x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Massachusetts | 04-2456637 | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | |
One Lincoln Street Boston, Massachusetts | 02111 | |
(Address of principal executive office) | (Zip Code) | |
617-786-3000 (Registrant’s telephone number, including area code) |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | |||
(Do not check if a smaller reporting company) |
PART I. FINANCIAL INFORMATION | |
PART II. OTHER INFORMATION | |
ACRONYMS | |||
2015 Form 10-K | State Street Corporation Annual Report on Form 10-K for the year ended December 31, 2015 | FHLB | Federal Home Loan Bank of Boston |
ABS | Asset-backed securities | FRBB | Federal Reserve Bank of Boston |
AFS | Available-for-sale | FSB | Financial Stability Board |
ALLL | Allowance for loan and lease losses | FX | Foreign exchange |
AML | Anti-money laundering | GAAP | Generally accepted accounting principles |
AOCI | Accumulated other comprehensive income (loss) | G-SIB | Global systemically important bank |
ASU | Accounting Standards Update | HQLA(1) | High-quality liquid assets |
AUCA | Assets under custody and administration | HTM | Held-to-maturity |
AUM | Assets under management | LCR(1) | Liquidity coverage ratio |
BCBS | Basel Committee on Banking Supervision | MRAC | Management Risk and Capital Committee |
Board | Board of Directors | NIR | Net interest revenue |
CCAR | Comprehensive Capital Analysis and Review | OCI | Other comprehensive income (loss) |
CD | Certificates of deposit | OCIO | Outsourced Chief Investment Officer |
CET1(1) | Common equity tier 1 | OFAC | Office of Foreign Assets Control |
CLO | Collateralized loan obligations | OTC | Over-the-counter |
CRE | Commercial real estate | OTTI | Other-than-temporary-impairment |
CVA | Credit valuation adjustment | Parent Company | State Street Corporation |
Dodd-Frank Act | Dodd-Frank Wall Street Reform and Consumer Protection Act | PCA | Prompt corrective action |
ECB | European Central Bank | P&L | Profit-and-loss |
EPS | Earnings per share | RC | Risk Committee |
ERISA | Employee Retirement Income Security Act | RWA(1) | Risk-weighted assets |
ERM | Enterprise Risk Management | SEC | Securities and Exchange Commission |
ETF | Exchange-Traded Fund | SLR(1) | Supplementary leverage ratio |
EVE | Economic value of equity | SSGA | State Street Global Advisors |
FASB | Financial Accounting Standards Board | State Street Bank | State Street Bank and Trust Company |
FCA | Financial Conduct Authority | TMRC | Trading and Markets Risk Committee |
FDIC | Federal Deposit Insurance Corporation | VaR | Value-at-risk |
Federal Reserve | Board of Governors of the Federal Reserve System | VIE | Variable interest entity |
• | 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 |
• | our ability to attract deposits and other low-cost, short-term funding, our ability to manage levels of such deposits and 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 needs, regulatory 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, Undertakings for Collective Investment in Transferable Securities Directives and Markets in Financial Instruments Directive II); 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, liquidity and capital planning, resolution planning, and compliance programs, and changes in governmental enforcement approaches to perceived failures to comply with regulatory or legal obligations; |
• | we may not successfully implement our plans to have a credible resolution plan by July 2017, including the sufficiency of the actions taken to address the deficiencies jointly identified by the Federal Reserve and the FDIC in April 2016 with respect to our 2015 resolution plan, or those plans may not be considered to be sufficient by the Federal Reserve and the FDIC, due to a number of factors, including, but not limited to challenges we may experience in interpreting and addressing regulatory expectations, failure to implement remediation in a timely |
• | 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; |
• | economic or financial market disruptions in the U.S. or internationally, including that which may result from recessions or political instability, for example, the U.K.'s referendum to exit from the European Union may continue to disrupt financial markets or economic growth in Europe; |
• | our ability to develop and execute State Street Beacon, our multi-year transformation program to digitize our business, deliver significant value and innovation for our clients and lower expenses across the organization, any failure of which, in whole or in part, may |
• | our ability to promote a strong culture of risk management, operating controls, compliance oversight, ethical behavior and governance that meet our expectations and those of our clients and our regulators, and the financial, regulatory, reputation and other consequences of our failure to meet such expectations; |
• | the results of our review of our billing practices, including additional amounts we may be required to reimburse clients, as well as potential consequences of such review, including damage to our client relationships and adverse actions by governmental authorities; |
• | the results of, and costs associated with, governmental or regulatory inquiries and investigations, litigation and similar claims, disputes, or civil or criminal 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 depositary 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 |
• | 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. |
TABLE 1: OVERVIEW OF FINANCIAL RESULTS | ||||||||||
Quarters Ended September 30, | ||||||||||
(Dollars in millions, except per share amounts) | 2016 | 2015 | % Change | |||||||
Total fee revenue | $ | 2,079 | $ | 2,103 | (1 | )% | ||||
Net interest revenue | 537 | 513 | 5 | |||||||
Gains (losses) related to investment securities, net | 4 | (2 | ) | nm | ||||||
Total revenue | 2,620 | 2,614 | — | |||||||
Provision for loan losses | — | 5 | nm | |||||||
Total expenses | 1,984 | 1,962 | 1 | |||||||
Income before income tax expense | 636 | 647 | (2 | ) | ||||||
Income tax expense | 72 | 67 | 7 | |||||||
Net Income (loss) from non-controlling interest | (1 | ) | 1 | nm | ||||||
Net income | $ | 563 | $ | 581 | (3 | ) | ||||
Adjustments to net income: | ||||||||||
Dividends on preferred stock(1) | (55 | ) | (42 | ) | 31 | |||||
Earnings allocated to participating securities(2) | (1 | ) | — | nm | ||||||
Net income available to common shareholders | $ | 507 | $ | 539 | (6 | ) | ||||
Earnings per common share: | ||||||||||
Basic | $ | 1.31 | $ | 1.33 | (2 | ) | ||||
Diluted | 1.29 | 1.31 | (2 | ) | ||||||
Average common shares outstanding (in thousands): | ||||||||||
Basic | 388,358 | 406,612 | ||||||||
Diluted | 393,212 | 412,167 | ||||||||
Cash dividends declared per common share | $ | .38 | $ | .34 | ||||||
Return on average common equity | 10.6 | % | 11.3 | % | ||||||
Nine Months Ended September 30, | ||||||||||
(Dollars in millions, except per share amounts) | 2016 | 2015 | % Change | |||||||
Total fee revenue | $ | 6,102 | $ | 6,234 | (2 | )% | ||||
Net interest revenue | 1,570 | 1,594 | (2 | ) | ||||||
Gains (losses) related to investment securities, net | 5 | (6 | ) | nm | ||||||
Total revenue | 7,677 | 7,822 | (2 | ) | ||||||
Provision for loan losses | 8 | 11 | (27 | ) | ||||||
Total expenses | 5,894 | 6,193 | (5 | ) | ||||||
Income before income tax expense | 1,775 | 1,618 | 10 | |||||||
Income tax expense | 226 | 215 | 5 | |||||||
Net income from non-controlling interest | 1 | 1 | nm | |||||||
Net income | $ | 1,550 | $ | 1,404 | 10 | |||||
Adjustments to net income: | ||||||||||
Dividends on preferred stock(1) | (137 | ) | (102 | ) | 34 | |||||
Earnings allocated to participating securities(2) | (2 | ) | (1 | ) | nm | |||||
Net income available to common shareholders | $ | 1,411 | $ | 1,301 | 8 | |||||
Earnings per common share: | ||||||||||
Basic | $ | 3.58 | $ | 3.18 | 13 | |||||
Diluted | 3.54 | 3.13 | 13 | |||||||
Average common shares outstanding (in thousands): | ||||||||||
Basic | 393,959 | 409,816 | ||||||||
Diluted | 398,413 | 415,772 | ||||||||
Cash dividends declared per common share | $ | 1.06 | $ | .98 | ||||||
Return on average common equity | 9.9 | % | 9.1 | % |
• | We secured new asset servicing mandates of $212 billion in the third quarter and $1,225 billion in the first nine months of 2016, of which approximately $95 billion and $886 billion was installed in the third quarter and first nine months of 2016, respectively. The remaining amount is expected to be installed in the remainder of 2016 or later. |
• | On July 1, 2016, we completed our previously announced acquisition of GE Asset Management ("GEAM") from General Electric Company, with a total initial purchase price of approximately $437 million and approximately $46 million in potential incremental purchase price related to future opportunities with General Electric. This acquisition extends our core investment management capabilities, including in the high growth OCIO markets, and enhances our capabilities in connection with the delivery of value-added solutions to our client base. In the third quarter of 2016, we incurred acquisition and restructuring costs associated with the acquisition of approximately $29 million and expect to incur approximately $80 million of such costs through 2018, including the third quarter costs. |
• | Excluding AUM associated with the acquired GEAM operations of $112 billion, net outflows of AUM totaled $36 billion and $58 billion in the quarter and nine months ended September 30, 2016, respectively. |
• | We declared common stock dividends of $0.38 per share, totaling approximately $147 million, in the third quarter of 2016. |
• | In the third quarter of 2016, we purchased approximately 4.7 million shares of our common stock at an average per-share cost of $69.03 and an aggregate cost of approximately $325 million under our current common stock purchase program approved by our Board in July 2016. |
• | Total revenue in the third quarter of 2016 increased slightly compared to the third quarter of 2015, primarily due to a 28% increase in management fee revenue, partially offset by a decrease in processing fees and other revenue. |
• | Servicing fee revenue increased 1% in the third quarter of 2016 compared to the third quarter of 2015, due to net new business. |
• | Management fee revenue increased 28% in the third quarter of 2016 compared to the third quarter of 2015, primarily due to the impact of the acquired GEAM business and lower money market fee waivers and higher global equity markets. |
• | Return on average common shareholders' equity decreased to 10.6% in the third quarter of 2016 compared to 11.3% in the third quarter of 2015. |
• | In the third quarter of 2016, we recorded restructuring charges of $10 million related to State Street Beacon, our multi-year transformation program to digitize our business, deliver significant value and innovation for our clients and lower expenses across the organization. We are on track to generate at least $165 million in estimated annual year-over-year pre-tax savings in 2016 related to State Street Beacon, all else equal. These savings include the effects of the targeted staff reductions announced in October 2015. The full effect of these 2016 savings will be felt in 2017. Actual expenses may increase or decrease in the future due to other factors. |
• | In the third quarter of 2016, we recorded a pre-tax charge of approximately $42 million to establish a legal reserve related to previously disclosed investigations by U.S. governmental agencies concerning our transition management business activities in 2010 and 2011. |
• | Total expenses in the third quarter of 2016 increased 1% compared to the third quarter of 2015, primarily driven by increases in acquisition costs, primarily associated with the acquired GEAM business, and information systems and communications expenses, partially offset by decreases in compensation and employee benefits and professional services expenses. |
TABLE 2: TOTAL REVENUE | ||||||||||
Quarters Ended September 30, | ||||||||||
(In millions) | 2016 | 2015 | % Change | |||||||
Fee revenue: | ||||||||||
Servicing fees | $ | 1,303 | $ | 1,289 | 1 | % | ||||
Management fees | 368 | 287 | 28 | |||||||
Trading services: | ||||||||||
Foreign exchange trading | 159 | 177 | (10 | ) | ||||||
Brokerage and other trading services | 108 | 117 | (8 | ) | ||||||
Total trading services | 267 | 294 | (9 | ) | ||||||
Securities finance | 136 | 113 | 20 | |||||||
Processing fees and other | 5 | 120 | (96 | ) | ||||||
Total fee revenue | 2,079 | 2,103 | (1 | ) | ||||||
Net interest revenue: | ||||||||||
Interest revenue | 647 | 614 | 5 | |||||||
Interest expense | 110 | 101 | 9 | |||||||
Net interest revenue | 537 | 513 | 5 | |||||||
Gains (losses) related to investment securities, net | 4 | (2 | ) | nm | ||||||
Total revenue | $ | 2,620 | $ | 2,614 | — | |||||
Nine Months Ended September 30, | ||||||||||
(In millions) | 2016 | 2015 | % Change | |||||||
Fee revenue: | ||||||||||
Servicing fees | $ | 3,784 | $ | 3,876 | (2 | )% | ||||
Management fees | 931 | 892 | 4 | |||||||
Trading services: | ||||||||||
Foreign exchange trading | 472 | 547 | (14 | ) | ||||||
Brokerage and other trading services | 334 | 352 | (5 | ) | ||||||
Total trading services | 806 | 899 | (10 | ) | ||||||
Securities finance | 426 | 369 | 15 | |||||||
Processing fees and other | 155 | 198 | (22 | ) | ||||||
Total fee revenue | 6,102 | 6,234 | (2 | ) | ||||||
Net interest revenue: | ||||||||||
Interest revenue | 1,896 | 1,885 | 1 | |||||||
Interest expense | 326 | 291 | 12 | |||||||
Net interest revenue | 1,570 | 1,594 | (2 | ) | ||||||
Gains (losses) related to investment securities, net | 5 | (6 | ) | nm | ||||||
Total revenue | $ | 7,677 | $ | 7,822 | (2 | ) |
• | A 10% increase or decrease in worldwide equity valuations, over the relevant periods for which our servicing and management fees are calculated, would result in a corresponding change in our total revenue of approximately 2%; and |
• | A 10% increase or decrease in worldwide fixed income security valuations, over the relevant periods for which our servicing and management fees are calculated, would result in a corresponding change in our total revenue of approximately 1%. |
TABLE 3: DAILY, MONTH-END AND QUARTER-END INDICES | ||||||||||||||||||||||||||
Daily Averages of Indices | Averages of Month-End Indices | Quarter-End Indices | ||||||||||||||||||||||||
Quarters Ended September 30, | Quarters Ended September 30, | As of September 30, | ||||||||||||||||||||||||
2016 | 2015 | % Change | 2016 | 2015 | % Change | 2016 | 2015 | % Change | ||||||||||||||||||
S&P 500® | 2,162 | 2,027 | 7 | % | 2,171 | 1,999 | 9 | % | 2,168 | 1,920 | 13 | % | ||||||||||||||
NASDAQ® | 5,169 | 4,924 | 5 | 5,229 | 4,842 | 8 | 5,312 | 4,620 | 15 | |||||||||||||||||
MSCI® EAFE® | 1,678 | 1,785 | (6 | ) | 1,692 | 1,754 | (4 | ) | 1,702 | 1,644 | 4 | |||||||||||||||
MSCI® Emerging Markets | 887 | 860 | 3 | 890 | 837 | 6 | 903 | 792 | 14 | |||||||||||||||||
Daily Averages of Indices | Averages of Month-End Indices | |||||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||||||||
S&P 500® | 2,065 | 2,064 | — | % | 2,078 | 2,047 | 2 | % | ||||||||||||||||||
NASDAQ® | 4,880 | 4,928 | (1 | ) | 4,922 | 4,891 | 1 | |||||||||||||||||||
MSCI EAFE® | 1,640 | 1,836 | (11 | ) | 1,650 | 1,827 | (10 | ) | ||||||||||||||||||
MSCI® Emerging Markets | 821 | 948 | (13 | ) | 830 | 940 | (12 | ) |
TABLE 4: AVERAGE BALANCES AND INTEREST RATES - FULLY TAXABLE-EQUIVALENT BASIS | |||||||||||||||||||||
Quarters Ended September 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
(Dollars in millions; fully taxable-equivalent basis) | Average Balance | Interest Revenue/ Expense | Rate | Average Balance | Interest Revenue/ Expense | Rate | |||||||||||||||
Interest-bearing deposits with banks | $ | 57,580 | $ | 29 | .20 | % | $ | 73,466 | $ | 53 | .29 | % | |||||||||
Securities purchased under resale agreements(1) | 2,667 | 40 | 6.01 | 4,838 | 18 | 1.51 | |||||||||||||||
Trading account assets | 994 | — | — | 1,338 | — | — | |||||||||||||||
Investment securities | 100,449 | 505 | 2.01 | 100,175 | 505 | 2.02 | |||||||||||||||
Loans and leases | 18,744 | 97 | 2.06 | 17,606 | 79 | 1.77 | |||||||||||||||
Other interest-earning assets | 21,721 | 18 | .30 | 24,001 | 2 | .03 | |||||||||||||||
Average total interest-earning assets | $ | 202,155 | $ | 689 | 1.35 | $ | 221,424 | $ | 657 | 1.18 | |||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
U.S. | $ | 33,668 | $ | 42 | .49 | % | $ | 36,033 | $ | 15 | .16 | % | |||||||||
Non-U.S. | 95,617 | (22 | ) | (.09 | ) | 101,297 | 13 | .05 | |||||||||||||
Securities sold under repurchase agreements(1) | 3,976 | — | — | 9,220 | — | — | |||||||||||||||
Federal funds purchased | 24 | — | — | 17 | — | — | |||||||||||||||
Other short-term borrowings | 1,566 | 2 | .57 | 3,791 | 1 | .18 | |||||||||||||||
Long-term debt | 11,885 | 68 | 2.27 | 10,497 | 62 | 2.36 | |||||||||||||||
Other interest-bearing liabilities | 5,647 | 20 | 1.41 | 4,463 | 10 | .88 | |||||||||||||||
Average total interest-bearing liabilities | $ | 152,383 | $ | 110 | .29 | $ | 165,318 | $ | 101 | .24 | |||||||||||
Interest-rate spread | 1.06 | % | .94 | % | |||||||||||||||||
Net interest revenue—fully taxable-equivalent basis | $ | 579 | $ | 556 | |||||||||||||||||
Net interest margin—fully taxable-equivalent basis | 1.14 | % | 1.00 | % | |||||||||||||||||
Tax-equivalent adjustment | (42 | ) | (43 | ) | |||||||||||||||||
Net interest revenue—GAAP basis | $ | 537 | $ | 513 | |||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
(Dollars in millions; fully taxable-equivalent basis) | Average Balance | Interest Revenue/ Expense | Rate | Average Balance | Interest Revenue/ Expense | Rate | |||||||||||||||
Interest-bearing deposits with banks | $ | 52,423 | $ | 101 | .26 | % | $ | 74,830 | $ | 161 | .29 | % | |||||||||
Securities purchased under resale agreements(1) | 2,610 | 112 | 5.73 | 3,325 | 45 | 1.79 | |||||||||||||||
Trading account assets | 908 | 1 | .09 | 1,234 | — | — | |||||||||||||||
Investment securities | 101,243 | 1,486 | 1.96 | 107,216 | 1,574 | 1.96 | |||||||||||||||
Loans and leases | 18,674 | 281 | 2.01 | 17,711 | 229 | 1.73 | |||||||||||||||
Other interest-earning assets | 22,316 | 39 | .24 | 22,731 | 7 | .04 | |||||||||||||||
Average total interest-earning assets | $ | 198,174 | $ | 2,020 | 1.36 | $ | 227,047 | $ | 2,016 | 1.19 | |||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
U.S. | $ | 30,388 | $ | 99 | .44 | % | $ | 31,479 | $ | 34 | .14 | % | |||||||||
Non-U.S. | 95,013 | (26 | ) | (.04 | ) | 105,347 | 33 | .04 | |||||||||||||
Securities sold under repurchase agreements(1) | 4,107 | 1 | .03 | 9,576 | — | — | |||||||||||||||
Federal funds purchased | 33 | — | — | 21 | — | — | |||||||||||||||
Other short-term borrowings | 1,727 | 4 | .34 | 4,211 | 5 | .16 | |||||||||||||||
Long-term debt | 11,306 | 191 | 2.24 | 9,779 | 185 | 2.52 | |||||||||||||||
Other interest-bearing liabilities | 5,550 | 57 | 1.38 | 6,835 | 34 | .65 | |||||||||||||||
Average total interest-bearing liabilities | $ | 148,124 | $ | 326 | .29 | $ | 167,248 | $ | 291 | .23 | |||||||||||
Interest-rate spread | 1.07 | % | .95 | % | |||||||||||||||||
Net interest revenue—fully taxable-equivalent basis | $ | 1,694 | $ | 1,725 | |||||||||||||||||
Net interest margin—fully taxable-equivalent basis | 1.14 | % | 1.02 | % | |||||||||||||||||
Tax-equivalent adjustment | (124 | ) | (131 | ) | |||||||||||||||||
Net interest revenue—GAAP basis | $ | 1,570 | $ | 1,594 |
TABLE 5: TOTAL DISCOUNT ACCRETION IN INTEREST REVENUE | |||
(In millions) | Discount Accretion in Interest Revenue | ||
Twelve Months Ended December 31, 2009 | $ | 621 | |
Twelve Months Ended December 31, 2010 | 712 | ||
Twelve Months Ended December 31, 2011 | 220 | ||
Twelve Months Ended December 31, 2012 | 215 | ||
Twelve Months Ended December 31, 2013 | 137 | ||
Twelve Months Ended December 31, 2014 | 119 | ||
Twelve Months Ended December 31, 2015 | 98 | ||
Nine Months Ended September 30, 2016 | 72 | ||
Total Discount Accretion | $ | 2,194 |
TABLE 6: U.S. AND NON-U.S. SHORT-DURATION ADVANCES | |||||||
Quarters Ended September 30, | |||||||
(Dollars in millions, except where otherwise noted) | 2016 | 2015 | |||||
Average U.S. short-duration advances | $ | 2,114 | $ | 2,226 | |||
Average non-U.S. short-duration advances | 1,299 | 1,325 | |||||
Average total short-duration advances | $ | 3,413 | $ | 3,551 | |||
Average short-duration advances to average loans and leases | 18 | % | 20 | % | |||
Nine Months Ended September 30, | |||||||
(Dollars in millions, except where otherwise noted) | 2016 | 2015 | |||||
Average U.S. short-duration advances | $ | 2,163 | $ | 2,284 | |||
Average non-U.S. short-duration advances | 1,345 | 1,432 | |||||
Average total short-duration advances | $ | 3,508 | $ | 3,716 | |||
Average short-duration advances to average loans and leases | 19 | % | 21 | % |
TABLE 7: EXPENSES | ||||||||||
Quarters Ended September 30, | ||||||||||
(Dollars in millions, except where otherwise noted) | 2016 | 2015 | % Change | |||||||
Compensation and employee benefits | $ | 1,013 | $ | 1,051 | (4 | )% | ||||
Information systems and communications | 285 | 265 | 8 | |||||||
Transaction processing services | 200 | 201 | — | |||||||
Occupancy | 107 | 110 | (3 | ) | ||||||
Acquisition costs | 33 | 7 | 371 | |||||||
Restructuring charges, net | 9 | 3 | 200 | |||||||
Other: | ||||||||||
Professional services | 95 | 136 | (30 | ) | ||||||
Amortization of other intangible assets | 55 | 48 | 15 | |||||||
Securities processing costs | 10 | 40 | (75 | ) | ||||||
Regulatory fees and assessments | 28 | 31 | (10 | ) | ||||||
Other | 149 | 70 | 113 | |||||||
Total other | 337 | 325 | 4 | |||||||
Total expenses | $ | 1,984 | $ | 1,962 | 1 | |||||
Number of employees at quarter-end | 33,332 | 31,860 | ||||||||
Nine Months Ended September 30, | ||||||||||
(In millions) | 2016 | 2015 | % Change | |||||||
Compensation and employee benefits | $ | 3,109 | $ | 3,122 | — | % | ||||
Information systems and communications | 827 | 761 | 9 | |||||||
Transaction processing services | 601 | 599 | — | |||||||
Occupancy | 331 | 332 | — | |||||||
Acquisition costs | 47 | 15 | 213 | |||||||
Restructuring charges, net | 119 | 4 | 2,875 | |||||||
Other: | ||||||||||
Professional services | 270 | 368 | (27 | ) | ||||||
Amortization of other intangible assets | 153 | 147 | 4 | |||||||
Securities processing costs | 20 | 75 | (73 | ) | ||||||
Regulatory fees and assessments | 65 | 90 | (28 | ) | ||||||
Other | 352 | 680 | (48 | ) | ||||||
Total other | 860 | 1,360 | (37 | ) | ||||||
Total expenses | $ | 5,894 | $ | 6,193 | (5 | ) |
TABLE 8: RESTRUCTURING CHARGES | |||||||||||||||
(In millions) | Employee Related Costs | Real Estate Consolidation | Asset and Other Write-offs | Total | |||||||||||
Balance at December 31, 2015 | $ | 9 | $ | 11 | $ | 3 | $ | 23 | |||||||
Accruals for State Street Beacon | 86 | — | 11 | 97 | |||||||||||
Payments and Other Adjustments | (4 | ) | (1 | ) | (7 | ) | (12 | ) | |||||||
Balance at March 31, 2016 | 91 | 10 | 7 | 108 | |||||||||||
Accruals for State Street Beacon | (1 | ) | 15 | (1 | ) | 13 | |||||||||
Payments and Other Adjustments | (35 | ) | (3 | ) | (1 | ) | (39 | ) | |||||||
Balance at June 30, 2016 | 55 | 22 | 5 | 82 | |||||||||||
Accruals for State Street Beacon | 8 | 3 | (1 | ) | 10 | ||||||||||
Payments and Other Adjustments | (14 | ) | (3 | ) | (1 | ) | (18 | ) | |||||||
Balance at September 30, 2016 | $ | 49 | $ | 22 | $ | 3 | $ | 74 |
TABLE 9: INVESTMENT SERVICING LINE OF BUSINESS RESULTS | |||||||||||||||||||||
Quarters Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
(Dollars in millions, except where otherwise noted) | 2016 | 2015 | % Change | 2016 | 2015 | % Change | |||||||||||||||
Servicing fees | $ | 1,303 | $ | 1,289 | 1 | % | $ | 3,784 | $ | 3,876 | (2 | )% | |||||||||
Trading services | 254 | 283 | (10 | ) | 771 | 869 | (11 | ) | |||||||||||||
Securities finance | 136 | 113 | 20 | 426 | 369 | 15 | |||||||||||||||
Processing fees and other | 6 | 131 | (95 | ) | 153 | 212 | (28 | ) | |||||||||||||
Total fee revenue | 1,699 | 1,816 | (6 | ) | 5,134 | 5,326 | (4 | ) | |||||||||||||
Net interest revenue | 536 | 514 | 4 | 1,567 | 1,593 | (2 | ) | ||||||||||||||
Gains (losses) related to investment securities, net | 4 | (2 | ) | nm | 5 | (6 | ) | nm | |||||||||||||
Total revenue | 2,239 | 2,328 | (4 | ) | 6,706 | 6,913 | (3 | ) | |||||||||||||
Provision for loan losses | — | 5 | nm | 8 | 11 | (27 | ) | ||||||||||||||
Total expenses | 1,634 | 1,673 | (2 | ) | 4,920 | 5,389 | (9 | ) | |||||||||||||
Income before income tax expense | $ | 605 | $ | 650 | (7 | ) | $ | 1,778 | $ | 1,513 | 18 | ||||||||||
Pre-tax margin | 27 | % | 28 | % | 27 | % | 22 | % |
TABLE 10: COMPONENTS OF ASSETS UNDER CUSTODY AND ADMINISTRATION | ||||||||||||
