this news release for
reconciliations applicable to the tier 1 common and TCE ratios.
Q3
2010
Q2
2010
Increase/(Decrease)
Q3
2009
Increase/(Decrease)
(dollars in millions) For the quarters ended: Total
revenue(1) $ 2,154 $ 2,163 $ (9) (0.4)% $ 1,988 $ 166 8.4% Total
expenses(1) 1,518 1,468 50 3.4% 1,472 46 3.1% Earnings per common
share(1) $ 0.86 $ 0.93 $ (0.07) (7.5)% $ 0.71 $ 0.15 21.1% Return
on common equity(1) 10.2% 11.8% (160) bps 11.0% (80) bps As of
period end: Total assets 172,964 162,075 10,889 6.7% 163,277 9,687
5.9% Unrealized loss on investment portfolio, after-tax (281) (994)
713 71.7% (2,985) 2,704 90.6% AUCM (dollars in billions) Assets
under custody and administration(2) $20,226 $19,032 $1,194 6.3% $
17,935 $ 2,291 12.8% Assets under management 1,904 1,782 122 6.8%
1,735 169 9.7% Tier 1 capital ratio 15.8% 15.1% 70 bps 15.3% 50 bps
Tier 1 leverage ratio 8.3% 7.8% 50 bps 8.0% 30 bps Tier 1 common
ratio 13.9% 13.1% 80 bps 13.3% 60 bps TCE ratio 6.9% 6.2% 70 bps
5.6% 130 bps TCE/RWA ratio 13.3% 11.9% 140 bps 10.2%
310 bps
(1) Presented on an operating basis. Operating-basis results for
the third quarter of 2009 presented in this news release have been
adjusted to reflect the 2010 basis of presentation and therefore
exclude discount accretion associated with the May 2009
consolidation of the former asset-backed commercial paper conduits.
Consequently, these operating-basis results may differ from
previously disclosed operating-basis results for the same
period.(2) Includes assets under custody of $14,860 billion,
$13,999 billion, and $13,260 billion, respectively, as of period
end Q3 2010, Q2 2010, and Q3 2009.
Total assets were $173 billion at September 30, 2010, including
$20 billion in excess deposits held primarily at the Federal
Reserve and at other central banks. The average balance sheet for
the third quarter was $154 billion, compared to $151 billion for
the second quarter of 2010 and $145 billion for the third quarter
of 2009. State Street’s regulatory capital ratios continue to be
strong as of September 30, 2010, with the Company’s tier 1 capital
ratio at 15.8% and its leverage ratio at 8.3%. In addition, at that
date, the Company’s tier 1 common ratio was 13.9%, its TCE to
risk-weighted assets ratio was 13.3%, and its TCE ratio was
6.9%.
At September 30, 2010, the after-tax, unrealized mark-to-market
losses in the investment portfolio were $281 million, down 72% from
$994 million at June 30, 2010, and down about 91% from $2.99
billion as of September 30, 2009.
In the third quarter of 2010, discount accretion related to the
former conduit assets of $189 million, or $0.23 per share,
contributed to State Street’s capital strength, and the Company
continues to expect a total of about $750 million of accretion to
be recorded in 2010. As of September 30, 2010, the Company expects
a pre-tax aggregate of about $3.6 billion to accrete into interest
revenue over the remaining lives of the assets. These expectations
are based on many assumptions, including holding the securities to
maturity, anticipated pre-payment speeds, credit quality, and sales
to date.
The following tables provide the components of operating-basis
revenue and operating-basis expenses for the noted periods:
Operating-Basis Revenue
(dollars in millions)
Q3 2010 Q2 2010
% Increase/(Decrease)
Q3 2009
% Increase/(Decrease)
Servicing fees $ 989 $ 957 3.3% $ 833 18.7% Investment management
fees 213 217 (1.8) 219 (2.7) Trading services revenue 228 326
(30.1) 269 (15.2) Securities finance revenue 68 109 (37.6) 105
(35.2) Processing fees and other revenue 71 87 (18.4) 45 57.8 Net
interest revenue, fully-taxable equivalent basis(1) 568 517 9.9 475
19.6 Gains (losses) related to investment securities, net 17
(50) 134.0 42 (59.5)
Total Operating-Basis
Revenue $ 2,154 $ 2,163
(0.4)% $ 1,988 8.4%
(1) Operating-basis information for the third quarter of 2010,
the second quarter of 2010, and the third quarter of 2009 included
$33 million, $31 million, and $31 million, respectively, of
tax-equivalent adjustments, and excluded $189 million, $172
million, and $279 million, respectively, of discount accretion.
GAAP-basis net interest revenue for those periods was $724 million,
$658 million and $723 million, respectively.
Operating-Basis Expenses
(dollars in millions)
Q3 2010 Q2 2010
% Increase/(Decrease)
Q3 2009
% Increase/(Decrease)
Salaries and employee benefits $ 871 $ 828 5.2% $ 819 6.3%
Information systems and communications
181
174
4.0
165
9.7
Transaction processing services 165 164 0.6 148 11.5 Occupancy 112
116 (3.4) 118 (5.1) Other 189 186 1.6
222 (14.9)
Total Operating-Basis Expenses $
1,518 $ 1,468 3.4% $
1,472 3.1%
THIRD-QUARTER 2010 RESULTS VS. THE THIRD
QUARTER of 2009
Servicing fees were up 19% to $989 million from $833 million in
the third quarter of 2009. The increase was attributable primarily
to the impact of the acquisition of Intesa Sanpaolo’s securities
servicing business (“Intesa”) and Mourant International Finance
Administration (“Mourant”), new business, and increases in daily
average equity valuations. Total assets under custody and
administration were $20.23 trillion at September 30, 2010, up 13%
compared with $17.94 trillion at September 30, 2009. Daily average
values for the S&P 500 Index were up 10% and the MSCI® EAFE
IndexES increased approximately 2% from the third quarter of
2009.
Investment management fees, generated by State Street Global
Advisors, were $213 million, down 3% from $219 million in the third
quarter of 2009. The decrease in management fees was attributable
primarily to the mix of business reflected in assets under
management, offset partially by increases in the average of
month-end valuations in worldwide equity markets. Average month-end
equity valuations increased about 7% compare to the third quarter
of 2009 as measured by the S & P 500 and were approximately
flat as measured by the MSCI EAFE indexES. Total assets under
management at September 30, 2010, were $1.90 trillion, up 10%
compared to $1.74 trillion at September 30, 2009.
