STATE STREET
REPORTS FOURTH-QUARTER 2012 GAAP EPS OF $1.00 ON REVENUE OF
$2.45 BILLION;
FULL-YEAR 2012 GAAP EPS OF $4.20, UP
10.8% COMPARED
TO 2011 ON REVENUE OF $9.65
BILLION
FOURTH-QUARTER OPERATING-BASIS EPS OF
$1.11;
FULL-YEAR OPERATING-BASIS EPS OF $3.95
ACHIEVES
POSITIVE OPERATING LEVERAGE(2)
Boston, MA ...January 18, 2013
In announcing today's financial results, Joseph L.
Hooley, State Street's chairman, president and chief executive
officer, said, "The fourth-quarter and full-year 2012 results
reflect continued resilience across our asset servicing and asset
management businesses. We achieved these results in a constrained
revenue environment, generating positive operating leverage and
continuing to invest in key markets that position us for further
growth.
"While equity markets improved in the fourth
quarter, our clients remained cautious for most of the quarter
given the uncertainty surrounding the global economic environment
and the U.S. fiscal cliff. We experienced strong demand for our
solutions as evidenced by $649 billion in asset servicing wins and
a continued strong pipeline.
"We remain focused on executing our Business
Operations and Information Technology Transformation program.
Additionally, to capture further efficiencies and cost savings,
today we announced a separate reduction in force to align our
expenses with our business outlook for 2013.
"We purchased approximately 11 million shares this
quarter for $480 million under our $1.8 billion common stock
purchase plan and declared a $0.24 per share common stock dividend.
Earlier this month, we submitted our 2013 capital plan to the
Federal Reserve Bank. We continue to prioritize the return of
capital to our shareholders.
"As we look ahead, we are encouraged by the recent
market strength and early signs of client re-risking. We remain
confident in the long-term growth prospects of our business and are
focused on servicing clients, growing revenues organically,
managing expenses prudently, and returning capital to
shareholders," Hooley concluded.
Fourth-Quarter 2012
GAAP Results
- Earnings per common share
(EPS) of $1.00 decreased from $1.36 in the third quarter
of 2012 and increased from $0.76 in the fourth quarter of 2011.
- Net income available to
common shareholders of $468 million decreased from $654
million in the third quarter of 2012 and increased from $371
million in the fourth quarter of 2011.
- Revenue of $2.45
billion increased 4% from the third quarter of 2012 and increased
6% from the fourth quarter of 2011.
- Net interest
revenue of $622 million increased slightly from $619
million in the third quarter of 2012 and increased 3% from the
fourth quarter of 2011.
- Expenses of $1.86
billion increased from $1.42 billion in the third quarter of 2012,
primarily the result of a non-recurring benefit in the third
quarter, and increased 4% from the fourth quarter of
2011.
- Return on average common
shareholders' equity (ROE) of 9.3% decreased from 13.3% in
the third quarter of 2012 and increased from 7.8% in the fourth
quarter of 2011.
- Recorded pre-tax
acquisition and restructuring costs of $139 million,
primarily related to severance and benefits costs for targeted
staff reductions expected to be substantially completed during
2013. This additional expense
control measure was taken to better align the Company's expenses to
its business outlook for 2013 and will involve the reduction of
approximately 630 positions worldwide.
Full-Year 2012 GAAP
Results
- EPS of $4.20,
increased 10.8% from $3.79 in 2011. Revenue increased 0.6% to $9.65
billion from $9.59 billion in 2011. Expenses decreased 2.4% to
$6.89 billion from $7.06 billion in 2011. ROE rose to 10.3% in 2012
from 10.0% in 2011.
Fourth-Quarter 2012
Operating-Basis (Non-GAAP)
Results(1)
- EPS of $1.11
increased 12% from $0.99 in the third quarter of 2012 and increased
19% from $0.93 in the fourth quarter of 2011.
- Net income available to
common shareholders of $521 million increased 10% from
$473 million in the third quarter of 2012 and increased 15% from
$454 million in the fourth quarter of 2011.
- Revenue of $2.46
billion increased 3.2% from the third quarter of 2012 and increased
7.0% from the fourth quarter of 2011.
- Net interest
revenue on a fully taxable-equivalent basis, and excluding
conduit-related discount accretion of $52 million, was $600
million, a slight decrease from $611 million in the third quarter
of 2012, and a 4% percent increase from $577 million in the fourth
quarter of 2011
- Expenses of $1.71
billion increased 3.0% from the third quarter of 2012 and increased
4.8% from the fourth quarter of 2011.