(In billions) | September 30, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
Mutual funds | $ | 6,906 | $ | 6,768 | $ | 6,698 | ||||||
Collective funds | 7,541 | 7,088 | 6,883 | |||||||||
Pension products | 5,671 | 5,510 | 5,497 | |||||||||
Insurance and other products | 9,060 | 8,142 | 8,187 | |||||||||
Total | $ | 29,178 | $ | 27,508 | $ | 27,265 |
TABLE 11: COMPOSITION OF ASSETS UNDER CUSTODY AND ADMINISTRATION | ||||||||||||
(In billions) | September 30, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
Equities | $ | 16,012 | $ | 14,888 | $ | 14,223 | ||||||
Fixed-income | 9,891 | 9,264 | 9,470 | |||||||||
Short-term and other investments | 3,275 | 3,356 | 3,572 | |||||||||
Total | $ | 29,178 | $ | 27,508 | $ | 27,265 |
TABLE 12: GEOGRAPHIC MIX OF ASSETS UNDER CUSTODY AND ADMINISTRATION(1) | ||||||||||||
(In billions) | September 30, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
North America | $ | 21,561 | $ | 20,842 | $ | 20,536 | ||||||
Europe/Middle East/Africa | 6,107 | 5,387 | 5,452 | |||||||||
Asia/Pacific | 1,510 | 1,279 | 1,277 | |||||||||
Total | $ | 29,178 | $ | 27,508 | $ | 27,265 |
TABLE 13: TRADING SERVICES REVENUE | ||||||||||
Quarters Ended September 30, | ||||||||||
(In millions) | 2016 | 2015 | % Change | |||||||
Foreign exchange trading: | ||||||||||
Direct sales and trading | $ | 94 | $ | 108 | (13 | )% | ||||
Indirect foreign exchange trading | 65 | 69 | (6 | ) | ||||||
Total foreign exchange trading | 159 | 177 | (10 | ) | ||||||
Brokerage and other trading services: | ||||||||||
Electronic foreign exchange services | 41 | 46 | (11 | ) | ||||||
Other trading, transition management and brokerage | 54 | 60 | (10 | ) | ||||||
Total brokerage and other trading services | 95 | 106 | (10 | ) | ||||||
Total trading services revenue | $ | 254 | $ | 283 | (10 | ) |
Nine Months Ended September 30, | ||||||||||
(In millions) | 2016 | 2015 | % Change | |||||||
Foreign exchange trading: | ||||||||||
Direct sales and trading | $ | 271 | $ | 331 | (18 | )% | ||||
Indirect foreign exchange trading | 201 | 216 | (7 | ) | ||||||
Total foreign exchange trading | 472 | 547 | (14 | ) | ||||||
Brokerage and other trading services: | ||||||||||
Electronic foreign exchange services | 128 | 138 | (7 | ) | ||||||
Other trading, transition management and brokerage | 171 | 184 | (7 | ) | ||||||
Total brokerage and other trading services | 299 | 322 | (7 | ) | ||||||
Total trading services revenue | $ | 771 | $ | 869 | (11 | ) |
TABLE 14: INVESTMENT MANAGEMENT LINE OF BUSINESS RESULTS | ||||||||||
Quarters Ended September 30, | ||||||||||
(Dollars in millions, except where otherwise noted) | 2016 | 2015 | % Change | |||||||
Management fees | $ | 368 | $ | 287 | 28 | % | ||||
Trading services | 13 | 11 | 18 | |||||||
Processing fees and other | (1 | ) | (11 | ) | nm | |||||
Total fee revenue | 380 | 287 | 32 | |||||||
Net interest revenue | 1 | (1 | ) | nm | ||||||
Total revenue | 381 | 286 | 33 | |||||||
Total expenses | 317 | 204 | 55 | |||||||
Income before income tax expense | $ | 64 | $ | 82 | (22 | ) | ||||
Pre-tax margin | 17 | % | 29 | % |
Nine Months Ended September 30, | ||||||||||
(Dollars in millions, except where otherwise noted) | 2016 | 2015 | % Change | |||||||
Management fees | $ | 931 | $ | 892 | 4 | % | ||||
Trading services | 35 | 30 | 17 | |||||||
Processing fees and other | 2 | (14 | ) | nm | ||||||
Total fee revenue | 968 | 908 | 7 | |||||||
Net interest revenue | 3 | 1 | nm | |||||||
Total revenue | 971 | 909 | 7 | |||||||
Total expenses | 817 | 711 | 15 | |||||||
Income before income tax expense | $ | 154 | $ | 198 | (22 | ) | ||||
Pre-tax margin | 16 | % | 22 | % |
TABLE 15: ASSETS UNDER MANAGEMENT BY ASSET CLASS AND INVESTMENT APPROACH | ||||||||||||
(In billions) | September 30, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
Equity: | ||||||||||||
Active | $ | 70 | $ | 32 | $ | 29 | ||||||
Passive | 1,340 | 1,294 | 1,237 | |||||||||
Total Equity | 1,410 | 1,326 | 1,266 | |||||||||
Fixed-Income: | ||||||||||||
Active | 73 | 18 | 16 | |||||||||
Passive | 318 | 294 | 300 | |||||||||
Total Fixed-Income | 391 | 312 | 316 | |||||||||
Cash(1) | 351 | 368 | 380 | |||||||||
Multi-Asset-Class Solutions: | ||||||||||||
Active | 19 | 17 | 26 | |||||||||
Passive | 106 | 86 | 85 | |||||||||
Total Multi-Asset-Class Solutions | 125 | 103 | 111 | |||||||||
Alternative Investments(2): | ||||||||||||
Active | 29 | 17 | 17 | |||||||||
Passive | 140 | 119 | 113 | |||||||||
Total Alternative Investments | 169 | 136 | 130 | |||||||||
Total | $ | 2,446 | $ | 2,245 | $ | 2,203 |
TABLE 16: EXCHANGE - TRADED FUNDS BY ASSET CLASS(1)(2) | ||||||||||||
(In billions) | September 30, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
Alternative Investments(2) | $ | 54 | $ | 34 | $ | 35 | ||||||
Cash | 2 | 3 | 3 | |||||||||
Equity | 370 | 350 | 323 | |||||||||
Fixed-income | 52 | 41 | 39 | |||||||||
Total Exchange-Traded Funds | $ | 478 | $ | 428 | $ | 400 |
TABLE 17: GEOGRAPHIC MIX OF ASSETS UNDER MANAGEMENT(1) | ||||||||||||
(In billions) | September 30, 2016 | December 31, 2015 | September 30, 2015 | |||||||||
North America | $ | 1,641 | $ | 1,452 | $ | 1,409 | ||||||
Europe/Middle East/Africa | 495 | 489 | 500 | |||||||||
Asia/Pacific | 310 | 304 | 294 | |||||||||
Total | $ | 2,446 | $ | 2,245 | $ | 2,203 |
TABLE 18: ACTIVITY IN ASSETS UNDER MANAGEMENT BY PRODUCT CATEGORY | |||||||||||||||||||||||
(In billions) | Equity | Fixed-Income | Cash(2) | Multi-Asset-Class Solutions | Alternative Investments(3) | Total | |||||||||||||||||
Balance as of September 30, 2015 | $ | 1,266 | $ | 316 | $ | 380 | $ | 111 | $ | 130 | $ | 2,203 | |||||||||||
Long-term institutional inflows(1) | 59 | 14 | — | 9 | 3 | 85 | |||||||||||||||||
Long-term institutional outflows(1) | (72 | ) | (22 | ) | — | (7 | ) | (3 | ) | (104 | ) | ||||||||||||
Long-term institutional flows, net | (13 | ) | (8 | ) | — | 2 | — | (19 | ) | ||||||||||||||
ETF flows, net | 10 | 3 | (1 | ) | — | (1 | ) | 11 | |||||||||||||||
Cash fund flows, net | — | — | (10 | ) | — | — | (10 | ) | |||||||||||||||
Total flows, net | (3 | ) | (5 | ) | (11 | ) | 2 | (1 | ) | (18 | ) | ||||||||||||
Market appreciation | 65 | 3 | — | (9 | ) | 7 | 66 | ||||||||||||||||
Foreign exchange impact | (2 | ) | (2 | ) | (1 | ) | (1 | ) | — | (6 | ) | ||||||||||||
Total market/foreign exchange impact | 63 | 1 | (1 | ) | (10 | ) | 7 | 60 | |||||||||||||||
Balance as of December 31, 2015 | 1,326 | 312 | 368 | 103 | 136 | 2,245 | |||||||||||||||||
Long-term institutional inflows(1) | 161 | 62 | — | 34 | 9 | 266 | |||||||||||||||||
Long-term institutional outflows(1) | (206 | ) | (71 | ) | — | (26 | ) | (16 | ) | (319 | ) | ||||||||||||
Long-term institutional flows, net | (45 | ) | (9 | ) | — | 8 | (7 | ) | (53 | ) | |||||||||||||
ETF flows, net | (3 | ) | 7 | (1 | ) | — | 13 | 16 | |||||||||||||||
Cash fund flows, net | — | — | (21 | ) | — | — | (21 | ) | |||||||||||||||
Total flows, net | (48 | ) | (2 | ) | (22 | ) | 8 | 6 | (58 | ) | |||||||||||||
Market appreciation | 84 | 19 | 1 | 11 | 15 | 130 | |||||||||||||||||
Foreign exchange impact | 10 | 6 | — | — | 1 | 17 | |||||||||||||||||
Total market/foreign exchange impact | 94 | 25 | 1 | 11 | 16 | 147 | |||||||||||||||||
Acquisitions and transfers(4) | 38 | 56 | 4 | 3 | 11 | 112 | |||||||||||||||||
Balance as of September 30, 2016 | $ | 1,410 | $ | 391 | $ | 351 | $ | 125 | $ | 169 | $ | 2,446 |
TABLE 19: AVERAGE STATEMENT OF CONDITION(1) | |||||||
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
(In millions) | Average Balance | Average Balance | |||||
Assets: | |||||||
Interest-bearing deposits with banks | $ | 52,423 | $ | 74,830 | |||
Securities purchased under resale agreements | 2,610 | 3,325 | |||||
Trading account assets | 908 | 1,234 | |||||
Investment securities | 101,243 | 107,216 | |||||
Loans and leases | 18,674 | 17,711 | |||||
Other interest-earning assets | 22,316 | 22,731 | |||||
Average total interest-earning assets | 198,174 | 227,047 | |||||
Cash and due from banks | 3,402 | 2,577 | |||||
Other noninterest-earning assets | 27,052 | 28,313 | |||||
Average total assets | $ | 228,628 | $ | 257,937 | |||
Liabilities and shareholders’ equity: | |||||||
Interest-bearing deposits: | |||||||
U.S. | $ | 30,388 | $ | 31,479 | |||
Non-U.S. | 95,013 | 105,347 | |||||
Total interest-bearing deposits | 125,401 | 136,826 | |||||
Securities sold under repurchase agreements | 4,107 | 9,576 | |||||
Federal funds purchased | 33 | 21 | |||||
Other short-term borrowings | 1,727 | 4,211 | |||||
Long-term debt | 11,306 | 9,779 | |||||
Other interest-bearing liabilities | 5,550 | 6,835 | |||||
Average total interest-bearing liabilities | 148,124 | 167,248 | |||||
Noninterest-bearing deposits | 43,806 | 54,153 | |||||
Other noninterest-bearing liabilities | 14,697 | 15,231 | |||||
Preferred shareholders’ equity | 3,015 | 2,322 | |||||
Common shareholders’ equity | 18,986 | 18,983 | |||||
Average total liabilities and shareholders’ equity | $ | 228,628 | $ | 257,937 |
TABLE 20: CARRYING VALUES OF INVESTMENT SECURITIES | |||||||
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Available-for-sale: | |||||||
U.S. Treasury and federal agencies: | |||||||
Direct obligations | $ | 5,302 | $ | 5,718 | |||
Mortgage-backed securities | 17,995 | 18,165 | |||||
Asset-backed securities: | |||||||
Student loans(1) | 7,307 | 7,176 | |||||
Credit cards | 1,375 | 1,341 | |||||
Sub-prime | 354 | 419 | |||||
Other | 1,273 | 1,764 | |||||
Total asset-backed securities | 10,309 | 10,700 | |||||
Non-U.S. debt securities: | |||||||
Mortgage-backed securities | 7,161 | 7,071 | |||||
Asset-backed securities | 2,529 | 3,267 | |||||
Government securities | 5,984 | 4,355 | |||||
Other | 5,919 | 4,834 | |||||
Total non-U.S. debt securities | 21,593 | 19,527 | |||||
State and political subdivisions | 10,756 | 9,746 | |||||
Collateralized mortgage obligations | 2,806 | 2,987 | |||||
Other U.S. debt securities | 2,338 | 2,624 | |||||
U.S. equity securities | 41 | 39 | |||||
Non-U.S. equity securities | 3 | 3 | |||||
U.S. money-market mutual funds | 361 | 542 | |||||
Non-U.S. money-market mutual funds | 16 | 19 | |||||
Total | $ | 71,520 | $ | 70,070 | |||
Held-to-maturity: | |||||||
U.S. Treasury and federal agencies: | |||||||
Direct obligations | $ | 17,553 | $ | 20,878 | |||
Mortgage-backed securities | 4,280 | 610 | |||||
Asset-backed securities: | |||||||
Student loans(1) | 1,440 | 1,592 | |||||
Credit cards | 897 | 897 | |||||
Other | 76 | 366 | |||||
Total asset-backed securities | 2,413 | 2,855 | |||||
Non-U.S. debt securities: | |||||||
Mortgage-backed securities | 1,581 | 2,202 | |||||
Asset-backed securities | 697 | 1,415 | |||||
Government securities | 288 | 239 | |||||
Other | 119 | 65 | |||||
Total non-U.S. debt securities | 2,685 | 3,921 | |||||
State and political subdivisions | — | 1 | |||||
Collateralized mortgage obligations | 1,437 | 1,687 | |||||
Total | $ | 28,368 | $ | 29,952 |
TABLE 21: INVESTMENT PORTFOLIO BY EXTERNAL CREDIT RATING | |||||
September 30, 2016 | December 31, 2015 | ||||
AAA(1) | 78 | % | 80 | % | |
AA | 14 | 12 | |||
A | 5 | 5 | |||
BBB | 2 | 2 | |||
Below BBB | 1 | 1 | |||
100 | % | 100 | % |
TABLE 22: NON-U.S. DEBT SECURITIES | |||||||
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Available-for-sale: | |||||||
United Kingdom | $ | 5,694 | $ | 5,754 | |||
Australia | 4,130 | 3,316 | |||||
Canada | 3,109 | 2,400 | |||||
Japan | 1,600 | 1,348 | |||||
Netherlands | 1,517 | 1,839 | |||||
South Korea | 941 | 1,052 | |||||
France | 872 | 954 | |||||
Germany | 731 | 990 | |||||
Italy | 666 | 389 | |||||
Hong Kong | 557 | — | |||||
Norway | 546 | 524 | |||||
Belgium | 315 | 234 | |||||
Finland | 256 | 319 | |||||
Sweden | 186 | 123 | |||||
Spain | 195 | 150 | |||||
Ireland | 118 | 29 | |||||
Other(1) | 160 | 106 | |||||
Total | $ | 21,593 | $ | 19,527 | |||
Held-to-maturity: | |||||||
Netherlands | $ | 673 | $ | 684 | |||
United Kingdom | 607 | 1,067 | |||||
Australia | 539 | 917 | |||||
Germany | 449 | 832 | |||||
Singapore | 174 | 129 | |||||
Spain | 106 | 108 | |||||
Italy | 53 | 59 | |||||
Ireland | — | 10 | |||||
Other(2) | 84 | 115 | |||||
Total | $ | 2,685 | $ | 3,921 |
TABLE 23: STATE AND MUNICIPAL OBLIGORS(1) | ||||||||||||||
(In millions) | Total Municipal Securities | Credit and Liquidity Facilities(2) | Total | % of Total Municipal Exposure | ||||||||||
September 30, 2016 | ||||||||||||||
State of Issuer: | ||||||||||||||
Texas | $ | 1,830 | $ | 1,773 | $ | 3,603 | 18 | % | ||||||
California | 531 | 2,342 | 2,873 | 14 | ||||||||||
Massachusetts | 951 | 1,073 | 2,024 | 10 | ||||||||||
New York | 779 | 1,146 | 1,925 | 10 | ||||||||||
Maryland | 512 | 413 | 925 | 5 | ||||||||||
Total | $ | 4,603 | $ | 6,747 | $ | 11,350 | ||||||||
December 31, 2015 | ||||||||||||||
State of Issuer: | ||||||||||||||
Texas | $ | 1,250 | $ | 1,962 | $ | 3,212 | 17 | % | ||||||
California | 444 | 2,220 | 2,664 | 14 | ||||||||||
New York | 817 | 1,259 | 2,076 | 11 | ||||||||||
Massachusetts | 927 | 731 | 1,658 | 9 | ||||||||||
Maryland | 454 | 413 | 867 | 5 | ||||||||||
Total | $ | 3,892 | $ | 6,585 | $ | 10,477 |
TABLE 24: AMORTIZED COST, FAIR VALUE AND NET UNREALIZED GAINS (LOSSES) OF INVESTMENT SECURITIES | |||||||||||||||||||||||
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
(In millions) | Amortized Cost | Net Unrealized Gains(Losses) | Fair Value | Amortized Cost | Net Unrealized Gains(Losses) | Fair Value | |||||||||||||||||
Available-for-sale(1) | $ | 70,795 | $ | 725 | $ | 71,520 | $ | 69,843 | $ | 227 | $ | 70,070 | |||||||||||
Held-to-maturity(1) | 28,368 | 412 | 28,780 | 29,952 | (154 | ) | 29,798 | ||||||||||||||||
Total investment securities | $ | 99,163 | $ | 1,137 | $ | 100,300 | $ | 99,795 | $ | 73 | $ | 99,868 | |||||||||||
Net after-tax unrealized gain (loss) | $ | 682 | $ | 44 |
TABLE 25: U.S. AND NON- U.S. LOANS AND LEASES | |||||||
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Institutional: | |||||||
U.S. | $ | 17,598 | $ | 16,237 | |||
Non-U.S. | 3,877 | 2,534 | |||||
Commercial real estate: | |||||||
U.S. | 27 | 28 | |||||
Total loans and leases | $ | 21,502 | $ | 18,799 |
TABLE 26: ALLOWANCE FOR LOAN AND LEASE LOSSES | |||||||
Nine Months Ended September 30, | |||||||
(In millions) | 2016 | 2015 | |||||
Allowance for loan and lease losses: | |||||||
Beginning balance | $ | 46 | $ | 37 | |||
Provision for loan losses | 8 | 11 | |||||
Charge-offs | (3 | ) | — | ||||
Ending balance | $ | 51 | $ | 48 |
TABLE 27: CROSS-BORDER OUTSTANDINGS(1) | |||||||||||
(In millions) | Investment Securities and Other Assets | Derivatives and Securities on Loan | Total Cross-Border Outstandings | ||||||||
September 30, 2016 | |||||||||||
United Kingdom | $ | 19,328 | $ | 1,494 | $ | 20,822 | |||||
Germany | 17,609 | 274 | 17,883 | ||||||||
Japan | 15,955 | 192 | 16,147 | ||||||||
Australia | 7,802 | 244 | 8,046 | ||||||||
Canada | 3,610 | 633 | 4,243 | ||||||||
Luxembourg | 3,366 | 226 | 3,592 | ||||||||
December 31, 2015 | |||||||||||
United Kingdom | $ | 16,965 | $ | 1,589 | $ | 18,554 | |||||
Japan | 17,328 | 87 | 17,415 | ||||||||
Germany | 12,111 | 569 | 12,680 | ||||||||
Australia | 4,035 | 292 | 4,327 | ||||||||
Canada | 3,156 | 1,113 | 4,269 | ||||||||
Luxembourg | 3,034 | 514 | 3,548 |
TABLE 28: CROSS-BORDER OUTSTANDINGS (IRELAND, ITALY, SPAIN AND PORTUGAL) | |||||||||||
(In millions) | Investment Securities and Other Assets | Derivatives and Securities on Loan | Total Cross-Border Outstandings | ||||||||
September 30, 2016 | |||||||||||
Ireland | $ | 887 | $ | 410 | $ | 1,297 | |||||
Italy | 988 | — | 988 | ||||||||
Spain | 301 | 8 | 309 | ||||||||
Portugal | 55 | 1 | 56 | ||||||||
December 31, 2015 | |||||||||||
Ireland | $ | 326 | $ | 678 | $ | 1,004 | |||||
Italy | 460 | — | 460 | ||||||||
Spain | 150 | 12 | 162 | ||||||||
Portugal | 26 | — | 26 |
• | credit and counterparty risk; |
• | liquidity risk, funding and management; |
• | operational risk; |
• | information technology risk; |
• | market risk associated with our trading activities; |
• | market risk associated with our non-trading activities, which we refer to as asset-and-liability management, and which consists primarily of interest-rate risk; |
• | strategic risk; |
• | model risk; and |
• | reputational, fiduciary and business conduct risk. |
TABLE 29: COMPONENTS OF HQLA BY TYPE OF ASSET | ||||||||
(In millions) | September 30, 2016 | December 31, 2015 | ||||||
Excess Central Bank Balances | $ | 68,937 | $ | 66,063 | ||||
U.S. Treasuries | 19,563 | 22,518 | ||||||
Other Investment securities | 15,771 | 16,952 | ||||||
Foreign government | 5,202 | 3,861 | ||||||
Total | $ | 109,473 | $ | 109,394 |
TABLE 30: CLIENT DEPOSITS | |||||||||||||||
Average Balance | |||||||||||||||
September 30, | Nine Months Ended September 30, | ||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Client deposits(1) | $ | 183,900 | $ | 168,757 | $ | 153,612 | $ | 178,313 |
TABLE 31: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS | |||||||||||||||||||||||||||||||
Quarter Ended September 30, 2016 | Quarter Ended June 30, 2016 | As of September 30, 2016 | As of June 30, 2016 | ||||||||||||||||||||||||||||
(In thousands) | Average | Maximum | Minimum | Average | Maximum | Minimum | VaR | VaR | |||||||||||||||||||||||
Global Markets | $ | 7,594 | $ | 14,160 | $ | 4,215 | $ | 6,051 | $ | 12,827 | $ | 3,605 | $ | 9,393 | $ | 5,830 | |||||||||||||||
Global Treasury | 563 | 762 | 399 | 601 | 767 | 433 | 584 | 590 | |||||||||||||||||||||||
Total VaR | $ | 7,497 | $ | 14,048 | $ | 4,124 | $ | 5,986 | $ | 12,838 | $ | 3,410 | $ | 9,746 | $ | 5,706 |
TABLE 32: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS | |||||||||||||||||||||||||||||||
Quarter Ended September 30, 2016 | Quarter Ended June 30, 2016 | As of September 30, 2016 | As of June 30, 2016 | ||||||||||||||||||||||||||||
(In thousands) | Average | Maximum | Minimum | Average | Maximum | Minimum | Stressed VaR | Stressed VaR | |||||||||||||||||||||||
Global Markets | $ | 35,056 | $ | 56,298 | $ | 20,763 | $ | 32,573 | $ | 40,723 | $ | 20,363 | $ | 41,487 | $ | 30,486 | |||||||||||||||
Global Treasury | 11,080 | 15,123 | 7,611 | 12,294 | 17,420 | 8,508 | 10,283 | 12,536 | |||||||||||||||||||||||
Total Stressed VaR | $ | 37,194 | $ | 53,771 | $ | 23,077 | $ | 35,410 | $ | 44,846 | $ | 24,726 | $ | 45,019 | $ | 32,378 |
TABLE 33: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1) | |||||||||||||||||||||||
As of September 30, 2016 | As of June 30, 2016 | ||||||||||||||||||||||
(In thousands) | Foreign Exchange Risk | Interest Rate Risk | Volatility Risk | Foreign Exchange Risk | Interest Rate Risk | Volatility Risk | |||||||||||||||||
By component: | |||||||||||||||||||||||
Global Markets | $ | 7,198 | $ | 4,407 | $ | 160 | $ | 3,272 | $ | 3,009 | $ | — | |||||||||||
Global Treasury | 184 | 576 | — | 161 | 595 | — | |||||||||||||||||
Total VaR | $ | 7,082 | $ | 4,589 | $ | 160 | $ | 3,353 | $ | 3,012 | $ | — |
TABLE 34: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1) | |||||||||||||||||||||||
As of September 30, 2016 | As of June 30, 2016 | ||||||||||||||||||||||
(In thousands) | Foreign Exchange Risk | Interest Rate Risk | Volatility Risk | Foreign Exchange Risk | Interest Rate Risk | Volatility Risk | |||||||||||||||||
By component: | |||||||||||||||||||||||
Global Markets | $ | 23,236 | $ | 47,093 | $ | 183 | $ | 5,704 | $ | 33,817 | $ | — | |||||||||||
Global Treasury | 229 | 10,310 | — | 183 | 12,665 | — | |||||||||||||||||
Total Stressed VaR | $ | 22,837 | $ | 43,256 | $ | 183 | $ | 5,730 | $ | 37,141 | $ | — |
TABLE 35: NIR SENSITIVITY | ||||||||
(In millions) | September 30, 2016 | December 31, 2015 | ||||||
Rate change: | Exposure/Benefit | |||||||
+100 bps shock | $ | 546 | $ | 471 | ||||
–100 bps shock | (232 | ) | (181 | ) | ||||
+100 bps ramp | 240 | 198 | ||||||
–100 bps ramp | (139 | ) | (96 | ) |
TABLE 36: EVE SENSITIVITY | ||||||||||||
September 30, 2016 | December 31, 2015 | December 31, 2015 | ||||||||||
(In millions) | (pro forma) | (as reported) | ||||||||||
Rate change: | Exposure/Benefit | |||||||||||
+200 bps shock | $ | (389 | ) | $ | (791 | ) | $ | (2,355 | ) | |||
–200 bps shock | 27 | (25 | ) | 1,655 |
• | Method 1: Assesses systemic importance based upon five equally-weighted components: size, interconnectedness, complexity, cross-jurisdictional activity and substitutability |
• | Method 2: Alters the calculation from Method 1 by factoring in a wholesale funding score in place of substitutability and applying a 2x multiplier to the sum of the five components |
TABLE 37: BASEL III FINAL RULES TRANSITION ARRANGEMENTS AND MINIMUM RISK-BASED CAPITAL RATIOS(1) (2) | |||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||
Capital conservation buffer (Common Equity Tier 1) | — | % | 0.625 | % | 1.250 | % | 1.875 | % | 2.500 | % | |||||
G-SIB surcharge (CET1)(1) | — | 0.375 | 0.750 | 1.125 | 1.500 | ||||||||||
Minimum common equity tier 1(3) | 4.5 | 5.500 | 6.500 | 7.500 | 8.500 | ||||||||||
Minimum tier 1 capital(3) | 6.0 | 7.000 | 8.000 | 9.000 | 10.000 | ||||||||||
Minimum total capital(3) | 8.0 | 9.000 | 10.000 | 11.000 | 12.000 |
TABLE 38: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS | |||||||||||||||||||||||||||||||||||
State Street | State Street Bank | ||||||||||||||||||||||||||||||||||
(In millions) | Basel III Advanced Approaches September 30, 2016(1) | Basel III Standardized Approach September 30, 2016(2) | Basel III Advanced Approaches December 31, 2015(1) | Basel III Standardized Approach December 31, 2015(2) | Basel III Advanced Approaches September 30, 2016(1) | Basel III Standardized Approach September 30, 2016(2) | Basel III Advanced Approaches December 31, 2015(1) | Basel III Standardized Approach December 31, 2015(2) | |||||||||||||||||||||||||||
Common shareholders' equity: | |||||||||||||||||||||||||||||||||||
Common stock and related surplus | $ | 10,282 | $ | 10,282 | $ | 10,250 | $ | 10,250 | $ | 11,339 | $ | 11,339 | $ | 10,938 | $ | 10,938 | |||||||||||||||||||
Retained earnings | 17,047 | 17,047 | 16,049 | 16,049 | 11,593 | 11,593 | 10,655 | 10,655 | |||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | (1,107 | ) | (1,107 | ) | (1,422 | ) | (1,422 | ) | (880 | ) | (880 | ) | (1,230 | ) | (1,230 | ) | |||||||||||||||||||
Treasury stock, at cost | (7,382 | ) | (7,382 | ) | (6,457 | ) | (6,457 | ) | — | — | — | — | |||||||||||||||||||||||
Total | 18,840 | 18,840 | 18,420 | 18,420 | 22,052 | 22,052 | 20,363 | 20,363 | |||||||||||||||||||||||||||
Regulatory capital adjustments: | |||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities(3) | (6,483 | ) | (6,483 | ) | (5,927 | ) | (5,927 | ) | (6,152 | ) | (6,152 | ) | (5,631 | ) | (5,631 | ) | |||||||||||||||||||
Other adjustments | (88 | ) | (88 | ) | (60 | ) | (60 | ) | (83 | ) | (83 | ) | (85 | ) | (85 | ) | |||||||||||||||||||
Common equity tier 1 capital | 12,269 | 12,269 | 12,433 | 12,433 | 15,817 | 15,817 | 14,647 | 14,647 | |||||||||||||||||||||||||||
Preferred stock | 3,196 | 3,196 | 2,703 | 2,703 | — | — | — | — | |||||||||||||||||||||||||||
Trust preferred capital securities subject to phase-out from tier 1 capital | — | — | 237 | 237 | — | — | — | — | |||||||||||||||||||||||||||
Other adjustments | (58 | ) | (58 | ) | (109 | ) | (109 | ) | — | — | — | — | |||||||||||||||||||||||
Tier 1 capital | 15,407 | 15,407 | 15,264 | 15,264 | 15,817 | 15,817 | 14,647 | 14,647 | |||||||||||||||||||||||||||
Qualifying subordinated long-term debt | 1,259 | 1,259 | 1,358 | 1,358 | 1,270 | 1,270 | 1,371 | 1,371 | |||||||||||||||||||||||||||
Trust preferred capital securities phased out of tier 1 capital | 890 | 890 | 713 | 713 | — | — | — | — | |||||||||||||||||||||||||||
ALLL and other | 3 | 75 | 12 | 66 | 4 | 75 | 8 | 66 | |||||||||||||||||||||||||||
Other adjustments | 1 | 1 | 2 | 2 | — | — | — | — | |||||||||||||||||||||||||||
Total capital | $ | 17,560 | $ | 17,632 | $ | 17,349 | $ | 17,403 | $ | 17,091 | $ | 17,162 | $ | 16,026 | $ | 16,084 | |||||||||||||||||||
Risk-weighted assets: | |||||||||||||||||||||||||||||||||||
Credit risk | $ | 51,916 | $ | 96,668 | $ | 51,733 | $ | 93,515 | $ | 47,609 | $ | 92,165 | $ | 47,677 | $ | 89,164 | |||||||||||||||||||
Operational risk | 44,643 | NA | 43,882 | NA | 44,115 | NA | 43,324 | NA | |||||||||||||||||||||||||||
Market risk(4) | 3,177 | 1,706 | 3,937 | 2,378 | 3,177 | 1,706 | 3,939 | 2,378 | |||||||||||||||||||||||||||
Total risk-weighted assets | $ | 99,736 | $ | 98,374 | $ | 99,552 | $ | 95,893 | $ | 94,901 | $ | 93,871 | $ | 94,940 | $ | 91,542 | |||||||||||||||||||
Adjusted quarterly average assets | $ | 226,093 | $ | 226,093 | $ | 221,880 | $ | 221,880 | $ | 221,508 | $ | 221,508 | $ | 217,358 | $ | 217,358 | |||||||||||||||||||
Capital Ratios(1): | 2016 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(5) | 2015 Minimum Requirements(6) | |||||||||||||||||||||||||||||||||