Trading services revenue, which includes foreign exchange
trading revenue and brokerage and other fees, was $228 million for
the third quarter of 2010, a decrease of 15% from $269 million in
the third quarter of 2009. Foreign exchange revenue decreased 30%
primarily due to lower volatility and volumes. Brokerage and other
fees were up about 3% due primarily to an increase in electronic
trading.
Securities finance revenue was $68 million in the quarter, down
35% from $105 million in the third quarter of 2009 due primarily to
compressed spreads and slightly lower volumes. Processing fees and
other revenue was $71 million, up from $45 million in the third
quarter of 2009 due primarily to increased revenue from structured
products.
Net interest revenue on a fully-taxable equivalent basis, which
includes discount accretion, was $757 million. On an operating
basis, which excludes discount accretion, net interest revenue was
$568 million, an increase of 20% from $475 million in the third
quarter of 2009 due to higher yields and volumes in the investment
portfolio and the full-quarter impact of deposits added in
connection with the Intesa acquisition. Net interest margin,
including the discount accretion, was 236 basis points in the third
quarter of 2010 compared to 247 basis points in the third quarter
of 2009. Operating-basis net interest margin was 177 basis points
in the third quarter of 2010, compared to 156 basis points in the
third quarter of 2009.
In the third quarter of 2010, we recorded $91 million of net
gains from sales of available-for-sale securities. Separately, we
recorded $(74) million of other-than-temporary impairment,
resulting in $17 million of net gains related to investment
securities.
Operating-basis expenses of $1.518 billion in the third quarter
of 2010 increased 3% compared to $1.472 billion in the third
quarter of 2009 primarily due to increases in salaries and benefits
expenses, offset partially by a lower level of other expenses.
Salaries and benefits expenses increased 6% to $871 million,
primarily due to the impact of the acquisitions. Information
systems and communications were $181 million, an increase of 10%
from $165 million due primarily to the impact of the two
acquisitions. Transaction processing services were up 11% to $165
million due to higher volumes in the investment servicing business
including the impact of the two acquisitions. Other expenses
decreased 15% to $189 million due to the impact of a $50 million
insurance recovery.
The effective tax rate on third-quarter 2010 GAAP-basis earnings
was 30.1%, compared to 32.8% in the third quarter of 2009. The
effective tax rate on operating-basis earnings for the third
quarter of 2010 was 28.1%, in line with our previously disclosed
outlook. The effective tax rate on operating-basis earnings for the
full year 2010 is expected to be between 28% and 29%.
THIRD-QUARTER 2010 RESULTS VS. SECOND
QUARTER 2010
Servicing fees were $989 million, up 3% from $957 million in the
second quarter due primarily to the impact of the Intesa
acquisition and new business installed, offset partly by lower
daily average equity valuations. Daily average values as measured
by the S & P 500 declined 3% and were up about 1% as measured
by the MSCI EAFE indexES. Management fees were $213 million, down
2% from $217 million, due primarily to the mix of business
reflected in the assets under management, offset partially by
higher average month-end equity market valuations. Average
month-end equity valuations were essentially flat as measured by
the S & P 500 and increased 5% as measured by the MSCI EAFE
indexES. Trading services revenue was $228 million, down 30%
compared to $326 million due to lower volatility and volumes in
foreign exchange as well as lower fees from transition management
and electronic trading in brokerage and other fees. Securities
finance revenue was $68 million, down 38% from $109 million in the
second quarter primarily due to lower spreads and slightly lower
volumes associated with the traditional second-quarter seasonality.
Processing fees and other revenue decreased from $87 million to $71
million due primarily to lower revenue from tax-advantaged
investments. Fully taxable-equivalent net interest revenue in the
third quarter of 2010 totaled $757 million, including discount
accretion. On an operating basis, fully taxable-equivalent net
interest revenue in the third quarter of 2010 was $568 million, up
from $517 million in the second quarter of 2010 due to favorable
yields in our investment portfolio, the full-quarter impact of the
Intesa deposits, and a modest decline in funding costs.
Compared to the second quarter of 2010, salaries and benefits
expense increased 5% to $871 million from $828 million primarily
due to the impact of the acquisition of Intesa and the effect of
the second-quarter reduction in incentive compensation associated
with the charge recorded in the second quarter related to the
securities finance lending programs. Information systems and
communications expense was $181 million, up 4% due primarily to the
impact of the Intesa acquisition. Other expenses were $189 million,
up 2%, due to increased securities processing costs, offset
partially by a higher level of recoveries.
ADDITIONAL INFORMATION
All per share amounts represent fully diluted earnings per
common share. Return on common shareholders’ equity is determined
by dividing annualized net income available to common equity by
average common shareholders’ equity for the period. Operating-basis
return on common equity utilizes annualized operating-basis net
income in the calculation. Positive operating leverage is defined
as the excess rate of growth of total revenue over the rate of
growth of total expenses, each determined on an operating
basis.
This news release includes financial information presented on a
GAAP basis as well as on an operating basis. Management measures
and compares certain financial information on an operating basis,
as it believes that this presentation supports meaningful
comparisons from period to period and the analysis of comparable
financial trends with respect to State Street’s normal ongoing
business operations. Management believes that operating-basis
financial information, which reports revenue from non-taxable
sources on a fully taxable-equivalent basis and excludes the impact
of revenue and expenses outside of the normal course of business,
facilitates an investor’s understanding and analysis of State
Street’s underlying financial performance and trends in addition to
financial information prepared in accordance with GAAP. Non-GAAP
financial measures should be considered in addition to, not as a
substitute for or superior to, financial measures determined in
accordance with GAAP. A full reconciliation of operating-basis
results to GAAP results is included in the addendum at the end of
this news release.
Management believes that the use of non-GAAP financial measures
in the calculation of capital ratios is useful to understanding
State Street’s capital position and of interest to investors. Below
is a description of, and other information with respect to, the
capital ratios referenced in this news release.
The tier 1 capital and tier 1 leverage ratios are capital ratios
used regularly by bank regulatory authorities to evaluate the
Company’s capital adequacy. The tier 1 common ratio was used by the
Federal Reserve in connection with its 2009 Supervisory Capital
Assessment Program. The TCE and TCE/risk-weighted assets ratios are
other capital ratios management believes provide additional context
for understanding and assessing the Company’s capital adequacy.
