EX-99.2 3 exhibit992-2q16earningsrel.htm EXHIBIT 99.2 Exhibit
 
Exhibit 99.2
STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
June 30, 2016
 
Table of Contents
 
 
 
Page
GAAP-Basis Financial Information:
 
Consolidated Financial Highlights
Consolidated Results of Operations
Consolidated Statement of Condition
Average and Period-End Balance Sheet Trends
Assets Under Custody and Administration
Assets Under Management
 
 
Investment Portfolio:
 
Investment Portfolio Credit Ratings
Investment Portfolio Holdings by Asset Class
Investment Portfolio Non-U.S. Investments
 
 
Operating-Basis (Non-GAAP) Financial Information:
 
Reconciliations of Operating-Basis (Non-GAAP) Financial Information
Reconciliations of Constant Currency Fx Impacts
 
 
Capital:
 
Regulatory Capital
Reconciliation of Tangible Common Equity Ratio
Reconciliations of Fully Phased-In Ratios
Reconciliations of Supplementary Leverage Ratios

This financial information should be read in conjunction with State Street's news release dated July 27, 2016.



STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
CONSOLIDATED FINANCIAL HIGHLIGHTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarters
 
% Change
 
Year-to-Date
 
% Change
(Dollars in millions, except per share amounts, or where otherwise noted)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
2Q15
 
2Q16
 
YTD 2Q16
vs.
YTD 2Q15
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee revenue
 
$
2,055

 
$
2,076

 
$
2,103

 
$
2,044

 
$
1,970

 
$
2,053

 
(1.1
)%
 
4.2
 %
 
$
4,131

 
$
4,023

 
(2.6
)%
Net interest revenue
 
546

 
535

 
513

 
494

 
512

 
521

 
(2.6
)
 
1.8

 
1,081

 
1,033

 
(4.4
)
Net gains (losses) from sales of available-for-sale securities
 

 
(3
)
 
(2
)
 

 
2

 
(1
)
 
nm

 
nm

 
(3
)
 
1

 
nm

Net losses from other-than-temporary impairment
 
(1
)
 

 

 

 

 

 
nm

 
nm

 
(1
)
 

 
nm

Total revenue
 
2,600

 
2,608

 
2,614

 
2,538

 
2,484

 
2,573

 
(1.3
)
 
3.6

 
5,208

 
5,057

 
(2.9
)
Provision for loan losses
 
4

 
2

 
5

 
1

 
4

 
4

 
nm

 
nm

 
6

 
8

 
nm

Total expenses
 
2,097

 
2,134

 
1,962

 
1,857

 
2,050

 
1,860

 
(12.8
)
 
(9.3
)
 
4,231

 
3,910

 
(7.6
)
Income before income tax expense
 
499

 
472

 
647

 
680

 
430

 
709

 
50.2

 
64.9

 
971

 
1,139

 
17.3

Income tax expense
 
94

 
54

 
67

 
103

 
62

 
92

 
70.4

 
48.4

 
148

 
154

 
4.1

Net income (loss) from minority interest
 

 

 
1

 
(1
)
 

 
2

 

 

 

 
2

 

Net income
 
405

 
418

 
581

 
576

 
368

 
619

 
48.1

 
68.2

 
823

 
987

 
19.9

Net income available to common shareholders
 
373

 
389

 
539

 
547

 
319

 
585

 
50.4

 
83.4

 
762

 
904

 
18.6

Diluted earnings per common share
 
.89

 
.93

 
1.31

 
1.34

 
.79

 
1.47

 
58.1

 
86.1

 
1.83

 
2.25

 
23.0

Average diluted common shares outstanding (in thousands)
 
418,750

 
416,712

 
412,167

 
407,012

 
403,615

 
398,847

 
(4.3
)
 
(1.2
)
 
417,643

 
401,113

 
(4.0
)
Cash dividends declared per common share
 
$
.30

 
$
.34

 
$
.34

 
$
.34

 
$
.34

 
$
.34

 

 

 
$
.64

 
$
.68

 
6.3

Closing price per share of common stock (as of quarter end)
 
73.53

 
77.00

 
67.21

 
66.36

 
58.52

 
53.92

 
(30.0
)
 
(7.9
)
 
77.00

 
53.92

 
(30.0
)
Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average common equity
 
7.9
%
 
8.2
%
 
11.3
%
 
11.6
%
 
6.8
%
 
12.4
%
 
51.2

 
82.4

 
8.0
%
 
9.6
%
 
20.0

Pre-tax operating margin
 
19.2

 
18.1

 
24.8

 
26.8

 
17.3

 
27.6

 
52.5

 
59.5

 
18.6

 
22.5

 
21.0

Common equity tier 1 risk-based capital1
 
12.0

 
12.0

 
12.0

 
12.5

 
12.3

 
12.0

 

 
(2.4
)
 
12.0

 
12.0

 

Tier 1 risk-based capital1
 
14.0

 
14.7

 
14.7

 
15.3

 
14.9

 
15.0

 
2.0

 
0.7

 
14.7

 
15.0

 
2.0

Total risk-based capital1
 
16.1

 
16.8

 
16.8

 
17.4

 
17.1

 
17.1

 
1.8

 

 
16.8

 
17.1

 
1.8

Tier 1 leverage1
 
5.8

 
6.0

 
6.3

 
6.9

 
6.9

 
7.0

 
16.7

 
1.4

 
6.0

 
7.0

 
16.7

Tangible common equity2
 
6.0

 
6.5

 
6.6

 
6.8

 
6.7

 
6.7

 
3.1

 

 
6.5

 
6.7

 
3.1

At quarter-end:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets under custody and administration (in trillions)3
 
$
28.49

 
$
28.65

 
$
27.27

 
$
27.51

 
$
26.94

 
$
27.79

 
(3.0
)
 
3.2

 
$
28.65

 
$
27.79

 
(3.0
)
Asset under management (in trillions)
 
2.44

 
2.37

 
2.20

 
2.25

 
2.30

 
2.30

 
(3.0
)
 

 
2.37

 
2.30

 
(3.0
)
Total assets
 
279,448

 
294,544

 
247,235

 
245,155

 
243,685

 
255,386

 
(13.3
)
 
4.8

 
294,544

 
255,386

 
(13.3
)
Investment securities
 
112,857

 
101,463

 
97,560

 
100,022

 
102,298

 
103,121

 
1.6

 
0.8

 
101,463

 
103,121

 
1.6

Deposits
 
211,352

 
230,591

 
186,367

 
191,627

 
185,516

 
193,130

 
(16.2
)
 
4.1

 
230,591

 
193,130

 
(16.2
)
Long-term debt
 
9,146

 
9,058

 
11,986

 
11,497

 
10,323

 
11,924

 
31.6

 
15.5

 
9,058

 
11,924

 
31.6

Total shareholders' equity
 
20,670

 
21,347

 
21,343

 
21,103

 
21,496

 
22,073

 
3.4

 
2.7

 
21,347

 
22,073

 
3.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 In early 2014, we announced that we had completed our Basel III qualification period. As a result, our regulatory capital ratios as of March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016 presented in the table above have been calculated under the advanced approaches provisions of the Basel III final rule. Refer to page 16 of this earnings release addendum for additional information about our regulatory capital ratios as of March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016.
2  Tangible common equity ratio is a non-GAAP measure. Refer to accompanying reconciliations on page 17 for additional information.
3  Included assets under custody of $21.98 trillion, $22.06 trillion, $20.95 trillion, $21.26 trillion, $20.79 trillion and $21.35 trillion as of March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016, respectively.
nm  Not meaningful

1


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
CONSOLIDATED RESULTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
Quarters
 
% Change
 
Year-to-Date
 
% Change
(Dollars in millions, except per share amounts, or where otherwise noted)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
2Q15
 
2Q16
 
YTD 2Q16
vs.
YTD 2Q15
Reported Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fees
 
$
1,268

 
$
1,319

 
$
1,289

 
$
1,277

 
$
1,242

 
$
1,239

 
(6.1
)%
 
(0.2
)%
 
$
2,587

 
$
2,481

 
(4.1
)%
Management fees
 
301

 
304

 
287

 
282

 
270

 
293

 
(3.6
)
 
8.5

 
605

 
563

 
(6.9
)
Trading services:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct sales and trading
 
135

 
88

 
108

 
79

 
90

 
87

 
(1.1
)
 
(3.3
)
 
223

 
177

 
(20.6
)
Indirect foreign exchange trading2
 
68

 
79

 
69

 
64

 
66

 
70

 
(11.4
)
 
6.1

 
147

 
136

 
(7.5
)
Total foreign exchange trading
 
203

 
167

 
177

 
143

 
156

 
157

 
(6.0
)
 
0.6

 
370

 
313

 
(15.4
)
Electronic foreign exchange services
 
48

 
44

 
46

 
37

 
44

 
43

 
(2.3
)
 
(2.3
)
 
92

 
87

 
(5.4
)
Other trading, transition management and brokerage
 
73

 
70

 
71

 
67

 
72

 
67

 
(4.3
)
 
(6.9
)
 
143

 
139

 
(2.8
)
Total brokerage and other trading services
 
121

 
114

 
117

 
104

 
116

 
110

 
(3.5
)
 
(5.2
)
 
235

 
226

 
(3.8
)
Total trading services
 
324

 
281

 
294

 
247

 
272

 
267

 
(5.0
)
 
(1.8
)
 
605

 
539

 
(10.9
)
Securities finance
 
101

 
155

 
113

 
127

 
134

 
156

 
0.6

 
16.4

 
256

 
290

 
13.3

Processing fees and other
 
61

 
17

 
120

 
111

 
52

 
98

 
476.5

 
88.5

 
78

 
150

 
92.3

Total fee revenue
 
2,055

 
2,076

 
2,103

 
2,044

 
1,970

 
2,053

 
(1.1
)
 
4.2

 
4,131

 
4,023

 
(2.6
)
Net interest revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest revenue
 
642

 
629

 
614

 
603

 
629

 
620

 
(1.4
)
 
(1.4
)
 
1,271

 
1,249

 
(1.7
)
Interest expense
 
96

 
94

 
101

 
109

 
117

 
99

 
5.3

 
(15.4
)
 
190

 
216

 
13.7

Net interest revenue
 
546

 
535

 
513

 
494

 
512

 
521

 
(2.6
)
 
1.8

 
1,081

 
1,033

 
(4.4
)
Gains (losses) related to investment securities, net:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains (losses) from sales of available-for-sale securities
 

 
(3
)
 
(2
)
 

 
2

 
(1
)
 
 
 
 
 
(3
)
 
1

 
 
Losses from other-than-temporary impairment
 
(1
)
 

 

 

 

 

 
 
 
 
 
(1
)
 

 
 
Gains (losses) related to investment securities, net
 
(1
)
 
(3
)
 
(2
)
 

 
2

 
(1
)
 
 
 
 
 
(4
)
 
1

 
 
Total revenue
 
2,600

 
2,608

 
2,614

 
2,538

 
2,484

 
2,573

 
(1.3
)
 
3.6

 
5,208

 
5,057

 
(2.9
)
Provision for loan losses
 
4

 
2

 
5

 
1

 
4

 
4

 
 
 
 
 
6

 
8

 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and employee benefits
 
1,087

 
984

 
1,051

 
939

 
1,107

 
989

 
0.5

 
(10.7
)
 
2,071

 
2,096

 
1.2

Information systems and communications
 
247

 
249

 
265

 
261

 
272

 
270

 
8.4

 
(0.7
)
 
496

 
542

 
9.3

Transaction processing services
 
197

 
201

 
201

 
194

 
200

 
201

 