Common equity tier 1 capital | 5.5 | % | 4.5 | % | 12.3 | % | 12.5 | % | 12.5 | % | 13.0 | % | 16.7 | % | 16.8 | % | 15.4 | % | 16.0 | % | |||||||||||||||
Tier 1 capital | 7.0 | 6.0 | 15.4 | 15.7 | 15.3 | 15.9 | 16.7 | 16.8 | 15.4 | 16.0 | |||||||||||||||||||||||||
Total capital | 9.0 | 8.0 | 17.6 | 17.9 | 17.4 | 18.1 | 18.0 | 18.3 | 16.9 | 17.6 | |||||||||||||||||||||||||
Tier 1 leverage | 4.0 | 4.0 | 6.8 | 6.8 | 6.9 | 6.9 | 7.1 | 7.1 | 6.7 | 6.7 |
TABLE 39: CAPITAL ROLL-FORWARD | ||||||||||||
State Street | ||||||||||||
(In millions) | Basel III Advanced Approaches September 30, 2016 | Basel III Standardized Approach September 30, 2016 | Basel III Advanced Approaches December 31, 2015 | Basel III Standardized Approach December 31, 2015 | ||||||||
Common equity tier 1 capital: | ||||||||||||
Common equity tier 1 capital balance, beginning of period | $ | 12,433 | $ | 12,433 | $ | 13,327 | $ | 13,327 | ||||
Net income | 1,550 | 1,550 | 1,980 | 1,980 | ||||||||
Changes in treasury stock, at cost | (925 | ) | (925 | ) | (1,299 | ) | (1,299 | ) | ||||
Dividends declared | (551 | ) | (551 | ) | (666 | ) | (666 | ) | ||||
Goodwill and other intangible assets, net of associated deferred tax liabilities | (556 | ) | (556 | ) | (58 | ) | (58 | ) | ||||
Effect of certain items in accumulated other comprehensive income (loss) | 315 | 315 | (780 | ) | (780 | ) | ||||||
Other adjustments | 3 | 3 | (71 | ) | (71 | ) | ||||||
Changes in common equity tier 1 capital | (164 | ) | (164 | ) | (894 | ) | (894 | ) | ||||
Common equity tier 1 capital balance, end of period | 12,269 | 12,269 | 12,433 | 12,433 | ||||||||
Additional tier 1 capital: | ||||||||||||
Tier 1 capital balance, beginning of period | 15,264 | 15,264 | 15,618 | 15,618 | ||||||||
Change in common equity tier 1 capital | (164 | ) | (164 | ) | (894 | ) | (894 | ) | ||||
Net issuance of preferred stock | 493 | 493 | 742 | 742 | ||||||||
Trust preferred capital securities phased out of tier 1 capital | (237 | ) | (237 | ) | (238 | ) | (238 | ) | ||||
Other adjustments | 51 | 51 | 36 | 36 | ||||||||
Changes in tier 1 capital | 143 | 143 | (354 | ) | (354 | ) | ||||||
Tier 1 capital balance, end of period | 15,407 | 15,407 | 15,264 | 15,264 | ||||||||
Tier 2 capital: | ||||||||||||
Tier 2 capital balance, beginning of period | 2,085 | 2,139 | 2,097 | 2,097 | ||||||||
Net issuance and changes in long-term debt qualifying as tier 2 | (99 | ) | (99 | ) | (260 | ) | (260 | ) | ||||
Trust preferred capital securities phased into tier 2 capital | 177 | 177 | 238 | 238 | ||||||||
Changes in ALLL and other | (9 | ) | 9 | 12 | 66 | |||||||
Change in other adjustments | (1 | ) | (1 | ) | (2 | ) | (2 | ) | ||||
Changes in tier 2 capital | 68 | 86 | (12 | ) | 42 | |||||||
Tier 2 capital balance, end of period | 2,153 | 2,225 | 2,085 | 2,139 | ||||||||
Total capital: | ||||||||||||
Total capital balance, beginning of period | 17,349 | 17,403 | 17,715 | 17,715 | ||||||||
Changes in tier 1 capital | 143 | 143 | (354 | ) | (354 | ) | ||||||
Changes in tier 2 capital | 68 | 86 | (12 | ) | 42 | |||||||
Total capital balance, end of period | $ | 17,560 | $ | 17,632 | $ | 17,349 | $ | 17,403 |
TABLE 40: ADVANCED APPROACHES RWA ROLL-FORWARD | ||||||||
State Street | ||||||||
(In millions) | Nine Months Ended September 30, 2016 | Year Ended December 31, 2015 | ||||||
Total risk-weighted assets, beginning of period | $ | 99,552 | $ | 107,827 | ||||
Changes in credit risk-weighted assets: | ||||||||
Net increase (decrease) in investment securities-wholesale | (629 | ) | 597 | |||||
Net increase (decrease) in loans and leases | 492 | (944 | ) | |||||
Net increase (decrease) in securitization exposures | (2,588 | ) | (9,569 | ) | ||||
Net increase (decrease) in repo-style transaction exposures | 475 | 842 | ||||||
Net increase (decrease) in OTC derivatives exposures | 296 | (1,317 | ) | |||||
Net increase (decrease) in all other(1) | 2,137 | (4,750 | ) | |||||
Net increase (decrease) in credit risk-weighted assets | 183 | (15,141 | ) | |||||
Net increase (decrease) in credit valuation adjustment | (88 | ) | (618 | ) | ||||
Net increase (decrease) in market risk-weighted assets | (672 | ) | (532 | ) | ||||
Net increase (decrease) in operational risk-weighted assets | 761 | 8,016 | ||||||
Total risk-weighted assets, end of period | $ | 99,736 | $ | 99,552 |
TABLE 41: STANDARDIZED APPROACH RWA ROLL-FORWARD | ||||||||
State Street | ||||||||
(In millions) | Nine Months Ended September 30, 2016 | Year Ended December 31, 2015 | ||||||
Total estimated risk-weighted assets, beginning of period (1) | $ | 95,893 | $ | 125,011 | ||||
Changes in credit risk-weighted assets: | ||||||||
Net increase (decrease) in investment securities- wholesale | (1,038 | ) | (2,579 | ) | ||||
Net increase (decrease) in loans and leases | 2,339 | (539 | ) | |||||
Net increase (decrease) in securitization exposures | (2,589 | ) | (9,569 | ) | ||||
Net increase (decrease) in repo-style transaction exposures | 4,409 | (7,535 | ) | |||||
Net increase (decrease) in OTC derivatives exposures | (1,617 | ) | (4,007 | ) | ||||
Net increase (decrease) in all other(2) | 1,649 | (4,357 | ) | |||||
Net increase (decrease) in credit risk-weighted assets | 3,153 | (28,586 | ) | |||||
Net increase (decrease) in market risk-weighted assets | (672 | ) | (532 | ) | ||||
Total risk-weighted assets, end of period | $ | 98,374 | $ | 95,893 |
TABLE 42: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS - STATE STREET | |||||||||||||||||||||||||||
September 30, 2016 (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 | |||||||||||||||||||||
Total common shareholders' equity | $ | 18,840 | $ | 113 | $ | 18,953 | $ | 18,840 | $ | 113 | $ | 18,953 | |||||||||||||||
Regulatory capital adjustments: | |||||||||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities | (6,483 | ) | (592 | ) | (7,075 | ) | (6,483 | ) | (592 | ) | (7,075 | ) | |||||||||||||||
Other adjustments | (88 | ) | (58 | ) | (146 | ) | (88 | ) | (58 | ) | (146 | ) | |||||||||||||||
Common equity tier 1 capital | 12,269 | (537 | ) | 11,732 | 12,269 | (537 | ) | 11,732 | |||||||||||||||||||
Additional tier 1 capital: | |||||||||||||||||||||||||||
Preferred stock | 3,196 | — | 3,196 | 3,196 | — | 3,196 | |||||||||||||||||||||
Trust preferred capital securities | — | — | — | — | — | — | |||||||||||||||||||||
Other adjustments | (58 | ) | 58 | — | (58 | ) | 58 | — | |||||||||||||||||||
Additional tier 1 capital | 3,138 | 58 | 3,196 | 3,138 | 58 | 3,196 | |||||||||||||||||||||
Tier 1 capital | 15,407 | (479 | ) | 14,928 | 15,407 | (479 | ) | 14,928 | |||||||||||||||||||
Tier 2 capital: | |||||||||||||||||||||||||||
Qualifying subordinated long-term debt | 1,259 | — | 1,259 | 1,259 | — | 1,259 | |||||||||||||||||||||
Trust preferred capital securities | 890 | (45 | ) | 845 | 890 | (45 | ) | 845 | |||||||||||||||||||
ALLL and other | 3 | — | 3 | 75 | — | 75 | |||||||||||||||||||||
Other | 1 | (1 | ) | — | 1 | (1 | ) | — | |||||||||||||||||||
Tier 2 capital | 2,153 | (46 | ) | 2,107 | 2,225 | (46 | ) | 2,179 | |||||||||||||||||||
Total capital | $ | 17,560 | $ | (525 | ) | $ | 17,035 | $ | 17,632 | $ | (525 | ) | $ | 17,107 | |||||||||||||
Risk weighted assets | $ | 99,736 | $ | (528 | ) | $ | 99,208 | $ | 98,374 | $ | (497 | ) | $ | 97,877 | |||||||||||||
Adjusted average assets | 226,093 | (297 | ) | 225,796 | 226,093 | (297 | ) | 225,796 | |||||||||||||||||||
Total assets for SLR | 250,991 | (297 | ) | 250,694 | 250,991 | (297 | ) | 250,694 | |||||||||||||||||||
Capital ratios(1): | Minimum Requirement | Minimum Requirement Including Capital Conservation Buffer and G-SIB Surcharge 2016 | Minimum Requirement Including Capital Conservation Buffer and G-SIB Surcharge 2019 | ||||||||||||||||||||||||
Common equity tier 1 capital(2) | 4.5% | 5.5% | 8.5% | 12.3 | % | 11.8 | % | 12.5 | % | 12.0 | % | ||||||||||||||||
Tier 1 capital | 6.0 | 7.0 | 10.0 | 15.4 | 15.0 | 15.7 | 15.3 | ||||||||||||||||||||
Total capital | 8.0 | 9.0 | 12.0 | 17.6 | 17.2 | 17.9 | 17.5 | ||||||||||||||||||||
Tier 1 leverage | 4.0 | NA | NA | 6.8 | 6.6 | 6.8 | 6.6 | ||||||||||||||||||||
Supplementary leverage | 5.0 | NA | NA | 6.1 | 6.0 | 6.1 | 6.0 |
TABLE 43: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS - STATE STREET BANK | |||||||||||||||||||||||||||
September 30, 2016 (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 | |||||||||||||||||||||
Total common shareholders' equity | $ | 22,052 | $ | 122 | $ | 22,174 | $ | 22,052 | $ | 122 | $ | 22,174 | |||||||||||||||
Regulatory capital adjustments: | |||||||||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities | (6,152 | ) | (565 | ) | (6,717 | ) | (6,152 | ) | (565 | ) | (6,717 | ) | |||||||||||||||
Other adjustments | (83 | ) | — | (83 | ) | (83 | ) | — | (83 | ) | |||||||||||||||||
Common equity tier 1 capital | 15,817 | (443 | ) | 15,374 | 15,817 | (443 | ) | 15,374 | |||||||||||||||||||
Additional tier 1 capital: | |||||||||||||||||||||||||||
Preferred stock | — | — | — | — | — | — | |||||||||||||||||||||
Trust preferred capital securities | — | — | — | — | — | — | |||||||||||||||||||||
Other adjustments | — | — | — | — | — | — | |||||||||||||||||||||
Additional tier 1 capital | — | — | — | — | — | — | |||||||||||||||||||||
Tier 1 capital | 15,817 | (443 | ) | 15,374 | 15,817 | (443 | ) | 15,374 | |||||||||||||||||||
Tier 2 capital: | |||||||||||||||||||||||||||
Qualifying subordinated long-term debt | 1,270 | — | 1,270 | 1,270 | — | 1,270 | |||||||||||||||||||||
Trust preferred capital securities | — | — | — | — | — | — | |||||||||||||||||||||
ALLL and other | 4 | — | 4 | 75 | — | 75 | |||||||||||||||||||||
Other | — | — | — | — | — | — | |||||||||||||||||||||
Tier 2 capital | 1,274 | — | 1,274 | 1,345 | — | 1,345 | |||||||||||||||||||||
Total capital | $ | 17,091 | $ | (443 | ) | $ | 16,648 | $ | 17,162 | $ | (443 | ) | $ | 16,719 | |||||||||||||
Risk weighted assets | $ | 94,901 | $ | (573 | ) | $ | 94,328 | $ | 93,871 | $ | (540 | ) | $ | 93,331 | |||||||||||||
Adjusted average assets | 221,508 | (274 | ) | 221,234 | 221,508 | (274 | ) | 221,234 | |||||||||||||||||||
Total assets for SLR | 246,306 | (274 | ) | 246,032 | 246,306 | (274 | ) | 246,032 | |||||||||||||||||||
Capital ratios(1): | Minimum Requirement | Minimum Requirement Including Capital Conservation Buffer and G-SIB Surcharge 2016 | Minimum Requirement Including Capital Conservation Buffer and G-SIB Surcharge 2019 | ||||||||||||||||||||||||
Common equity tier 1 capital(2) | 4.5% | 5.5% | 8.5% | 16.7 | % | 16.3 | % | 16.8 | % | 16.5 | % | ||||||||||||||||
Tier 1 capital | 6.0 | 7.0 | 10.0 | 16.7 | 16.3 | 16.8 | 16.5 | ||||||||||||||||||||
Total capital | 8.0 | 9.0 | 12.0 | 18.0 | 17.7 | 18.3 | 17.9 | ||||||||||||||||||||
Tier 1 leverage | 4.0 | NA | NA | 7.1 | 6.9 | 7.1 | 6.9 | ||||||||||||||||||||
Supplementary leverage | 6.0 | NA | NA | 6.4 | 6.2 | 6.4 | 6.2 |
TABLE 44: SUPPLEMENTARY LEVERAGE RATIO | ||||||||||||
September 30, 2016 | Transitional SLR | Phase-In Provisions | Fully Phased-in Pro Forma SLR Estimate | |||||||||
(Dollars in millions, except as otherwise noted) | ||||||||||||
State Street: | ||||||||||||
Tier 1 capital | $ | 15,407 | $ | (479 | ) | $ | 14,928 | |||||
On- and off-balance sheet leverage exposure | 257,179 | — | 257,179 | |||||||||
Less: regulatory deductions | (6,188 | ) | (297 | ) | (6,485 | ) | ||||||
Total assets for SLR | $ | 250,991 | $ | (297 | ) | $ | 250,694 | |||||
Supplementary leverage ratio | 6.1 | % | (0.1 | )% | 6.0 | % | ||||||
State Street Bank: | ||||||||||||
Tier 1 capital | $ | 15,817 | $ | (443 | ) | $ | 15,374 | |||||
On- and off-balance sheet leverage exposure | 252,104 | — | 252,104 | |||||||||
Less: regulatory deductions | (5,798 | ) | (274 | ) | (6,072 | ) | ||||||
Total assets for SLR | $ | 246,306 | $ | (274 | ) | $ | 246,032 | |||||
Supplementary leverage ratio | 6.4 | % | (0.2 | )% | 6.2 | % |
TABLE 45: PREFERRED STOCK ISSUED AND OUTSTANDING | ||||||||||||||||||||
Issuance Date | Depositary Shares Issued | Ownership Interest per Depositary Share | Liquidation Preference Per Share | Liquidation Preference Per Depositary Share | Net Proceeds of Offering (In millions) | Redemption Date(1) | ||||||||||||||
Preferred Stock(2): | ||||||||||||||||||||
Series C | August 2012 | 20,000,000 | 1/4,000th | $ | 100,000 | $ | 25 | $ | 488 | September 15, 2017 | ||||||||||
Series D | February 2014 | 30,000,000 | 1/4,000th | 100,000 | 25 | 742 | March 15, 2024 | |||||||||||||
Series E | November 2014 | 30,000,000 | 1/4,000th | 100,000 | 25 | 728 | December 15, 2019 | |||||||||||||
Series F | May 2015 | 750,000 | 1/100th | 100,000 | 1,000 | 742 | September 15, 2020 | |||||||||||||
Series G | April 2016 | 20,000,000 | 1/4,000th | 100,000 | 25 | 493 | March 15, 2026 |
TABLE 46: PREFERRED STOCK DIVIDENDS QUARTERS TO DATE | |||||||||||||||||||||||
Quarters Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||
Dividends Declared per Share | Dividends Declared per Depositary Share | Total (In millions)(1) | Dividends Declared per Share | Dividends Declared per Depositary Share | Total (In millions) | ||||||||||||||||||
Preferred Stock: | |||||||||||||||||||||||
Series C | $ | 1,313 | $ | 0.33 | $ | 6 | $ | 1,313 | $ | 0.33 | $ | 7 | |||||||||||
Series D | 1,475 | 0.37 | 11 | 1,475 | 0.37 | 11 | |||||||||||||||||
Series E | 1,500 | 0.38 | 11 | 1,500 | 0.38 | 11 | |||||||||||||||||
Series F | 2,625 | 26.25 | 20 | 1,663 | 16.63 | 12 | |||||||||||||||||
Series G | 1,338 | 0.33 | 7 | — | — | — | |||||||||||||||||
Total | $ | 55 | $ | 41 |
TABLE 47: PREFERRED STOCK DIVIDENDS YEAR TO DATE | |||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||
Dividends Declared per Share | Dividends Declared per Depositary Share | Total (In millions) | Dividends Declared per Share | Dividends Declared per Depositary Share | Total (In millions) | ||||||||||||||||||
Preferred Stock: | |||||||||||||||||||||||
Series C | $ | 3,939 | $ | 0.99 | $ | 19 | $ | 3,939 | $ | 0.99 | $ | 20 | |||||||||||
Series D | 4,425 | 1.11 | 33 | 4,425 | 1.11 | 33 | |||||||||||||||||
Series E | 4,500 | 1.14 | 33 | 4,833 | 1.22 | 36 | |||||||||||||||||
Series F | 5,250 | 52.50 | 40 | 1,663 | 16.63 | 12 | |||||||||||||||||
Series G | 2,289 | 0.57 | 12 | — | — | — | |||||||||||||||||
Total | $ | 137 | $ | 101 |
TABLE 48: SHARES REPURCHASED | |||||||||||||||||||||
Quarter Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||
Shares Purchased (In millions) | Average Cost per Share | Total Purchased (In millions) | Shares Purchased (In millions) | Average Cost per Share | Total Purchased (In millions) | ||||||||||||||||
2015 Program | — | $ | — | $ | — | 12.1 | $ | 58.83 | $ | 715 | |||||||||||
2016 Program | 4.7 | 69.03 | 325 | 4.7 | 69.03 | 325 | |||||||||||||||
Total | 4.7 | $ | 69.03 | $ | 325 | 16.8 | $ | 61.68 | $ | 1,040 |
TABLE 49: COMMON STOCK DIVIDENDS | |||||||||||||||||||||||||||||||
Quarters Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
Dividends Declared per Share | Total (In millions) | Dividends Declared per Share | Total (In millions) | Dividends Declared per Share | Total (In millions) | Dividends Declared per Share | Total (In millions) | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||||||
Common Stock | $ | 0.38 | $ | 147 | $ | 0.34 | $ | 138 | $ | 1.06 | $ | 414 | $ | 0.98 | $ | 401 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(Dollars in millions, except per share amounts) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Fee revenue: | |||||||||||||||
Servicing fees | $ | 1,303 | $ | 1,289 | $ | 3,784 | $ | 3,876 | |||||||
Management fees | 368 | 287 | 931 | 892 | |||||||||||
Trading services | 267 | 294 | 806 | 899 | |||||||||||
Securities finance | 136 | 113 | 426 | 369 | |||||||||||
Processing fees and other | 5 | 120 | 155 | 198 | |||||||||||
Total fee revenue | 2,079 | 2,103 | 6,102 | 6,234 | |||||||||||
Net interest revenue: | |||||||||||||||
Interest revenue | 647 | 614 | 1,896 | 1,885 | |||||||||||
Interest expense | 110 | 101 | 326 | 291 | |||||||||||
Net interest revenue | 537 | 513 | 1,570 | 1,594 | |||||||||||
Gains (losses) related to investment securities, net: | |||||||||||||||
Net gains (losses) from sales of available-for-sale securities | 6 | (2 | ) | 7 | (5 | ) | |||||||||
Losses from other-than-temporary impairment | (2 | ) | — | (2 | ) | (1 | ) | ||||||||
Gains (losses) related to investment securities, net | 4 | (2 | ) | 5 | (6 | ) | |||||||||
Total revenue | 2,620 | 2,614 | 7,677 | 7,822 | |||||||||||
Provision for loan losses | — | 5 | 8 | 11 | |||||||||||
Expenses: | |||||||||||||||
Compensation and employee benefits | 1,013 | 1,051 | 3,109 | 3,122 | |||||||||||
Information systems and communications | 285 | 265 | 827 | 761 | |||||||||||
Transaction processing services | 200 | 201 | 601 | 599 | |||||||||||
Occupancy | 107 | 110 | 331 | 332 | |||||||||||
Acquisition and restructuring costs | 42 | 10 | 166 | 19 | |||||||||||
Professional services | 95 | 136 | 270 | 368 | |||||||||||
Amortization of other intangible assets | 55 | 48 | 153 | 147 | |||||||||||
Other | 187 | 141 | 437 | 845 | |||||||||||
Total expenses | 1,984 | 1,962 | 5,894 | 6,193 | |||||||||||
Income before income tax expense | 636 | 647 | 1,775 | 1,618 | |||||||||||
Income tax expense | 72 | 67 | 226 | 215 | |||||||||||
Net income (loss) from non-controlling interest | (1 | ) | 1 | 1 | 1 | ||||||||||
Net income | $ | 563 | $ | 581 | $ | 1,550 | $ | 1,404 | |||||||
Net income available to common shareholders | $ | 507 | $ | 539 | $ | 1,411 | $ | 1,301 | |||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 1.31 | $ | 1.33 | $ | 3.58 | $ | 3.18 | |||||||
Diluted | 1.29 | 1.31 | 3.54 | 3.13 | |||||||||||
Average common shares outstanding (in thousands): | |||||||||||||||
Basic | 388,358 | 406,612 | 393,959 | 409,816 | |||||||||||
Diluted | 393,212 | 412,167 | 398,413 | 415,772 | |||||||||||
Cash dividends declared per common share | $ | .38 | $ | .34 | $ | 1.06 | $ | .98 |
Three Months Ended September 30, | |||||||
(In millions) | 2016 | 2015 | |||||
Net income | $ | 563 | $ | 581 | |||
Other comprehensive income (loss), net of related taxes: | |||||||
Foreign currency translation, net of related taxes of ($14) and ($51), respectively | 38 | (145 | ) | ||||
Net unrealized gains (losses) on available-for-sale securities, net of reclassification adjustment and net of related taxes of ($11) and $27, respectively | (13 | ) | 37 | ||||
Net unrealized gains (losses) on available-for-sale securities designated in fair value hedges, net of related taxes of $9 and ($10), respectively | 13 | (16 | ) | ||||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of $1 and $2, respectively | 2 | 4 | |||||
Net unrealized gains (losses) on cash flow hedges, net of related taxes of ($27) and $17, respectively | (39 | ) | 26 | ||||
Net unrealized gains (losses) on retirement plans, net of related taxes of ($1) and $3, respectively | 3 | 4 | |||||
Other comprehensive income (loss) | 4 | (90 | ) | ||||
Total comprehensive income | $ | 567 | $ | 491 | |||
Nine Months Ended September 30, | |||||||
(In millions) | 2016 | 2015 | |||||
Net income | $ | 1,550 | $ | 1,404 | |||
Other comprehensive income (loss), net of related taxes: | |||||||
Foreign currency translation, net of related taxes of ($24) and ($76), respectively | 132 | (555 | ) | ||||
Net unrealized gains (losses) on available-for-sale securities, net of reclassification adjustment and net of related taxes of $347 and ($48), respectively | 533 | (106 | ) | ||||
Net unrealized gains (losses) on available-for-sale securities designated in fair value hedges, net of related taxes of ($6) and ($5), respectively | (9 | ) | (9 | ) | |||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of $3 and $6, respectively | 5 | 11 | |||||
Net unrealized gains (losses) on cash flow hedges, net of related taxes of ($144) and $39, respectively | (213 | ) | 46 | ||||
Net unrealized gains (losses) on retirement plans, net of related taxes of $2 and $4, respectively | 1 | 19 | |||||
Other comprehensive income (loss) | 449 | (594 | ) | ||||
Total comprehensive income | $ | 1,999 | $ | 810 |
September 30, 2016 | December 31, 2015 | ||||||
(Dollars in millions, except per share amounts) | (Unaudited) | ||||||
Assets: | |||||||
Cash and due from banks | $ | 3,490 | $ | 1,207 | |||
Interest-bearing deposits with banks | 79,090 | 75,338 | |||||
Securities purchased under resale agreements | 2,442 | 3,404 | |||||
Trading account assets | 1,063 | 849 | |||||
Investment securities available-for-sale | 71,520 | 70,070 | |||||
Investment securities held-to-maturity (fair value of $28,780 and $29,798) | 28,368 | 29,952 | |||||
Loans and leases (less allowance for losses of $51 and $46) | 21,451 | 18,753 | |||||
Premises and equipment (net of accumulated depreciation of $3,271 and $4,820) | 2,042 | 1,894 | |||||
Accrued interest and fees receivable | 2,594 | 2,346 | |||||
Goodwill | 5,911 | 5,671 | |||||
Other intangible assets | 1,849 | 1,768 | |||||
Other assets | 36,320 | 33,903 | |||||
Total assets | $ | 256,140 | $ | 245,155 | |||
Liabilities: | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 60,545 | $ | 65,800 | |||
Interest-bearing—U.S. | 33,767 | 29,958 | |||||
Interest-bearing—non-U.S. | 104,454 | 95,869 | |||||
Total deposits | 198,766 | 191,627 | |||||
Securities sold under repurchase agreements | 4,364 | 4,499 | |||||
Federal funds purchased | 28 | 6 | |||||
Other short-term borrowings | 1,385 | 1,748 | |||||
Accrued expenses and other liabilities | 17,582 | 14,643 | |||||
Long-term debt | 11,834 | 11,497 | |||||
Total liabilities | 233,959 | 224,020 | |||||
Commitments, guarantees and contingencies (Notes 9 and 10) | |||||||
Shareholders’ equity: | |||||||
Preferred stock, no par, 3,500,000 shares authorized: | |||||||
Series C, 5,000 shares issued and outstanding | 491 | 491 | |||||
Series D, 7,500 shares issued and outstanding | 742 | 742 | |||||
Series E, 7,500 shares issued and outstanding | 728 | 728 | |||||
Series F, 7,500 shares issued and outstanding | 742 | 742 | |||||
Series G, 5,000 shares issued and outstanding | 493 | — | |||||
Common stock, $1 par, 750,000,000 shares authorized: | |||||||
503,879,642 and 503,879,642 shares issued | 504 | 504 | |||||
Surplus | 9,778 | 9,746 | |||||
Retained earnings | 17,047 | 16,049 | |||||
Accumulated other comprehensive income (loss) | (993 | ) | (1,442 | ) | |||
Treasury stock, at cost (118,309,341 and 104,227,647 shares) | (7,382 | ) | (6,457 | ) | |||
Total shareholders’ equity | 22,150 | 21,103 | |||||
Non-controlling interest-equity | 31 | 32 | |||||
Total equity | 22,181 | 21,135 | |||||
Total liabilities and equity | $ | 256,140 | $ | 245,155 |
(Dollars in millions, except per share amounts, shares in thousands) | PREFERRED STOCK | COMMON STOCK | Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | TREASURY STOCK | Total | ||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
Balance as of December 31, 2014 | $ | 1,961 | 503,880 | $ | 504 | $ | 9,791 | $ | 14,737 | $ | (507 | ) | 88,685 | $ | (5,158 | ) | $ | 21,328 | |||||||||||||||
Net income | 1,404 | 1,404 | |||||||||||||||||||||||||||||||
Other comprehensive loss | (594 | ) | (594 | ) | |||||||||||||||||||||||||||||
Preferred stock issued | 742 | 742 | |||||||||||||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||||||||
Common stock - $.98 per share | (401 | ) | (401 | ) | |||||||||||||||||||||||||||||
Preferred stock | (101 | ) | (101 | ) | |||||||||||||||||||||||||||||
Common stock acquired | 15,552 | (1,170 | ) | (1,170 | ) | ||||||||||||||||||||||||||||
Common stock awards and options exercised, including income tax benefit of $57 | (45 | ) | (4,148 | ) | 185 | 140 | |||||||||||||||||||||||||||
Other | (4 | ) | (1 | ) | (2 | ) | (5 | ) | |||||||||||||||||||||||||
Balance as of September 30, 2015 | $ | 2,703 | 503,880 | $ | 504 | $ | 9,742 | $ | 15,638 | $ | (1,101 | ) | 100,087 | $ | (6,143 | ) | $ | 21,343 | |||||||||||||||
Balance as of December 31, 2015 | $ | 2,703 | 503,880 | $ | 504 | $ | 9,746 | $ | 16,049 | $ | (1,442 | ) | 104,228 | $ | (6,457 | ) | $ | 21,103 | |||||||||||||||
Net income | 1,550 | 1,550 | |||||||||||||||||||||||||||||||
Other comprehensive income | 449 | 449 | |||||||||||||||||||||||||||||||
Preferred stock issued | 493 | 493 | |||||||||||||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||||||||
Common stock - $1.06 per share | (414 | ) | (414 | ) | |||||||||||||||||||||||||||||
Preferred stock | (137 | ) | (137 | ) | |||||||||||||||||||||||||||||
Common stock acquired | 16,861 | (1,040 | ) | (1,040 | ) | ||||||||||||||||||||||||||||
Common stock awards and options exercised, including income tax benefit of $6 | 32 | (2,765 | ) | 114 | 146 | ||||||||||||||||||||||||||||
Other | (1 | ) | (15 | ) | 1 | — | |||||||||||||||||||||||||||
Balance as of September 30, 2016 | $ | 3,196 | 503,880 | $ | 504 | $ | 9,778 | $ | 17,047 | $ | (993 | ) | 118,309 | $ | (7,382 | ) | $ | 22,150 |
Nine Months Ended September 30, | |||||||
(In millions) | 2016 | 2015 | |||||
Operating Activities: | |||||||