- The tier 1 risk-based capital, or
tier 1 capital, and tier 1 leverage ratios, as applicable, are
each calculated in accordance with applicable bank regulatory
requirements.
- The tier 1 risk-based common, or
tier 1 common, ratio is calculated by dividing (a) tier 1
capital less non-common elements including qualifying perpetual
preferred stock, qualifying minority interest in subsidiaries and
qualifying trust preferred securities, by (b) total risk-weighted
assets, which assets are calculated in accordance with applicable
bank regulatory requirements. The tier 1 common ratio is not
required by GAAP or on a recurring basis by bank regulations.
Management is currently monitoring this ratio, along with the other
capital ratios described in this news release, in evaluating State
Street’s capital levels and believes that, at this time, the ratio
may be of interest to investors. Reconciliations with respect to
unaudited tier 1 common capital as of September 30, 2010, June 30,
2010, and September 30, 2009 are provided in the addendum at the
end of this news release.
- The ratio of tangible common equity
to adjusted tangible assets, or TCE ratio, is calculated by
dividing consolidated total common shareholders’ equity by
consolidated total assets, after reducing both amounts by goodwill
and other intangible assets net of related deferred taxes. Total
assets reflected in the TCE ratio also exclude cash balances on
deposit at the Federal Reserve Bank and other central banks in
excess of required reserves. The TCE ratio is not required by GAAP
or by bank regulations, but is a metric used by management to
evaluate the adequacy of State Street’s capital levels. Since there
is no authoritative requirement to calculate the TCE ratio, our TCE
ratio is not necessarily comparable to similar capital measures
disclosed or used by other companies in the financial services
industry. Tangible common equity and adjusted tangible assets are
non-GAAP financial measures and should be considered in addition
to, not as a substitute for or superior to, financial measures
determined in accordance with GAAP. Reconciliations with respect to
the calculation of the unaudited TCE ratio as of September 30,
2010, June 30, 2010, and September 30, 2009 are provided in the
addendum at the end of this news release.
- The ratio of tangible common equity
to risk-weighted assets, or TCE/RWA ratio, is calculated by
dividing consolidated total common shareholders’ equity (reduced by
goodwill and other intangible assets net of related deferred taxes)
by total risk-weighted assets (determined in accordance with
applicable bank regulatory requirements). The TCE/RWA ratio is not
required by GAAP or by bank regulations, but is a metric used by
management to evaluate the adequacy of State Street’s capital
levels. Since there is no authoritative requirement to calculate
the TCE/RWA ratio, our TCE/RWA ratio is not necessarily comparable
to similar capital measures disclosed or used by other companies in
the financial services industry. Tangible common equity is a
non-GAAP financial measure and should be considered in addition to,
not as a substitute for or superior to, financial measures
determined in accordance with GAAP. Reconciliations with respect to
the calculation of the unaudited TCE/RWA ratio as of September 30,
2010, June 30, 2010 and September 30, 2009, are included in the
addendum at the end of this news release.
INVESTOR CONFERENCE CALL
State Street will webcast an investor conference call today,
Tuesday, October 19, 2010, at 9:30 a.m. EDT, available at
www.statestreet.com/stockholder. The conference call will also be
available via telephone, at +1 706/679-5594 or +1 888/391-4233
(Conference ID #62661040). Recorded replays of the conference call
will be available on the web site, and by telephone at +1
706/645-9291 or +1 800/642-1687 (Conference ID#62661040), beginning
approximately two hours after the call’s completion. The telephone
replay will be available for approximately two weeks following the
conference call. This news release, presentation materials referred
to on the conference call, and additional financial information are
available on State Street’s website, at
www.statestreet.com/stockholder under “Investor Information--Latest
News, Annual Reports and Financial Trends—Financial Trends,” and
“Investor Events and Presentations.”
State Street Corporation (NYSE: STT) is the world's leading
provider of financial services to institutional investors including
investment servicing, investment management and investment research
and trading. With $20.23 trillion in assets under custody and
administration and $1.90 trillion in assets under management at
September 30, 2010, State Street operates in 25 countries and more
than 100 geographic markets and employs 28,940 worldwide. For more
information, visit State Street’s web site at www.statestreet.com
or call +1 877/639-7788 [NEWS STT] toll-free in the United States
and Canada, or +1 678/999-4577 outside those countries.
FORWARD-LOOKING
STATEMENTS
This news release contains forward-looking statements as defined
by United States securities laws, including statements about our
goals and expectations regarding our business, financial condition,
results of operations and strategies, the financial and market
outlook, governmental and regulatory initiatives and developments,
and the business environment. Forward-looking statements are often,
but not always, identified by such forward-looking terminology as
“plan,” “expect,” “look,” “believe,” “anticipate,” “estimate,”
“seek,” “may,” “will,” “trend,” “target” and “goal,” or similar
statements or variations of such terms. These statements are not
guarantees of future performance, are inherently uncertain, are
based on current assumptions that are difficult to predict and
involve a number of risks and uncertainties. Therefore, actual
outcomes and results may differ materially from what is expressed
in those statements, and those statements should not be relied upon
as representing our expectations or beliefs as of any date
subsequent to the date of this news release.
Important factors that may affect future results and outcomes
include, but are not limited to:
- changes in law or regulation that may
adversely affect our clients’ or our counterparties’ business
activities and the products or services that we sell, including
additional or increased taxes or assessments, capital adequacy
requirements and changes that expose us to risks related to
compliance;
- financial market disruptions and the
economic recession, whether in the U.S. or internationally, and
monetary and other governmental actions, including regulation,
taxes and fees, designed to address or otherwise be responsive to
such disruptions and recession, including actions taken in the U.S.