 
0.5

 
398

 
401

 
0.8

Occupancy
 
113

 
109

 
110

 
112

 
113

 
111

 
1.8

 
(1.8
)
 
222

 
224

 
0.9

Acquisition and restructuring costs
 
6

 
3

 
10

 
6

 
104

 
20

 
566.7

 
(80.8
)
 
9

 
124

 
1,277.8

Other
 
447

 
588

 
325

 
345

 
254

 
269

 
(54.3
)
 
5.9

 
1,035

 
523

 
(49.5
)
Total expenses
 
2,097

 
2,134

 
1,962

 
1,857

 
2,050

 
1,860

 
(12.8
)
 
(9.3
)
 
4,231

 
3,910

 
(7.6
)
Income before income tax expense
 
499

 
472

 
647

 
680

 
430

 
709

 
50.2

 
64.9

 
971

 
1,139

 
17.3

Income tax expense
 
94

 
54

 
67

 
103

 
62

 
92

 
70.4

 
48.4

 
148

 
154

 
4.1

Net income (loss) from minority interest
 

 

 
1

 
(1
)
 

 
2

 

 

 

 
2

 

Net income
 
$
405

 
$
418

 
$
581

 
$
576

 
$
368

 
$
619

 
48.1

 
68.2

 
$
823

 
$
987

 
19.9



2


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarters
 
% Change
 
Year-to-Date
 
% Change
(Dollars in millions, except per share amounts, or where otherwise noted)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
2Q15
 
2Q16
 
YTD 2Q16
vs.
YTD 2Q15
Adjustments to net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends on preferred stock
 
$
(31
)
 
$
(29
)
 
$
(42
)
 
$
(28
)
 
$
(49
)
 
$
(33
)
 
13.8
 %
 
(32.7
)%
 
$
(60
)
 
$
(82
)
 
36.7
 %
Earnings allocated to participating securities
 
(1
)
 

 

 
(1
)
 

 
(1
)
 

 

 
(1
)
 
(1
)
 

Net income available to common shareholders
 
$
373

 
$
389

 
$
539

 
$
547

 
$
319

 
$
585

 
50.4

 
83.4

 
$
762

 
$
904

 
18.6

Earnings per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
.90

 
$
.95

 
$
1.33

 
$
1.36

 
$
.80

 
$
1.48

 
55.8

 
85.0

 
$
1.85

 
$
2.28

 
23.2

Diluted
 
.89

 
.93

 
1.31

 
1.34

 
.79

 
1.47

 
58.1

 
86.1

 
1.83

 
2.25

 
23.0

Average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
412,225

 
410,674

 
406,612

 
402,041

 
399,421

 
394,160

 
(4.0
)
 
(1.3
)
 
411,445

 
396,790

 
(3.6
)
Diluted
 
418,750

 
416,712

 
412,167

 
407,012

 
403,615

 
398,847

 
(4.3
)
 
(1.2
)
 
417,643

 
401,113

 
(4.0
)
Cash dividends declared per common share
 
$
.30

 
$
.34

 
$
.34

 
$
.34

 
$
.34

 
$
.34

 

 

 
$
.64

 
$
.68

 
6.3

Closing price per share of common stock (as of quarter end)
 
73.53

 
77.00

 
67.21

 
66.36

 
58.52

 
53.92

 
(30.0
)
 
(7.9
)
 
77.00

 
53.92

 
(30.0
)
Financial ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average common equity
 
7.9
%
 
8.2
%
 
11.3
%
 
11.6
%
 
6.8
%
 
12.4
%
 
51.2

 
82.4

 
8.0
%
 
9.6
%
 
20.0

Pre-tax operating margin
 
19.2

 
18.1

 
24.8

 
26.8

 
17.3

 
27.6

 
52.5

 
59.5

 
18.6

 
22.5

 
21.0

After-tax margin
 
15.6

 
16.0

 
22.2

 
22.7

 
12.8

 
22.7

 
41.9

 
77.3

 
14.6

 
17.9

 
22.6

Internal capital generation rate
 
5.3

 
5.3

 
8.3

 
8.7

 
3.9

 
9.6

 
81.1

 
146.2

 
5.3

 
6.8

 
28.3

Common dividend payout ratio
 
33.1

 
35.6

 
25.5

 
24.9

 
42.5

 
22.7

 
(36.2
)
 
(46.6
)
 
34.4

 
29.7

 
(13.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 We calculate revenue for indirect foreign exchange using an attribution methodology. This methodology takes into consideration estimated effective mark-ups/downs and observed client volumes. Direct sales and trading revenue is total foreign exchange trading revenue excluding the revenue attributed to indirect foreign exchange.
nm  Not meaningful




3


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
CONSOLIDATED STATEMENT OF CONDITION
 
 
 
 
 
 
As of Quarter End
 
% Change
(Dollars in millions, except per share amounts)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
3,149

 
$
3,084

 
$
3,660

 
$
1,207

 
$
3,735

 
$
4,673

 
51.5
 %
 
25.1
 %
Interest-bearing deposits with banks
 
83,398

 
116,728

 
68,361

 
75,338

 
65,032

 
75,169

 
(35.6
)
 
15.6

Securities purchased under resale agreements
 
11,331

 
4,447

 
9,155

 
3,404

 
3,722

 
2,010

 
(54.8
)
 
(46.0
)
Trading account assets
 
1,145

 
1,373

 
1,223

 
849

 
873

 
890

 
(35.2
)
 
1.9

Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities available for sale
 
96,612

 
85,308

 
80,097

 
70,070

 
71,086

 
72,735

 
(14.7
)
 
2.3

Investment securities held to maturity1
 
16,245

 
16,155

 
17,463

 
29,952

 
31,212

 
30,386

 
88.1

 
(2.6
)
Total investment securities
 
112,857

 
101,463

 
97,560

 
100,022

 
102,298

 
103,121

 
1.6

 
0.8

Loans and leases2
 
18,278

 
18,547

 
19,019

 
18,753

 
19,140

 
19,788

 
6.7

 
3.4

Premises and equipment3
 
1,933

 
2,035

 
1,984

 
1,894

 
1,949

 
1,994

 
(2.0
)
 
2.3

Accrued interest and fees receivable
 
2,281

 
2,385

 
2,271

 
2,346

 
2,371

 
2,399

 
0.6

 
1.2

Goodwill
 
5,663

 
5,729

 
5,716

 
5,671

 
5,733

 
5,671

 
(1.0
)
 
(1.1
)
Other intangible assets
 
1,892

 
1,871

 
1,820

 
1,768

 
1,749

 
1,682

 
(10.1
)
 
(3.8
)
Other assets
 
37,521

 
36,882

 
36,466

 
33,903

 
37,083

 
37,989

 
3.0

 
2.4

Total assets
 
$
279,448

 
$
294,544

 
$
247,235

 
$
245,155

 
$
243,685

 
$
255,386

 
(13.3
)
 
4.8

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Non-interest-bearing
 
$
72,704

 
$
83,120

 
$
58,426

 
$
65,800

 
$
54,248

 
$
57,268

 
(31.1
)
 
5.6

   Interest-bearing -- U.S.
 
30,769

 
32,839

 
30,407

 
29,958

 
31,159

 
33,060

 
0.7

 
6.1

   Interest-bearing -- Non-U.S.
 
107,879

 
114,632

 
97,534

 
95,869

 
100,109

 
102,802

 
(10.3
)
 
2.7

Total deposits
 
211,352

 
230,591

 
186,367

 
191,627

 
185,516

 
193,130

 
(16.2
)
 
4.1

Securities sold under repurchase agreements
 
10,158

 
10,978

 
7,760

 
4,499

 
4,224

 
4,350

 
(60.4
)
 
3.0

Federal funds purchased
 
17

 
15

 
25

 
6

 
23

 
29

 
93.3

 
26.1

Other short-term borrowings
 
4,346

 
4,756

 
3,761

 
1,748

 
1,683

 
1,683

 
(64.6
)
 

Accrued expenses and other liabilities
 
23,759

 
17,799

 
15,961

 
14,643

 
20,388

 
22,166

 
24.5

 
8.7

Long-term debt
 
9,146

 
9,058

 
11,986

 
11,497

 
10,323

 
11,924

 
31.6

 
15.5

Total liabilities
 
258,778

 
273,197

 
225,860

 
224,020

 
222,157

 
233,282

 
(14.6
)
 
5.0

Shareholders' equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, no par, 3,500,000 shares authorized:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series C, 5,000 shares issued and outstanding
 
491

 
491

 
491

 
491

 
491

 
491

 

 

Series D, 7,500 shares issued and outstanding
 
742

 
742

 
742

 
742

 
742

 
742

 

 

Series E, 7,500 shares issued and outstanding
 
728

 
728

 
728

 
728

 
728

 
728

 

 

Series F, 7,500 shares issued and outstanding
 

 
742

 
742

 
742

 
742

 
742

 

 

Series G, 5,000 shares issued and outstanding
 

 

 

 

 

 
493

 

 

Common stock, $1 par, 750,000,000 shares authorized4
 
504

 
504

 
504

 
504

 
504

 
504

 

 

Surplus
 
9,744

 
9,744

 
9,742

 
9,746

 
9,739

 
9,767

 
0.2

 
0.3

Retained earnings
 
14,986

 
15,237

 
15,638

 
16,049

 
16,233

 
16,686

 
9.5

 
2.8

Accumulated other comprehensive income (loss)
 
(1,006
)
 
(1,011
)
 
(1,101
)
 
(1,442
)
 
(964
)
 
(997
)
 
(1.4
)
 
3.4

Treasury stock, at cost5
 
(5,519
)
 
(5,830
)
 
(6,143
)
 
(6,457
)
 
(6,719
)
 
(7,083
)
 
21.5

 
5.4

Total shareholders' equity
 
20,670

 
21,347

 
21,343

 
21,103

 
21,496

 
22,073

 
3.4

 
2.7

Non-controlling interest-equity
 

 

 
32

 
32

 
32

 
31

 
 
 
 
Total equity
 
20,670

 
21,347

 
21,375

 
21,135

 
21,528

 
22,104

 
 
 
 
Total liabilities and equity
 
$
279,448

 
$
294,544

 
$
247,235

 
$
245,155

 
$
243,685

 
$
255,386

 
(13.3
)
 
4.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
 
 
 
1  Fair value of investment securities held to maturity
 
$
16,417

 
$
16,198

 
$
17,536

 
$
29,798

 
$
31,555

 
$
30,895

 
 
 
 
2  Allowance for loan losses
 
41

 
43

 
48

 
46

 
47

 
51

 
 
 
 
3  Accumulated depreciation for premises and equipment
 
4,653

 
4,780

 
4,768

 
4,820

 
4,929

 
3,164

 
 
 
 
4  Common stock shares issued
 
503,879,642

 
503,879,642

 
503,879,642

 
503,879,642

 
503,879,642

 
503,879,642

 
 
 
 
5  Treasury stock shares
 
92,569,079

 
96,125,524

 
100,086,970

 
104,227,647

 
108,316,401

 
114,229,535

 
 
 
 

4


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
AVERAGE AND PERIOD-END BALANCE SHEET TRENDS
 
 
 
 
 
 
Quarters
 
% Change
Average Balance Sheet Mix
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
Investment securities and short-duration instruments
 
80.4
%
 
81.8
%
 
81.2
%
 
79.9
%
 
78.5
%
 
78.4
%
 
(4.2
)%
 
(0.1
)%
Loans and leases
 
7.0

 
6.6

 
7.0

 
8.2

 
8.3

 
8.1

 
22.7

 
(2.4
)
Non-interest-earning assets
 
12.6

 
11.6

 
11.8

 
11.9

 
13.2

 
13.5

 
16.4

 
2.3

Total
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
 
 
 