Net income | $ | 1,550 | $ | 1,404 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Deferred income tax expense (benefit) | 31 | (12 | ) | ||||
Amortization of other intangible assets | 153 | 147 | |||||
Other non-cash adjustments for depreciation, amortization and accretion, net | 517 | 444 | |||||
(Gains) losses related to investment securities, net | (5 | ) | 6 | ||||
Change in trading account assets, net | (214 | ) | (299 | ) | |||
Change in accrued interest and fees receivable, net | (248 | ) | (29 | ) | |||
Change in collateral deposits, net | (615 | ) | (8,077 | ) | |||
Change in unrealized losses on foreign exchange derivatives, net | 853 | 434 | |||||
Change in other assets, net | (457 | ) | 687 | ||||
Change in accrued expenses and other liabilities, net | 399 | 128 | |||||
Other, net | 312 | 385 | |||||
Net cash provided by (used in) operating activities | 2,276 | (4,782 | ) | ||||
Investing Activities: | |||||||
Net (increase) decrease in interest-bearing deposits with banks | (3,752 | ) | 25,162 | ||||
Net decrease (increase) in securities purchased under resale agreements | 962 | (6,765 | ) | ||||
Proceeds from sales of available-for-sale securities | 424 | 12,417 | |||||
Proceeds from maturities of available-for-sale securities | 21,564 | 20,258 | |||||
Purchases of available-for-sale securities | (22,625 | ) | (19,494 | ) | |||
Proceeds from maturities of held-to-maturity securities | 7,184 | 2,835 | |||||
Purchases of held-to-maturity securities | (5,581 | ) | (2,962 | ) | |||
Net increase in loans and leases | (2,678 | ) | (837 | ) | |||
Business acquisitions | (437 | ) | — | ||||
Purchases of equity investments and other long-term assets | (265 | ) | (353 | ) | |||
Purchases of premises and equipment, net | (477 | ) | (543 | ) | |||
Other, net | 129 | 75 | |||||
Net cash (used in) provided by investing activities | (5,552 | ) | 29,793 | ||||
Financing Activities: | |||||||
Net (decrease) increase in time deposits | 9,077 | (5,933 | ) | ||||
Net decrease in all other deposits | (1,938 | ) | (16,740 | ) | |||
Net decrease in other short-term borrowings | (476 | ) | (1,781 | ) | |||
Proceeds from issuance of long-term debt, net of issuance costs | 1,492 | 2,995 | |||||
Payments for long-term debt and obligations under capital leases | (1,430 | ) | (914 | ) | |||
Proceeds from issuance of preferred stock, net | 493 | 742 | |||||
Proceeds from exercises of common stock options | — | 4 | |||||
Purchases of common stock | (1,029 | ) | (961 | ) | |||
Excess tax benefit related to stock-based compensation | 6 | 60 | |||||
Repurchases of common stock for employee tax withholding | (95 | ) | (189 | ) | |||
Payments for cash dividends | (541 | ) | (489 | ) | |||
Net cash provided by (used in) financing activities | 5,559 | (23,206 | ) | ||||
Net increase | 2,283 | 1,805 | |||||
Cash and due from banks at beginning of period | 1,207 | 1,855 | |||||
Cash and due from banks at end of period | $ | 3,490 | $ | 3,660 | |||
Note 13. Regulatory Capital | |
Relevant standards that were recently issued but not yet adopted | |||
Standard | Description | Date of Adoption | Effects on the financial statements or other significant matters |
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) | The standard, and its related amendments, will replace existing revenue recognition standards and significantly expand the disclosure requirements for revenue arrangements with customers. It may be adopted either retrospectively or on a modified retrospective basis to new contracts and existing contracts with remaining performance obligations as of the effective date. | January 1, 2018 | We are currently assessing the impact of the standard and its amendments on our consolidated financial statements and evaluating the alternative methods of adoption. |
ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities | The standard makes limited amendments to the guidance on the classification and measurement of financial instruments. Under the new standard, all equity securities will be measured at fair value through earnings with certain exceptions, including investments accounted for under the equity method of accounting. In addition, the FASB clarified the guidance related to valuation allowance assessments when recognizing deferred tax assets on unrealized losses on available-for-sale debt securities. This standard must be applied on a retrospective basis. | January 1, 2018 | We are currently assessing the impact of the standard on our consolidated financial statements. |
ASU 2016-02, Leases (Topic 842) | The standard represents a wholesale change to lease accounting and requires all leases, other than short-term leases, to be reported on balance sheet through recognition of a right-of-use asset and a corresponding liability for future lease obligations. The standard also requires extensive disclosures for assets, expenses, and cash flows associated with leases, as well as a maturity analysis of lease liabilities. | January 1, 2019 | We are currently assessing the impact of the standard on our consolidated financial statements, but we anticipate an increase in assets and liabilities due to the recognition of the required right-of-use asset and corresponding liability for all lease obligations that are currently classified as operating leases, as well as additional disclosure on our leases. |
ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (a consensus of the Emerging Issues Task Force) | The standard clarifies that a change in the counterparty to a derivative instrument that is designated as a hedging instrument would result in dedesignation of the hedging relationship. This may be applied on a prospective or modified retrospective basis. | January 1, 2017 | Our adoption of the standard will not have a material impact on our consolidated financial statements. |
ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting | The standard simplifies the guidance related to stock compensation, including the accounting for income taxes by eliminating the windfall pool and requiring recognition of all excess tax benefits and deficiencies within the statement of income, as well as changes in the accounting for forfeitures, classification in the statement of cash flows and tax withholding requirements. | January 1, 2017 | We anticipate increased income statement volatility due to the recognition of all excess tax benefits and deficiencies within the statement of income. We do not anticipate early adoption of this standard. |
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | The standard requires all expected credit losses for financial assets held at the reporting date to be measured based on historical experience, current conditions, and reasonable supportable forecasts. The standard will utilize forward-looking information to determine credit loss estimates. It will require immediate recognition of the full amount of credit losses that are expected for certain financial assets. | January 1, 2020 | We are currently assessing the impact of the standard on our consolidated financial statements. |
ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) | The standard amends the statement of cash flow guidance to address specific cash flow issues with the objective of reducing the existing diversity in practice. | January 1, 2018 | We are currently assessing the impact of the standard on our consolidated financial statements, however based on our current presentation we do not anticipate a significant change to our financial statement presentation of the statement of cash flows. |
Fair-Value Measurements on a Recurring Basis | |||||||||||||||||||
as of September 30, 2016 | |||||||||||||||||||
(In millions) | Quoted Market Prices in Active Markets (Level 1) | Pricing Methods with Significant Observable Market Inputs (Level 2) | Pricing Methods with Significant Unobservable Market Inputs (Level 3) | Impact of Netting(1) | Total Net Carrying Value in Consolidated Statement of Condition | ||||||||||||||
Assets: | |||||||||||||||||||
Trading account assets: | |||||||||||||||||||
U.S. government securities | $ | 57 | $ | — | $ | — | $ | 57 | |||||||||||
Non-U.S. government securities | 425 | — | — | 425 | |||||||||||||||
Other | 44 | 537 | — | 581 | |||||||||||||||
Total trading account assets | 526 | 537 | — | 1,063 | |||||||||||||||
AFS Investment securities: | |||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||
Direct obligations | 4,846 | 456 | — | 5,302 | |||||||||||||||
Mortgage-backed securities | — | 17,945 | 50 | 17,995 | |||||||||||||||
Asset-backed securities: | |||||||||||||||||||
Student loans | — | 7,115 | 192 | 7,307 | |||||||||||||||
Credit cards | — | 1,375 | — | 1,375 | |||||||||||||||
Sub-prime | — | 354 | — | 354 | |||||||||||||||
Other(2) | — | — | 1,273 | 1,273 | |||||||||||||||
Total asset-backed securities | — | 8,844 | 1,465 | 10,309 | |||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||
Mortgage-backed securities | — | 7,071 | 90 | 7,161 | |||||||||||||||
Asset-backed securities | — | 2,391 | 138 | 2,529 | |||||||||||||||
Government securities | — | 5,984 | — | 5,984 | |||||||||||||||
Other(3) | — | 5,461 | 458 | 5,919 | |||||||||||||||
Total non-U.S. debt securities | — | 20,907 | 686 | 21,593 | |||||||||||||||
State and political subdivisions | — | 10,716 | 40 | 10,756 | |||||||||||||||
Collateralized mortgage obligations | — | 2,704 | 102 | 2,806 | |||||||||||||||
Other U.S. debt securities | — | 2,338 | — | 2,338 | |||||||||||||||
U.S. equity securities | — | 41 | — | 41 | |||||||||||||||
Non-U.S. equity securities | — | 3 | — | 3 | |||||||||||||||
U.S. money-market mutual funds | — | 361 | — | 361 | |||||||||||||||
Non-U.S. money-market mutual funds | — | 16 | — | 16 | |||||||||||||||
Total investment securities available-for-sale | 4,846 | 64,331 | 2,343 | 71,520 | |||||||||||||||
Other assets: | |||||||||||||||||||
Derivative instruments: | |||||||||||||||||||
Foreign exchange contracts | — | 8,137 | — | $ | (4,679 | ) | 3,458 | ||||||||||||
Interest-rate contracts | — | 239 | — | (194 | ) | 45 | |||||||||||||
Other derivative contracts | — | 3 | — | (3 | ) | — | |||||||||||||
Total derivative instruments | — | 8,379 | — | (4,876 | ) | 3,503 | |||||||||||||
Other | 409 | — | — | — | 409 | ||||||||||||||
Total assets carried at fair value | $ | 5,781 | $ | 73,247 | $ | 2,343 | $ | (4,876 | ) | $ | 76,495 | ||||||||
Liabilities: | |||||||||||||||||||
Accrued expenses and other liabilities: | |||||||||||||||||||
Trading account liabilities: | |||||||||||||||||||
U.S. government securities | $ | 15 | $ | — | $ | — | $ | — | $ | 15 | |||||||||
Non-U.S. government securities | 60 | — | — | — | 60 | ||||||||||||||
Other | 32 | 6 | — | — | 38 | ||||||||||||||
Derivative instruments: | |||||||||||||||||||
Foreign exchange contracts | — | 7,901 | — | (4,636 | ) | 3,265 | |||||||||||||
Interest-rate contracts | — | 189 | — | (39 | ) | 150 | |||||||||||||
Other derivative contracts | — | 150 | — | (3 | ) | 147 | |||||||||||||
Total derivative instruments | — | 8,240 | — | (4,678 | ) | 3,562 | |||||||||||||
Other | 409 | — | — | — | 409 | ||||||||||||||
Total liabilities carried at fair value | $ | 516 | $ | 8,246 | $ | — | $ | (4,678 | ) | $ | 4,084 |
Fair-Value Measurements on a Recurring Basis | |||||||||||||||||||
as of December 31, 2015 | |||||||||||||||||||
(In millions) | Quoted Market Prices in Active Markets (Level 1) | Pricing Methods with Significant Observable Market Inputs (Level 2) | Pricing Methods with Significant Unobservable Market Inputs (Level 3) | Impact of Netting(1) | Total Net Carrying Value in Consolidated Statement of Condition | ||||||||||||||
Assets: | |||||||||||||||||||
Trading account assets: | |||||||||||||||||||
U.S. government securities | $ | 32 | $ | — | $ | — | $ | 32 | |||||||||||
Non-U.S. government securities | 479 | — | — | 479 | |||||||||||||||
Other | 10 | 328 | — | 338 | |||||||||||||||
Total trading account assets | 521 | 328 | — | 849 | |||||||||||||||
AFS Investment securities: | |||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||
Direct obligations | 5,206 | 512 | — | 5,718 | |||||||||||||||
Mortgage-backed securities | — | 18,165 | — | 18,165 | |||||||||||||||
Asset-backed securities: | |||||||||||||||||||
Student loans | — | 6,987 | 189 | 7,176 | |||||||||||||||
Credit cards | — | 1,341 | — | 1,341 | |||||||||||||||
Sub-prime | — | 419 | — | 419 | |||||||||||||||
Other(2) | — | — | 1,764 | 1,764 | |||||||||||||||
Total asset-backed securities | — | 8,747 | 1,953 | 10,700 | |||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||
Mortgage-backed securities | — | 7,071 | — | 7,071 | |||||||||||||||
Asset-backed securities | — | 3,093 | 174 | 3,267 | |||||||||||||||
Government securities | — | 4,355 | — | 4,355 | |||||||||||||||
Other(3) | — | 4,579 | 255 | 4,834 | |||||||||||||||
Total non-U.S. debt securities | — | 19,098 | 429 | 19,527 | |||||||||||||||
State and political subdivisions | — | 9,713 | 33 | 9,746 | |||||||||||||||
Collateralized mortgage obligations | — | 2,948 | 39 | 2,987 | |||||||||||||||
Other U.S. debt securities | — | 2,614 | 10 | 2,624 | |||||||||||||||
U.S. equity securities | — | 39 | — | 39 | |||||||||||||||
Non-U.S. equity securities | — | 3 | — | 3 | |||||||||||||||
U.S. money-market mutual funds | — | 542 | — | 542 | |||||||||||||||
Non-U.S. money-market mutual funds | — | 19 | — | 19 | |||||||||||||||
Total investment securities available-for-sale | 5,206 | 62,400 | 2,464 | 70,070 | |||||||||||||||
Other assets: | |||||||||||||||||||
Derivatives instruments: | |||||||||||||||||||
Foreign exchange contracts | — | 11,311 | 5 | $ | (6,562 | ) | 4,754 | ||||||||||||
Interest-rate contracts | — | 135 | — | (115 | ) | 20 | |||||||||||||
Other derivative contracts | — | 5 | — | (2 | ) | 3 | |||||||||||||
Total derivative instruments | — | 11,451 | 5 | (6,679 | ) | 4,777 | |||||||||||||
Other | 2 | — | — | — | 2 | ||||||||||||||
Total assets carried at fair value | $ | 5,729 | $ | 74,179 | $ | 2,469 | $ | (6,679 | ) | $ | 75,698 | ||||||||
Liabilities: | |||||||||||||||||||
Accrued expenses and other liabilities: | |||||||||||||||||||
Trading account liabilities: | |||||||||||||||||||
U.S. government securities | $ | 5 | $ | — | $ | — | $ | — | $ | 5 | |||||||||
Non-U.S. government securities | 76 | — | — | — | 76 | ||||||||||||||
Other | 5 | 13 | — | — | 18 | ||||||||||||||
Derivative instruments: | |||||||||||||||||||
Foreign exchange contracts | — | 10,863 | 5 | (6,995 | ) | 3,873 | |||||||||||||
Interest-rate contracts | — | 182 | — | (24 | ) | 158 | |||||||||||||
Other derivative contracts | — | 103 | — | (2 | ) | 101 | |||||||||||||
Total derivative instruments | — | 11,148 | 5 | (7,021 | ) | 4,132 | |||||||||||||
Other | 2 | — | — | — | 2 | ||||||||||||||
Total liabilities carried at fair value | $ | 88 | $ | 11,161 | $ | 5 | $ | (7,021 | ) | $ | 4,233 |
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||||||||||
Three Months Ended September 30, 2016 | |||||||||||||||||||||||||||||||
Fair Value as of June 30, 2016 | Total Realized and Unrealized Gains (Losses) | Purchases | Settlements | Transfers out of Level 3 | Fair Value as of September 30, 2016(1) | Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of September 30, 2016 | |||||||||||||||||||||||||
(In millions) | Recorded in Revenue | Recorded in Other Comprehensive Income | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
AFS Investment securities: | |||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies, mortgage-backed securities | $ | 25 | $ | — | $ | — | $ | 25 | $ | — | $ | — | $ | 50 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||||||||||
Student loans | 190 | — | 2 | — | — | — | 192 | ||||||||||||||||||||||||
Other | 1,710 | 13 | (8 | ) | 118 | (560 | ) | — | 1,273 | ||||||||||||||||||||||
Total asset-backed securities | 1,900 | 13 | (6 | ) | 118 | (560 | ) | — | 1,465 | ||||||||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||||||||||
Mortgage-backed securities | — | — | — | 90 | — | — | 90 | ||||||||||||||||||||||||
Asset-backed securities | 111 | — | — | 90 | (9 | ) | (54 | ) | 138 | ||||||||||||||||||||||
Other | 261 | — | — | 194 | 3 | — | 458 | ||||||||||||||||||||||||
Total non-U.S. debt securities | 372 | — | — | 374 | (6 | ) | (54 | ) | 686 | ||||||||||||||||||||||
State and political subdivisions | 33 | — | 7 | — | — | — | 40 | ||||||||||||||||||||||||
Collateralized mortgage obligations | 68 | — | 1 | 36 | (3 | ) | — | 102 | |||||||||||||||||||||||
Total AFS investment securities | 2,398 | 13 | 2 | 553 | (569 | ) | (54 | ) | 2,343 | ||||||||||||||||||||||
Total assets carried at fair value | $ | 2,398 | $ | 13 | $ | 2 | $ | 553 | $ | (569 | ) | $ | (54 | ) | $ | 2,343 | $ | — |
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2016 | |||||||||||||||||||||||||||||||
Fair Value as of December 31, 2015 | Total Realized and Unrealized Gains (Losses) | Purchases | Settlements | Transfers out of Level 3 | Fair Value as of September 30, 2016(1) | Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of September 30, 2016 | |||||||||||||||||||||||||
(In millions) | Recorded in Revenue | Recorded in Other Comprehensive Income | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
AFS Investment securities: | |||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies, mortgage-backed securities | $ | — | $ | — | $ | — | $ | 325 | $ | — | $ | (275 | ) | $ | 50 | ||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||||||||||
Student loans | 189 | 1 | 2 | — | — | — | 192 | ||||||||||||||||||||||||
Other | 1,764 | 29 | (21 | ) | 250 | (749 | ) | — | 1,273 | ||||||||||||||||||||||
Total asset-backed securities | 1,953 | 30 | (19 | ) | 250 | (749 | ) | — | 1,465 | ||||||||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||||||||||
Mortgage-backed securities | — | — | — | 90 | — | — | 90 | ||||||||||||||||||||||||
Asset-backed securities | 174 | — | (1 | ) | 196 | (43 | ) | (188 | ) | 138 | |||||||||||||||||||||
Other | 255 | — | — | 223 | 9 | (29 | ) | 458 | |||||||||||||||||||||||
Total Non-U.S. debt securities | 429 | — | (1 | ) | 509 | (34 | ) | (217 | ) | 686 | |||||||||||||||||||||
State and political subdivisions | 33 | — | 9 | — | (2 | ) | — | 40 | |||||||||||||||||||||||
Collateralized mortgage obligations | 39 | — | 2 | 86 | (25 | ) | — | 102 | |||||||||||||||||||||||
Other U.S. debt securities | 10 | — | — | — | (10 | ) | — | — | |||||||||||||||||||||||
Total AFS investment securities | 2,464 | 30 | (9 | ) | 1,170 | (820 | ) | (492 | ) | 2,343 | |||||||||||||||||||||
Other assets: | |||||||||||||||||||||||||||||||
Derivative instruments: | |||||||||||||||||||||||||||||||
Foreign exchange contracts | 5 | 3 | — | — | (8 | ) | — | — | $ | — | |||||||||||||||||||||
Total derivative instruments | 5 | 3 | — | — | (8 | ) | — | — | — | ||||||||||||||||||||||
Total assets carried at fair value | $ | 2,469 | $ | 33 | $ | (9 | ) | $ | 1,170 | $ | (828 | ) | $ | (492 | ) | $ | 2,343 | $ | — |
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||
Nine Months Ended September 30, 2016 | |||||||||||||||||||
Fair Value as of December 31, 2015 | Total Realized and Unrealized Gains (Losses) | Settlements | Fair Value as of September 30, 2016(2) | Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of September 30, 2016 | |||||||||||||||
(In millions) | Recorded in Revenue | ||||||||||||||||||
Liabilities: | |||||||||||||||||||
Accrued expenses and other liabilities: | |||||||||||||||||||
Derivative instruments: | |||||||||||||||||||
Foreign exchange contracts | $ | 5 | $ | 5 | $ | (10 | ) | $ | — | $ | — | ||||||||
Total derivative instruments | 5 | 5 | (10 | ) | — | — | |||||||||||||
Total liabilities carried at fair value | $ | 5 | $ | 5 | $ | (10 | ) | $ | — | $ | — |
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2015 | |||||||||||||||||||||||||||||||||||
Fair Value as of June 30, 2015 | Total Realized and Unrealized Gains (Losses) | Purchases | Sales | Settlements | Transfers out of Level 3 | Fair Value as of September 30, 2015(1) | Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of September 30, 2015 | ||||||||||||||||||||||||||||
(In millions) | Recorded in Revenue | Recorded in Other Comprehensive Income | |||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
AFS Investment securities: | |||||||||||||||||||||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||||||||||||||
Student loans | $ | 234 | $ | — | $ | (3 | ) | $ | — | $ | — | $ | (1 | ) | $ | — | $ | 230 | |||||||||||||||||
Other | 2,933 | 22 | (19 | ) | — | (686 | ) | (307 | ) | — | 1,943 | ||||||||||||||||||||||||
Total asset-backed securities | 3,167 | 22 | (22 | ) | — | (686 | ) | (308 | ) | — | 2,173 | ||||||||||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities | 97 | — | — | — | — | — | (97 | ) | — | ||||||||||||||||||||||||||
Asset-backed securities | 193 | — | (1 | ) | 168 | — | (83 | ) | — | 277 | |||||||||||||||||||||||||
Other | 264 | — | (1 | ) | — | — | — | — | 263 | ||||||||||||||||||||||||||
Total Non-U.S. debt securities | 554 | — | (2 | ) | 168 | — | (83 | ) | (97 | ) | 540 | ||||||||||||||||||||||||
State and political subdivisions | 36 | — | (1 | ) | — | — | — | — | 35 | ||||||||||||||||||||||||||
Collateralized mortgage obligations | 215 | — | (1 | ) | — | (17 | ) | (49 | ) | 148 | |||||||||||||||||||||||||
Other U.S. debt securities | 9 | — | — | — | — | — | — | 9 | |||||||||||||||||||||||||||
Total investment securities available-for-sale | 3,981 | 22 | (26 | ) | 168 | (686 | ) | (408 | ) | (146 | ) | 2,905 | |||||||||||||||||||||||
Other assets: | |||||||||||||||||||||||||||||||||||
Derivative instruments: | |||||||||||||||||||||||||||||||||||
Foreign exchange contracts | 60 | (5 | ) | — | 1 | — | (35 | ) | — | 21 | $ | — | |||||||||||||||||||||||
Total derivative instruments | 60 | (5 | ) | — | 1 | — | (35 | ) | — | 21 | — | ||||||||||||||||||||||||
Total assets carried at fair value | $ | 4,041 | $ | 17 | $ | (26 | ) | $ | 169 | $ | (686 | ) | $ | (443 | ) | $ | (146 | ) | $ | 2,926 | $ | — |
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||
Three Months Ended September 30, 2015 | |||||||||||||||||||||||
Fair Value as of June 30, 2015 | Total Realized and Unrealized Gains (Losses) | Issuances | Settlements | Fair Value as of September 30, 2015(2) | Change in Unrealized (Gains) Losses Related to Financial Instruments Held as of September 30, 2015 | ||||||||||||||||||
(In millions) | Recorded in Revenue | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Accrued expenses and other liabilities: | |||||||||||||||||||||||
Derivative instruments: | |||||||||||||||||||||||
Foreign exchange contracts | $ | 50 | $ | (3 | ) | $ | 1 | $ | (26 | ) | $ | 22 | $ | 1 | |||||||||
Total derivative instruments | 50 | (3 | ) | 1 | (26 | ) | 22 | 1 | |||||||||||||||
Total liabilities carried at fair value | $ | 50 | $ | (3 | ) | $ | 1 | $ | (26 | ) | $ | 22 | $ | 1 |
Fair-Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||||||||||||||||||
Fair Value as of December 31, 2014 | Total Realized and Unrealized Gains (Losses) | Purchases | Sales | Settlements | Transfers into Level 3 | Transfers out of Level 3 | Fair Value as of September 30, 2015 | Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of September 30, 2015 | |||||||||||||||||||||||||||||||
(In millions) | Recorded in Revenue | Recorded in Other Comprehensive Income | |||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||||||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||||||||||||||||||
Student loans | $ | 259 | $ | — | $ | (2 | ) | $ | — | $ | — | $ | (6 | ) | $ | — | $ | (21 | ) | $ | 230 | ||||||||||||||||||
Other | 3,780 | 47 | (37 | ) | — | (1,106 | ) | (741 | ) | — | — | 1,943 | |||||||||||||||||||||||||||
Total asset-backed securities | 4,039 | 47 | (39 | ) | — | (1,106 | ) | (747 | ) | — | (21 | ) | 2,173 | ||||||||||||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | — | — | — | 43 | — | — | 97 | (140 | ) | — | |||||||||||||||||||||||||||||
Asset-backed securities | 295 | 1 | (1 | ) | 168 | — | (169 | ) | — | (17 | ) | 277 | |||||||||||||||||||||||||||
Other | 371 | — | — | 111 | — | (32 | ) | — | (187 | ) | 263 | ||||||||||||||||||||||||||||
Total non-U.S. debt securities | 666 | 1 | (1 | ) | 322 | — | (201 | ) | 97 | (344 | ) | 540 | |||||||||||||||||||||||||||
State and political subdivisions | 38 | — | (2 | ) | — | — | (1 | ) | — | — | 35 | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 614 | — | (2 | ) | 293 | (88 | ) | (82 | ) | — | (587 | ) | 148 | ||||||||||||||||||||||||||
Other U.S. debt securities | 9 | — | — | — | — | — | — | — | 9 | ||||||||||||||||||||||||||||||
Total investment securities available-for-sale | 5,366 | 48 | (44 | ) | 615 | (1,194 | ) | (1,031 | ) | 97 | (952 | ) | 2,905 | ||||||||||||||||||||||||||
Other assets: | |||||||||||||||||||||||||||||||||||||||
Derivative instruments: | |||||||||||||||||||||||||||||||||||||||
Derivative instruments, foreign exchange contracts | 81 | 49 | — | 17 | — | (126 | ) | — | — | 21 | $ | — | |||||||||||||||||||||||||||