and internationally to address the financial and economic
disruptions that began in 2007;
- increases in the volatility of, or
declines in the levels of, our net interest revenue, changes in the
composition of the assets on our consolidated balance sheet and the
possibility that we may be required to change the manner in which
we fund those assets;
- the financial strength and continuing
viability of the counterparties with which we or our clients do
business and to which we have investment, credit or financial
exposure;
- the liquidity of the U.S. and
international securities markets, particularly the markets for
fixed-income securities, and the liquidity requirements of our
clients;
- 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 other-than-temporary impairment of the respective
securities and the recognition of an impairment loss in our
consolidated statement of income;
- the maintenance of credit agency
ratings for our debt and depository obligations as well as the
level of credibility of credit agency ratings;
- the performance and demand for the
products and services we offer, including the level and timing of
redemptions and withdrawals from our collateral pools and other
collective investment products;
- the risks that acquired businesses will
not be integrated successfully, or that the integration will take
longer than anticipated, that expected synergies will not be
achieved or unexpected disynergies will be experienced, that client
and deposit retention goals will not be met, that other regulatory
or operational challenges will be experienced or that disruptions
from the transaction will harm relationships with clients,
employees or regulators;
- the ability to complete acquisitions,
divestitures and joint ventures, including the ability to obtain
regulatory approvals, the ability to arrange financing as required,
and the ability to satisfy other closing conditions;
- the possibility of our clients
incurring substantial losses in investment pools where we act as
agent, and the possibility of further general reductions in the
valuation of assets;
- our ability to attract deposits and
other low-cost, short-term funding;
- potential changes to the competitive
environment, including changes due to the effects of consolidation
and perceptions of State Street as a suitable service provider or
counterparty;
- the level and volatility of interest
rates and the performance and volatility of securities, credit,
currency and other markets in the U.S. and internationally;
- our ability to measure the fair value
of the investment securities on our consolidated balance
sheet;
- the results of litigation, government
investigations and similar disputes or proceedings;
- adverse publicity or other reputational
harm;
- our ability to grow revenue, attract,
retain and compensate highly skilled people, control expenses and
attract the capital necessary to achieve our business goals and
comply with regulatory requirements;
- our ability to control operating risks,
information technology systems risks and outsourcing risks, and 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 fail or be
circumvented;
- the potential for new products and
services to impose additional costs on us and expose us to
increased operational risk;
- changes in accounting standards and
practices; and
- changes in the interpretation of
existing tax laws by U.S. and non-U.S. tax authorities that affect
the amount of taxes due.
Other important factors that could cause actual results to
differ materially from those indicated by any forward-looking
statements are set forth in our 2009 Annual Report on Form 10-K,
and our subsequent SEC filings. We encourage investors to read
these filings, particularly the sections on Risk Factors, for
additional information with respect to any forward-looking
statements and prior to making any investment decision. The
forward-looking statements contained in this news release speak
only as of the date hereof, October 19, 2010, and we do not
undertake efforts to revise those forward-looking statements to
reflect events after this date.
STATE STREET CORPORATION Earnings Release
Addendum CONSOLIDATED FINANCIAL HIGHLIGHTS
September 30, 2010
Quarters Ended % Change Q3 2010 Q3 2010 (Dollars in
millions, except per share amounts
September 30, June 30,
September 30, vs. vs. or where otherwise noted)
2010 2010 2009
Q2 2010 Q3 2009 Revenue: Fee revenue
$ 1,569 $ 1,696 $ 1,471 (7 )% 7 % Net interest
revenue
724 658 723 10 - Net gains from sales of
available-for-sale securities
91 3 141 Losses from
other-than-temporary impairment
(74 )
(53 ) (99 ) Total Revenue
2,310 2,304 2,236 - 3
Provision for Loan Losses
1 10 16 Total Expenses: Expenses
from operations
1,518 1,468 1,472 3 3 Securities lending
charge - 414 - Provision for legal exposure - - 250 Merger and
integration costs and U.K. bonus tax, net
9 62 11 Income tax
expense (benefit) (1)
236 (82 ) 160 Net Income
546
432 327 26 67 Net Income Available to Common Shareholders
540 427 327 Diluted Earnings Per Common Share
1.08 .87 .66 24 64 Average Diluted Common Shares
Outstanding (in thousands)
498,159 498,886 498,290
Cash Dividends Declared Per Common Share
$ .01 $ .01
$ .01 Closing Price Per Share of Common Stock (at quarter end)
37.66 33.82 52.60 Ratios: Return on common equity
before extraordinary loss
12.9
%
11.0
%
10.2
%
Net interest margin, fully taxable-equivalent basis
2.36
2.21 2.47 Tier 1 risk-based capital
15.8 15.1 15.3 Total
risk-based capital
17.1 16.4 16.5 Tier 1 leverage
8.3
7.8 8.0 Tier 1 common to risk-weighted assets (2)
13.9 13.1
13.3 Tangible common equity to tangible assets (2)
6.9 6.2
5.6 Tangible common equity to risk-weighted assets (2)
13.3
11.9 10.2 At Quarter End: Assets Under Custody and
Administration (3) (in trillions)
$ 20.23 $ 19.03 $
17.94 Assets Under Management (in trillions)
1.90 1.78 1.74
Nine Months Ended % Change 2010
September
30, September 30, vs. (Dollars in millions, except per share
amounts)
2010 2009
2009 Revenue: Fee revenue
$ 4,805 $
4,409 9 % Net interest revenue
2,043 1,867 9 Net gains from
sales of available-for-sale securities
286 260 Losses from
other-than-temporary impairment
(224 )
(176 ) Total Revenue
6,910 6,360 9 Provision for Loan Losses
26 114 Total Expenses: Expenses from operations
4,552
4,111 11 Securities lending charge
414 - Provision for legal
exposure - 250 Merger and integration costs and U.K. bonus tax, net
84 40 Income tax expense(1)
361 540 Net Income Before
Extraordinary Loss
1,473 1,305 13 Extraordinary Loss, Net of
Tax
- (3,684 ) Net Income (Loss)
1,473 (2,379 )
Net Income Before Extraordinary Loss Available to Common
Shareholders
1,459 1,142 Net Income (Loss) Available to
Common Shareholders
1,459 (2,542 ) Diluted Earnings
Per Common Share Before Extraordinary Loss
$ 2.93 $
2.45 20 Diluted Earnings (Loss) Per Common Share
2.93 (5.45
) Average Diluted Common Shares Outstanding (in thousands):
497,715 466,234 Cash Dividends Declared Per Common
Share
$ .03 $ .03 Return on Common Equity
Before Extraordinary Loss
12.4
%
12.8
%
Net interest margin, fully taxable-equivalent basis
2.30
2.14
(1) Quarter ended June 30, 2010 and nine
months ended September 30, 2010 reflect a discrete tax benefit of
$180 million generated by the restructuring of former non-U.S.
conduit assets.
(2) Refer to accompanying reconciliation
for additional information.
(3) Includes assets under custody of $14.86 trillion, $14.00
trillion, and $13.26 trillion, respectively.