Client funds bearing interest
 
59.9
%
 
61.5
%
 
61.6
%
 
60.4
%
 
59.0
%
 
60.2
%
 
(2.1
)
 
2.0

Client funds not bearing interest
 
21.2

 
21.3

 
20.4

 
19.4

 
20.1

 
18.3

 
(14.1
)
 
(9.0
)
Other non-interest-bearing liabilities
 
6.9

 
5.6

 
5.1

 
5.6

 
6.3

 
7.0

 
25.0

 
11.1

Long-term debt and common shareholders' equity
 
11.2

 
10.7

 
11.8

 
13.4

 
13.4

 
13.1

 
22.4

 
(2.2
)
Preferred shareholders' equity
 
0.8

 
0.9

 
1.1

 
1.2

 
1.2

 
1.4

 
55.6

 
16.7

Total
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
 
 
 
(Dollars in millions)
 
Quarters
 
% Change
Average Asset Backed Securities
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
Fixed
 
$
1,293

 
$
1,748

 
$
2,231

 
$
2,151

 
$
2,045

 
$
2,023

 
15.7
 %
 
(1.1
)%
Floating
 
40,306

 
36,931

 
29,973

 
26,891

 
24,795

 
24,313

 
(34.2
)
 
(1.9
)
Total
 
$
41,599

 
$
38,679

 
$
32,204

 
$
29,042

 
$
26,840

 
$
26,336

 
 
 
 
(Dollars in millions)
 
Quarters
 
% Change
Investment Securities - Appreciation (Depreciation)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
Held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortized cost (book value)
 
$
16,245

 
$
16,155

 
$
17,463

 
$
29,952

 
$
31,212

 
$
30,386

 
88.1
 %
 
(2.6
)%
Fair value
 
16,417

 
16,198

 
17,536

 
29,798

 
31,555

 
30,895

 
90.7

 
(2.1
)
Appreciation (depreciation)
 
172

 
43

 
73

 
(154
)
 
343

 
509

 
1,083.7

 
48.4

Available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortized cost
 
95,524

 
84,689

 
79,415

 
69,843

 
70,366

 
71,720

 
(15.3
)
 
1.9

Fair value (book value)
 
96,612

 
85,308

 
80,097

 
70,070

 
71,086

 
72,735

 
(14.7
)
 
2.3

Appreciation (depreciation)
 
1,088

 
619

 
682

 
227

 
720

 
1,015

 
64.0

 
41.0

Pre-tax depreciation related to securities available for sale transferred to held to maturity
 
(95
)
 
(86
)
 
(70
)
 
23

 
(193
)
 
(197
)
 
129.1

 
2.1

Total pre-tax appreciation (depreciation) related to investment securities portfolio
 
1,165

 
576

 
685

 
96

 
870

 
1,327

 
130.4

 
52.5

Total after-tax appreciation (depreciation) related to investment securities portfolio
 
699

 
346

 
411

 
58

 
522

 
796

 
130.1

 
52.5

(Dollars in billions)
 
Quarters
 
% Change
Securities on Loan
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
Average securities on loan
 
$
350

 
$
356

 
$
331

 
$
341

 
$
334

 
$
348

 
(2.2
)%
 
4.2
%
End-of-period securities on loan
 
350

 
333

 
332

 
323

 
341

 
348

 
4.5

 
2.1


5


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
ASSETS UNDER CUSTODY AND ADMINISTRATION
 
 
 
 
 
 
 
Quarters
 
% Change
(Dollars in billions)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
Assets Under Custody and Administration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By Product Classification:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mutual funds
 
$
7,073

 
$
7,107

 
$
6,698

 
$
6,768

 
$
6,728

 
$
6,734

 
(5.2
)%
 
0.1
 %
Collective funds
 
7,113

 
7,189

 
6,883

 
7,088

 
7,000

 
7,234

 
0.6

 
3.3

Pension products
 
5,745

 
5,830

 
5,497

 
5,510

 
5,197

 
5,496

 
(5.7
)
 
5.8

Insurance and other products
 
8,560

 
8,524

 
8,187

 
8,142

 
8,018

 
8,322

 
(2.4
)
 
3.8

Total Assets Under Custody and Administration
 
$
28,491

 
$
28,650

 
$
27,265

 
$
27,508

 
$
26,943

 
$
27,786

 
(3.0
)
 
3.1

By Financial Instrument:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equities
 
$
15,660

 
$
16,006

 
$
14,223

 
$
14,888

 
$
14,433

 
$
14,960

 
(6.5
)
 
3.7

Fixed-income
 
9,157

 
8,939

 
9,470

 
9,264

 
9,199

 
9,530

 
6.6

 
3.6

Short-term and other investments
 
3,674

 
3,705

 
3,572

 
3,356

 
3,311

 
3,296

 
(11.0
)
 
(0.5
)
Total Assets Under Custody and Administration
 
$
28,491

 
$
28,650

 
$
27,265

 
$
27,508

 
$
26,943

 
$
27,786

 
(3.0
)
 
3.1

By Geographic Location1:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
$
21,554

 
$
21,667

 
$
20,536

 
$
20,842

 
$
20,505

 
$
21,072

 
(2.7
)
 
2.8

Europe/Middle East/Africa
 
5,590

 
5,621

 
5,452

 
5,387

 
5,159

 
5,356

 
(4.7
)
 
3.8

Asia/Pacific
 
1,347

 
1,362

 
1,277

 
1,279

 
1,279

 
1,358

 
(0.3
)
 
6.2

Total Assets Under Custody and Administration
 
$
28,491

 
$
28,650

 
$
27,265

 
$
27,508

 
$
26,943

 
$
27,786

 
(3.0
)
 
3.1

Assets Under Custody2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By Product Classification:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mutual funds
 
$
6,786

 
$
6,744

 
$
6,369

 
$
6,413

 
$
6,363

 
$
6,361

 
(5.7
)
 

Collective funds
 
5,626

 
5,674

 
5,412

 
5,642

 
5,589

 
5,788

 
2.0

 
3.6

Pension products
 
5,160

 
5,243

 
4,921

 
4,944

 
4,673

 
4,947

 
(5.6
)
 
5.9

Insurance and other products
 
4,406

 
4,403

 
4,245

 
4,259

 
4,163

 
4,258

 
(3.3
)
 
2.3

Total Assets Under Custody
 
$
21,978

 
$
22,064

 
$
20,947

 
$
21,258

 
$
20,788

 
$
21,354

 
(3.2
)
 
2.7

By Geographic Location1:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
$
17,221

 
$
17,255

 
$
16,379

 
$
16,664

 
$
16,420

 
$
16,756

 
(2.9
)
 
2.0

Europe/Middle East/Africa
 
3,732

 
3,779

 
3,615

 
3,635

 
3,422

 
3,584

 
(5.2
)
 
4.7

Asia/Pacific
 
1,025

 
1,030

 
953

 
959

 
946

 
1,014

 
(1.6
)
 
7.2

Total Assets Under Custody
 
$
21,978

 
$
22,064

 
$
20,947

 
$
21,258

 
$
20,788

 
$
21,354

 
(3.2
)
 
2.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1   Geographic mix is based on the location at which the assets are serviced.
 
 
 
 
2   Assets under custody are a component of assets under custody and administration presented above.
 
 
 
 

6


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
ASSETS UNDER MANAGEMENT
 
 
 
 
 
 
 
Quarters
 
% Change
(Dollars in billions)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
Assets Under Management
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By Asset Class and Investment Approach:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Active
 
$
38

 
$
36

 
$
29

 
$
32

 
$
32

 
$
32

 
(11.1
)%
 
 %
   Passive
 
1,434

 
1,386

 
1,237

 
1,294

 
1,295

 
1,275

 
(8.0
)
 
(1.5
)
Total Equity
 
1,472

 
1,422

 
1,266

 
1,326

 
1,327

 
1,307

 
(8.1
)
 
(1.5
)
Fixed-Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Active
 
17

 
17

 
16

 
18

 
17

 
17

 

 

   Passive
 
306

 
303

 
300

 
294

 
310

 
318

 
5.0

 
2.6

Total Fixed-Income
 
323

 
320

 
316

 
312

 
327

 
335

 
4.7

 
2.4

Cash1
 
393

 
376

 
380

 
368

 
381

 
380

 
1.1

 
(0.3
)
Multi-Asset-Class Solutions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Active
 
31

 
29

 
26

 
17

 
17

 
17

 
(41.4
)
 

   Passive
 
84

 
89

 
85

 
86

 
92

 
100

 
12.4

 
8.7

Total Multi-Asset-Class Solutions
 
115

 
118

 
111

 
103

 
109

 
117

 
(0.8
)
 
7.3

Alternative Investments2:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Active
 
17

 
18

 
17

 
17

 
18

 
18

 

 

   Passive
 
123

 
120

 
113

 
119

 
134

 
144

 
20.0

 
7.5

Total Alternative Investments
 
140

 
138

 
130

 
136

 
152

 
162

 
17.4

 
6.6

Total Assets Under Management
 
$
2,443

 
$
2,374

 
$
2,203

 
$
2,245

 
$
2,296

 
$
2,301

 
(3.1
)
 
0.2

By Geographic Location3:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
$
1,549

 
$
1,486

 
$
1,409

 
$
1,452

 
$
1,491

 
$
1,501

 
1.0

 
0.7

Europe/Middle East/Africa
 
566

 
563

 
500

 
489

 
496

 
492

 
(12.6
)
 
(0.8
)
Asia/Pacific
 
328

 
325

 
294

 
304

 
309

 
308

 
(5.2
)
 
(0.3
)
Total Assets Under Management
 
$
2,443

 
$
2,374

 
$
2,203

 
$
2,245

 
$
2,296

 
$
2,301

 
(3.1
)
 
0.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1  Includes both floating- and constant-net-asset-value portfolios held in commingled structures or separate accounts.
 
 
 
 
2  Includes real estate investment trusts, currency and commodities, including SPDR® Gold Fund for which State Street is not the investment manager, but acts as distribution agent.
 
 
 
 
3  Geographic mix is based on client location or fund management location.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-Traded Funds1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By Asset Class:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Alternative investments
 
$
40

 
$
37

 
$
35

 
$
34

 
$
45

 
$
54

 
45.9
 %
 
20.0
 %
Cash
 
1

 
2

 
3

 
3

 
3

 
2

 

 
(33.3
)
Equity
 
356

 
342

 
323

 
350

 
349

 
348

 
1.8

 
(0.3
)
Fixed-income
 
43

 
41

 
39

 
41

 
46

 
48

 
17.1

 
4.3

Total Exchange-Traded Funds
 
$
440

 
$
422

 
$
400

 
$
428

 
$
443

 
$
452

 
7.1

 
2.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1  Exchange-traded funds are a component of assets under management presented above.
 