- ROE of 10.3%
increased from 9.6% in the third quarter of 2012 and increased from
9.5% in the fourth quarter of 2011.
Full-Year 2012
Operating-Basis (Non-GAAP) Results(1)
- EPS increased 5.9%
to $3.95 from $3.73 in 2011. Revenue of $9.73 billion increased
1.74% from $9.56 billion in 2011, and expenses of $6.91 billion
increased 1.71% from $6.79 billion in 2011. ROE decreased to 9.7%
in 2012 from 9.9% in 2011.
Fourth-Quarter 2012
and Full-Year 2012 Operating-Basis (Non-GAAP)
Highlights(1)
- New Business:
Awarded $649 billion in asset servicing mandates and $24 billion in
net new assets to be managed at SSgA, excluding net outflows in the
securities lending cash collateral pools.
- Operating
Leverage(2): Achieved
positive operating leverage of 20 basis points and 220 basis points
compared to the third quarter of 2012 and the fourth quarter of
2011, respectively. For full-year 2012, the Company achieved 3
basis points of positive operating leverage.
- Business Operations and
Information Technology Transformation program(3): Achieved
incremental pre-tax expense savings of $112 million in 2012,
resulting in cumulative pre-tax expense savings of $198 million
since the program's inception in 2010 through the end of 2012. The
incremental pre-tax expense savings in 2013 are forecasted to be
approximately $220 million.
- Capital(4):
Estimated pro forma tier 1 common ratio
under the June 2012 U.S. Basel III Notices of Proposed Rulemaking
(NPRs) was 10.8% as of December 31, 2012.
- Dividend and stock
purchases: Purchased $480 million of our common stock at
an average price of $43.99 and declared a quarterly common stock
dividend of $0.24 per share.
- The acquired Goldman Sachs
Administration Services (GSAS) business contributed $24
million to revenues and $13 million to expenses subsequent to
October 15, 2012, when the acquisition was completed.
(1) Operating
basis is a non-GAAP presentation. For an explanation of
operating-basis information and related reconciliations, refer to
the addendum included with this news release.
(2) Operating
leverage is defined as the rate of growth of total revenue less the
rate of growth of total expenses, each as determined on an
operating basis.
(3) Estimated
pre-tax expense savings relate only to the Business Operations and
Information Technology Transformation program and are based on
projected improvement from total 2010 operating-basis expenses of
$6.18 billion; actual total expenses of the Company have increased
since 2010, and may in the future increase or decrease, due to
other factors.
(4) Unless
otherwise specified, all capital ratios referenced in this news
release refer to State Street Corporation and not State Street Bank
and Trust Company. Refer to the addendum included with this news
release for a further discussion of these ratios and for
reconciliations applicable to the tier 1 common ratio. Also, see
"Capital" below.
Non-GAAP Financial
Measures
In addition to presenting State Street's financial
results in conformity with U.S. generally accepted accounting
principles (GAAP), management also presents results on a non-GAAP,
or operating basis, in order to highlight comparable financial
trends and other characteristics with respect to State Street's
business operations from period to period. Descriptions of our
non-GAAP, or operating-basis financial measures, together with
reconciliations of operating-basis information to GAAP-basis
information, are provided in the addendum included with this news
release.