STATE STREET
CORPORATION Earnings Release Addendum SELECTED
CONSOLIDATED FINANCIAL INFORMATION Quarters and Nine Months
Ended September 30, 2010 and September 30, 2009
Quarters Ended Nine Months Ended
September 30, September 30,
September 30, September
30, (Dollars in millions, except per share amounts)
2010 2009 % Change
2010 2009 % Change
Fee Revenue: Servicing fees
$ 989 $ 833 19 %
$ 2,826 $ 2,394 18 % Management fees
213 219
(3 )
656 593 11 Trading services
228 269 (15 )
796 824 (3 ) Securities finance
68 105 (35 )
249 487 (49 ) Processing fees and other
71
45 58
278 111
150 Total fee revenue
1,569 1,471 7
4,805
4,409 9
Net Interest Revenue: Interest revenue
904 898 1
2,628 2,409 9 Interest expense
180 175 3
585
542 8 Net interest revenue (1)
724 723
- 2,043 1,867 9
Gains related to investment
securities, net: Net gains from sales of available-for-sale
securities
91 141
286 260 Losses from
other-than-temporary impairment
(132 ) (828 )
(612 ) (1,008 ) Losses not related to credit
58 729
388
832 Gains related to investment securities, net
17 42
62 84 Total revenue
2,310 2,236 3.3
6,910 6,360 8.6 Provision for loan losses
1 16
26 114
Expenses: Salaries and employee
benefits
857 819 5
2,589 2,246 15 Information systems
and communications
181 165 10
522 493 6 Transaction
processing services
165 148 11
482 425 13 Occupancy
112 118 (5 )
346 360 (4 ) Securities lending charge
- - 414 - Provision for legal exposure
- 250
- 250 Merger and integration costs
23 11
109
77 40 93 Other
189 222
(15 )
620 587 6 Total
expenses
1,527 1,733 (11.9 )
5,050 4,401 14.7 Income before
income tax expense and extraordinary loss
782 487 61
1,834 1,845 - Income tax expense (benefit)
236
160
361 540
Income before extraordinary loss
546 327 67
1,473
1,305 13 Extraordinary loss, net of tax
-
-
- (3,684 )
Net
income (loss) $ 546 $ 327 67
$ 1,473 $ (2,379 )
Adjustments to net income (loss): Prepayment of
preferred stock discount
$ - $ -
$ - $
(106 ) Dividend on preferred stock
- -
- (46 )
Accretion of preferred stock discount
- -
- (11 )
Earnings allocated to participating securities
(6
) -
(14 ) -
(6 ) -
(14
) (163 )
Net income before extraordinary loss
available to common shareholders
$ 540 $ 327
$ 1,459 $ 1,142
Net income (loss) available to common shareholders
$ 540 $ 327
$ 1,459 $ (2,542 )
Earnings Per Common Share Before Extraordinary Loss:
Basic
$ 1.09 $ .66 65
$ 2.94 $ 2.48 19
Diluted
1.08 .66 64
2.93 2.45 20
Earnings
(Loss) Per Common Share: Basic
$ 1.09 $ .66 65
$ 2.94 $ (5.47 ) (154 ) Diluted
1.08 .66 64
2.93 (5.45 ) (154 )
Average Common Shares
Outstanding (in thousands): Basic
495,729 493,453
495,312 462,900 Diluted
498,159 498,290
497,715 466,234 Selected consolidated financial
information presented above was prepared in accordance with
accounting principles generally accepted in the United States.
(1) Net interest revenue on a fully taxable-equivalent basis
was $757 million and $754 million for the quarters ended September
30, 2010 and 2009, respectively, and $2.14 billion and $1.96
billion for the nine months ended September 30, 2010 and 2009,
respectively. These amounts include taxable-equivalent adjustments
of $33 million and $31 million for the quarters ended September 30,
2010 and 2009, respectively, and $96 million and $94 million for
the nine months ended September 30, 2010 and 2009, respectively.
STATE STREET CORPORATION Earnings Release
Addendum SELECTED CONSOLIDATED FINANCIAL
INFORMATION Quarters Ended September 30, 2010 and June 30,
2010 Quarters Ended
September
30, June 30, (Dollars in millions, except per share amounts)
2010 2010 %
Change
Fee Revenue: Servicing fees
$
989 $ 957 3 % Management fees
213 217 (2 ) Trading
services
228 326 (30 ) Securities finance
68 109 (38
) Processing fees and other
71 87
(18 ) Total fee revenue
1,569 1,696 (7 )
Net Interest Revenue: Interest revenue
904 846 7
Interest expense
180 188 (4 )
Net interest revenue (1)
724 658 10
Gains related
to investment securities, net: Net gains from sales of
available-for-sale securities
91 3 Losses from
other-than-temporary impairment
(132 ) (240 ) Losses
not related to credit
58 187
Gains (Losses) related to investment securities, net
17 (50
) Total revenue
2,310 2,304 0.3 Provision for
loan losses
1 10
Expenses: Salaries and
employee benefits
857 849 1 Information systems and
communications
181 174 4 Transaction processing services
165 164 1 Occupancy
112 116 (3 ) Securities lending
charge
- 414 Merger and integration costs
23 41 (44 )
Other
189 186 2 Total expenses
1,527 1,944 (21.5 ) Income
before income tax expense
782 350 123 Income tax expense
(benefit)
236 (82 )
Net income
$ 546 $ 432 26 Earnings
allocated to participating securities
$ (6 ) $
(5 )
Net income available to common shareholders $
540 $ 427
Earnings Per Common
Share: Basic
$ 1.09 $ .87 25 Diluted
1.08
.87 24
Average Common Shares Outstanding (in
thousands): Basic
495,729 495,606 Diluted
498,159
498,886 Selected consolidated financial Information
presented above was prepared in accordance with accounting
principles generally accepted in the United States. (1) Net
interest revenue on a fully taxable-equivalent basis was $757
million and $689 million for the quarters ended September 30, 2010
and June 30, 2010, respectively. These amounts include
taxable-equivalent adjustments of $33 million and $31 million for
the quarters ended September 30, 2010 and June 30, 2010,
respectively.