 
 
 

7


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
INVESTMENT PORTFOLIO CREDIT RATINGS
 
(Dollars in billions, book value)
 
U.S. Treasuries & Agencies
 
AAA
 
AA
 
A
 
BBB
 
<BBB
 
Not Rated
 
Total
 
Unrealized MTM Gain/(Loss)
(in millions)
(1)
6/30/2016
 
$
48.1

 
$
33.6

 
$
13.5

 
$
4.6

 
$
1.7

 
$
0.8

 
$

 
$
102.3

 
$
796

 
 
47
%
 
33
%
 
13
%
 
4
%
 
2
%
 
1
%
 
%
 
100
%
 
 
12/31/2015
 
$
45.3

 
$
34.7

 
$
12.5

 
$
4.7

 
$
1.6

 
$
1.0

 
$

 
$
99.8

 
$
58

 
 
45
%
 
35
%
 
12
%
 
5
%
 
2
%
 
1
%
 
%
 
100
%
 
 
12/31/2014
 
$
36.4

 
$
45.8

 
$
18.6

 
$
7.2

 
$
2.2

 
$
1.6

 
$
0.1

 
$
111.9

 
$
487

 
 
32
%
 
41
%
 
17
%
 
6
%
 
2
%
 
2
%
 
%
 
100
%
 
 
12/31/2013
 
$
29.6

 
$
51.7

 
$
22.4

 
$
7.7

 
$
3.4

 
$
2.2

 
$
0.1

 
$
117.1

 
$
(213
)
 
 
26
%
 
44
%
 
19
%
 
6
%
 
3
%
 
2
%
 
%
 
100
%
 
 
12/31/2012
 
$
37.6

 
$
46.0

 
$
22.7

 
$
8.5

 
$
3.2

 
$
2.1

 
$
0.1

 
$
120.2

 
$
697

 
 
31
%
 
38
%
 
19
%
 
7
%
 
3
%
 
2
%
 
%
 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) As of June 30, 2016 the after tax unrealized MTM gain/(loss) includes after-tax unrealized gain on securities available for sale of $477 million, after-tax unrealized gain on securities held to maturity of $305 million and after-tax unrealized gain primarily related to securities previously transferred from available for sale to held to maturity of $14 million.

8


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
INVESTMENT PORTFOLIO HOLDINGS BY ASSET CLASS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratings
 
 
 
 
 
 
 
 
 
 
UST/AGY
 
AAA
 
AA
 
A
 
BBB
 
<BBB
 
NR
 
Book Value
(In billions)
(1)
 
Book Value
(% Total)
 
Unrealized After-tax MTM Gain/(Loss)
(In millions)
(2)
 
Fixed Rate/
Floating Rate
Government & agency securities
 
83
%
 
8
%
 
4
%
 
5
%
 
%
 
%
 
%
 
$
33.6

 
32.8
%
 
$
346

 
98% / 2%
Asset-backed securities
 

 
77

 
18

 
3

 
1

 
1

 

 
25.9

 
25.3

 
(131
)
 
8% / 92%
Student loans
 

 
55

 
43

 
2

 

 

 

 
8.7

 
33.6

 
(155
)
 
 
Credit cards
 

 
100

 

 

 

 

 

 
2.9

 
11.2

 
(12
)
 
 
Auto & equipment
 

 
95

 
5

 

 

 

 

 
2.7

 
10.5

 
(2
)
 
 
Non-US residential mortgage backed securities
 

 
86

 
7

 
4

 
1

 
2

 

 
9.2

 
35.5

 
37

 
 
Collateralized loan obligation
 

 
99

 
1

 

 

 

 

 
1.9

 
7.3

 
17

 
 
Sub-prime
 

 
7

 
13

 
21

 
11

 
48

 

 
0.4

 
1.5

 
(16
)
 
 
Other
 

 

 
99

 
1

 

 

 

 
0.1

 
0.4

 

 
 
Mortgage-backed securities
 
92

 
6

 

 

 

 
2

 

 
21.3

 
20.8

 
194

 
88% / 12%
Agency MBS
 
100

 

 

 

 

 

 

 
19.5

 
91.5

 
177

 
 
Non-Agency MBS
 

 
72

 
3

 
1

 
5

 
19

 

 
1.8

 
8.5

 
17

 
 
CMBS
 
24

 
71

 
3

 
1

 

 
1

 

 
3.2

 
3.1

 
19

 
62% / 38%
Corporate bonds
 

 

 
12

 
46

 
41

 
1

 

 
3.5

 
3.5

 
27

 
89% / 11%
Covered bonds
 

 
100

 

 

 

 

 

 
3.4

 
3.3

 
14

 
16% / 84%
Municipal bonds
 

 
29

 
66

 
5

 

 

 

 
8.0

 
7.0

 
306

 
99% / 1%
Clipper tax-exempt bonds/other
 

 
45

 
42

 
12

 

 

 
1

 
3.4

 
3.4

 
21

 
24% / 76%
Total Portfolio
 
47
%
 
33
%
 
13
%
 
4
%
 
2
%
 
1
%
 
%
 
$
102.3

 
100.0
%
 
$
796

 
67% / 33%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Portfolio amounts are expressed at book value; book value includes the amortized cost of transferred securities at the time they were transferred.
(2) At June 30, 2016 the after-tax unrealized MTM gain/(loss) includes after-tax unrealized gain on securities available for sale of $477 million, after-tax unrealized gain on securities held to maturity of $305 million and after-tax unrealized gain primarily related to securities previously transferred from available for sale to held to maturity of $14 million.

9


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
INVESTMENT PORTFOLIO NON-U.S. INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book Value (In billions)
June 30, 2016
 
Book Value
(In billions)
 
Average Rating
 
Gov't/Agency(1)
 
ABS
FRMBS
 
ABS
All Other
 
Corporate Bonds
 
Covered Bonds
 
Other
United Kingdom
 
$
6.7

 
AAA
 
$

 
$
4.7

 
$
1.1

 
$
0.3

 
$
0.6

 
$

Australia
 
4.4

 
AAA
 
0.5

 
1.7

 
0.3

 
0.3

 
0.7

 
0.9

Canada
 
2.7

 
AAA
 
1.9

 

 

 
0.2

 
0.6

 

Netherlands
 
2.1

 
AAA
 

 
1.9

 
0.1

 

 
0.1

 

Japan
 
1.6

 
AAA
 
1.6

 

 

 

 

 

Germany
 
1.4

 
A
 
0.1

 

 
1.3

 

 

 

Korea
 
1.0

 
AA
 
1.0

 

 

 

 

 

France
 
0.9

 
AAA
 
0.1

 
0.1

 
0.2

 
0.1

 
0.4

 

Italy
 
0.7

 
AA
 

 
0.5

 
0.2

 

 

 

Norway
 
0.6

 
AAA
 

 

 
0.1

 

 
0.5

 

Finland
 
0.3

 
AAA
 

 

 
0.1

 

 
0.2

 

Spain
 
0.2

 
A
 

 
0.1

 
0.1

 

 

 

Portugal
 
0.1

 
BB
 

 
0.1

 

 

 

 

Other
 
1.2

 
AA
 
0.6

 
0.1

 

 
0.2

 
0.3

 

Total Non-U.S. Investments(2)
 
$
23.9

 
 
 
$
5.8

 
$
9.2

 
$
3.5

 
$
1.1

 
$
3.4

 
$
0.9

U.S. Investments
 
78.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Portfolio
 
$
102.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Sovereign debt is reflected in the government agency column.
(2) Country of collateral used except for corporates where country of issuer is used; excludes equity securities of approximately $20.3 million.


10


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATIONS OF OPERATING-BASIS (NON-GAAP) FINANCIAL INFORMATION
 
     In addition to presenting State Street’s financial results in conformity with U.S. generally accepted accounting principles, or GAAP, management also presents results on a non-GAAP, or "operating" basis, as it believes that this presentation supports meaningful analysis and comparisons of trends with respect to State Street's normal ongoing business operations from period to period, as well as additional information (such as capital ratios calculated under regulatory standards scheduled to be effective in the future or other standards) that management uses in evaluating State Street’s business and activities.
     Management believes that operating-basis financial information, which excludes the impact of revenue and expenses outside of State Street's normal course of business (such as acquisitions and restructuring charges), facilitates an investor's understanding and analysis of State Street's underlying financial performance and trends in addition to financial information prepared and reported in conformity with GAAP. Excluding the impact of revenue and expenses outside of State Street's normal course of business (such as acquisition and restructuring charges) provides additional insight into our underlying margin and profitability. Our operating-basis presentation also reports revenue from non-taxable sources, such as interest revenue from tax-exempt investment securities and processing fees and other revenue associated with tax-advantaged investments, in a fully taxable-equivalent basis. Taxable-equivalent revenue allows management to provide more meaningful comparisons of yields and margins on assets and to evaluate investment opportunities with different tax profiles. Management also believes that the use of other non-GAAP financial measures in the calculation of identified capital ratios is useful to understanding State Street's capital position and is of interest to investors. Additionally, management presents revenue and expense measures on a constant currency (non-GAAP) basis to identify the significance of changes in foreign currency exchange rates (which often are variable) in period-to-period comparisons. This presentation represents the effects of applying prior period weighted average foreign currency exchange rates to current period results. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures determined in conformity with GAAP.
 
 
 
Quarters
 
% Change
 
Year-to-Date
 
% Change
(Dollars in millions, except per share amounts, or where otherwise noted)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
 
2Q15
 
2Q16
 
YTD 2Q16
vs.
YTD 2Q15
 
Total Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue, GAAP-basis
 
$
2,600

 
$
2,608

 
$
2,614

 
$
2,538

 
$
2,484

 
$
2,573

 
(1.3
)%
 
3.6
 %
 
 
$
5,208

 
$
5,057

 
(2.9
)%
 
 
Adjustment to processing fees and other revenue (see below)
 
53

 
98

 
12

 
31

 
63

 
34

 
 
 
 
 
 
151

 
97

 
 
 
 
Adjustment to net interest revenue (see below)
 
19

 
21

 
16

 
19

 
27

 
25

 
 
 
 
 
 
40

 
52

 
 
 
 
Adjustment to servicing and management fee revenue (see below)
 

 

 

 

 

 
43

 
 
 
 
 
 

 
43

 
 
 
Total revenue, operating-basis
 
$
2,672

 
$
2,727

 
$
2,642

 
$
2,588

 
$
2,574

 
$
2,675

 
(1.9
)
 
3.9

 
 
$
5,399

 
$
5,249

 
(2.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fee revenue, GAAP-basis
 
$
2,055

 
$
2,076

 
$
2,103

 
$
2,044

 
$
1,970

 
$
2,053

 
(1.1
)
 
4.2

 
 
$
4,131

 
$
4,023

 
(2.6
)
 
 
Tax-equivalent adjustment associated with tax-advantaged investments
 
53

 
98

 
95

 
113

 
63

 
87

 
 
 
 
 
 
151

 
150

 
 
 
 
Gain on sale of CRE and CRE loan extinguishment / paydown
 

 

 
(83
)
 
(82
)
 

 

 
 
 
 
 
 

 

 
 
 
 
Gain on sale of WM/Reuters Business
 

 

 

 

 

 
(53
)
 
 
 
 
 
 

 
(53
)
 
 
 
 
Expense billing matter, net
 

 

 

 

 

 
43

 
 
 
 
 
 

 
43

 
 
 
Total fee revenue, operating-basis
 
$
2,108

 
$
2,174

 
$
2,115

 
$
2,075

 
$
2,033

 
$
2,130

 
(2.0
)
 
4.8

 
 
$
4,282

 
$
4,163

 
(2.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing Fees:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total servicing fees, GAAP-basis
 
$
1,268

 
$
1,319

 
$
1,289

 
$
1,277

 
$
1,242

 
$
1,239

 
(6.1
)
 
(0.2
)
 
 
$
2,587

 
$
2,481

 
(4.1
)
 
 
Expense billing matter
 

 

 

 

 

 
48

 
 
 
 
 
 

 
48

 
 
 
Total servicing fees, operating-basis
 
$
1,268

 
$
1,319

 
$
1,289

 
$
1,277

 
$
1,242

 
$
1,287

 
(2.4
)
 