The table below provides a summary of selected
financial information and key ratios for the indicated periods,
presented on an operating (non-GAAP) basis where noted. Amounts are
presented in millions of dollars, except for per-share amounts or
where otherwise noted.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Highlights(1) |
|
|
|
|
|
|
|
|
|
(Dollars in millions) |
Q4 2012 |
|
Q3 2012 |
|
% Increase (Decrease) |
|
Q4 2011 |
|
% Increase (Decrease) |
Total revenue(1) |
$ |
2,463 |
|
|
$ |
2,387 |
|
|
3.2 |
% |
|
$ |
2,301 |
|
|
7.0 |
% |
Total expenses(1) |
$ |
1,714 |
|
|
$ |
1,664 |
|
|
3.0 |
% |
|
$ |
1,636 |
|
|
4.8 |
% |
Net income available to common
shareholders(1) |
$ |
521 |
|
|
$ |
473 |
|
|
10.1 |
% |
|
$ |
454 |
|
|
14.8 |
% |
Earnings per common share(1) |
$ |
1.11 |
|
|
$ |
0.99 |
|
|
12.1 |
% |
|
$ |
0.93 |
|
|
19.4 |
% |
Return on average common
equity(1) |
10.3 |
% |
|
9.6 |
% |
|
70 bps |
|
|
9.5 |
% |
|
80 bps |
|
|
|
|
|
|
|
|
|
|
|
Total assets at
period-end |
$ |
222,582 |
|
|
$ |
204,522 |
|
|
8.8 |
% |
|
$ |
216,827 |
|
|
2.7 |
% |
Quarterly average total assets |
$ |
202,051 |
|
|
$ |
195,805 |
|
|
3.2 |
% |
|
$ |
194,708 |
|
|
3.8 |
% |
Net interest margin(1) |
1.36 |
% |
|
1.44 |
% |
|
(8) bps |
|
|
1.40 |
% |
|
(4) bps |
|
Net unrealized gain (loss) on investment portfolio,
after-tax at period-end |
$ |
698 |
|
|
$ |
577 |
|
|
|
|
$ |
(374 |
) |
|
|
|
|
(1) Presented
on an operating basis, a non-GAAP presentation. Refer to the
addendum included with this news release for explanations of our
non-GAAP financial measures and for reconciliations of our
operating-basis financial information. Total revenue for the third
quarter of 2012 and fourth quarter of 2011, presented in the table,
has been adjusted for comparative purposes from amounts previously
reported to include tax-equivalent adjustments to processing fees
and other revenue related to tax credits generated by
tax-advantaged investments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
Under Custody and Administration and Assets Under
Management |
(Dollars in billions) |
Q4 2012 |
|
Q3 2012 |
|
% Increase (Decrease) |
|
Q4 2011 |
|
% Increase (Decrease) |
Assets under custody and
administration(1) (2) |
$ |
24,371 |
|
|
$ |
23,441 |
|
|
4.0 |
% |
|
$ |
21,807 |
|
|
11.8 |
% |
Assets under management(2) |
$ |
2,089 |
|
|
$ |
2,065 |
|
|
1.2 |
% |
|
$ |
1,845 |
|
|
13.2 |
% |
|
|
|
|
|
|
|
|
|
|
Market Indices |
|
|
|
|
|
|
|
|
|
S&P 500® daily
average |
1,418 |
|
|
1,401 |
|
|
1.2 |
% |
|
1,226 |
|
|
15.7 |
% |
MSCI EAFE® daily
average |
1,544 |
|
|
1,468 |
|
|
5.2 |
% |
|
1,420 |
|
|
8.7 |
% |
S&P 500® average
of month end |
1,418 |
|
|
1,409 |
|
|
0.6 |
% |
|
1,253 |
|
|
13.2 |
% |
MSCI EAFE® average
of month end |
1,561 |
|
|
1,474 |
|
|
5.9 |
% |
|
1,448 |
|
|
7.8 |
% |
(1) Includes
assets under custody of $17.806 trillion, $17.287 trillion and
$15.863 trillion, as of period-end Q4 2012, Q3 2012 and Q4 2011,
respectively.
(2) At
period-end.