Total derivative instruments | 81 | 49 | — | 17 | — | (126 | ) | — | — | 21 | — | ||||||||||||||||||||||||||||
Total assets carried at fair value | $ | 5,447 | $ | 97 | $ | (44 | ) | $ | 632 | $ | (1,194 | ) | $ | (1,157 | ) | $ | 97 | $ | (952 | ) | $ | 2,926 | $ | — |
Fair-Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||
Fair Value as of December 31, 2014 | Total Realized and Unrealized (Gains) Losses | Issuances | Settlements | Fair Value as of September 30, 2015(1) | Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of September 30, 2015 | ||||||||||||||||||
(In millions) | Recorded in Revenue | ||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Accrued expenses and other liabilities: | |||||||||||||||||||||||
Derivative instruments: | |||||||||||||||||||||||
Foreign exchange contracts | $ | 74 | $ | 24 | $ | 19 | $ | (95 | ) | $ | 22 | $ | (2 | ) | |||||||||
Other | 9 | — | — | (9 | ) | — | — | ||||||||||||||||
Total derivative instruments | 83 | 24 | 19 | (104 | ) | 22 | (2 | ) | |||||||||||||||
Total liabilities carried at fair value | $ | 83 | $ | 24 | $ | 19 | $ | (104 | ) | $ | 22 | $ | (2 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
Total Realized and Unrealized Gains (Losses) Recorded in Revenue | Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of September 30, | Total Realized and Unrealized Gains (Losses) Recorded in Revenue | Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of September 30, | ||||||||||||||||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||
Fee revenue: | |||||||||||||||||||||||||||||||
Trading services | $ | — | $ | (1 | ) | $ | — | $ | (1 | ) | $ | (2 | ) | $ | 25 | $ | — | $ | 2 | ||||||||||||
Total fee revenue | — | (1 | ) | — | (1 | ) | (2 | ) | 25 | — | 2 | ||||||||||||||||||||
Net interest revenue | 13 | 21 | — | — | 30 | 48 | — | — | |||||||||||||||||||||||
Total revenue | $ | 13 | $ | 20 | $ | — | $ | (1 | ) | $ | 28 | $ | 73 | $ | — | $ | 2 |
Quantitative Information about Level-3 Fair-Value Measurements | ||||||||||||||||||
Fair Value | Weighted-Average | |||||||||||||||||
(Dollars in millions, except where otherwise noted) | As of September 30, 2016 | As of December 31, 2015 | Valuation Technique | Significant Unobservable Input(1) | As of September 30, 2016 | As of December 31, 2015 | ||||||||||||
Significant unobservable inputs readily available to State Street: | ||||||||||||||||||
Assets: | ||||||||||||||||||
Asset-backed securities, other | $ | 14 | $ | 28 | Discounted cash flows | Credit spread | 0.7 | % | (0.1 | )% | ||||||||
State and political subdivisions | 40 | 33 | Discounted cash flows | Credit spread | 2.0 | 2.2 | ||||||||||||
Derivative instruments, foreign exchange contracts | — | 5 | Option model | Volatility | — | 9.3 | ||||||||||||
Total | $ | 54 | $ | 66 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Derivative instruments, foreign exchange contracts | $ | — | $ | 5 | Option model | Volatility | — | 9.2 | ||||||||||
Total | $ | — | $ | 5 |
September 30, 2016 | Significant Unobservable Inputs Readily Available to State Street(1) | Significant Unobservable Inputs Not Developed by State Street and Not Readily Available(2) | Total Assets and Liabilities with Significant Unobservable Inputs | |||||||||
(In millions) | ||||||||||||
Assets: | ||||||||||||
U.S. Treasury and federal agencies, mortgage-backed securities | $ | — | $ | 50 | $ | 50 | ||||||
Asset-backed securities, student loans | — | 192 | 192 | |||||||||
Asset-backed securities, other | 14 | 1,259 | 1,273 | |||||||||
Non-U.S. debt securities, mortgage-backed securities | — | 90 | 90 | |||||||||
Non-U.S. debt securities, asset-backed securities | — | 138 | 138 | |||||||||
Non-U.S. debt securities, other | — | 458 | 458 | |||||||||
State and political subdivisions | 40 | — | 40 | |||||||||
Collateralized mortgage obligations | — | 102 | 102 | |||||||||
Total | $ | 54 | $ | 2,289 | $ | 2,343 |
December 31, 2015 | Significant Unobservable Inputs Readily Available to State Street(1) | Significant Unobservable Inputs Not Developed by State Street and Not Readily Available(2) | Total Assets and Liabilities with Significant Unobservable Inputs | |||||||||
(In millions) | ||||||||||||
Assets: | ||||||||||||
Asset-backed securities, student loans | $ | — | $ | 189 | $ | 189 | ||||||
Asset-backed securities, other | 28 | 1,736 | 1,764 | |||||||||
Non-U.S. debt securities, asset-backed securities | — | 174 | 174 | |||||||||
Non-U.S. debt securities, other | — | 255 | 255 | |||||||||
State and political subdivisions | 33 | — | 33 | |||||||||
Collateralized mortgage obligations | — | 39 | 39 | |||||||||
Other U.S. debt securities | — | 10 | 10 | |||||||||
Derivative instruments, foreign exchange contracts | 5 | — | 5 | |||||||||
Total | $ | 66 | $ | 2,403 | $ | 2,469 | ||||||
Liabilities: | ||||||||||||
Derivative instruments, foreign exchange contracts | $ | 5 | $ | — | $ | 5 | ||||||
Total | $ | 5 | $ | — | $ | 5 |
Fair-Value Hierarchy | ||||||||||||||||||||
September 30, 2016 | Reported Amount | Estimated Fair Value | Quoted Market Prices in Active Markets (Level 1) | Pricing Methods with Significant Observable Market Inputs (Level 2) | Pricing Methods with Significant Unobservable Market Inputs (Level 3) | |||||||||||||||
(In millions) | ||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||
Cash and due from banks | $ | 3,490 | $ | 3,490 | $ | 3,490 | $ | — | $ | — | ||||||||||
Interest-bearing deposits with banks | 79,090 | 79,090 | — | 79,090 | — | |||||||||||||||
Securities purchased under resale agreements | 2,442 | 2,442 | — | 2,442 | — | |||||||||||||||
Investment securities held-to-maturity | 28,368 | 28,780 | 17,795 | 10,910 | 75 | |||||||||||||||
Net loans (excluding leases)(1) | 20,605 | 20,610 | — | 20,509 | 101 | |||||||||||||||
Financial Liabilities: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing | $ | 60,545 | $ | 60,545 | $ | — | $ | 60,545 | $ | — | ||||||||||
Interest-bearing - U.S. | 33,767 | 33,767 | — | 33,767 | — | |||||||||||||||
Interest-bearing - non-U.S. | 104,454 | 104,454 | — | 104,454 | — | |||||||||||||||
Securities sold under repurchase agreements | 4,364 | 4,364 | — | 4,364 | — | |||||||||||||||
Federal funds purchased | 28 | 28 | — | 28 | — | |||||||||||||||
Other short-term borrowings | 1,385 | 1,385 | — | 1,385 | — | |||||||||||||||
Long-term debt | 11,834 | 12,015 | — | 11,657 | 358 |
Fair-Value Hierarchy | ||||||||||||||||||||
December 31, 2015 | Reported Amount | Estimated Fair Value | Quoted Market Prices in Active Markets (Level 1) | Pricing Methods with Significant Observable Market Inputs (Level 2) | Pricing Methods with Significant Unobservable Market Inputs (Level 3) | |||||||||||||||
(In millions) | ||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||
Cash and due from banks | $ | 1,207 | $ | 1,207 | $ | 1,207 | $ | — | $ | — | ||||||||||
Interest-bearing deposits with banks | 75,338 | 75,338 | — | 75,338 | — | |||||||||||||||
Securities purchased under resale agreements | 3,404 | 3,404 | — | 3,404 | — | |||||||||||||||
Investment securities held-to-maturity | 29,952 | 29,798 | — | 29,798 | — | |||||||||||||||
Net loans (excluding leases)(1) | 17,838 | 17,792 | — | 17,667 | 125 | |||||||||||||||
Financial Liabilities: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing | $ | 65,800 | $ | 65,800 | $ | — | $ | 65,800 | $ | — | ||||||||||
Interest-bearing - U.S. | 29,958 | 29,958 | — | 29,958 | — | |||||||||||||||
Interest-bearing - non-U.S. | 95,869 | 95,869 | — | 95,869 | — | |||||||||||||||
Securities sold under repurchase agreements | 4,499 | 4,499 | — | 4,499 | — | |||||||||||||||
Federal funds purchased | 6 | 6 | — | 6 | — | |||||||||||||||
Other short-term borrowings | 1,748 | 1,748 | — | 1,748 | — | |||||||||||||||
Long-term debt | 11,497 | 11,604 | — | 11,215 | 389 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | Amortized Cost | Gross Unrealized | Fair Value | ||||||||||||||||||||||||||
(In millions) | Gains | Losses | Gains | Losses | |||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||||||||||||||
Direct obligations | $ | 5,283 | $ | 20 | $ | 1 | $ | 5,302 | $ | 5,717 | $ | 6 | $ | 5 | $ | 5,718 | |||||||||||||||
Mortgage-backed securities | 17,796 | 224 | 25 | 17,995 | 18,168 | 131 | 134 | 18,165 | |||||||||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||||||||||
Student loans(1) | 7,451 | 19 | 163 | 7,307 | 7,358 | 16 | 198 | 7,176 | |||||||||||||||||||||||
Credit cards | 1,388 | 12 | 25 | 1,375 | 1,378 | — | 37 | 1,341 | |||||||||||||||||||||||
Sub-prime | 376 | 2 | 24 | 354 | 448 | 2 | 31 | 419 | |||||||||||||||||||||||
Other(2) | 1,257 | 16 | — | 1,273 | 1,724 | 43 | 3 | 1,764 | |||||||||||||||||||||||
Total asset-backed securities | 10,472 | 49 | 212 | 10,309 | 10,908 | 61 | 269 | 10,700 | |||||||||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||||||||||
Mortgage-backed securities | 7,122 | 48 | 9 | 7,161 | 7,010 | 72 | 11 | 7,071 | |||||||||||||||||||||||
Asset-backed securities | 2,528 | 4 | 3 | 2,529 | 3,272 | 2 | 7 | 3,267 | |||||||||||||||||||||||
Government securities | 5,967 | 17 | — | 5,984 | 4,348 | 7 | — | 4,355 | |||||||||||||||||||||||
Other(3) | 5,876 | 44 | 1 | 5,919 | 4,817 | 29 | 12 | 4,834 | |||||||||||||||||||||||
Total non-U.S. debt securities | 21,493 | 113 | 13 | 21,593 | 19,447 | 110 | 30 | 19,527 | |||||||||||||||||||||||
State and political subdivisions | 10,274 | 505 | 23 | 10,756 | 9,402 | 371 | 27 | 9,746 | |||||||||||||||||||||||
Collateralized mortgage obligations | 2,752 | 62 | 8 | 2,806 | 2,993 | 16 | 22 | 2,987 | |||||||||||||||||||||||
Other U.S. debt securities | 2,306 | 39 | 7 | 2,338 | 2,611 | 31 | 18 | 2,624 | |||||||||||||||||||||||
U.S. equity securities | 39 | 4 | 2 | 41 | 33 | 9 | 3 | 39 | |||||||||||||||||||||||
Non-U.S. equity securities | 3 | — | — | 3 | 3 | — | — | 3 | |||||||||||||||||||||||
U.S. money-market mutual funds | 361 | — | — | 361 | 542 | — | — | 542 | |||||||||||||||||||||||
Non-U.S. money-market mutual funds | 16 | — | — | 16 | 19 | — | — | 19 | |||||||||||||||||||||||
Total | $ | 70,795 | $ | 1,016 | $ | 291 | $ | 71,520 | $ | 69,843 | $ | 735 | $ | 508 | $ | 70,070 | |||||||||||||||
Held-to-maturity: | |||||||||||||||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||||||||||||||
Direct obligations | $ | 17,553 | $ | 333 | $ | 1 | $ | 17,885 | $ | 20,878 | $ | 2 | $ | 217 | $ | 20,663 | |||||||||||||||
Mortgage-backed securities | 4,280 | 20 | 3 | 4,297 | 610 | 2 | 8 | 604 | |||||||||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||||||||||
Student loans(1) | 1,440 | — | 40 | 1,400 | 1,592 | — | 47 | 1,545 | |||||||||||||||||||||||
Credit cards | 897 | 3 | — | 900 | 897 | — | 1 | 896 | |||||||||||||||||||||||
Other | 76 | — | — | 76 | 366 | 2 | 1 | 367 | |||||||||||||||||||||||
Total asset-backed securities | 2,413 | 3 | 40 | 2,376 | 2,855 | 2 | 49 | 2,808 | |||||||||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||||||||||
Mortgage-backed securities | 1,581 | 84 | 17 | 1,648 | 2,202 | 109 | 26 | 2,285 | |||||||||||||||||||||||
Asset-backed securities | 697 | — | 1 | 696 | 1,415 | 4 | 3 | 1,416 | |||||||||||||||||||||||
Government securities | 288 | 3 | — | 291 | 239 | — | 1 | 238 | |||||||||||||||||||||||
Other | 119 | 2 | — | 121 | 65 | — | — | 65 | |||||||||||||||||||||||
Total non-U.S. debt securities | 2,685 | 89 | 18 | 2,756 | 3,921 | 113 | 30 | 4,004 | |||||||||||||||||||||||
State and political subdivisions | — | — | — | — | 1 | — | — | 1 | |||||||||||||||||||||||
Collateralized mortgage obligations | 1,437 | 42 | 13 | 1,466 | 1,687 | 60 | 29 | 1,718 | |||||||||||||||||||||||
Total | $ | 28,368 | $ | 487 | $ | 75 | $ | 28,780 | $ | 29,952 | $ | 179 | $ | 333 | $ | 29,798 |
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
September 30, 2016 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
(In millions) | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||||||
Direct obligations | $ | 35 | $ | — | $ | 177 | $ | 1 | $ | 212 | $ | 1 | |||||||||||
Mortgage-backed securities | 3,116 | 12 | 858 | 13 | 3,974 | 25 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||
Student loans | 520 | 3 | 4,990 | 160 | 5,510 | 163 | |||||||||||||||||
Credit cards | — | — | 505 | 25 | 505 | 25 | |||||||||||||||||
Sub-prime | 3 | — | 330 | 24 | 333 | 24 | |||||||||||||||||
Other | 150 | — | 150 | — | 300 | — | |||||||||||||||||
Total asset-backed securities | 673 | 3 | 5,975 | 209 | 6,648 | 212 | |||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||
Mortgage-backed securities | 368 | 1 | 1,137 | 8 | 1,505 | 9 | |||||||||||||||||
Asset-backed securities | 333 | 1 | 463 | 2 | 796 | 3 | |||||||||||||||||
Government securities | 2,044 | — | — | — | 2,044 | — | |||||||||||||||||
Other | 569 | 1 | 363 | — | 932 | 1 | |||||||||||||||||
Total non-U.S. debt securities | 3,314 | 3 | 1,963 | 10 | 5,277 | 13 | |||||||||||||||||
State and political subdivisions | 714 | 9 | 508 | 14 | 1,222 | 23 | |||||||||||||||||
Collateralized mortgage obligations | 397 | 3 | 219 | 5 | 616 | 8 | |||||||||||||||||
Other U.S. debt securities | 133 | — | 157 | 7 | 290 | 7 | |||||||||||||||||
U.S. equity securities | — | — | 5 | 2 | 5 | 2 | |||||||||||||||||
Non-U.S. equity securities | — | — | 1 | — | 1 | — | |||||||||||||||||
Total | $ | 8,382 | $ | 30 | $ | 9,863 | $ | 261 | $ | 18,245 | $ | 291 | |||||||||||
Held-to-maturity: | |||||||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||||||
Direct obligations | $ | — | $ | — | $ | 90 | $ | 1 | $ | 90 | $ | 1 | |||||||||||
Mortgage-backed securities | 936 | 3 | — | — | 936 | 3 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||
Student loans | 452 | 12 | 922 | 28 | 1,374 | 40 | |||||||||||||||||
Other | — | — | 15 | — | 15 | — | |||||||||||||||||
Total asset-backed securities | 452 | 12 | 937 | 28 | 1,389 | 40 | |||||||||||||||||
Non-U.S. mortgage-backed securities: | |||||||||||||||||||||||
Mortgage-backed securities | 104 | 3 | 406 | 14 | 510 | 17 | |||||||||||||||||
Asset-backed securities | 8 | — | 271 | 1 | 279 | 1 | |||||||||||||||||
Government securities | 174 | — | — | — | 174 | — | |||||||||||||||||
Total non-U.S. debt securities | 286 | 3 | 677 | 15 | 963 | 18 | |||||||||||||||||
Collateralized mortgage obligations | 521 | 4 | 196 | 9 | 717 | 13 | |||||||||||||||||
Total | $ | 2,195 | $ | 22 | $ | 1,900 | $ | 53 | $ | 4,095 | $ | 75 |
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||
December 31, 2015 | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||
(In millions) | |||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||||||
Direct obligations | $ | 3,123 | $ | 4 | $ | 121 | $ | 1 | $ | 3,244 | $ | 5 | |||||||||||
Mortgage-backed securities | 5,729 | 48 | 3,166 | 86 | 8,895 | 134 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||
Student loans | 2,841 | 54 | 3,217 | 144 | 6,058 | 198 | |||||||||||||||||
Credit cards | 838 | 7 | 490 | 30 | 1,328 | 37 | |||||||||||||||||
Sub-prime | 7 | — | 387 | 31 | 394 | 31 | |||||||||||||||||
Other | 720 | 3 | 43 | — | 763 | 3 | |||||||||||||||||
Total asset-backed securities | 4,406 | 64 | 4,137 | 205 | 8,543 | 269 | |||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||
Mortgage-backed securities | 1,457 | 7 | 437 | 4 | 1,894 | 11 | |||||||||||||||||
Asset-backed securities | 2,190 | 7 | 22 | — | 2,212 | 7 | |||||||||||||||||
Government securities | 1,691 | — | — | — | 1,691 | — | |||||||||||||||||
Other | 1,548 | 5 | 527 | 7 | 2,075 | 12 | |||||||||||||||||
Total non-U.S. debt securities | 6,886 | 19 | 986 | 11 | 7,872 | 30 | |||||||||||||||||
State and political subdivisions | 206 | 1 | 658 | 26 | 864 | 27 | |||||||||||||||||
Collateralized mortgage obligations | 1,511 | 14 | 217 | 8 | 1,728 | 22 | |||||||||||||||||
Other U.S. debt securities | 475 | 9 | 178 | 9 | 653 | 18 | |||||||||||||||||
U.S. equity securities | — | — | 5 | 3 | 5 | 3 | |||||||||||||||||
Total | $ | 22,336 | $ | 159 | $ | 9,468 | $ | 349 | $ | 31,804 | $ | 508 | |||||||||||
Held-to-maturity: | |||||||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||||||
Direct obligations | $ | 16,370 | $ | 120 | $ | 3,005 | $ | 97 | $ | 19,375 | $ | 217 | |||||||||||
Mortgage-backed securities | 560 | 8 | — | — | 560 | 8 | |||||||||||||||||
Asset-backed securities: | |||||||||||||||||||||||
Student loans | 896 | 25 | 615 | 22 | 1,511 | 47 | |||||||||||||||||
Credit cards | 636 | 1 | — | — | 636 | 1 | |||||||||||||||||
Other | 102 | — | 31 | 1 | 133 | 1 | |||||||||||||||||
Total asset-backed securities | 1,634 | 26 | 646 | 23 | 2,280 | 49 | |||||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||||||
Mortgage-backed securities | 338 | 2 | 524 | 24 | 862 | 26 | |||||||||||||||||
Asset-backed securities | 1,015 | 3 | 69 | — | 1,084 | 3 | |||||||||||||||||
Government securities | 128 | 1 | — | — | 128 | 1 | |||||||||||||||||
Other | — | — | 43 | — | 43 | — | |||||||||||||||||
Total non-U.S. debt securities | 1,481 | 6 | 636 | 24 | 2,117 | 30 | |||||||||||||||||
Collateralized mortgage obligations | 634 | 9 | 537 | 20 | 1,171 | 29 | |||||||||||||||||
Total | $ | 20,679 | $ | 169 | $ | 4,824 | $ | 164 | $ | 25,503 | $ | 333 |
September 30, 2016 | Under 1 Year | 1 to 5 Years | 6 to 10 Years | Over 10 Years | Total | ||||||||||||||
(In millions) | |||||||||||||||||||
Available-for-sale: | |||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||
Direct obligations | $ | 3,504 | $ | 1,250 | $ | 146 | $ | 402 | $ | 5,302 | |||||||||
Mortgage-backed securities | 61 | 1,940 | 4,343 | 11,651 | 17,995 | ||||||||||||||
Asset-backed securities: | |||||||||||||||||||
Student loans | 894 | 3,376 | 1,132 | 1,905 | 7,307 | ||||||||||||||
Credit cards | 4 | 1,068 | 303 | — | 1,375 | ||||||||||||||
Sub-prime | 3 | 2 | 2 | 347 | 354 | ||||||||||||||
Other | 3 | 84 | 1,036 | 150 | 1,273 | ||||||||||||||
Total asset-backed securities | 904 | 4,530 | 2,473 | 2,402 | 10,309 | ||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||
Mortgage-backed securities | 1,239 | 3,734 | 850 | 1,338 | 7,161 | ||||||||||||||
Asset-backed securities | 80 | 2,214 | 229 | 6 | 2,529 | ||||||||||||||
Government securities | 4,453 | 1,319 | 212 | — | 5,984 | ||||||||||||||
Other | 1,818 | 3,710 | 391 | — | 5,919 | ||||||||||||||
Total non-U.S. debt securities | 7,590 | 10,977 | 1,682 | 1,344 | 21,593 | ||||||||||||||
State and political subdivisions | 460 | 2,387 | 5,730 | 2,179 | 10,756 | ||||||||||||||
Collateralized mortgage obligations | 16 | 55 | 842 | 1,893 | 2,806 | ||||||||||||||
Other U.S. debt securities | 601 | 1,074 | 616 | 47 | 2,338 | ||||||||||||||
Total | $ | 13,136 | $ | 22,213 | $ | 15,832 | $ | 19,918 | $ | 71,099 | |||||||||
Held-to-maturity: | |||||||||||||||||||
U.S. Treasury and federal agencies: | |||||||||||||||||||
Direct obligations | $ | — | $ | 14,732 | $ | 2,745 | $ | 76 | $ | 17,553 | |||||||||
Mortgage-backed securities | 1 | 8 | 167 | 4,104 | 4,280 | ||||||||||||||
Asset-backed securities: | |||||||||||||||||||
Student loans | 89 | 175 | 230 | 946 | 1,440 | ||||||||||||||
Credit cards | 98 | 799 | — | — | 897 | ||||||||||||||
Other | 13 | 26 | 34 | 3 | 76 | ||||||||||||||
Total asset-backed securities | 200 | 1,000 | 264 | 949 | 2,413 | ||||||||||||||
Non-U.S. debt securities: | |||||||||||||||||||
Mortgage-backed securities | 368 | 387 | 74 | 752 | 1,581 | ||||||||||||||
Asset-backed securities | 145 | 546 | 6 | — | 697 | ||||||||||||||
Government securities | 175 | 113 | — | — | 288 | ||||||||||||||
Other | 74 | 45 | — | — | 119 | ||||||||||||||
Total non-U.S. debt securities | 762 | 1,091 | 80 | 752 | 2,685 | ||||||||||||||
Collateralized mortgage obligations | 103 | 25 | 299 | 1,010 | 1,437 | ||||||||||||||
Total | $ | 1,066 | $ | 16,856 | $ | 3,555 | $ | 6,891 | $ | 28,368 |
Nine Months Ended September 30, | |||||||
(In millions) | 2016 | 2015 | |||||
Balance, beginning of period | $ | 92 | $ | 115 | |||
Additions: | |||||||
Losses for which OTTI was previously recognized | 2 | 1 | |||||
Deductions: | |||||||
Previously recognized losses related to securities sold or matured | (26 | ) | (22 | ) | |||
Balance, end of period | $ | 68 | $ | 94 |
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Institutional: | |||||||
Investment funds: | |||||||
U.S. | $ | 13,647 | $ | 11,136 | |||
Non-U.S. | 3,092 | 1,678 | |||||
Commercial and financial: | |||||||
U.S. | 3,540 | 4,671 | |||||
Non-U.S. | 275 | 278 | |||||
Purchased receivables: | |||||||
U.S. | 74 | 93 | |||||
Non-U.S. | — | — | |||||
Lease financing: | |||||||
U.S. | 337 | 337 | |||||
Non-U.S. | 510 | 578 | |||||
Total institutional | 21,475 | 18,771 | |||||
Commercial real estate: | |||||||
U.S. | 27 | 28 | |||||
Total loans and leases | 21,502 | 18,799 | |||||
Allowance for loan and lease losses | (51 | ) | (46 | ) | |||
Loans and leases, net of allowance for loan and lease losses | $ | 21,451 | $ | 18,753 |
Institutional | |||||||||||||||||||||||
September 30, 2016 | Investment Funds | Commercial and Financial | Purchased Receivables | Lease Financing | Commercial Real Estate | Total Loans and Leases | |||||||||||||||||
(In millions) | |||||||||||||||||||||||
Investment grade(1) | $ | 15,828 | $ | 422 | $ | 74 | $ | 847 | $ | 27 | $ | 17,198 | |||||||||||
Speculative(2) | 908 | 3,378 | — | — | — | 4,286 | |||||||||||||||||
Special mention(3) | 3 | — | — | — | — | 3 | |||||||||||||||||
Substandard(4) | — | 15 | — | — | — | 15 | |||||||||||||||||
Total | $ | 16,739 | $ | 3,815 | $ | 74 | $ | 847 | $ | 27 | $ | 21,502 |
Institutional | |||||||||||||||||||||||
December 31, 2015 | Investment Funds | Commercial and Financial | Purchased Receivables | Lease Financing | Commercial Real Estate | Total Loans and Leases | |||||||||||||||||
(In millions) | |||||||||||||||||||||||
Investment grade(1) | $ | 12,415 | $ | 1,780 | $ | 93 | $ | 888 | $ | 28 | $ | 15,204 | |||||||||||
Speculative(2) | 399 | 3,138 | — | 27 | — | 3,564 | |||||||||||||||||
Special mention(3) | — | 31 | — | — | — | 31 | |||||||||||||||||
Total | $ | 12,814 | $ | 4,949 | $ | 93 | $ | 915 | $ | 28 | $ | 18,799 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
(In millions) | Institutional | Commercial Real Estate | Total Loans and Leases | Institutional | Commercial Real Estate | Total Loans and Leases | |||||||||||||||||
Loans and leases(1): | |||||||||||||||||||||||
Collectively evaluated for impairment | $ | 21,475 | $ | 27 | $ | 21,502 | $ | 18,771 | $ | 28 | $ | 18,799 | |||||||||||
Total | $ | 21,475 | $ | 27 | $ | 21,502 | $ | 18,771 | $ | 28 | $ | 18,799 |
As of September 30, 2016 | As of December 31, 2015 | ||||||||||||||
(In millions) | Recorded Investment | Unpaid Principal Balance(1) | Recorded Investment | Unpaid Principal Balance | |||||||||||
With no related allowance recorded: | |||||||||||||||
CRE—property development—acquired credit-impaired | $ | — | $ | 34 | $ | — | $ | 34 | |||||||
CRE—other—acquired credit-impaired | — | 22 | — | 22 | |||||||||||
Total CRE | $ | — | $ | 56 | $ | — | $ | 56 |
Three Months Ended September 30, | |||||||
2016 | 2015 | ||||||
(In millions) | Total Loans and Leases | Total Loans and Leases | |||||
Allowance for loan and lease losses(1): | |||||||
Beginning balance | $ | 51 | $ | 43 | |||
Provision for loan losses | — | 5 | |||||
Charge-offs | — | — | |||||
Ending balance | $ | 51 | $ | 48 | |||
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
(In millions) | Total Loans and Leases | Total Loans and Leases | |||||
Allowance for loan and lease losses(1): | |||||||
Beginning balance | $ | 46 | $ | 37 | |||
Provision for loan losses | 8 | 11 | |||||
Charge-offs | (3 | ) | — | ||||
Ending balance | $ | 51 | $ | 48 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
(In millions) | Investment Servicing | Investment Management | Total | Investment Servicing | Investment Management | Total | |||||||||||||||||
Goodwill: | |||||||||||||||||||||||
Beginning balance | $ | 5,641 | $ | 30 | $ | 5,671 | $ | 5,793 | $ | 33 | $ | 5,826 | |||||||||||
Acquisitions(1) | — | 236 | 236 | — | — | — | |||||||||||||||||
Divestitures and other reductions | (11 | ) | — | (11 | ) | — | — | — | |||||||||||||||
Foreign currency translation | 15 | — | 15 | (152 | ) | (3 | ) | (155 | ) | ||||||||||||||
Ending balance | $ | 5,645 | $ | 266 | $ | 5,911 | $ | 5,641 | $ | 30 | $ | 5,671 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
(In millions) | Investment Servicing | Investment Management | Total | Investment Servicing | Investment Management | Total | |||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||
Beginning balance | $ | 1,753 | $ | 15 | $ | 1,768 | $ | 1,998 | $ | 27 | $ | 2,025 | |||||||||||
Acquisitions(1) | — | 217 | 217 | 16 | — | 16 | |||||||||||||||||
Amortization | (141 | ) | (12 | ) | (153 | ) | (187 | ) | (10 | ) | (197 | ) | |||||||||||
Foreign currency translation and other, net | 17 | — | 17 | (74 | ) | (2 | ) | (76 | ) | ||||||||||||||
Ending balance | $ | 1,629 | $ | 220 | $ | 1,849 | $ | 1,753 | $ | 15 | $ | 1,768 |