3.6

 
 
$
2,587

 
$
2,529

 
(2.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Management Fees:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total management fees, GAAP-basis
 
$
301

 
$
304

 
$
287

 
$
282

 
$
270

 
$
293

 
(3.6
)
 
8.5

 
 
$
605

 
$
563

 
(6.9
)
 
 
Expense billing matter
 

 

 

 

 

 
(5
)
 
 
 
 
 
 

 
(5
)
 
 
 
Total management fees, operating-basis
 
$
301

 
$
304

 
$
287

 
$
282

 
$
270

 
$
288

 
(5.3
)
 
6.7

 
 
$
605

 
$
558

 
(7.8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Processing Fees and Other Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total processing fees and other revenue, GAAP-basis
 
$
61

 
$
17

 
$
120

 
$
111

 
$
52

 
$
98

 
476.5

 
88.5

 
 
$
78

 
$
150

 
92.3

 
 
Tax-equivalent adjustment associated with tax-advantaged investments
 
53

 
98

 
95

 
113

 
63

 
87

 
 
 
 
 
 
151

 
150

 
 
 
 
Gain on sale of CRE and CRE loan extinguishment / paydown
 

 

 
(83
)
 
(82
)
 

 

 
 
 
 
 
 

 

 
 
 
 
Gain on sale of WM/Reuters Business
 

 

 

 

 

 
(53
)
 
 
 
 
 
 

 
(53
)
 
 
 
Total processing fees and other revenue, operating-basis
 
$
114

 
$
115

 
$
132

 
$
142

 
$
115

 
$
132

 
14.8

 
14.8

 
 
$
229

 
$
247

 
7.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

11


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATIONS OF OPERATING-BASIS (NON-GAAP) FINANCIAL INFORMATION (Continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarters
 
% Change
 
 
Year-to-Date
 
% Change
(Dollars in millions, except per share amounts, or where otherwise noted)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
 
2Q15
 
2Q16
 
YTD 2Q16
vs.
YTD 2Q15
 
Net Interest Revenue & Net Interest Margin:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest revenue, GAAP-basis
 
$
546

 
$
535

 
$
513

 
$
494

 
$
512

 
$
521

 
(2.6
)%
 
1.8
 %
 
 
$
1,081

 
$
1,033

 
(4.4
)%
 
 
Tax-equivalent adjustment associated with tax-exempt investment securities
 
44

 
44

 
43

 
42

 
42

 
40

 
 
 
 
 
 
88

 
82

 
 
 
Net interest revenue, fully taxable-equivalent basis1
 
590

 
579

 
556

 
536

 
554

 
561

 
 
 
 
 
 
1,169

 
1,115

 
 
 
 
Average interest earning assets1
 
226,359

 
233,411

 
221,424

 
200,899

 
194,081

 
198,243

 
 
 
 
 
 
229,905

 
196,162

 
 
 
Net interest margin, fully taxable-equivalent basis1
 
1.06
 %
 
1.00
 %
 
1.00
 %
 
1.06
 %
 
1.15
 %
 
1.14
 %
 
14

bps
(10
)
bps
 
1.03
 %
 
1.14
 %
 
11

bps
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest revenue, fully taxable-equivalent basis1
 
$
590

 
$
579

 
$
556

 
$
536

 
$
554

 
$
561

 
 
 
 
 
 
$
1,169

 
1,115

 
 
 
 
Discount accretion associated with former conduit securities
 
(25
)
 
(23
)
 
(27
)
 
(23
)
 
(15
)
 
(15
)
 
 
 
 
 
 
(48
)
 
(30
)
 
 
 
Net interest revenue, operating-basis1
 
565

 
556

 
529

 
513

 
539

 
546

 
(1.8
)
 
1.3

 
 
1,121

 
1,085

 
(3.2
)
 
 
Average interest earning assets1
 
226,359

 
233,411

 
221,424

 
200,899

 
194,081

 
198,243

 
 
 
 
 
 
229,905

 
196,162

 
 
 
Net interest margin, operating-basis1
 
1.01
 %
 
0.96
 %
 
0.95
 %
 
1.01
 %
 
1.12
 %
 
1.11
 %
 
15

bps
(1
)
bps
 
0.98
 %
 
1.11
 %
 
13

bps
 
Effect of discount accretion
 
0.05
 %
 
0.04
 %
 
0.05
 %
 
0.05
 %
 
0.03
 %
 
0.03
 %
 
 
 
 
 
 
0.05
 %
 
0.03
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total expenses, GAAP-basis
 
$
2,097

 
$
2,134

 
$
1,962

 
$
1,857

 
$
2,050

 
$
1,860

 
(12.8
)%
 
(9.3
)%
 
 
$
4,231

 
$
3,910

 
(7.6
)%
 
 
Severance costs associated with staffing realignment
 
1

 

 
(75
)
 
1

 
(3
)
 
3

 
 
 
 
 
 
1

 

 
 
 
 
Provisions for legal contingencies
 
(150
)
 
(250
)
 

 
(15
)
 

 

 
 
 
 
 
 
(400
)
 

 
 
 
 
Expense billing matter, net
 

 

 

 
(17
)
 

 
(15
)
 
 
 
 
 
 

 
(15
)
 
 
 
 
Acquisition costs
 
(5
)
 
(3
)
 
(7
)
 
(5
)
 
(7
)
 
(7
)
 
 
 
 
 
 
(8
)
 
(14
)
 
 
 
 
Restructuring charges, net
 
(1
)
 

 
(3
)
 
(1
)
 
(97
)
 
(13
)
 
 
 
 
 
 
(1
)
 
(110
)
 
 
 
Total expenses, operating-basis
 
$
1,942

 
$
1,881

 
$
1,877

 
$
1,820

 
$
1,943

 
$
1,828

 
(2.8
)
 
(5.9
)
 
 
$
3,823

 
$
3,771

 
(1.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and Employee Benefits Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total compensation and employee benefits expenses, GAAP-basis
 
$
1,087

 
$
984

 
$
1,051

 
$
939

 
$
1,107

 
$
989

 
0.5

 
(10.7
)
 
 
$
2,071

 
$
2,096

 
1.2

 
 
Severance costs associated with staffing realignment
 
1

 

 
(75
)
 
1

 
(3
)
 
3

 
 
 
 
 
 
1

 

 
 
 
Total compensation and employee benefits expenses, operating-basis
 
$
1,088

 
$
984

 
$
976

 
$
940

 
$
1,104

 
$
992

 
0.8

 
(10.1
)
 
 
$
2,072

 
$
2,096

 
1.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total other expenses, GAAP-basis
 
$
447

 
$
588

 
$
325

 
$
345

 
$
254

 
$
269

 
(54.3
)
 
5.9

 
 
$
1,035

 
$
523

 
(49.5
)
 
 
Provisions for legal contingencies
 
(150
)
 
(250
)
 

 
(15
)
 

 

 
 
 
 
 
 
(400
)
 

 
 
 
 
Expense billing matter, net
 

 

 

 
(17
)
 

 
(15
)
 
 
 
 
 
 

 
(15
)
 
 
 
Total other expenses, operating-basis
 
$
297

 
$
338

 
$
325

 
$
313

 
$
254

 
$
254

 
(24.9
)
 

 
 
$
635

 
$
508

 
(20.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Before Income Tax Expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax expense, GAAP-basis
 
$
499

 
$
472

 
$
647

 
$
680

 
$
430

 
$
709

 
50.2

 
64.9

 
 
$
971

 
$
1,139

 
17.3

 
 
Net pre-tax effect of non-operating adjustments to revenue and expenses
 
227

 
372

 
113

 
87

 
197

 
134

 
 
 
 
 
 
599

 
331

 
 
 
Income before income tax expense, operating-basis
 
$
726

 
$
844

 
$
760

 
$
767

 
$
627

 
$
843

 
(0.1
)
 
34.4

 
 
$
1,570

 
$
1,470

 
(6.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax operating margin:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-tax operating margin, GAAP-basis
 
19.2
 %
 
18.1
 %
 
24.8
 %
 
26.8
 %
 
17.3
 %
 
27.6
 %
 
 
 
 
 
 
18.6
 %
 
22.5
 %
 
 
 
 
Net effect of non-operating adjustments
 
8.0

 
12.8

 
4.0

 
2.8

 
7.1

 
3.9

 
 
 
 
 
 
10.5

 
5.5

 
 
 
Pre-tax operating margin, operating-basis2
 
27.2
 %
 
30.9
 %
 
28.8
 %
 
29.6
 %
 
24.4
 %
 
31.5
 %
 
 
 
 
 
 
29.1
 %
 
28.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

12


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATIONS OF OPERATING-BASIS (NON-GAAP) FINANCIAL INFORMATION (Continued)
 
 
 
 
Quarters
 
% Change
 
Year-to-Date
 
% Change
(Dollars in millions, except per share amounts, or where otherwise noted)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
 
2Q15
 
2Q16
 
YTD 2Q16
vs.
YTD 2Q15
 
Income Tax Expense:
 
 
 
 
 
 
 
 
Income tax expense, GAAP-basis
 
$
94

 
$
54

 
$
67

 
$
103

 
$
62

 
$
92

 
70.4
 %
 
48.4
 %
 
 
$
148

 
$
154

 
4.1
 %
 
 
Aggregate tax-equivalent adjustments
 
97

 
142

 
138

 
155

 
105

 
127

 
 
 
 
 
 
239

 
232

 
 
 
 
Italian deferred tax liability
 

 

 
25

 
(33
)
 

 

 
 
 
 
 
 

 

 
 
 
 
Net tax effect of non-operating adjustments
 
16

 
54

 
13

 
18

 
15

 
10

 
 
 
 
 
 
70

 
25

 
 
 
Income tax expense, operating-basis
 
$
207

 
$
250

 
$
243

 
$
243

 
$
182

 
$
229

 
(8.4
)
 
25.8

 
 
$
457

 
$
411

 
(10.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Tax Rate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax expense, operating-basis
 
$
726

 
$
844

 
$
760

 
$
767

 
$
627

 
$
843

 
(0.1
)
 
34.4

 
 
$
1,570

 
$
1,470

 
(6.4
)
 
Income tax expense, operating-basis
 
207

 
250

 
243

 
243

 
182

 
229

 
 
 
 
 
 
457

 
411

 
 
 
Effective tax rate, operating-basis
 
28.4
 %
 
29.6
 %
 
32.0
 %
 
31.8
 %
 
29.1
 %
 
27.0
 %
 
(8.8
)
 
(7.2
)
 
 
29.1
 %
 
27.9
 %
 
(4.1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income Available to Common Shareholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders, GAAP-basis
 
$
373

 
$
389

 
$
539

 
$
547

 
$
319

 
$
585

 
50.4

 
83.4

 
 
$
762

 
$
904

 
18.6

 

Net after-tax effect of non-operating adjustments to processing fees and other revenue, net interest revenue, expenses and income tax expense
 
114

 
176

 
(63
)
 
(53
)
 
77

 
(3
)
 
 
 
 
 
 
290

 
74

 
 
 
Net income available to common shareholders, operating-basis
 
$
487

 
$
565

 
$
476

 
$
494

 
$
396

 
$
582

 
3.0

 
47.0

 
 
$
1,052

 
$
978

 
(7.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted Earnings per Common Share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per common share, GAAP-basis
 
$
.89

 
$
.93

 
$
1.31

 
$
1.34

 
$
.79

 
$
1.47

 
58.1

 
86.1

 
 
$
1.83

 
$
2.25

 
23.0

 
 