STATE STREET CORPORATION Earnings
Release Addendum SELECTED CONSOLIDATED
OPERATING-BASIS FINANCIAL INFORMATION Quarters and Nine
Months Ended September 30, 2010 and September 30, 2009
Quarters Ended (1)
Nine Months Ended (1)
September 30, September 30,
September 30, September
30, (Dollars in millions, except per share amounts)
2010 2009 % Change
2010 2009 % Change
Fee Revenue: Servicing fees
$ 989 $ 833 19 %
$ 2,826 $ 2,394 18 % Management fees
213 219
(3 )
656 593 11 Trading services
228 269 (15 )
796 824 (3 ) Securities finance
68 105 (35 )
249 487 (49 ) Processing fees and other
71
45 58
278 111
150 Total fee revenue
1,569 1,471 7
4,805
4,409 9
Net Interest Revenue: Interest revenue,
operating basis
748 650 15
2,151 2,088 3 Interest
expense
180 175 3
585 525 11 Net interest revenue,
operating basis
568 475 20
1,566 1,563
-
Gains related to investment securities, net
17
42
62 84
Total revenue, operating basis (2)
2,154 1,988 8.4
6,433 6,056 6.2 Provision for
loan losses
1 16
26 114
Expenses:
Salaries and employee benefits
871 819 6
2,582 2,246
15 Information systems and communications
181 165 10
522 493 6 Transaction processing services
165 148 11
482 425 13 Occupancy
112 118 (5 )
346 360 (4 )
Other
189 222 (15 )
620 587 6 Total expenses, operating
basis (2)
1,518 1,472 3.1
4,552 4,111 10.7 Income before income
tax expense, operating basis
635 500 27
1,855 1,831 1
Income tax expense, operating basis
170 115
492 460
Tax-equivalent adjustment
33 31
96 94
Net income, operating
basis $ 432 $ 354 22
$
1,267 $ 1,277
- Adjustments
to net income: Dividend on preferred stock
$ - $
-
$ - $ (46 ) Accretion of preferred stock discount
- -
- (11 ) Earnings allocated to participating
securities
(5 ) -
(12 ) -
(5 )
-
(12 ) (57 )
Net
income available to common shareholders, operating basis
$ 427 $ 354
$ 1,255 $ 1,220
Diluted earnings per common share, operating
basis $ .86 $ .71 21
$ 2.52 $ 2.62
(4 )
Average diluted common shares outstanding (in
thousands) 498,159 498,290
497,715 466,234
Return on common equity, operating basis 10.2
% 11.0 %
10.7 %
13.7
% (1) Refer to the accompanying reconciliation of
reported results to operating-basis results.
(2) For the quarter ended September 30,
2010, positive operating leverage in the year-over-year comparison
was 530 basis points, based on an increase in total operating-basis
revenue of 8.4% and an increase in total operating-basis expenses
of 3.1%. For the nine months ended September 30, 2010, negative
operating leverage in the year-over-year comparison was 450 basis
points, based on an increase in total operating-basis revenue of
6.2% and an increase in total operating-basis expenses of
10.7%.
STATE STREET CORPORATION Earnings Release
Addendum SELECTED CONSOLIDATED OPERATING-BASIS
FINANCIAL INFORMATION Quarters Ended September 30, 2010 and
June 30, 2010 Quarters Ended (1)
September 30, June 30, (Dollars in millions, except per
share amounts)
2010 2010
% Change
Fee Revenue: Servicing
fees
$ 989 $ 957 3 % Management fees
213 217
(2 ) Trading services
228 326 (30 ) Securities finance
68 109 (38 ) Processing fees and other
71
87 (18 ) Total fee revenue
1,569 1,696
(7 )
Net Interest Revenue: Interest revenue,
operating basis
748 705 6 Interest expense
180
188 (4 ) Net interest revenue, operating basis
568 517 10 Gains (Losses) related to investment
securities, net
17 (50 )
Total revenue, operating basis (2)
2,154 2,163 (0.4 ) Provision for loan losses
1
10
Expenses: Salaries and employee benefits
871 828 5 Information systems and communications
181
174 4 Transaction processing services
165 164 1 Occupancy
112 116 (3 ) Other
189 186
2 Total expenses, operating basis (2)
1,518
1,468 3.4 Income before income tax expense,
operating basis
635 685 (7 ) Income tax expense
170
190 Tax-equivalent adjustment
33 31
Net income, operating basis $ 432
$ 464 (7 ) Earnings allocated to participating
securities
$ (5 ) $ (5 )
Net income
available to common shareholders $ 427 $
459
Diluted earnings per common share, operating
basis $ .86 $ .93 (8 )
Average diluted
common shares outstanding (in thousands) 498,159 498,886
Return on common equity, operating basis 10.2
% 11.8 % (1) Refer to the accompanying
reconciliation of reported results to operating-basis results.
(2) For the quarter ended September 30,
2010, negative operating leverage in the quarter-over-quarter
comparison was 380 basis points, based on a decrease in total
operating-basis revenue of 0.4% and an increase in total
operating-basis expenses of 3.4%.
STATE STREET CORPORATION Earnings Release
Addendum RECONCILIATION OF REPORTED RESULTS TO
OPERATING-BASIS RESULTS Quarter and Nine Months Ended
September 30, 2010
(Dollars in millions, except per share amounts)
Quarter Ended
September 30, 2010 Nine Months Ended September 30, 2010
Reported Operating Reported
Operating Results Adjustments Results
Results Adjustments Results Fee
Revenue: Servicing fees
$ 989 $ 989
$ 2,826 $ 2,826 Management fees
213 213 656 656 Trading services
228 228 796 796 Securities finance
68 68 249 249 Processing fees and other
71 71 278
278 Total fee revenue
1,569
1,569 4,805 4,805 Net Interest
Revenue: Interest revenue
904 $ (156
)
(1)
748 2,628 $ (477 )
(7)
2,151 Interest expense
180
- 180 585
- 585 Net interest
revenue
724 (156 ) 568 2,043
(477 ) 1,566 Gains related to
investment securities, net:
17 -
17 62
- 62 Total revenue
2,310 (156 ) 2,154 6,910
(477 ) 6,433 Provision for loan losses
1 - 1 26 - 26
Expenses: Salaries and employee benefits
857
14
(2)
871 2,589 (7 )
(8)
2,582 Information systems and communications
181
- 181 522 - 522 Transaction
processing services
165 - 165 482
- 482 Occupancy
112 - 112
346 - 346 Securities lending charge
-
- - 414 (414 )
(9)
- Merger and integration costs
23 (23 )
(3)
- 77 (77 )
(3)
- Other
189 -
189 620 -
620 Total expenses
1,527
(9 ) 1,518
5,050 (498 ) 4,552
Income before income tax expense
782 (147
) 635 1,834 21 1,855 Income tax
expense
236 (66 )
(4)
170 361 131
(10)
492 Tax-equivalent adjustment
-
33
(5)
33 - 96
(5)
96 Net Income $ 546
$ (114 ) $ 432
$ 1,473 $ (206 ) $
1,267 Earnings allocated to participating
securities
$ (6 ) $ 1
(6)
$ (5 ) $ (14 ) $
2
(6)
$ (12 ) Net income available to common
shareholders $ 540 $ (113
) $ 427 $ 1,459
$ (204 ) $ 1,255
Diluted earnings per common share $ 1.08
$ (.22 ) $ .86 $
2.93 $ (.41 ) $ 2.52
Average diluted common shares outstanding (in
thousands) 498,159 498,159 498,159
497,715 497,715 497,715 Return on
common equity 12.9 %
(2.7
)%
10.2 % 12.4 %
(1.7
)%
10.7 %
(1) Represents tax-equivalent adjustment
of $33 million, which is not included in reported results, net of
$189 of discount accretion related to former conduit assets.