September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
(In millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||
Client relationships | $ | 2,703 | $ | (1,312 | ) | $ | 1,391 | $ | 2,486 | $ | (1,198 | ) | $ | 1,288 | |||||||||
Core deposits | 673 | (273 | ) | 400 | 667 | (246 | ) | 421 | |||||||||||||||
Other | 158 | (100 | ) | 58 | 147 | (88 | ) | 59 | |||||||||||||||
Total | $ | 3,534 | $ | (1,685 | ) | $ | 1,849 | $ | 3,300 | $ | (1,532 | ) | $ | 1,768 |
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Collateral deposits, net | $ | 24,458 | $ | 21,465 | |||
Derivative instruments, net | 3,503 | 4,777 | |||||
Bank-owned life insurance | 3,137 | 3,078 | |||||
Investments in joint ventures and other unconsolidated entities | 2,235 | 2,034 | |||||
Receivable for securities settlement | 598 | 311 | |||||
Accounts receivable | 454 | 1,018 | |||||
Prepaid expenses | 363 | 284 | |||||
Income taxes receivable | 219 | 154 | |||||
Deferred tax assets, net of valuation allowance | 215 | 182 | |||||
Deposits with clearing organizations | 138 | 127 | |||||
Other(1) | 1,000 | 473 | |||||
Total | $ | 36,320 | $ | 33,903 |
September 30, 2016 | Maturity | Paid Fixed Interest Rate | ||
Senior Notes | ||||
2018 | 1.35% | |||
2020 | 2.55 | |||
2021 | 1.95 | |||
2021 | 4.38 | |||
2023 | 3.70 | |||
2024 | 3.30 | |||
2025 | 3.55 | |||
2026 | 2.65 | |||
Subordinated Notes | ||||
2018 | 4.96 | |||
2023 | 3.10 |
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Derivatives not designated as hedging instruments: | |||||||
Interest-rate contracts: | |||||||
Swap agreements and forwards | $ | — | $ | 336 | |||
Futures | 6,492 | 2,621 | |||||
Foreign exchange contracts: | |||||||
Forward, swap and spot | 1,313,515 | 1,274,277 | |||||
Options purchased | 131 | 403 | |||||
Options written | 24 | 404 | |||||
Futures | 37 | — | |||||
Credit derivative contracts: | |||||||
Credit swap agreements(1) | — | 141 | |||||
Commodity and equity contracts: | |||||||
Commodity(1) | 142 | 113 | |||||
Equity(1) | 76 | 87 | |||||
Other: | |||||||
Stable value contracts | 27,319 | 24,583 | |||||
Deferred value awards(2) | 456 | 320 | |||||
Derivatives designated as hedging instruments: | |||||||
Interest-rate contracts: | |||||||
Swap agreements | 10,276 | 9,398 | |||||
Foreign exchange contracts: | |||||||
Forward and swap | 4,812 | 4,515 |
September 30, 2016(1) | |||
(In millions) | Fair Value Hedges | ||
Investment securities available-for-sale | $ | 1,551 | |
Long-term debt(2) | 8,725 | ||
Total | $ | 10,276 |
December 31, 2015(1) | |||
(In millions) | Fair Value Hedges | ||
Investment securities available-for-sale | $ | 1,698 | |
Long-term debt(2) | 7,700 | ||
Total | $ | 9,398 |
Three Months Ended September 30, | |||||||||||
2016 | 2015 | ||||||||||
Contractual Rates | Rate Including Impact of Hedges | Contractual Rates | Rate Including Impact of Hedges | ||||||||
Long-term debt | 3.37 | % | 2.27 | % | 3.59 | % | 2.35 | % | |||
Nine Months Ended September 30, | |||||||||||
2016 | 2015 | ||||||||||
Contractual Rates | Rate Including Impact of Hedges | Contractual Rates | Rate Including Impact of Hedges | ||||||||
Long-term debt | 3.41 | % | 2.24 | % | 3.60 | % | 2.51 | % |
Derivative Assets(1) | |||||||
Fair Value | |||||||
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign exchange contracts | $ | 7,838 | $ | 10,799 | |||
Interest-rate contracts | — | 2 | |||||
Other derivative contracts | 3 | 5 | |||||
Total | $ | 7,841 | $ | 10,806 | |||
Derivatives designated as hedging instruments: | |||||||
Foreign exchange contracts | $ | 299 | $ | 517 | |||
Interest-rate contracts | 239 | 133 | |||||
Total | $ | 538 | $ | 650 |
Derivative Liabilities(1) | |||||||
Fair Value | |||||||
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Derivatives not designated as hedging instruments: | |||||||
Foreign exchange contracts | $ | 7,753 | $ | 10,795 | |||
Other derivative contracts | 150 | 103 | |||||
Interest-rate contracts | — | 2 | |||||
Total | $ | 7,903 | $ | 10,900 | |||
Derivatives designated as hedging instruments: | |||||||
Foreign exchange contracts | $ | 148 | $ | 73 | |||
Interest-rate contracts | 189 | 180 | |||||
Total | $ | 337 | $ | 253 |
Location of Gain (Loss) on Derivative in Consolidated Statement of Income | Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Foreign exchange contracts | Trading services revenue | $ | 161 | $ | 177 | $ | 477 | $ | 546 | ||||||||
Interest-rate contracts | Processing fees and other revenue | — | — | 1 | — | ||||||||||||
Interest-rate contracts | Trading services revenue | (1 | ) | — | (6 | ) | (1 | ) | |||||||||
Credit derivative contracts | Trading services revenue | — | — | (1 | ) | ||||||||||||
Other derivative contracts | Trading services revenue | 1 | (1 | ) | (2 | ) | 1 | ||||||||||
Total | $ | 161 | $ | 176 | $ | 469 | $ | 546 |
Location of (Gain) Loss on Derivative in Consolidated Statement of Income | Amount of (Gain) Loss on Derivative Recognized in Consolidated Statement of Income | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Other derivative contracts | Compensation and employee benefits | $ | 41 | $ | 28 | $ | 168 | $ | 121 | ||||||||
Total | $ | 41 | $ | 28 | $ | 168 | $ | 121 |
Location of Gain (Loss) on Derivative in Consolidated Statement of Income | Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income | Hedged Item in Fair Value Hedging Relationship | Location of Gain (Loss) on Hedged Item in Consolidated Statement of Income | Amount of Gain (Loss) on Hedged Item Recognized in Consolidated Statement of Income | |||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
Derivatives designated as fair value hedges: | |||||||||||||||||||
Foreign exchange contracts | Processing fees and other revenue | $ | 24 | $ | (80 | ) | Investment securities | Processing fees and other revenue | $ | (24 | ) | $ | 80 | ||||||
Foreign exchange contracts | Processing fees and other revenue | 1 | (13 | ) | FX deposit | Processing fees and other revenue | (1 | ) | 13 | ||||||||||
Interest-rate contracts | Processing fees and other revenue | 22 | (25 | ) | Available-for-sale securities | Processing fees and other revenue(1) | (22 | ) | 26 | ||||||||||
Interest-rate contracts | Processing fees and other revenue | (79 | ) | 182 | Long-term debt | Processing fees and other revenue | 78 | (176 | ) | ||||||||||
Total | $ | (32 | ) | $ | 64 | $ | 31 | $ | (57 | ) |
Location of Gain (Loss) on Derivative in Consolidated Statement of Income | Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income | Hedged Item in Fair Value Hedging Relationship | Location of Gain (Loss) on Hedged Item in Consolidated Statement of Income | Amount of Gain (Loss) on Hedged Item Recognized in Consolidated Statement of Income | |||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
Derivatives designated as fair value hedges: | |||||||||||||||||||
Foreign exchange contracts | Processing fees and other revenue | $ | 43 | $ | (132 | ) | Investment securities | Processing fees and other revenue | $ | (43 | ) | $ | 132 | ||||||
Foreign exchange contracts | Processing fees and other revenue | 247 | 102 | FX deposit | Processing fees and other revenue | (247 | ) | (102 | ) | ||||||||||
Interest-rate contracts | Processing fees and other revenue | (15 | ) | (13 | ) | Available-for-sale securities | Processing fees and other revenue(2) | 15 | 14 | ||||||||||
Interest-rate contracts | Processing fees and other revenue | 297 | 165 | Long-term debt | Processing fees and other revenue | (282 | ) | (159 | ) | ||||||||||
Total | $ | 572 | $ | 122 | $ | (557 | ) | $ | (115 | ) |
Amount of Gain (Loss) on Derivative Recognized in Other Comprehensive Income | Location of Gain (Loss) Reclassified from OCI to Consolidated Statement of Income | Amount of Gain (Loss) Reclassified from OCI to Consolidated Statement of Income | Location of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income | Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income | |||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||||||||
Interest-rate contracts | $ | — | $ | — | Net interest revenue | $ | — | $ | (1 | ) | Net interest revenue | $ | — | $ | — | ||||||||||||
Foreign exchange contracts | (1 | ) | 40 | Net interest revenue | — | — | Net interest revenue | 6 | 2 | ||||||||||||||||||
Total | $ | (1 | ) | $ | 40 | $ | — | $ | (1 | ) | $ | 6 | $ | 2 | |||||||||||||
Derivatives designated as net investment hedges: | |||||||||||||||||||||||||||
Foreign exchange contracts | $ | 4 | $ | — | Gains (Losses) related to investment securities, net | $ | — | $ | — | Gains (Losses) related to investment securities, net | $ | — | $ | — | |||||||||||||
Total | $ | 4 | $ | — | $ | — | $ | — | $ | — | $ | — |
Amount of Gain (Loss) on Derivative Recognized in Other Comprehensive Income | Location of Gain (Loss) Reclassified from OCI to Consolidated Statement of Income | Amount of Gain (Loss) Reclassified from OCI to Consolidated Statement of Income | Location of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income | Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income | |||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||||||||
Interest-rate contracts | $ | — | $ | — | Net interest revenue | $ | — | $ | (3 | ) | Net interest revenue | $ | — | $ | — | ||||||||||||
Foreign exchange contracts | (293 | ) | 81 | Net interest revenue | — | — | Net interest revenue | 17 | 6 | ||||||||||||||||||
Total | $ | (293 | ) | $ | 81 | $ | — | $ | (3 | ) | $ | 17 | $ | 6 | |||||||||||||
Derivatives designated as net investment hedges: | |||||||||||||||||||||||||||
Foreign exchange contracts | $ | 55 | $ | — | Gains (Losses) related to investment securities, net | $ | — | $ | — | Gains (Losses) related to investment securities, net | $ | — | $ | — | |||||||||||||
Total | $ | 55 | $ | — | $ | — | $ | — | $ | — | $ | — |
Assets: | September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
(In millions) | Gross Amounts of Recognized Assets(1)(2) | Gross Amounts Offset in Statement of Condition(3) | Net Amounts of Assets Presented in Statement of Condition | Gross Amounts of Recognized Assets(1) | Gross Amounts Offset in Statement of Condition(3) | Net Amounts of Assets Presented in Statement of Condition | ||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||
Foreign exchange contracts | $ | 8,137 | $ | (3,936 | ) | $ | 4,201 | $ | 11,316 | $ | (5,896 | ) | $ | 5,420 | ||||||||||
Interest-rate contracts | 239 | (8 | ) | 231 | 135 | (5 | ) | 130 | ||||||||||||||||
Other derivative contracts | 3 | (3 | ) | — | 5 | (2 | ) | 3 | ||||||||||||||||
Cash collateral netting | NA | (929 | ) | (929 | ) | N/A | (776 | ) | (776 | ) | ||||||||||||||
Total derivatives | $ | 8,379 | $ | (4,876 | ) | $ | 3,503 | $ | 11,456 | $ | (6,679 | ) | $ | 4,777 | ||||||||||
Other financial instruments: | ||||||||||||||||||||||||
Resale agreements and securities borrowing(4) | $ | 62,733 | $ | (36,580 | ) | $ | 26,153 | $ | 62,522 | $ | (38,997 | ) | $ | 23,525 | ||||||||||
Total derivatives and other financial instruments | $ | 71,112 | $ | (41,456 | ) | $ | 29,656 | $ | 73,978 | $ | (45,676 | ) | $ | 28,302 |
September 30, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||
Gross Amounts Not Offset in Statement of Condition | Gross Amounts Not Offset in Statement of Condition | |||||||||||||||||||||||||||||||
(In millions) | Net Amount of Assets Presented in Statement of Condition | Counterparty Netting | Cash and Securities Received(1) | Net Amount(2) | Net Amount of Assets Presented in Statement of Condition | Counterparty Netting | Cash and Securities Received(1) | Net Amount(2) | ||||||||||||||||||||||||
Derivatives | $ | 3,503 | $ | — | $ | (159 | ) | $ | 3,344 | $ | 4,777 | $ | — | $ | (405 | ) | $ | 4,372 | ||||||||||||||
Resale agreements and securities borrowing | 26,153 | (120 | ) | (25,783 | ) | 250 | 23,525 | (63 | ) | (22,812 | ) | 650 | ||||||||||||||||||||
Total | $ | 29,656 | $ | (120 | ) | $ | (25,942 | ) | $ | 3,594 | $ | 28,302 | $ | (63 | ) | $ | (23,217 | ) | $ | 5,022 |
Liabilities: | September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
(In millions) | Gross Amounts of Recognized Liabilities(1)(2) | Gross Amounts Offset in Statement of Condition(3) | Net Amounts of Liabilities Presented in Statement of Condition | Gross Amounts of Recognized Liabilities(1) | Gross Amounts Offset in Statement of Condition(3) | Net Amounts of Liabilities Presented in Statement of Condition | ||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||
Foreign exchange contracts | $ | 7,901 | $ | (3,936 | ) | $ | 3,965 | $ | 10,868 | $ | (5,896 | ) | $ | 4,972 | ||||||||||
Interest-rate contracts | 189 | (8 | ) | 181 | 182 | (5 | ) | 177 | ||||||||||||||||
Other derivative contracts | 150 | (3 | ) | 147 | 103 | (2 | ) | 101 | ||||||||||||||||
Cash collateral netting | NA | (731 | ) | (731 | ) | N/A | (1,118 | ) | (1,118 | ) | ||||||||||||||
Total derivatives | $ | 8,240 | $ | (4,678 | ) | $ | 3,562 | $ | 11,153 | $ | (7,021 | ) | $ | 4,132 | ||||||||||
Other financial instruments: | ||||||||||||||||||||||||
Repurchase agreements and securities lending(4) | $ | 46,363 | $ | (36,580 | ) | $ | 9,783 | $ | 46,766 | $ | (38,997 | ) | $ | 7,769 | ||||||||||
Total derivatives and other financial instruments | $ | 54,603 | $ | (41,258 | ) | $ | 13,345 | $ | 57,919 | $ | (46,018 | ) | $ | 11,901 |
September 30, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||
Gross Amounts Not Offset in Statement of Condition | Gross Amounts Not Offset in Statement of Condition | |||||||||||||||||||||||||||||||
(In millions) | Net Amount of Liabilities Presented in Statement of Condition | Counterparty Netting | Cash and Securities Provided(1) | Net Amount(2) | Net Amount of Liabilities Presented in Statement of Condition | Counterparty Netting | Cash and Securities Provided(1) | Net Amount(2) | ||||||||||||||||||||||||
Derivatives | $ | 3,562 | $ | — | $ | (8 | ) | $ | 3,554 | $ | 4,132 | $ | — | $ | (64 | ) | $ | 4,068 | ||||||||||||||
Repurchase agreements and securities lending | 9,783 | (120 | ) | (7,461 | ) | 2,202 | 7,769 | (63 | ) | (5,287 | ) | 2,419 | ||||||||||||||||||||
Total | $ | 13,345 | $ | (120 | ) | $ | (7,469 | ) | $ | 5,756 | $ | 11,901 | $ | (63 | ) | $ | (5,351 | ) | $ | 6,487 |
Remaining Contractual Maturity of the Agreements | ||||||||||||||||
As of September 30, 2016 | ||||||||||||||||
(In millions) | Overnight and Continuous | Up to 30 days | 30 – 90 days | Total | ||||||||||||
Repurchase agreements: | ||||||||||||||||
U.S. Treasury and agency securities | $ | 35,399 | $ | 15 | $ | — | $ | 35,414 | ||||||||
Non-U.S. sovereign debt | — | 57 | — | 57 | ||||||||||||
Total | 35,399 | 72 | — | 35,471 | ||||||||||||
Securities lending transactions: | ||||||||||||||||
Corporate debt securities | 63 | — | — | 63 | ||||||||||||
Equity securities | 9,526 | — | 894 | 10,420 | ||||||||||||
Non-U.S. sovereign debt | 409 | — | — | 409 | ||||||||||||
Total | 9,998 | — | 894 | 10,892 | ||||||||||||
Gross amount of recognized liabilities for repurchase agreements and securities lending | $ | 45,397 | $ | 72 | $ | 894 | $ | 46,363 |
Remaining Contractual Maturity of the Agreements | ||||||||||||||||
As of December 31, 2015 | ||||||||||||||||
(In millions) | Overnight and Continuous | Up to 30 days | 30 – 90 days | Total | ||||||||||||
Repurchase agreements: | ||||||||||||||||
U.S. Treasury and agency securities | $ | 37,157 | $ | 5 | $ | — | $ | 37,162 | ||||||||
Non-U.S. sovereign debt | — | 97 | — | 97 | ||||||||||||
Total | 37,157 | 102 | — | 37,259 | ||||||||||||
Securities lending transactions: | ||||||||||||||||
Corporate debt securities | 1 | — | — | 1 | ||||||||||||
Equity securities | 8,502 | — | 1,002 | 9,504 | ||||||||||||
Non-U.S. sovereign debt | 2 | — | — | 2 | ||||||||||||
Total | 8,505 | — | 1,002 | 9,507 | ||||||||||||
Gross amount of recognized liabilities for repurchase agreements and securities lending | $ | 45,662 | $ | 102 | $ | 1,002 | $ | 46,766 |
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Indemnified securities financing | $ | 344,191 | $ | 320,436 | |||
Stable value protection | 27,319 | 24,583 | |||||
Asset purchase agreements | 4,989 | 3,990 | |||||
Standby letters of credit | 3,597 | 4,700 |
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Fair value of indemnified securities financing | $ | 344,191 | $ | 320,436 | |||
Fair value of cash and securities held by us, as agent, as collateral for indemnified securities financing | 359,107 | 335,420 | |||||
Fair value of collateral for indemnified securities financing invested in indemnified repurchase agreements | 64,982 | 63,055 | |||||
Fair value of cash and securities held by us or our agents as collateral for investments in indemnified repurchase agreements | 69,031 | 67,016 |
(In millions) | Revenue from Indirect Foreign Exchange Trading | |||
Twelve Months Ended December 31, 2008 | $ | 462 | ||
Twelve Months Ended December 31, 2009 | 369 | |||
Twelve Months Ended December 31, 2010 | 336 | |||
Twelve Months Ended December 31, 2011 | 331 | |||
Twelve Months Ended December 31, 2012 | 248 | |||
Twelve Months Ended December 31, 2013 | 285 | |||
Twelve Months Ended December 31, 2014 | 246 | |||
Twelve Months Ended December 31, 2015 | 280 | |||
Nine Months Ended September 30, 2016 | 201 |
Issuance Date | Depositary Shares Issued | Ownership Interest per Depositary Share | Liquidation Preference Per Share | Liquidation Preference Per Depositary Share | Net Proceeds of Offering (In millions) | Redemption Date(1) | ||||||||||||||
Preferred Stock(2): | ||||||||||||||||||||
Series C | August 2012 | 20,000,000 | 1/4,000th | $ | 100,000 | $ | 25 | $ | 488 | September 15, 2017 | ||||||||||
Series D | February 2014 | 30,000,000 | 1/4,000th | 100,000 | 25 | 742 | March 15, 2024 | |||||||||||||
Series E | November 2014 | 30,000,000 | 1/4,000th | 100,000 | 25 | 728 | December 15, 2019 | |||||||||||||
Series F | May 2015 | 750,000 | 1/100th | 100,000 | 1,000 | 742 | September 15, 2020 | |||||||||||||
Series G | April 2016 | 20,000,000 | 1/4,000th | 100,000 | 25 | 493 | March 15, 2026 |
Three Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||
Dividends Declared per Share | Dividends Declared per Depositary Share | Total (In millions)(1) | Dividends Declared per Share | Dividends Declared per Depositary Share | Total (In millions) | ||||||||||||||||||
Preferred Stock: | |||||||||||||||||||||||
Series C | $ | 1,313 | $ | 0.33 | $ | 6 | $ | 1,313 | $ | 0.33 | $ | 7 | |||||||||||
Series D | 1,475 | 0.37 | 11 | 1,475 | 0.37 | 11 | |||||||||||||||||
Series E | 1,500 | 0.38 | 11 | 1,500 | 0.38 | 11 | |||||||||||||||||
Series F | 2,625 | 26.25 | 20 | 1,663 | 16.63 | 12 | |||||||||||||||||
Series G | 1,338 | 0.33 | 7 | — | — | — | |||||||||||||||||
Total | $ | 55 | $ | 41 | |||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||
Dividends Declared per Share | Dividends Declared per Depositary Share | Total (In millions) | Dividends Declared per Share | Dividends Declared per Depositary Share | Total (In millions) | ||||||||||||||||||
Preferred Stock: | |||||||||||||||||||||||
Series C | $ | 3,939 | $ | 0.99 | $ | 19 | $ | 3,939 | $ | 0.99 | $ | 20 | |||||||||||
Series D | 4,425 | 1.11 | 33 | 4,425 | 1.11 | 33 | |||||||||||||||||
Series E | 4,500 | 1.14 | 33 | 4,833 | 1.22 | 36 | |||||||||||||||||
Series F | 5,250 | 52.50 | 40 | 1,663 | 16.63 | 12 | |||||||||||||||||
Series G | 2,289 | 0.57 | 12 | — | — | — | |||||||||||||||||
Total | $ | 137 | $ | 101 |
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||
Shares Purchased (In millions) | Average Cost per Share | Total Purchased (In millions) | Shares Purchased (In millions) | Average Cost per Share | Total Purchased (In millions) | ||||||||||||||||
2015 Program | — | $ | — | $ | — | 12.1 | $ | 58.83 | $ | 715 | |||||||||||
2016 Program | 4.7 | 69.03 | 325 | 4.7 | 69.03 | 325 | |||||||||||||||
Total | 4.7 | $ | 69.03 | $ | 325 | 16.8 | $ | 61.68 | $ | 1,040 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
Dividends Declared per Share | Total (In millions) | Dividends Declared per Share | Total (In millions) | Dividends Declared per Share | Total (In millions) | Dividends Declared per Share | Total (In millions) | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||||||
Common Stock | $ | 0.38 | $ | 147 | $ | 0.34 | $ | 138 | $ | 1.06 | $ | 414 | $ | 0.98 | $ | 401 |
(In millions) | September 30, 2016 | December 31, 2015 | |||||
Net unrealized gains on cash flow hedges | $ | 80 | $ | 293 | |||
Net unrealized gains (losses) on available-for-sale securities portfolio | 542 | 9 | |||||
Net unrealized gains (losses) related to reclassified available-for-sale securities | (28 | ) | (28 | ) | |||
Net unrealized gains (losses) on available-for-sale securities | 514 | (19 | ) | ||||
Net unrealized losses on available-for-sale securities designated in fair value hedges | (118 | ) | (109 | ) | |||
Net unrealized gains (losses) on hedges of net investments in non-U.S. subsidiaries | 41 | (14 | ) | ||||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit | (11 | ) | (16 | ) | |||
Net unrealized losses on retirement plans | (182 | ) | (183 | ) | |||
Foreign currency translation | (1,317 | ) | (1,394 | ) | |||
Total | $ | (993 | ) | $ | (1,442 | ) |
Nine Months Ended September 30, 2016 | |||||||||||||||||||||||||||
(In millions) | Net Unrealized Gains (Losses) on Cash Flow Hedges | Net Unrealized Gains (Losses) on Available-for-Sale Securities | Net Unrealized Gains (Losses) on Hedges of Net Investments in Non-U.S. Subsidiaries | Other-Than-Temporary Impairment on Held-to-Maturity Securities | Net Unrealized Losses on Retirement Plans | Foreign Currency Translation | Total | ||||||||||||||||||||
Balance as of December 31, 2015 | $ | 293 | $ | (128 | ) | $ | (14 | ) | $ | (16 | ) | $ | (183 | ) | $ | (1,394 | ) | $ | (1,442 | ) | |||||||
Other comprehensive income (loss) before reclassifications | (213 | ) | 520 | 55 | 6 | — | 77 | 445 | |||||||||||||||||||
Amounts reclassified into (out of) earnings | — | 4 | — | (1 | ) | 1 | — | 4 | |||||||||||||||||||
Other comprehensive income (loss) | (213 | ) | 524 | 55 | 5 | 1 | 77 | 449 | |||||||||||||||||||
Balance as of September 30, 2016 | $ | 80 | $ | 396 | $ | 41 | $ | (11 | ) | $ | (182 | ) | $ | (1,317 | ) | $ | (993 | ) |
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||||||
(In millions) | Net Unrealized Gains (Losses) on Cash Flow Hedges | Net Unrealized Gains (Losses) on Available-for-Sale Securities | Net Unrealized Losses on Hedges of Net Investments in Non-U.S. Subsidiaries | Other-Than-Temporary Impairment on Held-to-Maturity Securities | Net Unrealized Losses on Retirement Plans | Foreign Currency Translation | Total | ||||||||||||||||||||
Balance as of December 31, 2014 | $ | 276 | $ | 192 | $ | (14 | ) | $ | (29 | ) | $ | (272 | ) | $ | (660 | ) | $ | (507 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | 44 | (112 | ) | — | 12 | — | (555 | ) | (611 | ) | |||||||||||||||||
Amounts reclassified into (out of) earnings | 2 | (3 | ) | — | (1 | ) | 19 | — | 17 | ||||||||||||||||||
Other comprehensive income (loss) | 46 | (115 | ) | — | 11 | 19 | (555 | ) | (594 | ) | |||||||||||||||||
Balance as of September 30, 2015 | $ | 322 | $ | 77 | $ | (14 | ) | $ | (18 | ) | $ | (253 | ) | $ | (1,215 | ) | $ | (1,101 | ) |
Three Months Ended September 30, | |||||||||
2016 | 2015 | ||||||||
(In millions) | Amounts Reclassified into (out of) Earnings | Affected Line Item in Consolidated Statement of Income | |||||||
Cash flow hedges: | |||||||||
Interest-rate contracts | $ | — | $ | 1 | Net interest revenue | ||||
Available-for-sale securities: | |||||||||
Net realized gains from sales of available-for-sale securities, net of related taxes of ($2) and $0, respectively | 2 | (1 | ) | Net gains (losses) from sales of available-for-sale securities | |||||
Held-to-maturity securities: | |||||||||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related tax benefit of $1 and $0, respectively | — | — | Losses reclassified (from) to other comprehensive income | ||||||
Retirement plans: | |||||||||
Amortization of actuarial losses, net of related taxes of $1 and ($3), respectively | (1 | ) | 4 | Compensation and employee benefits expenses | |||||
Total reclassifications into AOCI | $ | 1 | $ | 4 |
Nine Months Ended September 30, | |||||||||
2016 | 2015 | ||||||||
(In millions) | Amounts Reclassified into (out of) Earnings | Affected Line Item in Consolidated Statement of Income | |||||||
Cash flow hedges: | |||||||||
Interest-rate contracts, net of related taxes of $0 and $1, respectively | $ | — | $ | 2 | Net interest revenue | ||||
Available-for-sale securities: | |||||||||
Net realized gains from sales of available-for-sale securities, net of related taxes of ($3) and $1, respectively | 4 | (3 | ) | Net gains (losses) from sales of available-for-sale securities | |||||
Held-to-maturity securities: | |||||||||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of $1 and $0, respectively | (1 | ) | (1 | ) | Losses reclassified (from) to other comprehensive income | ||||