Severance costs associated with staffing realignment
 

 

 
.11

 

 
.01

 
(.01
)
 
 
 
 
 
 

 

 
 
 
 
Provisions for legal contingencies
 
.36

 
.37

 

 
.02

 

 

 
 
 
 
 
 
.73

 

 
 
 
 
Expense billing matter, net
 

 

 

 
.03

 

 
.10

 
 
 
 
 
 

 
.10

 
 
 
 
Acquisition costs
 
.01

 

 
.01

 
.01

 
.01

 
.01

 
 
 
 
 
 
.01

 
.02

 
 
 
 
Restructuring charges, net
 

 

 

 

 
.15

 
.02

 
 
 
 
 
 

 
.17

 
 
 
 
Effect on income tax of non-operating adjustments
 
(.06
)
 
.08

 
.02

 
(.04
)
 
.04

 
(.01
)
 
 
 
 
 
 
.02

 
.04

 
 
 
 
Discount accretion associated with former conduit securities
 
(.04
)
 
(.02
)
 
(.04
)
 
(.03
)
 
(.02
)
 
(.02
)
 
 
 
 
 
 
(.07
)
 
(.04
)
 
 
 
 
Gain on sale of CRE and CRE loan extinguishment / paydown
 

 

 
(.12
)
 
(.12
)
 

 

 
 
 
 
 
 

 

 
 
 
 
Italian deferred tax liability
 

 

 
(.14
)
 

 

 

 
 
 
 
 
 

 

 
 
 
 
Gain on sale of WM/Reuters Business
 

 

 

 

 

 
(.10
)
 
 
 
 
 
 

 
(.10
)
 
 
 
Diluted earnings per common share, operating-basis
 
$
1.16

 
$
1.36

 
$
1.15

 
$
1.21

 
$
.98

 
$
1.46

 
7.4

 
49.0

 
 
$
2.52

 
$
2.44

 
(3.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

13


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATIONS OF OPERATING-BASIS (NON-GAAP) FINANCIAL INFORMATION (Continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarters
 
% Change
 
Year-to-Date
 
% Change
(Dollars in millions, except per share amounts, or where otherwise noted)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
 
2Q15
 
2Q16
 
YTD 2Q16
vs.
YTD 2Q15
 
Return on Average Common Equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average common equity, GAAP-basis
 
7.9
 %
 
8.2
 %
 
11.3
 %
 
11.6
 %
 
6.8
 %
 
12.4
 %
 
420

bps
560

bps
 
8.0
 %
 
9.6
 %
 
160

bps
 
Severance costs associated with staffing realignment
 

 

 
1.0

 

 

 
(.1
)
 
 
 
 
 
 

 

 
 
 
 
Provisions for legal contingencies
 
3.2

 
3.3

 

 
.2

 

 

 
 
 
 
 
 
3.2

 

 
 
 
 
Expense billing matter, net
 

 

 

 
.3

 

 
.8

 
 
 
 
 
 

 
.4

 
 
 
 
Acquisition costs
 
.1

 

 
.1

 
.1

 
.1

 
.1

 
 
 
 
 
 
.1

 
.1

 
 
 
 
Restructuring charges, net
 

 

 

 

 
1.3

 
.2

 
 
 
 
 
 

 
.7

 
 
 
 
Effect on income tax of non-operating adjustments
 
(.5
)
 
.7

 
.1

 
(.3
)
 
.4

 
(.1
)
 
 
 
 
 
 
.1

 
.2

 
 
 
 
Discount accretion associated with former conduit securities
 
(.3
)
 
(.3
)
 
(.3
)
 
(.3
)
 
(.2
)
 
(.2
)
 
 
 
 
 
 
(.3
)
 
(.2
)
 
 
 
 
Gain on sale of CRE and CRE loan extinguishment / paydown
 

 

 
(1.0
)
 
(1.1
)
 

 

 
 
 
 
 
 

 

 
 
 
 
Italian deferred tax liability
 

 

 
(1.2
)
 

 

 

 
 
 
 
 
 

 

 
 
 
 
Gain on sale of WM/Reuters Business
 

 

 

 

 

 
(0.8
)
 
 
 
 
 
 

 
(0.4
)
 
 
 
Return on average common equity, operating-basis
 
10.4
 %
 
11.9
 %
 
10.0
 %
 
10.5
 %
 
8.4
 %
 
12.3
 %
 
40

bps
390

bps
 
11.1
 %
 
10.4
 %
 
(70
)
bps
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee Operating Leverage:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fee revenue, operating-basis (as reconciled above)
 
$
2,108

 
$
2,174

 
$
2,115

 
$
2,075

 
$
2,033

 
$
2,130

 
(2.02
)%
 

 
 
$
4,282

 
$
4,163

 
(2.78
)%
 
Total expenses, operating-basis (as reconciled above)
 
1,942

 
1,881

 
1,877

 
1,820

 
1,943

 
1,828

 
(2.82
)
 

 
 
3,823

 
3,771

 
(1.36
)
 
Fee operating leverage
 
 
 
 
 
 
 
 
 
 
 
 
 
80

bps


 
 
 
 
 
(142
)
bps
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Leverage:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue, operating-basis (as reconciled above)
 
$
2,672

 
$
2,727

 
$
2,642

 
$
2,588

 
$
2,574

 
$
2,675

 
(1.91
)%
 
 
 
 
$
5,399

 
$
5,249

 
(2.78
)%
 
Total expenses, operating-basis (as reconciled above)
 
1,942

 
1,881

 
1,877

 
1,820

 
1,943

 
1,828

 
(2.82
)
 
 
 
 
3,823

 
3,771

 
(1.36
)
 
Operating leverage
 
 
 
 
 
 
 
 
 
 
 
 
 
91

bps
 
 
 
 
 
 
 
(142
)
bps
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Fully taxable-equivalent net interest margin for the periods presented above represented fully taxable-equivalent net interest revenue composed of GAAP-basis net interest revenue plus tax-equivalent adjustments, on an annualized basis, as a percentage of average total interest-earning assets for the quarters presented.
2 Pre-tax operating margin for the first, second, third and fourth quarters of 2015 and first and second quarters of 2016 was calculated by dividing income before income tax expense by total revenue.

14


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATION OF CONSTANT CURRENCY FX IMPACTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP-Basis Quarter Comparison
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported
 
Currency Translation Impact
 
Excluding Currency Impact
 
% Change
(Dollars in millions)
 
2Q15
 
1Q16
 
2Q16
 
2Q16
vs.
1Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
2Q16
vs.
2Q15
GAAP-Basis Results:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee revenue
 
$
2,076

 
$
1,970

 
$
2,053

 
$
8

 
$
(10
)
 
$
2,045

 
$
2,063

 
3.8
 %
 
(1.5
)%
NIR
 
535

 
512

 
521

 
1

 
(2
)
 
520

 
523

 
1.6

 
(2.8
)
Total revenue
 
2,608

 
2,484

 
2,573

 
9

 
(12
)
 
2,564

 
2,585

 
3.2

 
(1.7
)
Total expenses
 
2,134

 
2,050

 
1,860

 
9

 
(12
)
 
1,851

 
1,872

 
(9.7
)
 
(13.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP-Basis YTD Comparison
 
 
 
 
 
 
 
 
 
 
Reported
 
Currency Translation Impact
 
Excluding Currency Impact
 
% Change
(Dollars in millions)
 
YTD 2Q15
 
YTD 2Q16
 
YTD 2Q16
vs
YTD 2Q15
 
YTD 2Q16
 
YTD 2Q16
vs.
YTD 2Q15
GAAP-Basis Results:
 
 
 
 
 
 
 
 
 
 
Fee revenue
 
$
4,131

 
$
4,023

 
$
(25
)
 
$
4,048

 
(2.0
)%
NIR
 
1,081

 
1,033

 
(6
)
 
1,039

 
(3.9
)
Total revenue
 
5,208

 
5,057

 
(31
)
 
5,088

 
(2.3
)
Total expenses
 
4,231

 
3,910

 
(26
)
 
3,936

 
(7.0
)
 
 
 
 
 
 
 
 
 
 
 
Operating-Basis Quarter Comparison
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported
 
Currency Translation Impact
 
Excluding Currency Impact
 
% Change
(Dollars in millions)
 
2Q15
 
1Q16
 
2Q16
 
2Q16
vs.
1Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
2Q16
vs.
2Q15
 
2Q16
vs.
1Q16
 
2Q16
vs.
2Q15
Operating-Basis Results:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee revenue
 
$
2,174

 
$
2,033

 
$
2,130

 
$
8

 
$
(10
)
 
$
2,122

 
$
2,140

 
4.4
 %
 
(2.4
)%
NIR
 
556

 
539

 
546

 
1

 
(2
)
 
545

 
548

 
1.1

 
(2.0
)
Total revenue
 
2,727

 
2,574

 
2,675

 
9

 
(12
)
 
2,666

 
2,687

 
3.6

 
(2.2
)
Total expenses
 
1,881

 
1,943

 
1,828

 
9

 
(12
)
 
1,819

 
1,840

 
(6.4
)
 
(3.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating-Basis YTD Comparison
 
 
 
 
 
 
 
 
 
 
Reported
 
Currency Translation Impact
 
Excluding Currency Impact
 
% Change
(Dollars in millions)
 
YTD 2Q15
 
YTD 2Q16
 
YTD 2Q16
 
YTD 2Q16
 
YTD 2Q16
vs.
YTD 2Q15
Operating-Basis Results:
 
 
 
 
 
 
 
 
 
 
Fee revenue
 
$
4,282

 
$
4,163

 
$
(25
)
 
$
4,188

 
(2.2
)%
NIR
 
1,121

 
1,085

 
(6
)
 
1,091

 
(2.7
)
Total revenue
 
5,399

 
5,249

 
(31
)
 
5,280

 
(2.2
)
Total expenses
 
3,823

 
3,771

 
(26
)
 
3,797

 
(0.7
)
 
 
 
 
 
 
 
 
 
 
 

15


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
REGULATORY CAPITAL
 
     The accompanying materials present capital ratios in addition to, or adjusted from, those calculated in conformity with applicable regulatory requirements. These include capital ratios based on tangible common equity, as well as capital ratios adjusted to reflect our estimate of the impact of the relevant Basel III requirements, as specified in the July 2013 final rule issued by the Board of Governors of the Federal Reserve System, referred to as the Basel III final rule. These non-regulatory and adjusted capital measures are non-GAAP financial measures. Management currently calculates the non-GAAP capital ratios presented in the news release to aid in its understanding of State Street’s capital position under a variety of standards, including currently applicable and transitioning regulatory requirements. Management believes that the use of the non-GAAP capital ratios presented in the accompanying materials similarly aids in an investor's understanding of State Street's capital position and therefore is of interest to investors.
     The common equity tier 1 risk-based capital, or CET1, tier 1 risk-based capital, total risk-based capital and tier 1 leverage ratios have each been calculated in conformity with applicable regulatory requirements as of the dates that each was first publicly disclosed. The capital component, or numerator, of these ratios was calculated in conformity with the provisions of the Basel III final rule. As of March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016, the total risk-weighted assets component, or denominator, used in the calculation of the CET1, tier 1 risk-based capital and total risk-based capital ratios were each calculated in conformity with the advanced approaches and standardized approach provisions of Basel III, as the case may be.
     The advanced approaches-based ratios (actual and estimated) included in this presentation reflect calculations and determinations with respect to our capital and related matters, based on State Street and external data, quantitative formula, statistical models, historical correlations and assumptions, collectively referred to as “advanced systems,” in effect and used by us for those purposes as of the respective date of each ratio’s first public announcement. Significant components of these advanced systems involve the exercise of judgment by us and our regulators, and these advanced systems may not, individually or collectively, precisely represent or calculate the scenarios, circumstances, outputs or other results for which they are designed or intended. Due to the influence of changes in these advanced systems, whether resulting from changes in data inputs, regulation or regulatory supervision or interpretation, State Street-specific or market activities or experiences or other updates or factors, we expect that our advanced systems and our capital ratios calculated in conformity with the Basel III framework will change and may be volatile over time, and that those latter changes or volatility could be material as calculated and measured from period to period.
     The tangible common equity, or TCE, ratio is an additional capital ratio that management believes provides context useful in understanding and assessing State Street's capital adequacy. The 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 banking 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 or other applicable requirements. Reconciliations with respect to the calculation of the TCE ratios are provided on page 17 of this earnings release addendum.
    The following table presents State Street's regulatory capital ratios and underlying components, calculated in conformity with applicable regulatory requirements as described above.
 