(2) Represents the partial reversal of
expense associated with a tax on bonus payments to employees in the
U.K.
(3) Represents merger and integration costs.
(4) Represents the net tax effect of
non-operating adjustments.
(5) Represents tax-equivalent adjustment,
which is not included in reported results.
(6) Represents the effect of the
difference between reported and operating-basis earnings on
allocation to participating securities.
(7) Represents tax-equivalent adjustment
of $96 million, which is not included in reported results, net of
$573 of discount accretion related to former conduit assets.
(8) Represents a tax on bonus payments to
employees in the U.K.
(9) Represents a charge, including related
costs of $9 million, to provide for a one-time cash contribution of
$330 million to SSgA lending fund collateral pools and $75 million
to establish a reserve to address potential inconsistencies in
connection with the implementation of redemption restrictions
applicable to cash collateral pools underlying the agency lending
program.
(10) Represents a discrete tax benefit of
$180 million generated by the restructuring of former non-U.S.
conduit assets and the net tax effect of non-operating
adjustments.
STATE STREET CORPORATION Earnings Release
Addendum RECONCILIATION OF REPORTED RESULTS TO
OPERATING-BASIS RESULTS Quarter and Nine Months Ended
September 30, 2009
(Dollars in millions, except per share amounts)
Quarter Ended
September 30, 2009 Nine Months Ended September 30, 2009
Reported Operating Reported
Operating Results Adjustments
Results Results Adjustments
Results Fee Revenue: Servicing fees $ 833 $ 833 $
2,394 $ 2,394 Management fees 219 219 593 593 Trading services 269
269 824 824 Securities finance 105 105 487 487 Processing fees and
other 45 45 111
111 Total fee revenue 1,471 1,471 4,409 4,409
Net
Interest Revenue: Interest revenue 898 $ (248 )
(1)
650 2,409 $ (321 )
(6)
2,088 Interest expense 175 - 175
542 (17 )
(7)
525 Net interest revenue 723 (248 ) 475 1,867 (304 )
1,563 Gains related to investment securities, net: 42
- 42 84 -
84
Total revenue 2,236 (248 ) 1,988
6,360 (304 ) 6,056 Provision for loan losses 16 - 16 114 -
114
Expenses: Salaries and employee benefits 819 -
819 2,246 - 2,246 Information systems and communications 165 - 165
493 - 493 Transaction processing services 148 - 148 425 - 425
Occupancy 118 - 118 360 - 360 Provision for legal exposure 250 (250
)
(2)
- 250 (250 )
(2)
- Merger and integration costs 11 (11 )
(3)
- 40 (40 )
(3)
- Other 222 - 222
587 - 587 Total expenses
1,733 (261 ) 1,472 4,401
(290 ) 4,111 Income before income tax expense
and extraordinary loss 487 13 500 1,845 (14 ) 1,831 Income tax
expense
160
(45 )
(4)
115
540
(80
)
(4)
460 Tax-equivalent adjustment - 31
(5)
31 - 94
(5)
94 Income before extraordinary loss 327 27
354
1,305
(28
)
1,277 Extraordinary loss, net of tax - -
- (3,684 ) 3,684
(8)
-
Net income (loss) $ 327 $ 27 $
354 $
(2,379
) $
3,656
$ 1,277
Adjustments to net income
(loss): Prepayment of preferred stock discount $ - $ - $ - $
(106 ) $ 106
(9)
$ - Dividend on preferred stock - - - (46 ) - (46 ) Accretion of
preferred stock discount - - -
(11 ) - (11 ) -
- - (163 ) 106
(57 )
Net income before extraordinary loss
available to common shareholders
$ 327 $ 27 $ 354 $
1,142
$
78
$ 1,220
Net income (loss) available to
common shareholders $ 327 $ 27 $ 354 $
(2,542
) $
3,762
$ 1,220
Diluted earnings per common share
before extraordinary loss $ .66 $ .05 $ .71 $
2.45
$
.17
$ 2.62
Diluted earnings (loss) per common share $ .66
$ .05 $ .71 $
(5.45
) $
8.07
$ 2.62
Average diluted common shares outstanding (in
thousands) 498,290 498,290 498,290 466,234 466,234 466,234
Return on common equity before extraordinary loss
10.2 %
0.8
%
11.0 %
12.8
%
0.9
%
13.7
%
(1) Represents tax-equivalent adjustment
of $31 million, which is not included in reported results, net of
$279 million of discount accretion related to former conduit
assets.
(2) Represents provision for legal exposure associated with certain
fixed-income strategies managed by SSgA. (3) Represents merger and
integration costs.
(4) Represents the net tax effect of
non-operating adjustments.
(5) Represents tax-equivalent adjustment,
which is not included in reported results.
(6) Represents tax-equivalent adjustment
of $94 million, which is not included in reported results, net of
$391 million of discount accretion related to former conduit assets
and $24 million of revenue related to the AMLF.
(7) Represents interest expense related to
the AMLF.
(8) Represents extraordinary loss related
to the May 2009 consolidation of the asset-backed commercial paper
conduits onto State Street's balance sheet.
(9) Represents prepayment of the preferred
stock discount in connection with redemption of the U.S. Treasury's
preferred stock investment under the TARP Capital Purchase
Program.