Retirement plans: | |||||||||
Amortization of actuarial losses, net of related taxes of ($2) and ($4), respectively | 1 | 19 | Compensation and employee benefits expenses | ||||||
Total reclassifications into AOCI | $ | 4 | $ | 17 |
State Street | State Street Bank | ||||||||||||||||||||||||||||||||||
(In millions) | Basel III Advanced Approaches September 30, 2016(1) | Basel III Standardized Approach September 30, 2016(2) | Basel III Advanced Approaches December 31, 2015(1) | Basel III Standardized Approach December 31, 2015(2) | Basel III Advanced Approaches September 30, 2016(1) | Basel III Standardized Approach September 30, 2016(2) | Basel III Advanced Approaches December 31, 2015(1) | Basel III Standardized Approach December 31, 2015(2) | |||||||||||||||||||||||||||
Common shareholders' equity: | |||||||||||||||||||||||||||||||||||
Common stock and related surplus | $ | 10,282 | $ | 10,282 | $ | 10,250 | $ | 10,250 | $ | 11,339 | $ | 11,339 | $ | 10,938 | $ | 10,938 | |||||||||||||||||||
Retained earnings | 17,047 | 17,047 | 16,049 | 16,049 | 11,593 | 11,593 | 10,655 | 10,655 | |||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | (1,107 | ) | (1,107 | ) | (1,422 | ) | (1,422 | ) | (880 | ) | (880 | ) | (1,230 | ) | (1,230 | ) | |||||||||||||||||||
Treasury stock, at cost | (7,382 | ) | (7,382 | ) | (6,457 | ) | (6,457 | ) | — | — | — | — | |||||||||||||||||||||||
Total | 18,840 | 18,840 | 18,420 | 18,420 | 22,052 | 22,052 | 20,363 | 20,363 | |||||||||||||||||||||||||||
Regulatory capital adjustments: | |||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities(3) | (6,483 | ) | (6,483 | ) | (5,927 | ) | (5,927 | ) | (6,152 | ) | (6,152 | ) | (5,631 | ) | (5,631 | ) | |||||||||||||||||||
Other adjustments | (88 | ) | (88 | ) | (60 | ) | (60 | ) | (83 | ) | (83 | ) | (85 | ) | (85 | ) | |||||||||||||||||||
Common equity tier 1 capital | 12,269 | 12,269 | 12,433 | 12,433 | 15,817 | 15,817 | 14,647 | 14,647 | |||||||||||||||||||||||||||
Preferred stock | 3,196 | 3,196 | 2,703 | 2,703 | — | — | — | — | |||||||||||||||||||||||||||
Trust preferred capital securities subject to phase-out from tier 1 capital | — | — | 237 | 237 | — | — | — | — | |||||||||||||||||||||||||||
Other adjustments | (58 | ) | (58 | ) | (109 | ) | (109 | ) | — | — | — | — | |||||||||||||||||||||||
Tier 1 capital | 15,407 | 15,407 | 15,264 | 15,264 | 15,817 | 15,817 | 14,647 | 14,647 | |||||||||||||||||||||||||||
Qualifying subordinated long-term debt | 1,259 | 1,259 | 1,358 | 1,358 | 1,270 | 1,270 | 1,371 | 1,371 | |||||||||||||||||||||||||||
Trust preferred capital securities phased out of tier 1 capital | 890 | 890 | 713 | 713 | — | — | — | — | |||||||||||||||||||||||||||
ALLL and other | 3 | 75 | 12 | 66 | 4 | 75 | 8 | 66 | |||||||||||||||||||||||||||
Other adjustments | 1 | 1 | 2 | 2 | — | — | — | — | |||||||||||||||||||||||||||
Total capital | $ | 17,560 | $ | 17,632 | $ | 17,349 | $ | 17,403 | $ | 17,091 | $ | 17,162 | $ | 16,026 | $ | 16,084 | |||||||||||||||||||
Risk-weighted assets: | |||||||||||||||||||||||||||||||||||
Credit risk | $ | 51,916 | $ | 96,668 | $ | 51,733 | $ | 93,515 | $ | 47,609 | $ | 92,165 | $ | 47,677 | $ | 89,164 | |||||||||||||||||||
Operational risk | 44,643 | NA | 43,882 | NA | 44,115 | NA | 43,324 | NA | |||||||||||||||||||||||||||
Market risk(4) | 3,177 | 1,706 | 3,937 | 2,378 | 3,177 | 1,706 | 3,939 | 2,378 | |||||||||||||||||||||||||||
Total risk-weighted assets | $ | 99,736 | $ | 98,374 | $ | 99,552 | $ | 95,893 | $ | 94,901 | $ | 93,871 | $ | 94,940 | $ | 91,542 | |||||||||||||||||||
Adjusted quarterly average assets | $ | 226,093 | $ | 226,093 | $ | 221,880 | $ | 221,880 | $ | 221,508 | $ | 221,508 | $ | 217,358 | $ | 217,358 | |||||||||||||||||||
Capital Ratios: | 2016 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(5) | 2015 Minimum Requirements(6) | |||||||||||||||||||||||||||||||||
Common equity tier 1 capital | 5.5 | % | 4.5 | % | 12.3 | % | 12.5 | % | 12.5 | % | 13.0 | % | 16.7 | % | 16.8 | % | 15.4 | % | 16.0 | % | |||||||||||||||
Tier 1 capital | 7.0 | 6.0 | 15.4 | 15.7 | 15.3 | 15.9 | 16.7 | 16.8 | 15.4 | 16.0 | |||||||||||||||||||||||||
Total capital | 9.0 | 8.0 | 17.6 | 17.9 | 17.4 | 18.1 | 18.0 | 18.3 | 16.9 | 17.6 | |||||||||||||||||||||||||
Tier 1 leverage | 4.0 | 4.0 | 6.8 | 6.8 | 6.9 | 6.9 | 7.1 | 7.1 | 6.7 | 6.7 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Interest revenue: | |||||||||||||||
Deposits with banks | $ | 29 | $ | 53 | $ | 101 | $ | 161 | |||||||
Investment securities: | |||||||||||||||
U.S. Treasury and federal agencies | 200 | 178 | 620 | 537 | |||||||||||
State and political subdivisions | 55 | 57 | 162 | 173 | |||||||||||
Other investments | 208 | 227 | 580 | 733 | |||||||||||
Securities purchased under resale agreements | 40 | 18 | 112 | 45 | |||||||||||
Trading account assets | — | — | 1 | — | |||||||||||
Loans and leases | 97 | 79 | 281 | 229 | |||||||||||
Other interest-earning assets | 18 | 2 | 39 | 7 | |||||||||||
Total interest revenue | 647 | 614 | 1,896 | 1,885 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 20 | 28 | 73 | 67 | |||||||||||
Securities sold under repurchase agreements | — | — | 1 | — | |||||||||||
Short-term borrowings | 2 | 1 | 4 | 5 | |||||||||||
Long-term debt | 68 | 62 | 191 | 185 | |||||||||||
Other interest-bearing liabilities | 20 | 10 | 57 | 34 | |||||||||||
Total interest expense | 110 | 101 | 326 | 291 | |||||||||||
Net interest revenue | $ | 537 | $ | 513 | $ | 1,570 | $ | 1,594 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Litigation | $ | 47 | $ | (7 | ) | $ | 47 | $ | 396 | ||||||
Insurance | 31 | 33 | 74 | 98 | |||||||||||
Regulatory fees and assessments | 28 | 31 | 65 | 90 | |||||||||||
Securities processing | 10 | 40 | 20 | 75 | |||||||||||
Other | 71 | 44 | 231 | 186 | |||||||||||
Total other expenses | $ | 187 | $ | 141 | $ | 437 | $ | 845 |
(In millions) | Employee Related Costs | Real Estate Consolidation | Asset and Other Write-offs | Total | |||||||||||
Balance at December 31, 2015 | $ | 9 | $ | 11 | $ | 3 | $ | 23 | |||||||
Accruals for State Street Beacon | 86 | — | 11 | 97 | |||||||||||
Payments and Other Adjustments | (4 | ) | (1 | ) | (7 | ) | (12 | ) | |||||||
Balance at March 31, 2016 | 91 | 10 | 7 | 108 | |||||||||||
Accruals for State Street Beacon | (1 | ) | 15 | (1 | ) | 13 | |||||||||
Payments and Other Adjustments | (35 | ) | (3 | ) | (1 | ) | (39 | ) | |||||||
Balance at June 30, 2016 | 55 | 22 | 5 | 82 | |||||||||||
Accruals for State Street Beacon | 8 | 3 | (1 | ) | 10 | ||||||||||
Payments and Other Adjustments | (14 | ) | (3 | ) | (1 | ) | (18 | ) | |||||||
Balance at September 30, 2016 | $ | 49 | $ | 22 | $ | 3 | $ | 74 |
Three Months Ended September 30, | |||||||
(Dollars in millions, except per share amounts) | 2016 | 2015 | |||||
Net income | $ | 563 | $ | 581 | |||
Less: | |||||||
Preferred stock dividends | (55 | ) | (42 | ) | |||
Dividends and undistributed earnings allocated to participating securities(1) | (1 | ) | — | ||||
Net income available to common shareholders | $ | 507 | $ | 539 | |||
Average common shares outstanding (In thousands): | |||||||
Basic average common shares | 388,358 | 406,612 | |||||
Effect of dilutive securities: common stock options and common stock awards | 4,854 | 5,555 | |||||
Diluted average common shares | 393,212 | 412,167 | |||||
Anti-dilutive securities(2) | 2,166 | 619 | |||||
Earnings per Common Share: | |||||||
Basic | $ | 1.31 | $ | 1.33 | |||
Diluted(3) | 1.29 | 1.31 | |||||
Nine Months Ended September 30, | |||||||
(Dollars in millions, except per share amounts) | 2016 | 2015 | |||||
Net income | $ | 1,550 | $ | 1,404 | |||
Less: | |||||||
Preferred stock dividends | (137 | ) | (102 | ) | |||
Dividends and undistributed earnings allocated to participating securities(1) | (2 | ) | (1 | ) | |||
Net income available to common shareholders | $ | 1,411 | $ | 1,301 | |||
Average common shares outstanding (In thousands): | |||||||
Basic average common shares | 393,959 | 409,816 | |||||
Effect of dilutive securities: common stock options and common stock awards | 4,454 | 5,956 | |||||
Diluted average common shares | 398,413 | 415,772 | |||||
Anti-dilutive securities(2) | 3,027 | 675 | |||||
Earnings per Common Share: | |||||||
Basic | $ | 3.58 | $ | 3.18 | |||
Diluted(3) | 3.54 | 3.13 |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||
Investment Servicing | Investment Management | Other | Total | ||||||||||||||||||||||||||||
(Dollars in millions, except where otherwise noted) | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||
Servicing fees | $ | 1,303 | $ | 1,289 | $ | — | $ | — | $ | — | $ | — | $ | 1,303 | $ | 1,289 | |||||||||||||||
Management fees | — | — | 368 | 287 | — | — | 368 | 287 | |||||||||||||||||||||||
Trading services | 254 | 283 | 13 | 11 | — | — | 267 | 294 | |||||||||||||||||||||||
Securities finance | 136 | 113 | — | — | — | — | 136 | 113 | |||||||||||||||||||||||
Processing fees and other | 6 | 131 | (1 | ) | (11 | ) | — | — | 5 | 120 | |||||||||||||||||||||
Total fee revenue | 1,699 | 1,816 | 380 | 287 | — | — | 2,079 | 2,103 | |||||||||||||||||||||||
Net interest revenue | 536 | 514 | 1 | (1 | ) | — | — | 537 | 513 | ||||||||||||||||||||||
Gains (losses) related to investment securities, net | 4 | (2 | ) | — | — | — | — | 4 | (2 | ) | |||||||||||||||||||||
Total revenue | 2,239 | 2,328 | 381 | 286 | — | — | 2,620 | 2,614 | |||||||||||||||||||||||
Provision for loan losses | — | 5 | — | — | — | — | — | 5 | |||||||||||||||||||||||
Total expenses | 1,634 | 1,673 | 317 | 204 | 33 | 85 | 1,984 | 1,962 | |||||||||||||||||||||||
Income before income tax expense | $ | 605 | $ | 650 | $ | 64 | $ | 82 | $ | (33 | ) | $ | (85 | ) | $ | 636 | $ | 647 | |||||||||||||
Pre-tax margin | 27 | % | 28 | % | 17 | % | 29 | % | 24 | % | 25 | % | |||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
Investment Servicing | Investment Management | Other | Total | ||||||||||||||||||||||||||||
(Dollars in millions, except where otherwise noted) | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||
Servicing fees | $ | 3,784 | $ | 3,876 | $ | — | $ | — | $ | — | $ | — | $ | 3,784 | $ | 3,876 | |||||||||||||||
Management fees | — | — | 931 | 892 | — | — | 931 | 892 | |||||||||||||||||||||||
Trading services | 771 | 869 | 35 | 30 | — | — | 806 | 899 | |||||||||||||||||||||||
Securities finance | 426 | 369 | — | — | — | — | 426 | 369 | |||||||||||||||||||||||
Processing fees and other | 153 | 212 | 2 | (14 | ) | — | — | 155 | 198 | ||||||||||||||||||||||
Total fee revenue | 5,134 | 5,326 | 968 | 908 | — | — | 6,102 | 6,234 | |||||||||||||||||||||||
Net interest revenue | 1,567 | 1,593 | 3 | 1 | — | — | 1,570 | 1,594 | |||||||||||||||||||||||
Gains (losses) related to investment securities, net | 5 | (6 | ) | — | — | — | — | 5 | (6 | ) | |||||||||||||||||||||
Total revenue | 6,706 | 6,913 | 971 | 909 | — | — | 7,677 | 7,822 | |||||||||||||||||||||||
Provision for loan losses | 8 | 11 | — | — | — | — | 8 | 11 | |||||||||||||||||||||||
Total expenses | 4,920 | 5,389 | 817 | 711 | 157 | 93 | 5,894 | 6,193 | |||||||||||||||||||||||
Income before income tax expense | $ | 1,778 | $ | 1,513 | $ | 154 | $ | 198 | $ | (157 | ) | $ | (93 | ) | $ | 1,775 | $ | 1,618 | |||||||||||||
Pre-tax margin | 27 | % | 22 | % | 16 | % | 22 | % | 23 | % | 21 | % |
Three Months Ended September 30, 2016 | Three Months Ended September 30, 2015 | ||||||||||||||||||||||
(In millions) | Non-U.S. | U.S. | Total | Non-U.S. | U.S. | Total | |||||||||||||||||
Total revenue | $ | 1,117 | $ | 1,503 | $ | 2,620 | $ | 1,088 | $ | 1,526 | $ | 2,614 | |||||||||||
Income before income taxes | 314 | 322 | 636 | 255 | 392 | 647 | |||||||||||||||||
Nine Months Ended September 30, 2016 | Nine Months Ended September 30, 2015 | ||||||||||||||||||||||
(In millions) | Non-U.S. | U.S. | Total | Non-U.S. | U.S. | Total | |||||||||||||||||
Total revenue | $ | 3,278 | $ | 4,399 | $ | 7,677 | $ | 3,385 | $ | 4,437 | $ | 7,822 | |||||||||||
Income before income taxes | 835 | 940 | 1,775 | 946 | 672 | 1,618 |
(Dollars in millions, except per share amounts, shares in thousands) | Total Number of Shares Purchased Under Publicly Announced Program | Average Price Paid Per Share | Approximate Dollar Value of Shares Purchased Under Publicly Announced Program | Approximate Dollar Value of Shares Yet to be Purchased Under Publicly Announced Program | |||||||||||
Period: | |||||||||||||||
July 1 - July 31, 2016 | — | $ | — | $ | — | $ | 1,400 | ||||||||
August 1 - August 31, 2016 | 2,393 | 68.03 | 163 | 1,237 | |||||||||||
September 1 - September 30, 2016 | 2,315 | 70.07 | 162 | 1,075 | |||||||||||
Total | 4,708 | $ | 69.03 | $ | 325 | $ | 1,075 |
STATE STREET CORPORATION | |||||
(Registrant) | |||||
Date: | November 3, 2016 | By: | /s/ MICHAEL W. BELL | ||
Michael W. Bell, | |||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||||
Date: | November 3, 2016 | By: | /s/ SEAN P. NEWTH | ||
Sean P. Newth, | |||||
Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) | |||||
† | 10.1 | Letter Agreement dated September 22, 2016 between Eric Aboaf and State Street Corporation (filed as Exhibit 10.1 to State Street's Current Report on Form 8-K (File No. 001-07511), filed with the SEC on September 28, 2016 and incorporated herein by reference) | |
12 | Statement of Ratios of Earnings to Fixed Charges | ||
15 | Letter regarding unaudited interim financial information | ||
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chairman, President and Chief Executive Officer | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | ||
32 | Section 1350 Certifications | ||
* | 101.INS | XBRL Instance Document | |
* | 101.SCH | XBRL Taxonomy Extension Schema Document | |
* | 101.CAL | XBRL Taxonomy Calculation Linkbase Document | |
* | 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
* | 101.LAB | XBRL Taxonomy Label Linkbase Document | |
* | 101.PRE | XBRL Taxonomy Presentation Linkbase Document |
† | Denotes management contract or compensatory plan or arrangement | |
* | Submitted electronically herewith |
Nine Months Ended September 30, | Years Ended December 31, | |||||||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
EXCLUDING INTEREST ON DEPOSITS: | ||||||||||||||||||||||||
Pre-tax income from continuing operations, as reported | $ | 1,775 | $ | 2,298 | $ | 2,437 | $ | 2,666 | $ | 2,747 | $ | 2,518 | ||||||||||||
Share of pre-tax income (loss) of unconsolidated entities | 549 | (700 | ) | (10 | ) | 1 | (15 | ) | 37 | |||||||||||||||
Fixed charges | 243 | 321 | 318 | 365 | 370 | 462 | ||||||||||||||||||
Adjusted earnings | (A) | $ | 2,567 | $ | 1,919 | $ | 2,745 | $ | 3,032 | $ | 3,102 | $ | 3,017 | |||||||||||
Interest on short-term borrowings | $ | 5 | $ | 7 | $ | 6 | $ | 60 | $ | 73 | $ | 96 | ||||||||||||
Interest on long-term debt, including amortization of debt issuance costs | 174 | 219 | 206 | 184 | 176 | 241 | ||||||||||||||||||
Portion of long-term leases representative of the interest factor(1) | 64 | 95 | 106 | 121 | 121 | 125 | ||||||||||||||||||
Preferred stock dividends and related adjustments(2) | 157 | 112 | 61 | 33 | 39 | 27 | ||||||||||||||||||
Fixed charges and preferred stock dividends | (B) | $ | 400 | $ | 433 | $ | 379 | $ | 398 | $ | 409 | $ | 489 | |||||||||||
Consolidated ratios of adjusted earnings to combined fixed charges and preferred stock dividends, excluding interest on deposits | (A)/(B) | 6.41 x | 4.43x | 7.24x | 7.62x | 7.58x | 6.17x | |||||||||||||||||
INCLUDING INTEREST ON DEPOSITS: | ||||||||||||||||||||||||
Pre-tax income from continuing operations, as reported | $ | 1,775 | $ | 2,298 | $ | 2,437 | $ | 2,666 | $ | 2,747 | $ | 2,518 | ||||||||||||
Share of pre-tax income (loss) of unconsolidated entities | 549 | (700 | ) | (10 | ) | 1 | (15 | ) | 37 | |||||||||||||||
Fixed charges | 315 | 418 | 416 | 458 | 536 | 682 | ||||||||||||||||||
Adjusted earnings | (C) | $ | 2,639 | $ | 2,016 | $ | 2,843 | $ | 3,125 | $ | 3,268 | $ | 3,237 | |||||||||||
Interest on short-term borrowings and deposits | $ | 77 | $ | 104 | $ | 104 | $ | 153 | $ | 239 | $ | 316 | ||||||||||||
Interest on long-term debt, including amortization of debt issuance costs | 174 | 219 | 206 | 184 | 176 | 241 | ||||||||||||||||||
Portion of long-term leases representative of the interest factor(1) | 64 | 95 | 106 | 121 | 121 | 125 | ||||||||||||||||||
Preferred stock dividends and related adjustments(2) | 157 | 112 | 61 | 33 | 39 | 27 | ||||||||||||||||||
Fixed charges and preferred stock dividends | (D) | $ | 472 | $ | 530 | $ | 477 | $ | 491 | $ | 575 | $ | 709 | |||||||||||
Consolidated ratios of adjusted earnings to combined fixed charges and preferred stock dividends, including interest on deposits | (C)/(D) | 5.59 x | 3.80x | 5.96x | 6.36x | 5.68x | 4.57x |
Nine Months Ended September 30, | Years Ended December 31, | |||||||||||||||||||||||
(Dollars in millions) | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
EXCLUDING INTEREST ON DEPOSITS: | ||||||||||||||||||||||||
Pre-tax income from continuing operations, as reported | $ | 1,775 | $ | 2,298 | $ | 2,437 | $ | 2,666 | $ | 2,747 | $ | 2,518 | ||||||||||||
Share of pre-tax income (loss) of unconsolidated entities | 549 | (700 | ) | (10 | ) | 1 | (15 | ) | 37 | |||||||||||||||
Fixed charges | 243 | 321 | 318 | 365 | 370 | 462 | ||||||||||||||||||
Adjusted earnings | (A) | $ | 2,567 | $ | 1,919 | $ | 2,745 | $ | 3,032 | $ | 3,102 | $ | 3,017 | |||||||||||
Interest on short-term borrowings | $ | 5 | $ | 7 | $ | 6 | $ | 60 | $ | 73 | $ | 96 | ||||||||||||
Interest on long-term debt, including amortization of debt issuance costs | 174 | 219 | 206 | 184 | 176 | 241 | ||||||||||||||||||
Portion of long-term leases representative of the interest factor(1) | 64 | 95 | 106 | 121 | 121 | 125 | ||||||||||||||||||
Fixed charges | (B) | $ | 243 | $ | 321 | $ | 318 | $ | 365 | $ | 370 | $ | 462 | |||||||||||
Consolidated ratios of adjusted earnings to fixed charges, excluding interest on deposits | (A)/(B) | 10.56 x | 5.98x | 8.63x | 8.31x | 8.38x | 6.53x | |||||||||||||||||
INCLUDING INTEREST ON DEPOSITS: | ||||||||||||||||||||||||
Pre-tax income from continuing operations, as reported | $ | 1,775 | $ | 2,298 | $ | 2,437 | $ | 2,666 | $ | 2,747 | $ | 2,518 | ||||||||||||
Share of pre-tax income (loss) of unconsolidated entities | 549 | (700 | ) | (10 | ) | 1 | (15 | ) | 37 | |||||||||||||||
Fixed charges | 315 | 418 | 416 | 458 | 536 | 682 | ||||||||||||||||||
Adjusted earnings | (C) | $ | 2,639 | $ | 2,016 | $ | 2,843 | $ | 3,125 | $ | 3,268 | $ | 3,237 | |||||||||||
Interest on short-term borrowings and deposits | $ | 77 | $ | 104 | $ | 104 | $ | 153 | $ | 239 | $ | 316 | ||||||||||||
Interest on long-term debt, including amortization of debt issuance costs | 174 | 219 | 206 | 184 | 176 | 241 | ||||||||||||||||||
Portion of long-term leases representative of the interest factor(1) | 64 | 95 | 106 | 121 | 121 | 125 | ||||||||||||||||||
Fixed charges | (D) | $ | 315 | $ | 418 | $ | 416 | $ | 458 | $ | 536 | $ | 682 | |||||||||||
Consolidated ratios of adjusted earnings to fixed charges, including interest on deposits | (C)/(D) | 8.38 x | 4.82x | 6.83x | 6.82x | 6.10x | 4.75x |
1. | I have reviewed this Quarterly Report on Form 10-Q of State Street Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
Date: | November 3, 2016 | By: | /s/ JOSEPH L. HOOLEY | |
Joseph L. Hooley, | ||||
Chairman and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of State Street Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
Date: | November 3, 2016 | By: | /s/ MICHAEL W. BELL | |
Michael W. Bell, | ||||
Executive Vice President and Chief Financial Officer |
Date: | November 3, 2016 | By: | /s/ JOSEPH L. HOOLEY | |
Joseph L. Hooley, | ||||
Chairman and Chief Executive Officer | ||||
Date: | November 3, 2016 | By: | /s/ MICHAEL W. BELL | |
Michael W. Bell, | ||||
Executive Vice President and Chief Financial Officer |
Document And Entity Information - shares |
9 Months Ended | |
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Sep. 30, 2016 |
Oct. 31, 2016 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | STATE STREET Corp | |
Entity Central Index Key | 0000093751 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 385,734,628 |
Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation, Taxes | $ (14) | $ (51) | $ (24) | $ (76) |
Change in net unrealized losses on available-for-sale securities, Taxes | (11) | 27 | 347 | (48) |
Change in net unrealized losses on available-for-sale securities designated in fair value hedges, Taxes | 9 | (10) | (6) | (5) |
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, Taxes | 1 | 2 | 3 | 6 |
Change in net unrealized losses on cash flow hedges, Taxes | (27) | 17 | (144) | 39 |
Change in unrealized losses on retirement plans, Taxes | $ (1) | $ 3 | $ 2 | $ 4 |
Consolidated Statement of Changes In Shareholders' Equity (Parenthetical) - USD ($) $ in Millions |
9 Months Ended | |
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Sep. 30, 2016 |
Sep. 30, 2015 |
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Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared (in USD per share) | $ 1.06 | $ 0.98 |
Common stock awards and options exercised, related taxes | $ 6 | $ 57 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation: The accounting and financial reporting policies of State Street Corporation conform to U.S. GAAP. State Street Corporation, the parent company, is a financial holding company headquartered in Boston, Massachusetts. Unless otherwise indicated or unless the context requires otherwise, all references in these notes to consolidated financial statements to “State Street,” “we,” “us,” “our” or similar references mean State Street Corporation and its subsidiaries on a consolidated basis. Our principal banking subsidiary is State Street Bank. The accompanying Consolidated Financial Statements should be read in conjunction with the financial and risk factor information included in our 2015 Form 10-K, which we previously filed with the SEC. The consolidated financial statements accompanying these condensed notes are unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the consolidated results of operations in these financial statements, have been made. Certain previously reported amounts presented in this Form 10-Q have been reclassified to conform to current-period presentation. Events occurring subsequent to the date of our consolidated statement of condition were evaluated for potential recognition or disclosure in our consolidated financial statements through the date we filed this Form 10-Q with the SEC. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the application of certain of our significant accounting policies that may materially affect the reported amounts of assets, liabilities, equity, revenue, and expenses. As a result of unanticipated events or circumstances, actual results could differ from those estimates. These accounting estimates reflect the best judgment of management, but actual results could differ. Our consolidated statement of condition as of December 31, 2015 included in the accompanying consolidated financial statements was derived from the audited financial statements as of that date, but does not include all notes required by U.S. GAAP for a complete set of consolidated financial statements. Acquisition On July 1, 2016, we completed our acquisition of GE Asset Management ("GEAM") from General Electric Company, with a total initial purchase price of approximately $437 million and approximately $46 million in potential incremental purchase price related to future opportunities with General Electric. The acquisition of GEAM extends our core investment management capabilities, including in the high growth OCIO markets, and enhances our capabilities in connection with the delivery of value-added solutions to our client base. AUM associated with the acquired GEAM operations was $112 billion as of September 30, 2016. We accounted for this acquisition as a business combination and, in accordance with ASC Topic 805, Business Combinations, we have recorded assets acquired and liabilities assumed at their respective fair values as of the acquisition date. Our consolidated financial statements include the operating results for the acquired business from the date of acquisition, July 1, 2016. Recent Accounting Developments:
Relevant standards that were adopted during the nine months ended September 30, 2016: We adopted ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, effective January 1, 2016. The implementation of the new standard did not result in any changes to our previous consolidation conclusions. We adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, effective January 1, 2016 with retrospective application for all prior periods presented. The implementation of this standard resulted in debt issuance costs of $40 million and $37 million as of September 30, 2016 and December 31, 2015, respectively, being netted against long-term debt in our consolidated statement of condition. |