 
Quarters
 
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
(Dollars in millions)
 
Basel III Advanced Approach1
 
Basel III Standardized Approach2
 
Basel III Advanced Approach1 
 
Basel III Standardized Approach2
 
Basel III Advanced Approach1 
 
Basel III Standardized Approach2
 
Basel III Advanced Approach1 
 
Basel III Standardized Approach2
 
Basel III Advanced Approach1 
 
Basel III Standardized Approach2
 
Basel III Advanced Approach1 
 
Basel III Standardized Approach2
RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
 
12.0
%
 
10.2
%
 
12.0
%
 
11.4
%
 
12.0
%
 
11.8
%
 
12.5
%
 
13.0
%
 
12.3
%
 
12.5
%
 
12.0
%
 
12.0
%
Tier 1 capital
 
14.0

 
12.0

 
14.7

 
14.0

 
14.7

 
14.5

 
15.3

 
15.9

 
14.9

 
15.1

 
15.0

 
15.0

Total capital
 
16.1

 
13.7

 
16.8

 
16.0

 
16.8

 
16.6

 
17.4

 
18.1

 
17.1

 
17.3

 
17.1

 
17.1

Tier 1 leverage
 
5.8

 
5.8

 
6.0

 
6.0

 
6.3

 
6.3

 
6.9

 
6.9

 
6.9

 
6.9

 
7.0

 
7.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supporting Calculations:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
 
$
12,494

 
$
12,494

 
$
12,559

 
$
12,559

 
$
12,515

 
$
12,515

 
$
12,433

 
$
12,433

 
$
12,404

 
$
12,404

 
$
12,515

 
$
12,515

Total risk-weighted assets
 
103,998

 
121,946

 
104,533

 
109,788

 
104,365

 
105,765

 
99,552

 
95,893

 
100,633

 
99,617

 
103,992

 
104,554

Common equity tier 1 risk-based capital
 
12.0
%
 
10.2
%
 
12.0
%
 
11.4
%
 
12.0
%
 
11.8
%
 
12.5
%
 
13.0
%
 
12.3
%
 
12.5
%
 
12.0
%
 
12.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 capital
 
$
14,598

 
$
14,598

 
$
15,401

 
$
15,401

 
$
15,361

 
$
15,361

 
$
15,264

 
$
15,264

 
$
15,032

 
$
15,032

 
$
15,637

 
$
15,637

Total risk-weighted assets
 
103,998

 
121,946

 
104,533

 
109,788

 
104,365

 
105,765

 
99,552

 
95,893

 
100,633

 
99,617

 
103,992

 
104,554

Tier 1 risk-based capital ratio
 
14.0
%
 
12.0
%
 
14.7
%
 
14.0
%
 
14.7
%
 
14.5
%
 
15.3
%
 
15.9
%
 
14.9
%
 
15.1
%
 
15.0
%
 
15.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total capital
 
$
16,752

 
$
16,752

 
$
17,554

 
$
17,554

 
$
17,526

 
$
17,583

 
$
17,349

 
$
17,403

 
$
17,191

 
$
17,248

 
$
17,786

 
$
17,864

Total risk-weighted assets
 
103,998

 
121,946

 
104,533

 
109,788

 
104,365

 
105,765

 
99,552

 
95,893

 
100,633

 
99,617

 
103,992

 
104,554

Total risk-based capital ratio
 
16.1
%
 
13.7
%
 
16.8
%
 
16.0
%
 
16.8
%
 
16.6
%
 
17.4
%
 
18.1
%
 
17.1
%
 
17.3
%
 
17.1
%
 
17.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 capital
 
$
14,598

 
$
14,598

 
$
15,401

 
$
15,401

 
$
15,361

 
$
15,361

 
$
15,264

 
$
15,264

 
$
15,032

 
$
15,032

 
$
15,637

 
$
15,637

Adjusted quarterly average assets
 
252,406

 
252,406

 
257,227

 
257,227

 
244,553

 
244,553

 
221,880

 
221,880

 
217,029

 
217,029

 
222,649

 
222,649

Tier 1 leverage ratio
 
5.8
%
 
5.8
%
 
6.0
%
 
6.0
%
 
6.3
%
 
6.3
%
 
6.9
%
 
6.9
%
 
6.9
%
 
6.9
%
 
7.0
%
 
7.0
%
1 CET1, tier 1 capital, total capital and tier 1 leverage ratios as of March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016 were calculated in conformity with the advanced approaches provisions of the Basel III final rule.
2 CET1, tier 1 capital, total capital, and tier 1 leverage ratios as of March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016 were calculated in conformity with the standardized approaches provisions of the Basel III final rule.


16


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATION OF TANGIBLE COMMON EQUITY RATIO
 
     The following table presents the calculation of State Street's ratios of tangible common equity to total tangible assets.
 
 
Quarters
(Dollars in millions)
 
1Q15
 
2Q15
 
3Q15
 
4Q15
 
1Q16
 
2Q16
Consolidated total assets
 
$
279,448

 
$
294,544

 
$
247,235

 
$
245,155

 
$
243,685

 
$
255,386

Less:
 
 
 
 
 
 
 
 
 
 
 
 
   Goodwill
 
5,663

 
5,729

 
5,716

 
5,671

 
5,733

 
5,671

   Other intangible assets
 
1,892

 
1,871

 
1,820

 
1,768

 
1,749

 
1,682

Cash balances held at central banks in excess of required reserves
 
71,740

 
106,202

 
60,160

 
66,259

 
58,639

 
67,710

Adjusted assets
 
200,153

 
180,742

 
179,539

 
171,457

 
177,564

 
180,323

   Plus related deferred tax liabilities
 
814

 
834

 
713

 
694

 
698

 
688

Total tangible assets
A
200,967

 
181,576

 
180,252

 
172,151

 
178,262

 
181,011

Consolidated total common shareholders' equity
 
$
18,709

 
$
18,643

 
$
18,640

 
$
18,399

 
$
18,793

 
$
18,877

Less:
 
 
 
 
 
 
 
 
 
 
 
 
   Goodwill
 
5,663

 
5,729

 
5,716

 
5,671

 
5,733

 
5,671

   Other intangible assets
 
1,892

 
1,871

 
1,820

 
1,768

 
1,749

 
1,682

Adjusted equity
 
11,154

 
11,043

 
11,104

 
10,960

 
11,311

 
11,524

   Plus related deferred tax liabilities
 
814

 
834

 
713

 
694

 
698

 
688

Total tangible common equity
B
$
11,968

 
$
11,877

 
$
11,817

 
$
11,654

 
$
12,009

 
$
12,212

Tangible common equity ratio
B/A
6.0
%
 
6.5
%
 
6.6
%
 
6.8
%
 
6.7
%
 
6.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 



17


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATION OF FULLY PHASED-IN CAPITAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
Fully phased-in pro-forma estimates of common equity tier 1 capital include 100% of the accumulated other comprehensive income component of common shareholder’s equity, including accumulated other comprehensive income attributable to available-for-sale securities, cash flow hedges and defined benefit pension plans, as well as 100% of applicable deductions, including but not limited to, intangible assets net of deferred tax liabilities. Fully phased-in pro-forma estimates of tier 1 and total capital both reflect the transition of trust preferred capital securities from tier 1 capital to total capital. For both Basel III advanced and standardized approaches, fully phased-in pro-forma estimates of risk-weighted assets reflect the exclusion of intangible assets, offset by additions related to non-significant equity exposures and deferred tax assets related to temporary differences. All fully phased-in ratios are preliminary estimates, based on our interpretations of the Basel III final rule as of the date each such ratio was first announced publicly and as applied to our businesses and operations as of the date of such ratio.
The following tables reconcile our fully phased-in estimated pro-forma common equity tier 1 capital, tier 1 capital, total capital and tier 1 leverage ratios, calculated in conformity with the Basel III final rule, as of the dates indicated, to those same ratios calculated in conformity with the applicable regulatory requirements as of such dates.
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2016
(Dollars in millions)
 
Basel III Advanced Approaches
 
Phase-In Provisions
 
Basel III Advanced Approaches Fully Phased-In Pro-Forma Estimate
 
Basel III Standardized Approach
 
Phase-In Provisions
 
Basel III Standardized Approach Fully Phased-In Pro-Forma Estimate
Common equity tier 1 capital
 
$
12,515

 
$
(454
)
 
$
12,061

 
$
12,515

 
$
(454
)
 
$
12,061

Tier 1 capital
 
15,637

 
(393
)
 
15,244

 
15,637

 
(393
)
 
15,244

Total capital
 
17,786

 
(438
)
 
17,348

 
17,864

 
(438
)
 
17,426

Risk weighted assets
 
103,992

 
65

 
104,057

 
104,554

 
61

 
104,615

Adjusted average assets
 
222,649

 
(282
)
 
222,367

 
222,649

 
(282
)
 
222,367

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
 
12.0
%
 
 
 
11.6
%
 
12.0
%
 
 
 
11.5
%
Tier 1 capital
 
15.0

 
 
 
14.6

 
15.0

 
 
 
14.6

Total capital
 
17.1

 
 
 
16.7

 
17.1

 
 
 
16.7

Tier 1 leverage
 
7.0

 
 
 
6.9

 
7.0

 
 
 
6.9

 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2016
(Dollars in millions)
 
Basel III Advanced Approaches
 
Phase-In Provisions
 
Basel III Advanced Approaches Fully Phased-In Pro-Forma Estimate
 
Basel III Standardized Approach
 
Phase-In Provisions
 
Basel III Standardized Approach Fully Phased-In Pro-Forma Estimate
Common equity tier 1 capital
 
$
12,404

 
$
(547
)
 
$
11,857

 
$
12,404

 
$
(547
)
 
$
11,857

Tier 1 capital
 
15,032

 
(486
)
 
14,546

 
15,032

 
(486
)
 
14,546

Total capital
 
17,191

 
(532
)
 
16,659

 
17,248

 
(532
)
 
16,716

Risk weighted assets
 
100,633

 
95

 
100,728

 
99,617

 
89

 
99,706

Adjusted average assets
 
217,029

 
(357
)
 
216,672

 
217,029

 
(357
)
 
216,672

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
 
12.3
%
 
 
 
11.8
%
 
12.5
%
 
 
 
11.9
%
Tier 1 capital
 
14.9

 
 
 
14.4

 
15.1

 
 
 
14.6

Total capital
 
17.1

 
 
 
16.5

 
17.3

 
 
 
16.8

Tier 1 leverage
 
6.9

 
 
 
6.7

 
6.9

 
 