The following table provides the components of
operating-basis (non-GAAP) revenue(1) for the
periods noted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions) |
Q4 2012 |
|
Q3 2012 |
|
% Increase (Decrease) |
|
Q4 2011 |
|
% Increase (Decrease) |
Servicing fees |
$ |
1,150 |
|
|
$ |
1,100 |
|
|
4.5 |
% |
|
$ |
1,057 |
|
|
8.8 |
% |
Investment management fees |
260 |
|
|
251 |
|
|
3.6 |
|
|
202 |
|
|
28.7 |
|
Trading services revenue: |
|
|
|
|
|
|
|
|
|
Foreign exchange trading |
118 |
|
|
115 |
|
|
2.6 |
|
|
150 |
|
|
(21.3 |
) |
Brokerage
and other fees |
125 |
|
|
117 |
|
|
6.8 |
|
|
123 |
|
|
1.6 |
|
Total trading services revenue |
243 |
|
|
232 |
|
|
4.7 |
|
|
273 |
|
|
(11.0 |
) |
Securities finance
revenue |
74 |
|
|
91 |
|
|
(18.7 |
) |
|
90 |
|
|
(17.8 |
) |
Processing fees and other revenue(1) (2) |
115 |
|
|
84 |
|
|
36.9 |
|
|
60 |
|
|
91.7 |
|
Net interest revenue, fully
taxable-equivalent basis(1) (3) |
600 |
|
|
611 |
|
|
(1.8 |
) |
|
577 |
|
|
4.0 |
|
Gains (Losses) related to investment securities, net |
21 |
|
|
18 |
|
|
16.7 |
|
|
42 |
|
|
(50.0 |
) |
Total
Operating-Basis Revenue(1) |
$ |
2,463 |
|
|
$ |
2,387 |
|
|
3.2 |
% |
|
$ |
2,301 |
|
|
7.0 |
% |
|
|
(1) Refer
to the addendum included with this news release for explanations of
our non-GAAP financial measures and for reconciliations of our
operating-basis financial information. |
(2) Processing
fees and other revenue for the fourth and third quarters of 2012
and fourth quarter of 2011, presented in the table, included
tax-equivalent adjustments of $36 million, $39 million and $15
million, respectively, related to tax credits generated by
tax-advantaged investments. GAAP-basis processing fees and other
revenue for these periods was $79 million, $45 million and $45
million, respectively. Amounts previously reported for the third
quarter of 2012 and fourth quarter of 2011 have been adjusted for
comparative purposes. |
(3) Net
interest revenue for the fourth and third quarters of 2012 and
fourth quarter of 2011, presented in the table, included
tax-equivalent adjustments of $30 million, $32 million and $32
million, respectively, and excluded conduit related discount
accretion of $52 million, $40 million and $61 million,
respectively. GAAP-basis net interest revenue for these periods was
$622 million, $619 million and $606 million, respectively. The
Company continues to expect to record aggregate pre-tax
conduit-related accretion of approximately $770 million in interest
revenue from January 1, 2013 through the remaining terms of the
former conduit securities. This expectation is based on numerous
assumptions, including holding the securities to maturity,
anticipated pre-payment speeds, credit quality and sales. |
Servicing fees
increased 4.5% to $1.2 billion in the fourth quarter of 2012 from
the third quarter of 2012, due to revenue contributions from the
acquired GSAS business, net new business, and stronger global
equity markets. Compared to the fourth quarter of 2011, servicing
fees increased 8.8%, due to stronger global equity markets, the
impact of net new business, and revenue contributions from
acquisitions.
Investment management
fees increased 3.6% to $260 million in the fourth quarter
of 2012 from the third quarter of 2012, due to higher performance
fees and stronger global equity markets. Compared to the fourth
quarter of 2011, investment management fees increased 28.7%,
primarily due to stronger equity markets, net new business, and
higher performance fees.
Trading services
revenue, which includes foreign-exchange trading revenue
and brokerage and other fees, was $243 million in the fourth
quarter of 2012, up 4.7% from the third quarter of 2012 due to
strength in both brokerage and other fee revenue and
foreign-exchange trading. Trading services revenue decreased 11.0%
from the fourth quarter of 2011, primarily due to weakness in
foreign-exchange trading, partially offset by stronger brokerage
and other fees. Foreign-exchange
revenue increased 2.6% from the third quarter of 2012 due
to higher revenue from direct foreign exchange trading, partially
offset by lower volatility. Foreign-exchange revenue decreased
21.3% from the fourth quarter of 2011 due to lower volatility.
Brokerage and other fees increased
6.8% to $125 million from the third quarter of 2012 due to growth
in transition management.
Securities finance
revenue was $74 million in the fourth quarter of 2012, a
decline of 18.7% and 17.8% from the third quarter of 2012 and
fourth quarter of 2011, respectively. The decrease from both
periods reflects lower spreads and volumes.
Processing fees and other
revenue in the fourth quarter of 2012 increased 36.9% from
the third quarter of 2012, primarily due to higher revenue from
joint ventures as well as a gain of $10 million from the sale of a
Lehman Brothers-related asset. Processing fees and other revenue
reflects a tax-equivalent adjustment of $36 million related to tax
credits generated by tax-advantaged investments. This non-GAAP
presentation is similar to adjustments to net interest revenue
generated by tax-exempt investment securities. These adjustments
enable management to compare revenue from all investments on an
equivalent (pre-tax) basis. Processing fees and other revenue
presented for all prior periods has been adjusted to conform to
this new presentation.