STATE STREET CORPORATION Earnings Release
Addendum RECONCILIATION OF REPORTED RESULTS TO
OPERATING-BASIS RESULTS Quarter Ended June 30, 2010
(Dollars in millions, except per share
amounts)
Quarter Ended June 30, 2010
Reported Operating Results Adjustments
Results Fee Revenue: Servicing fees $ 957 $ 957
Management fees 217 217 Trading services 326 326 Securities finance
109 109 Processing fees and other 87 87
Total fee revenue 1,696 1,696
Net Interest Revenue:
Interest revenue 846 $ (141 )
(1)
705 Interest expense 188 - 188
Net interest revenue 658 (141 ) 517 Losses related to
investment securities, net: (50 ) - (50
)
Total revenue 2,304 (141 ) 2,163 Provision for loan
losses 10 - 10
Expenses: Salaries and employee
benefits 849 (21 )
(2)
828 Information systems and communications 174 - 174 Transaction
processing services 164 - 164 Occupancy 116 - 116 Securities
lending charge 414 (414 )
(3)
- Merger and integration costs 41 (41 )
(4)
- Other 186 - 186 Total
expenses 1,944 (476 ) 1,468
Income before income tax expense 350 335 685 Income tax expense
(benefit) (82 ) 272
(5)
190 Tax-equivalent adjustment - 31
(6)
31
Net income $ 432 $ 32 $ 464
Earnings allocated to participating securities $ (5 )
$ - $ (5 )
Net income available to common
shareholders $ 427 $ 32 $ 459
Diluted earnings per common share $ .87 $ .06 $ .93
Average diluted common shares outstanding (in thousands)
498,886 498,886 498,886
Return on common equity 11.0
%
0.8
%
11.8 %
(1) Represents tax-equivalent adjustment
of $31 million, which is not included in reported results, net of
$172 of discount accretion related to former conduit assets.
(2) Represents a tax on bonus payments to
employees in the U.K.
(3) Represents a charge, including related
costs of $9 million, to provide for a one-time cash contribution of
$330 million to SSgA lending fund collateral pools and $75 million
to establish a reserve to address potential inconsistencies in
connection with the implementation of redemption restrictions
applicable to cash collateral pools underlying the agency lending
program.
(4) Represents merger and integration costs.
(5) Represents a discrete tax benefit of
$180 million generated by the restructuring of former non-U.S.
conduit assets and the net tax effect of non-operating
adjustments.
(6) Represents tax-equivalent adjustment,
which is not included in reported results.
STATE STREET CORPORATION Earnings Release
Addendum TANGIBLE COMMON EQUITY AND TIER 1 COMMON RATIOS
As of Period End The table set forth below presents
the calculations of State Street's ratios of tangible common equity
to total tangible assets and to total risk-weighted assets, and its
ratios of tier 1 common capital to total risk-weighted assets.
For the periods ended
September
30, June 30, September 30, (Dollars in millions)
2010 2010 2009
Consolidated Total Assets $ 172,964 $ 162,075
$ 163,277 Less: Goodwill
5,521 5,380 4,554 Other intangible
assets
2,812 2,731 1,845 Excess reserves held at central
banks
20,217 14,768
22,125 Adjusted assets
144,414 139,196 134,753 Plus:
Deferred tax liability
803 788
524 Total tangible assets
A $
145,217 $ 139,984 $ 135,277
Consolidated Total Common Shareholders' Equity
$ 17,569 $ 16,059 $ 13,440 Less: Goodwill
5,521 5,380 4,554 Intangible assets
2,812
2,731 1,845 Adjusted equity
9,236 7,948 7,041 Plus deferred tax liability
803 788 524 Total
tangible common equity
B $ 10,039 $
8,736 $ 7,565 Tangible common equity ratio
B/A 6.9 % 6.2 % 5.6 % Ratio of tangible
common equity to total risk-weighted assets
B/D 13.3
% 11.9 % 10.2 %
Tier 1 capital $
11,964 $ 11,107 $ 11,271
Less:
Trust preferred securities
1,450 1,450
1,450 Tier 1 common capital
C $
10,514 9,657 $ 9,821
Total risk-weighted assets D
75,625
73,532 73,823 Ratio of tier 1 common capital to total
risk-weighted assets
C/D 13.9 % 13.1 % 13.3 %
STATE STREET CORPORATION Earnings Release
Addendum CONSOLIDATED STATEMENT OF CONDITION
September 30, December 31, September 30,
(Dollars in millions, except per share amounts)
2010 2009 2009
Assets Cash and due from banks
$
4,583 $ 2,641 $ 5,027 Interest-bearing deposits with banks
24,560 26,632 27,479 Securities purchased under resale
agreements
3,941 2,387 1,579 Trading account assets
1,485 148 150 Investment securities available for sale
80,719 72,699 71,675 Investment securities held to maturity
17,577 20,877 21,267 Loans and leases (net of allowance of
$101, $79 and $53)
13,665 10,729 11,406 Premises and
equipment
1,835 1,953 1,947 Accrued income receivable
1,767 1,497 1,618 Goodwill
5,521 4,550 4,554 Other
intangible assets
2,812 1,810 1,845 Other assets
14,499 12,023 14,730
Total assets
$ 172,964 $ 157,946 $
163,277
Liabilities Deposits:
Noninterest-bearing
$ 17,313 $ 11,969 $ 13,572
Interest-bearing -- U.S.
9,823 5,956 5,327 Interest-bearing
-- Non-U.S.
77,898 72,137
72,869 Total deposits
105,034 90,062 91,768
Securities sold under repurchase agreements
8,671 10,542
11,890 Federal funds purchased
5,308 4,532 4,949 Other
short-term borrowings
13,657 20,200 20,724 Accrued taxes and
other liabilities
14,152 9,281 11,661 Long-term debt
8,573 8,838 8,845 Total
liabilities
155,395 143,455 149,837
Shareholders'
Equity
Preferred stock, no par: authorized
3,500,000; none issued
Common stock, $1 par: authorized
750,000,000 shares; 502,029,493, 495,365,571 and 494,652,372 shares
issued
502 495 495 Surplus
9,310 9,180 9,159 Retained
earnings
8,556 7,071 6,579 Accumulated other comprehensive
loss
(782 ) (2,238 ) (2,776 ) Treasury stock (at cost
437,953, 431,832 and 429,499 shares)
(17 )
(17 ) (17 ) Total shareholders' equity
17,569 14,491 13,440
Total liabilities and shareholders' equity
$ 172,964
$ 157,946 $ 163,277
State Street (NYSE:STT)
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From Aug 2024 to Sep 2024
State Street (NYSE:STT)
Historical Stock Chart
From Sep 2023 to Sep 2024