 
6.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

18


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATION OF FULLY PHASED-IN CAPITAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2015
(Dollars in millions)
 
Basel III Advanced Approaches
 
Phase-In Provisions
 
Basel III Advanced Approaches Fully Phased-In Pro-Forma Estimate
 
Basel III Standardized Approach
 
Phase-In Provisions
 
Basel III Standardized Approach Fully Phased-In Pro-Forma Estimate
Common equity tier 1 capital
 
$
12,433

 
$
(929
)
 
$
11,504

 
$
12,433

 
$
(929
)
 
$
11,504

Tier 1 capital
 
15,264

 
(1,076
)
 
14,188

 
15,264

 
(1,076
)
 
14,188

Total capital
 
17,349

 
(946
)
 
16,403

 
17,403

 
(946
)
 
16,457

Risk weighted assets
 
99,552

 
(405
)
 
99,402

 
95,893

 
(382
)
 
95,721

Adjusted average assets
 
221,880

 
(546
)
 
221,334

 
221,880

 
(546
)
 
221,334

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
 
12.5
%
 
 
 
11.6
%
 
13.0
%
 
 
 
12.0
%
Tier 1 capital
 
15.3

 
 
 
14.3

 
15.9

 
 
 
14.8

Total capital
 
17.4

 
 
 
16.5

 
18.1

 
 
 
17.2

Tier 1 leverage
 
6.9

 
 
 
6.4

 
6.9

 
 
 
6.4

 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2015
(Dollars in millions)
 
Basel III Advanced Approaches
 
Phase-In Provisions
 
Basel III Advanced Approaches Fully Phased-In Pro-Forma Estimate
 
Basel III Standardized Approach
 
Phase-In Provisions
 
Basel III Standardized Approach Fully Phased-In Pro-Forma Estimate
Common equity tier 1 capital
 
$
12,515

 
$
(855
)
 
$
11,660

 
$
12,515

 
$
(855
)
 
$
11,660

Tier 1 capital
 
15,361

 
(998
)
 
14,363

 
15,361

 
(998
)
 
14,363

Total capital
 
17,526

 
(868
)
 
16,658

 
17,583

 
(868
)
 
16,715

Risk weighted assets
 
104,365

 
(478
)
 
103,887

 
105,765

 
(451
)
 
105,314

Adjusted average assets
 
244,553

 
(488
)
 
244,065

 
244,553

 
(488
)
 
244,065

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
 
12.0
%
 
 
 
11.2
%
 
11.8
%
 
 
 
11.1
%
Tier 1 capital
 
14.7

 
 
 
13.8

 
14.5

 
 
 
13.6

Total capital
 
16.8

 
 
 
16.0

 
16.6

 
 
 
15.9

Tier 1 leverage
 
6.3

 
 
 
5.9

 
6.3

 
 
 
5.9

 
 
 
 
 
 
 
 
 
 
 
 
 

19


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATION OF FULLY PHASED-IN CAPITAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2015
(Dollars in millions)
 
Basel III Advanced Approaches
 
Phase-In Provisions
 
Basel III Advanced Approaches Fully Phased-In Pro-Forma Estimate
 
Basel III Standardized Approach
 
Phase-In Provisions
 
Basel III Standardized Approach Fully Phased-In Pro-Forma Estimate
Common equity tier 1 capital
 
$
12,559

 
$
(846
)
 
$
11,713

 
$
12,559

 
$
(846
)
 
$
11,713

Tier 1 capital
 
15,401

 
(985
)
 
14,416

 
15,401

 
(985
)
 
14,416

Total capital
 
17,554

 
(855
)
 
16,699

 
17,554

 
(855
)
 
16,699

Risk weighted assets
 
104,533

 
(481
)
 
104,052

 
109,788

 
(453
)
 
109,335

Adjusted average assets
 
257,227

 
(295
)
 
256,932

 
257,227

 
(295
)
 
256,932

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
 
12.0
%
 
 
 
11.3
%
 
11.4
%
 
 
 
10.7
%
Tier 1 capital
 
14.7

 
 
 
13.9

 
14.0

 
 
 
13.2

Total capital
 
16.8

 
 
 
16.0

 
16.0

 
 
 
15.3

Tier 1 leverage
 
6.0

 
 
 
5.6

 
6.0

 
 
 
5.6

 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2015
(Dollars in millions)
 
Basel III Advanced Approaches
 
Phase-In Provisions
 
Basel III Advanced Approaches Fully Phased-In Pro-Forma Estimate
 
Basel III Standardized Approach
 
Phase-In Provisions
 
Basel III Standardized Approach Fully Phased-In Pro-Forma Estimate
Common equity tier 1 capital
 
$
12,494

 
$
(684
)
 
$
11,810

 
$
12,494

 
$
(684
)
 
$
11,810

Tier 1 capital
 
14,598

 
(827
)
 
13,771

 
14,598

 
(827
)
 
13,771

Total capital
 
16,752

 
(697
)
 
16,055

 
16,752

 
(697
)
 
16,055

Risk weighted assets
 
103,998

 
(552
)
 
103,446

 
121,946

 
(520
)
 
121,426

Adjusted average assets
 
252,406

 
(215
)
 
252,191

 
252,406

 
(215
)
 
252,191

 
 
 
 
 
 
 
 
 
 
 
 
 
Capital ratios:
 
 
 
 
 
 
 
 
 
 
 
 
Common equity tier 1 capital
 
12.0
%
 
 
 
11.4
%
 
10.2
%
 
 
 
9.7
%
Tier 1 capital
 
14.0

 
 
 
13.3

 
12.0

 
 
 
11.3

Total capital
 
16.1

 
 
 
15.5

 
13.7

 
 
 
13.2

Tier 1 leverage
 
5.8

 
 
 
5.5

 
5.8

 
 
 
5.5

 
 
 
 
 
 
 
 
 
 
 
 
 


20


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATIONS OF SUPPLEMENTARY LEVERAGE RATIOS
 
 
 
 
 
 
 
 
 
        In 2014, U.S. banking regulators issued final rules implementing a supplementary leverage ratio, or SLR, for certain bank holding companies, like State Street, and their insured depository institution subsidiaries, like State Street Bank. We refer to these final rules as the SLR final rule. Under the SLR final rule, upon implementation as of January 1, 2018, (i) State Street Bank must maintain an SLR of at least 6% to be well capitalized under the U.S. banking regulators’ Prompt Corrective Action framework and (ii) if State Street maintains an SLR of at least 5%, it is not subject to limitations on distribution and discretionary bonus payments under the SLR final rule. Beginning with reporting for March 31, 2015, State Street was required to include SLR disclosures with its other Basel disclosures.
        Estimated pro forma fully phased-in SLR ratios as of June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015 are preliminary estimates by State Street (in each case, fully phased-in as of January 1, 2018, as per the phase-in requirements of the SLR final rule), calculated based on our interpretations of the SLR final rule as of July 27, 2016 and as applied to our businesses and operations as of June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015.
     The following tables reconcile our estimated pro forma fully-phased in SLR ratios as of June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015, and March 31, 2015 calculated in conformity with the SLR final rule, as described, to our SLR ratios calculated in conformity with applicable regulatory requirements as of the dates indicated.
 
 
 
 
 
 
 
 
 
 
 
 
State Street
 
State Street Bank
As of June 30, 2016
(Dollars in millions)
 
Transitional SLR
 
Fully Phased-In SLR
 
Transitional SLR
 
Fully Phased-In SLR
Tier 1 Capital
 
15,637

A
15,244

 
15,734

 
15,377

On-and off-balance sheet leverage exposure
 
255,010

 
255,010

 
250,062

 
250,062

Less: regulatory deductions
 
(5,953
)
 
(6,236
)
 
(5,581
)
 
(5,835
)
Total assets for SLR
 
249,057

B
248,774

 
244,481

 
244,227

Supplementary Leverage Ratio
 
6.3
%
A/B
6.1
%
 
6.4
%
 
6.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State Street
 
State Street Bank
As of March 31, 2016
(Dollars in millions)
 
Transitional SLR
 
Fully Phased-In SLR
 
Transitional SLR
 
Fully Phased-In SLR
Tier 1 Capital
 
$
15,032

C
$
14,546

 
$
15,071

 
$
14,628

On-and off-balance sheet leverage exposure
 
247,923

 
247,923

 
243,043

 
243,043

Less: regulatory deductions
 
(6,130
)
 
(6,487
)
 
(5,751
)
 
(6,073
)
Total assets for SLR
 
241,793

D
241,436

 
237,292

 
236,970

Supplementary Leverage Ratio
 
6.2
%
C/D
6.0
%
 
6.4
%
 
6.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State Street
 
State Street Bank
As of December 31, 2015
(Dollars in millions)
 
Transitional SLR
 
Fully Phased-In SLR
 
Transitional SLR
 
Fully Phased-In SLR
Tier 1 Capital
 
$
15,264

E
$
14,188


$
14,647


$
13,869

On-and off-balance sheet leverage exposure
 
252,752


252,752


247,736


247,736

Less: regulatory deductions
 
(5,895
)

(6,440
)

(5,536
)

(6,036
)
Total assets for SLR
 
246,857

F
246,312


242,200


241,700

Supplementary Leverage Ratio
 
6.2
%
E/F
5.8
%

6.0
%

5.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

21


STATE STREET CORPORATION
EARNINGS RELEASE ADDENDUM
RECONCILIATIONS OF SUPPLEMENTARY LEVERAGE RATIOS (Continued)
 
 
 
 
 
 
 
 
 
 
 
State Street
 
State Street Bank
As of September 30, 2015
(Dollars in millions)
 
Transitional SLR
 
Fully Phased-In SLR
 
Transitional SLR
 
Fully Phased-In SLR
Tier 1 Capital
 
$
15,361

G
$
14,363

 
$
14,863

 
$
14,162

On-and off-balance sheet leverage exposure
 
276,673

 
276,673

 
271,347

 
271,347

Less: regulatory deductions
 
(5,911
)
 
(6,399
)
 
(5,550
)
 
(5,993
)
Total assets for SLR
 
270,762

H
270,274

 
265,797

 
265,354

Supplementary Leverage Ratio
 
5.7
%
G/H
5.3
%
 
5.6
%
 
5.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State Street
 
State Street Bank
As of June 30, 2015 (Dollars in millions)
 
Transitional SLR
 
Fully Phased-In SLR
 
Transitional SLR
 
Fully Phased-In SLR
Tier 1 Capital
 
$
15,401

I
$
14,416

 
$
14,352

 
$
13,667

On-and off-balance sheet leverage exposure
 
291,875

 
291,875

 
286,851

 
286,851

Less: regulatory deductions
 
(6,138
)
 
(6,930
)
 
(5,776
)
 
(6,515
)
Total assets for SLR
 
285,737

J
284,945

 
281,075

 
280,336

Supplementary Leverage Ratio
 
5.4
%
I/J
5.1
%
 
5.1
%
 
4.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State Street
 
State Street Bank
As of March 31, 2015 (Dollars in millions)
 
Transitional SLR
 
Fully Phased-In SLR
 
Transitional SLR
 
Fully Phased-In SLR
Tier 1 Capital
 
$
14,598

K
$
13,772

 
$
13,770

 
$
13,245

On-and off-balance sheet leverage exposure
 
288,932

 
288,932

 
284,060

 
284,060

Less: regulatory deductions
 
(6,088
)
 
(6,898
)
 
(5,734
)
 
(6,489
)
Total assets for SLR
 
282,844

L
282,034

 
278,326

 
277,571

Supplementary Leverage Ratio
 
5.2
%
K/L
4.9
%
 
4.9
%
 
4.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

22