Processing fees and other revenue in the fourth
quarter of 2012 increased 91.7% from the fourth quarter of 2011,
primarily due to a $25 million negative fair-value adjustment in
the fourth quarter of 2011 related to positions in the fixed-income
trading initiative, a business State Street exited in the fourth
quarter of 2011, as well as an increase in revenue associated with
tax-advantaged investments.
Fully taxable-equivalent net
interest revenue in the fourth quarter of 2012 was $600
million, a decrease of 1.8% from $611 million in the third quarter
of 2012, primarily due to lower yields on earning assets. Compared
to the fourth quarter of 2011, fully taxable-equivalent net
interest revenue was up 4.0% from $577 million, largely driven by
higher earning assets and lower funding costs, partially offset by
lower asset yields.
Net interest
margin, including excess deposits held at the Federal
Reserve and other central banks, was 136 basis points in the fourth
quarter of 2012 compared to 144 basis points in the third quarter
of 2012 and 140 basis points in the fourth quarter of 2011.
Net gains from sales of
available-for-sale securities of $26 million were recorded
in the fourth quarter of 2012, and separately, $5 million of net
losses from other-than-temporary impairment were recorded,
resulting in $21 million of net gains related to investment
securities.
The following table provides the components of
operating-basis (non-GAAP)(1) expenses
for the periods noted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions) |
Q4 2012 |
|
Q3 2012 |
|
% Increase (Decrease) |
|
Q4 2011 |
|
% Increase (Decrease) |
Compensation and employee
benefits |
$ |
915 |
|
|
$ |
916 |
|
|
(0.1 |
)% |
|
$ |
872 |
|
|
4.9 |
% |
Information systems and communications |
234 |
|
|
211 |
|
|
10.9 |
|
|
195 |
|
|
20.0 |
|
Transaction processing
services |
179 |
|
|
170 |
|
|
5.3 |
|
|
179 |
|
|
- |
|
Occupancy |
121 |
|
|
115 |
|
|
5.2 |
|
|
116 |
|
|
4.3 |
|
Other |
265 |
|
|
252 |
|
|
5.2 |
|
|
274 |
|
|
(3.3 |
) |
Total Operating-Basis
Expenses(1) |
$ |
1,714 |
|
|
$ |
1,664 |
|
|
3.0 |
% |
|
$ |
1,636 |
|
|
4.8 |
% |
(1) Refer to
the addendum included with this news release for explanations of
our non-GAAP financial measures and for reconciliations of our
operating-basis financial information.
Compensation and employee
benefits expenses in the fourth quarter of 2012 were
essentially flat compared to the third quarter of 2012. Additional
costs from the acquired GSAS business were offset by savings
associated with the execution of the Business Operations and
Information Technology Transformation program. Compensation and
employee benefits increased 4.9% from the fourth quarter of 2011,
primarily due to higher benefit and incentive compensation costs,
merit increases, and acquisitions, partially offset by the savings
associated with the execution of the Business Operations and
Information Technology Transformation program.
Information systems and
communications expenses were $234 million in the fourth
quarter of 2012, up 10.9% from the third quarter of 2012 and up
20.0% from the fourth quarter of 2011. The increase in both periods
is primarily due to costs related to transition activities in
connection with the Business Operations and Information Technology
Transformation program.
Transaction processing
services expenses increased 5.3% to $179 million in the
fourth quarter of 2012 from the third quarter of 2012, primarily
due to higher volumes in the asset servicing business.
Other expenses
increased 5.2% to $265 million in the fourth quarter of 2012 from
$252 million in the third quarter of 2012; the increase was
primarily due to higher legal and regulatory costs.
Income Taxes
The effective tax
rate on fourth-quarter 2012 GAAP earnings is 19.9%, down
from 28.3% in the third quarter of 2012, due to the net tax impact
of settling Italian tax audits and recoveries associated with the
2008 Lehman Brothers bankruptcy. The effective tax rate on
operating-basis earnings for the fourth quarter of 2012 was 23.5%,
down from 24.5% in the third quarter of 2012, due to deferred tax
liability adjustments, and down from 25.0% in the fourth quarter of
2011 due to additional investments in renewable energy projects in
2012.
Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
ratios(1): |
December 31,
2012 |
|
September 30,
2012 |
|
bps Increase
(Decrease) |
|
December 31,
2011 |
|
bps Increase
(Decrease) |
Total capital ratio |
20.6 |
% |
|
21.3 |
% |
|
(70) |
|
bps |
|
20.5 |
% |
|
10 bps |
Tier 1 capital ratio |
19.1 |
% |
|
19.8 |
% |
|
(70) |
|
bps |
|
18.8 |
% |
|
30 bps |
Tier 1 leverage ratio |
7.1 |
% |
|
7.6 |
% |
|
(50) |
|
bps |
|
7.3 |
% |
|
(20) bps |
Tier 1 common ratio |
17.1 |
% |
|
17.8 |
% |
|
(70) |
|
bps |
|
16.8 |
% |
|
30 bps |
Estimated pro forma tier 1
common ratio under Basel III NPRs, including impact of
SSFA(2) |
10.8 |
% |
|
11.3 |
% |
|
(50) |
|
bps |
|
N/A |
|
|
N/A |
TCE ratio |
7.2 |
% |
|
7.6 |
% |
|
(40) |
|
bps |
|
7.2 |
% |
|
- |
(1) Unless
otherwise specified, all capital ratios referenced in the table
above and elsewhere in this news release refer to State Street
Corporation and not State Street Bank and Trust Company. Refer to
the addendum included with this news release for a further
description of these ratios, and for reconciliations applicable to
the tier 1 common and tangible common equity, or TCE, ratios
presented in this table. All ratios are presented at period-end.
Total capital, tier 1 capital and tier 1 leverage ratios as of
December 31, 2012 presented in the table above were down from
September 30, 2012, primarily due to slightly lower capital.
(2) Basel III
capital ratios reflect the impact estimated by State Street of the
Notices of Proposed Rulemaking (NPRs) issued by federal banking
regulators in June 2012 regarding capital, primarily the
application of the Simplified Supervisory Formula Approach (SSFA)
to the investment portfolio. The capital rules in the NPR are not
final. This estimate is subject to change based on regulatory
clarifications, further analysis, the results of industry comment
on the NPRs and other factors. Refer to the addendum included with
this news release for information concerning the specified capital
ratios and for reconciliations of the Basel III tier 1 common ratio
to the tier 1 common ratio calculated under currently applicable
regulatory guidelines.
N/A Not
applicable.
The estimated
pro forma
Basel III tier 1 common ratio as of
December 31, 2012 was 10.8%. As noted above, this includes the
estimated impact of the NPRs on the risk-weightings of the
investment portfolio. This estimate would be 11.9% as of
December 31, 2012, if adjusted on a pro forma basis to
hypothetically give effect as of that date to all of the projected
run-off and reinvestment through January 1, 2015 of our investment
portfolio assets affected by the SSFA. Refer to the addendum
included with this news release for a reconciliation of this
ratio.
Common Stock Dividend and
Share Repurchase Program
The Company purchased approximately 10.9 million
shares of its common stock at a total cost of $480 million at an
average price of $43.99 per share in the fourth quarter of 2012 and
declared a quarterly common stock dividend of $0.24 per share. For
full-year 2012, the Company purchased a total of 33.4 million
shares of its common stock at an average price of $43.11 per share
for approximately $1.4 billion. Approximately $360 million remains
available for purchase under its $1.8 billion stock purchase
program authorization, effective through March 2013. The Company
has submitted its 2013 capital distribution plan to the Federal
Reserve and expects a response from the Federal Reserve in mid- to
late-March.
Additional
Information
All per share amounts represent fully diluted earnings per common
share. Return on average 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 average common equity utilizes annualized operating-basis
net income available to common equity in the calculation.
Investor Conference
Call
State Street will webcast an investor conference call today,
Friday, January 18, 2013, at 9:00 a.m. EST, available at
www.statestreet.com/stockholder. The conference call will also be
available via telephone, at +1 888/391-4233 in the U.S. or at +1
706/679-5594 outside of the U.S. The Conference ID is #80960325.
Recorded replays of the conference call will be available on the
web site, and by telephone at +1 855/859-2056 inside the U.S. or at
+1 404/537-3406 outside the U.S. beginning approximately two hours
after the call's completion. The Conference ID is #80960325. 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 (including those
concerning our investment portfolio), and additional financial
information are available on State Street's website, at
www.statestreet.com/stockholder under "Investor Relations--Investor
News & Events" and under the title "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 $24.37 trillion in assets
under custody and administration and $2.09 trillion in assets under
management at December 31, 2012, State Street operates in 29
countries and more than 100 geographic markets and employs 29,660
worldwide. For more information, visit State Street's website 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 relating to our
goals and expectations regarding our business, financial and
capital condition (including without limitation, our capital ratios
under Basel III), results of operations, investment portfolio
performance 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
January 18, 2013.
