State Street Corp. Announces an Intention to Increase Its Quarterly Common Stock Dividend to $0.34 per Share & an Authorizati...
March 11 2015 - 5:08PM
Business Wire
State Street Corporation (NYSE:STT) today announced that the
Federal Reserve did not object to the Company's capital plan,
reviewed by the Federal Reserve as part of the 2015 Comprehensive
Capital Analysis and Review (CCAR) process. The capital plan
includes a proposed common stock dividend increase and a new common
stock purchase program.
Under the capital plan, State Street intends to increase its
quarterly common stock dividend to $0.34 per share, from $0.30 per
share, beginning in the second quarter of 2015. The common stock
dividend for the second quarter of 2015 is to be considered by
State Street’s Board of Directors at its regularly scheduled
meeting in May 2015. Additionally, State Street announced that its
Board has approved a new common stock purchase program authorizing
the purchase of up to $1.8 billion of its common stock. The program
will be effective April 1, 2015 and extend through June 30,
2016.
Capital distributions under State Street’s capital plan include
common stock repurchases and dividends on State Street’s common and
preferred stock. Unlike the four-quarter capital plan submitted in
connection with CCAR 2014, the plan submitted for CCAR 2015 covers
five quarters (ending June 30, 2016). Total projected average
quarterly capital distributions under the CCAR 2015 capital plan
are generally comparable to those projected in the CCAR 2014
capital plan in March 2014, when State Street announced that plan’s
common stock purchase program.
State Street’s second quarter 2015 common stock and other stock
dividends, including the declaration, timing and amount thereof,
remain subject to consideration and approval by its Board of
Directors at the relevant times. State Street may commence
purchases of its common stock under the new authorization beginning
April 1, 2015. Stock purchases may be made using various types of
transactions, including open-market purchases or transactions off
the market, and may be made under Rule 10b5-1 trading programs. The
timing of stock purchases, type of transaction and number of shares
purchased will depend on several factors, including market
conditions and State Street’s capital position, its financial
performance and investment opportunities. The common stock purchase
program does not have specific price targets and may be suspended
at any time.
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 capital plans, involving
common stock dividends and purchases and other capital actions, and
expectations for returning capital to shareholders. Forward-looking
statements are often, but not always, identified by such
forward-looking terminology as “plan,” “propose,” “intend,”
“project,” “expect,” “may,” “will,” “objective,” “forecast,”
“outlook,” “believe,” “anticipate,” “estimate,” “seek,” “focus,”
“trend,” “target,” “strategy” 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 March 11,
2015.
Factors that could cause changes in the expectations or
assumptions on which forward-looking statements are based cannot be
foreseen with certainty and 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 of the sovereign-debt risks in the U.S., Europe
and other regions;
- increases in the volatility of, or
declines in the level of, our net interest revenue, 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 the possibility that we may 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, the valuation of the U.S. dollar relative to other
currencies in which we record revenue or accrue expenses 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, the relative portion of our
deposits that are determined to be operational under regulatory
guidelines and our ability to deploy deposits in a profitable
manner consistent with our liquidity requirements and risk
profile;
- the manner and timing with which the
Federal Reserve and other U.S. and foreign regulators implement
changes to the regulatory framework applicable to our operations,
including implementation of the Dodd-Frank Act, the Basel III final
rule and European legislation (such as the Alternative Investment
Fund Managers Directive and Undertakings for Collective Investment
in Transferable Securities Directives); among other consequences,
these regulatory changes impact the levels of regulatory capital we
must maintain, acceptable levels of credit exposure to third
parties, margin requirements applicable to derivatives, and
restrictions on banking and financial activities. In addition, our
regulatory posture and related expenses have been and will continue
to be affected by changes in regulatory expectations for global
systemically important financial institutions applicable to, among
other things, risk management, capital planning and compliance
programs, and changes in governmental enforcement approaches to
perceived failures to comply with regulatory or legal
obligations;
- adverse changes in the regulatory
ratios that we are required or will be required to meet, whether
arising under the Dodd-Frank Act or the Basel III final rule, 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
ratios that cause changes in those ratios as they are measured from
period to period;
- increasing requirements to obtain the
prior approval of the Federal Reserve or our other U.S. and
non-U.S. regulators for the use, allocation or distribution of our
capital or other specific capital actions or programs, including
acquisitions, dividends and stock purchases, without which our
growth plans, distributions to shareholders, share repurchase
programs or other capital initiatives may be restricted;
- 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 additional or
increased taxes or assessments thereon, capital adequacy
requirements, margin requirements and changes that expose us to
risks related to the adequacy of our controls or compliance
programs;
- financial market disruptions or
economic recession, whether in the U.S., Europe, Asia or other
regions;
- our ability to promote a strong culture
of risk management, operating controls, compliance oversight and
governance that meet our expectations and those of our clients and
our regulators;
- the results of, and costs associated
with, governmental or regulatory inquiries and investigations,
litigation and similar claims, disputes, or proceedings;
- the potential for losses arising from
our investments in sponsored investment funds;
- 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
liquidity or valuation of assets underlying those pools;
- our ability to anticipate and manage
the level and timing of redemptions and withdrawals from our
collateral pools and other collective investment products;
- the credit agency ratings of our debt
and depository obligations and investor and client perceptions of
our financial strength;
- adverse publicity, whether specific to
State Street or regarding other industry participants or
industry-wide factors, or other reputational harm;
- our ability to control operational
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;
- our ability to expand our use of
technology to enhance the efficiency, accuracy and reliability of
our operations and our dependencies on information technology and
our ability to control related risks, including cyber-crime and
other threats to our information technology infrastructure and
systems and their effective operation both independently and with
external systems, and complexities and costs of protecting the
security of our systems and data;
- 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;
- changes or potential changes to the
competitive environment, including changes due to regulatory and
technological changes, the effects of industry consolidation and
perceptions of State Street as a suitable service provider or
counterparty;
- 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;
- our ability to complete acquisitions,
joint ventures and divestitures, including the ability to obtain
regulatory approvals, the ability to arrange financing as required
and the ability to satisfy closing conditions;
- the risks that our 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 negative
synergies or liabilities 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 our relationships with our clients,
our employees or regulators;
- our ability to recognize emerging 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;
- 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 2014 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 presentation speak only as of the date
hereof, March 11, 2015, and we do not undertake efforts to revise
those forward-looking statements to reflect events after that
date.
State Street CorporationInvestor Relations
Contact:Anthony Ostler, 1 617-664-3477orMedia
Contact:Carolyn Cichon, 1 617-664-8672
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