Important factors that may affect future results
and outcomes include, but are not limited to:
- 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,
including, for example, the direct and indirect effects on
counterparties to the current sovereign debt risks in Europe and
other regions;
- financial market disruptions or economic
recession, whether in the U.S., Europe or other regions
internationally;
- increases in the volatility of, or declines in
the level of, our net interest revenue, changes in the composition
of the assets recorded in our consolidated statement of condition
and the possibility that we may be required to change the manner in
which we fund those assets;
- the liquidity of the U.S. and international
securities markets, particularly the markets for fixed-income
securities and inter-bank credits, and the liquidity requirements
of our clients;
- 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;
- 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;
- our ability to attract deposits and other
low-cost, short-term funding, and our ability to deploy deposits in
a profitable manner consistent with our liquidity requirements and
risk profile;
- the manner in which the Federal Reserve and other
regulators implement the Dodd-Frank Act, Basel III, European
legislation with respect to banking and financial activities and
other regulatory initiatives in the U.S. and internationally,
including regulatory developments that result in changes to our
structure or operating model, increased costs or other changes to
the provision of our services;
- adverse changes in required regulatory capital
ratios, whether arising under the Dodd-Frank Act, Basel II or Basel
III, or due to changes in regulatory positions or regulations in
jurisdictions in which we engage in banking activities;
- increasing requirements to obtain necessary
approvals of the Federal Reserve and our other regulators for the
use, allocation or distribution of our capital or for other
specific capital actions or programs, including acquisitions,
dividends and equity repurchases, without which our growth plans,
distributions to shareholders, equity purchase programs or other
capital initiatives may be restricted;
- changes in law or regulation that may adversely
affect our, our clients' or our counterparties' business activities
and the products or services that we sell, including additional or
increased taxes or assessments thereon, capital adequacy
requirements and changes that expose us to risks related to
compliance;
- the maintenance of credit agency ratings for our
debt and depository obligations as well as the level of credibility
of credit agency ratings;
- delays or difficulties in the execution of our
previously announced Business Operations and Information Technology
Transformation program, which could lead to changes in our
estimates of the charges, expenses or savings associated with the
planned program, resulting in increased volatility of our
earnings;
- the results of, and costs associated with,
government investigations, litigation, and similar claims,
disputes, or proceedings;
- the possibility that our clients will incur
substantial losses in investment pools for which we act as agent,
and the possibility of significant reductions in the valuation of
assets;
- adverse publicity or other reputational
harm;
- dependencies on information technology,
complexities and costs of protecting the security of our systems
and difficulties with protecting our intellectual property
rights;
- our ability to grow revenue, attract and/or
retain and compensate highly skilled people, control expenses and
attract the capital necessary to achieve our business goals and
comply with regulatory requirements;
- potential changes to the competitive environment,
including changes due to regulatory and technological changes, the
effects of consolidation, and perceptions of State Street as a
suitable service provider or counterparty;
- potential changes in how clients compensate us
for our services, and the mix of services that clients choose from
us;
- the risks that acquired businesses and joint
ventures will not achieve their anticipated financial and
operational benefits or 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 and 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 closing conditions;
- our ability to recognize emerging needs of
clients and to develop products that are responsive to such trends
and profitable to the company; the performance of 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; and the potential for new products
and services to impose additional costs on us and expose us to
increased operational risk;
- our ability to measure the fair value of the
investment securities recorded in our consolidated statement of
condition;
- our ability to control operating risks, data
security breach 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 prove insufficient, fail or be circumvented;
- changes in accounting standards and practices;
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.
Other important factors that could cause actual
results to differ materially from those indicated by any
forward-looking statements are set forth in our 2011 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, January 18, 2013, and we do not
undertake efforts to revise those forward-looking statements to
reflect events after that date.
Investor Relations
Contact: |
Valerie Haertel |
Telephone: |
+1 617/664-3477 |
|
|
Media Contact: |
Hannah Grove |
Telephone: |
+1 617/664-3377 |
Q4 2012 Financial HIghlights
Presentation
Press Release Addendum
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: State Street Corporation via Thomson Reuters
ONE
HUG#1671364
State Street (NYSE:STT)
Historical Stock Chart
From Jun 2024 to Jul 2024
State Street (NYSE:STT)
Historical Stock Chart
From Jul 2023 to Jul 2024