Fair Value |
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Fair Value | Fair Value Fair-Value Measurements: We carry trading account assets, AFS investment securities and various types of derivative financial instruments at fair value in our consolidated statement of condition on a recurring basis. Changes in the fair values of these financial assets and liabilities are recorded either as components of our consolidated statement of income or as components of AOCI within shareholders' equity in our consolidated statement of condition. We measure fair value for the above-described financial assets and liabilities in conformity with U.S. GAAP that governs the measurement of the fair value of financial instruments. Management believes that its valuation techniques and underlying assumptions used to measure fair value conform to the provisions of U.S. GAAP. We categorize the financial assets and liabilities that we carry at fair value based on a prescribed three-level valuation hierarchy. For information about our valuation techniques for financial assets and financial liabilities measured at fair value and the fair value hierarchy, refer to Note 2 to the consolidated financial statements on pages 132 to 142 of our 2015 Form 10-K. The following tables present information with respect to our financial assets and liabilities carried at fair value in our consolidated statement of condition on a recurring basis as of the dates indicated. No transfers of financial assets or liabilities between levels 1 and 2 occurred in the nine months ended September 30, 2016 or the year ended December 31, 2015.
(2) As of September 30, 2016, the fair value of other asset-backed securities was primarily composed of $1.27 billion of collateralized loan obligations. (3) As of September 30, 2016, the fair value of other non-U.S. debt securities was primarily composed of $3.98 billion of covered bonds and $981 million of corporate bonds.
(1) Represents counterparty netting against level 2 financial assets and liabilities where a legally enforceable master netting agreement exists between State Street and the counterparty. Netting also reflects asset and liability reductions of $776 million and $1.12 billion, respectively, for cash collateral received from and provided to derivative counterparties. (2) As of December 31, 2015, the fair value of other asset-backed securities was primarily composed of $1.76 billion of collateralized loan obligations. (3) As of December 31, 2015, the fair value of other non-U.S. debt securities was primarily composed of $3.18 billion of covered bonds and $613 million of corporate bonds. The following tables present activity related to our level-3 financial assets and liabilities during the three and nine months ended September 30, 2016 and 2015, respectively. Transfers into and out of level 3 are reported as of the beginning of the period presented. During the three and nine months ended September 30, 2016 and 2015, transfers out of level 3 were mainly related to certain mortgage- and asset-backed securities, including non-U.S. debt securities, for which fair value was measured using prices for which observable market information became available.
(1) There were no transfers of assets into level 3 during the three months ended September 30, 2016. There was no activity related to our level-3 financial liabilities during the three months ended September 30, 2016.
(1) There were no transfers of assets into level 3 during the nine months ended September 30, 2016. (2) There were no transfers of liabilities into or out of level 3 during the nine months ended September 30, 2016.
(1) There were no transfers of assets into level 3 during the three months ended September 30, 2015. (2) There were no transfers of liabilities into or out of level 3 during the three months ended September 30, 2015.
(1) There were no transfers of liabilities into or out of level 3 during the nine months ended September 30, 2015. The following table presents total realized and unrealized gains and losses for our level-3 financial assets and liabilities and where they are presented in our consolidated statement of income for the periods indicated:
The following table presents quantitative information, as of the dates indicated, about the valuation techniques and significant unobservable inputs used in the valuation of our level-3 financial assets and liabilities measured at fair value on a recurring basis for which we use internally-developed pricing models. The significant unobservable inputs for our level-3 financial assets and liabilities whose fair value is measured using pricing information from non-binding broker or dealer quotes are not included in the table, as the specific inputs applied are not provided by the broker/dealer.
The following tables present information with respect to the composition of our level-3 financial assets and liabilities, by availability of significant unobservable inputs, as of the dates indicated:
(1) Information with respect to these model-priced financial assets are provided in a separate table. (2) Fair value for these financial assets is measured using non-binding broker or dealer quotes.
(2) Fair value for these financial assets is measured using non-binding broker or dealer quotes. We use internally-developed pricing models that incorporate discounted cash flow and option model techniques to measure the fair value of certain level-3 financial assets and liabilities. Use of these techniques requires the determination of relevant inputs and assumptions, some of which represent significant unobservable inputs as indicated in the preceding tables. Accordingly, changes in these unobservable inputs may have a significant impact on fair value. Fair Value Estimates: Estimates of fair value for financial instruments not carried at fair value on a recurring basis in our consolidated statement of condition are generally subjective in nature, and are determined as of a specific point in time based on the characteristics of the financial instruments and relevant market information. The following tables present the reported amounts and estimated fair values of the financial assets and liabilities not carried at fair value on a recurring basis, as they would be categorized within the fair-value hierarchy, as of the dates indicated.
(1) Includes $14 million of loans classified as held-for-sale that were measured at fair value on a non-recurring basis as of September 30, 2016 .
(1) Includes $14 million of loans classified as held-for-sale that were measured at fair value on a non-recurring basis as of December 31, 2015 . |
Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities Investment securities held by us are classified as either trading, AFS, or HTM at the time of purchase and reassessed periodically, based on management’s intent. Generally, trading assets are debt and equity securities purchased in connection with our trading activities and, as such, are expected to be sold in the near term. Our trading activities typically involve active and frequent buying and selling with the objective of generating profits on short-term movements. AFS investment securities are those securities that we intend to hold for an indefinite period of time. AFS investment securities include securities utilized as part of our asset-and-liability management activities that may be sold in response to changes in interest rates, prepayment risk, liquidity needs or other factors. HTM securities are debt securities that management has the intent and the ability to hold to maturity. Trading assets are carried at fair value. Both realized and unrealized gains and losses on trading assets are recorded in trading services revenue in our consolidated statement of income. Debt and marketable equity securities classified as AFS are carried at fair value, and after-tax net unrealized gains and losses are recorded in AOCI. Gains or losses realized on sales of AFS investment securities are computed using the specific identification method and are recorded in gains (losses) related to investment securities, net, in our consolidated statement of income. HTM investment securities are carried at cost, adjusted for amortization of premiums and accretion of discounts. The following table presents the amortized cost and fair value, and associated unrealized gains and losses, of investment securities as of the dates indicated:
(1) Primarily composed of securities guaranteed by the federal government with respect to at least 97% of defaulted principal and accrued interest on the underlying loans. (2) As of September 30, 2016 and December 31, 2015, the fair value of other ABS was primarily composed of $1.27 billion and $1.76 billion, respectively, of collateralized loan obligations. (3) As of September 30, 2016 and December 31, 2015, the fair value of other non-U.S. debt securities was primarily composed of $3.98 billion and $3.18 billion, respectively, of covered bonds and $981 million and $613 million, as of September 30, 2016 and December 31, 2015, respectively, of corporate bonds. Aggregate investment securities with carrying values of $35.69 billion and $34.18 billion as of September 30, 2016 and December 31, 2015, respectively, were designated as pledged for public and trust deposits, short-term borrowings and for other purposes as provided by law. The following tables present the aggregate fair values of investment securities that have been in a continuous unrealized loss position for less than 12 months, and those that have been in a continuous unrealized loss position for 12 months or longer, as of the dates indicated:
The following table presents contractual maturities of debt investment securities by carrying amount as of September 30, 2016. The maturities of certain asset-backed securities, mortgage-backed securities, and collateralized mortgage obligations are based on expected principal payments. Actual maturities may differ from these expected maturities since certain borrowers have the right to prepay obligations with or without prepayment penalties.
The following table presents a roll-forward with respect to net impairment losses that have been recognized in income for the periods indicated.
Interest revenue related to debt securities is recognized in our consolidated statement of income using the effective interest method, or on a basis approximating a level rate of return over the contractual or estimated life of the security. The level rate of return considers any nonrefundable fees or costs, as well as purchase premiums or discounts, resulting in amortization or accretion, accordingly. For debt securities acquired for which we consider it probable as of the date of acquisition that we will be unable to collect all contractually required principal, interest and other payments, the excess of our estimate of undiscounted future cash flows from these securities over their initial recorded investment is accreted into interest revenue on a level-yield basis over the securities’ estimated remaining terms. Subsequent decreases in these securities’ expected future cash flows are either recognized prospectively through an adjustment of the yields on the securities over their remaining terms, or are evaluated for other-than-temporary impairment. Increases in expected future cash flows are recognized prospectively over the securities’ estimated remaining terms through the recalculation of their yields. For certain debt securities acquired which are considered to be beneficial interests in securitized financial assets, the excess of our estimate of undiscounted future cash flows from these securities over their initial recorded investment is accreted into interest revenue on a level-yield basis over the securities’ estimated remaining terms. Subsequent decreases in these securities’ expected future cash flows are either recognized prospectively through an adjustment of the yields on the securities over their remaining terms, or are evaluated for other-than-temporary impairment. Increases in expected future cash flows are recognized prospectively over the securities’ estimated remaining terms through the recalculation of their yields. Impairment: We conduct periodic reviews of individual securities to assess whether OTTI exists. For more information about the review of securities for impairment, refer to Note 3 in the consolidated financial statements on pages 149 to 152 in our 2015 Form 10-K. In the nine months ended September 30, 2016 and 2015, we recorded $2 million and $1 million, respectively, of OTTI, which resulted from adverse changes in the timing of expected future cash flows from the securities. After a review of the investment portfolio, taking into consideration current economic conditions, adverse situations that might affect our ability to fully collect principal and interest, the timing of future payments, the credit quality and performance of the collateral underlying mortgage- and asset-backed securities and other relevant factors, and excluding the OTTI recorded in the nine months ended September 30, 2016, management considers the aggregate decline in fair value of the investment securities portfolio and the resulting gross pre-tax unrealized losses of $366 million related to 962 securities as of September 30, 2016 to be temporary, and not the result of any material changes in the credit characteristics of the securities. |
Loans and Leases |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases | Loans and Leases We segregate our loans and leases into two segments: institutional and CRE. Within the institutional and CRE segments, we further segregate the receivables into classes based on their risk characteristics, their initial measurement attributes and the methods we use to monitor and assess credit risk. For additional information on our loans and leases, including our internal risk-rating system used to assess our risk of credit loss for each loan or lease, refer to Note 4 to the consolidated financial statements on pages 152 to 156 in our 2015 Form 10-K. The following table presents our recorded investment in loans and leases, by segment and class, as of the dates indicated:
Short-duration advances to our clients included in the institutional segment were $5.70 billion and $2.62 billion as of September 30, 2016 and December 31, 2015, respectively. These short-duration advances provide liquidity to fund clients in support of their transaction flows associated with securities settlement activities. The commercial-and-financial class in the institutional segment presented in the preceding table included approximately $3.38 billion and $3.14 billion of senior secured loans as of September 30, 2016 and December 31, 2015, respectively. These senior secured loans are included in the “speculative”, "special mention" and "substandard" categories in the credit-quality-indicator tables presented below. As of September 30, 2016 and December 31, 2015, our allowance for loan and lease losses included approximately $43 million and $35 million, respectively, related to these loans. Certain loans are pledged as collateral for access to the Federal Reserve's discount window. As of September 30, 2016 and December 31, 2015, these loans and leases pledged as collateral totaled $1.7 billion and $2.5 billion, respectively. The following tables present our recorded investment in each class of loans and leases by credit quality indicator as of the dates indicated:
(1) Investment-grade loans and leases consist of counterparties with strong credit quality and low expected credit risk and probability of default. Ratings apply to counterparties with a strong capacity to support the timely repayment of any financial commitment. (2) Speculative loans and leases consist of counterparties that face ongoing uncertainties or exposure to business, financial, or economic downturns. However, these counterparties may have financial flexibility or access to financial alternatives, which allow for financial commitments to be met. (3) Special mention loans and leases consist of counterparties with potential weaknesses that, if uncorrected, may result in deterioration of repayment prospects. (4) Substandard loans and leases consist of counterparties with well-defined weakness that jeopardizes repayment with the possibility we will sustain some loss. The following table presents our recorded investment in loans and leases, disaggregated based on our impairment methodology, as of the dates indicated:
(1) For those portfolios where there are a small number of loans each with a large balance, we review each loan annually for indicators of impairment. For those loans where no such indicators are identified, the loans are collectively evaluated for impairment. As of September 30, 2016 and December 31, 2015, zero of the allowance for loan and lease loss related to institutional loans individually evaluated for impairment. As of September 30, 2016 and December 31, 2015, all of the allowance for loan and lease loss related to institutional loans collectively evaluated for impairment. The following table presents information related to our recorded investment in impaired loans and leases for the dates or periods indicated:
(1) As of September 30, 2016 and December 31, 2015, all of the allowance for loan and lease losses of $51 million and $46 million, respectively, related to loans that were not impaired. In certain circumstances, we restructure troubled loans by granting concessions to borrowers experiencing financial difficulty. Once restructured, the loans are generally considered impaired until their maturity, regardless of whether the borrowers perform under the modified terms of the loans. No loans were modified in troubled debt restructurings during the nine months ended September 30, 2016 and the year ended December 31, 2015. As of September 30, 2016 and December 31, 2015, no institutional loans or leases and no CRE loans were on non-accrual status or 90 days or more contractually past due. The following table presents activity in the allowance for loan and lease losses for the periods indicated:
The provision of $8 million and $11 million recorded in the nine months ended September 30, 2016 and 2015, respectively, as well as the charge-offs of $3 million recorded in the nine months ended September 30, 2016 were a result of exposure to senior secured loans to non-investment grade borrowers, purchased in connection with our participation in syndicated loans. Loans and leases are reviewed on a regular basis, and any provisions for loan losses that are recorded reflect management's estimate of the amount necessary to maintain the allowance for loan and lease losses at a level considered appropriate to absorb estimated incurred losses in the loan-and-lease portfolio. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following table presents changes in the carrying amount of goodwill during the periods indicated:
(1) Amounts for 2016 reflect our acquisition of GEAM, which is more fully described in Note 1. The following table presents changes in the net carrying amount of other intangible assets during the periods indicated:
(1) Amounts for 2016 reflect our acquisition of GEAM, which is more fully described in Note 1. The following table presents the gross carrying amount, accumulated amortization and net carrying amount of other intangible assets by type as of the dates indicated:
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Other Assets |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets The following table presents the components of other assets as of the dates indicated:
(1) Includes amounts held in escrow accounts at third parties related to the negotiated settlements in the indirect foreign exchange legal matter (see Note 10). |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments We use derivative financial instruments to support our clients' needs and to manage our interest-rate and currency risk. In undertaking these activities, we assume positions in both the foreign exchange and interest-rate markets by buying and selling cash instruments and using derivative financial instruments, including foreign exchange forward contracts, foreign exchange and interest-rate options and interest-rate swaps, interest-rate forward contracts and interest-rate futures. For information on our derivative instruments, including the related accounting policies, refer to Note 10 to the consolidated financial statements on pages 162 to 168 in our 2015 Form 10-K. Derivative financial instruments are also subject to credit and counterparty risk, which we manage by performing credit reviews, maintaining individual counterparty limits, entering into netting arrangements and requiring the receipt of collateral. Cash collateral received from and provided to counterparties in connection with derivative financial instruments is recorded in accrued expenses and other liabilities and other assets, respectively, in our consolidated statement of condition. As of September 30, 2016 and December 31, 2015, we had recorded approximately $1.70 billion and $1.40 billion, respectively, of cash collateral received from counterparties and approximately $971 million and $1.65 billion, respectively, of cash collateral provided to counterparties in connection with derivative financial instruments in our consolidated statement of condition. Certain of our derivative assets and liabilities as of September 30, 2016 and December 31, 2015 are subject to master netting agreements with our derivative counterparties. Certain of these agreements contain credit risk-related contingent features in which the counterparty has the right to declare us in default and accelerate cash settlement of our net derivative liabilities with the counterparty in the event that our credit rating falls below specified levels. The aggregate fair value of all derivative instruments with credit risk-related contingent features that were in a net liability position as of September 30, 2016 totaled approximately $757 million, against which we provided $2 million of underlying collateral. If our credit rating were downgraded below levels specified in the agreements, the maximum additional amount of payments related to termination events that could have been required pursuant to these contingent features, assuming no change in fair value, as of September 30, 2016 was approximately $755 million. Such accelerated settlement would be at fair value and therefore not affect our consolidated results of operations. Derivatives Not Designated as Hedging Instruments: In connection with our trading activities, we use derivative financial instruments in our role as a financial intermediary and as both a manager and servicer of financial assets, in order to accommodate our clients' investment and risk management needs. In addition, we use derivative financial instruments for risk management purposes as economic hedges, which are not formally designated as accounting hedges, in order to contribute to our overall corporate earnings and liquidity. These activities are designed to generate trading services revenue and to manage volatility in our net interest revenue. The level of market risk that we assume is a function of our overall objectives and liquidity needs, our clients' requirements and market volatility. For additional information on derivatives not designated as hedging instruments, refer to Note 10 to the consolidated financial statements on pages 163 to 164 in our 2015 Form 10-K. Derivatives Designated as Hedging Instruments: In connection with our asset-and-liability management activities, we use derivative financial instruments to manage our interest-rate risk and foreign currency risk. Interest-rate risk, defined as the sensitivity of income or financial condition to variations in interest rates, is a significant non-trading market risk to which our assets and liabilities are exposed. We manage our interest-rate risk by identifying, quantifying and hedging our exposures, using fixed-rate portfolio securities and a variety of derivative financial instruments, most frequently interest-rate swaps and options (for example, interest-rate caps and floors). Interest-rate swap agreements alter the interest-rate characteristics of specific balance sheet assets or liabilities. When appropriate, forward-rate agreements, options on swaps, and exchange-traded futures and options are also used. We use foreign exchange forward and swap contracts to hedge foreign exchange exposure to various foreign currencies with respect to certain assets and liabilities. Our hedging relationships are formally designated, and qualify for hedge accounting, as fair value, cash flow or net investment hedges. For additional information on derivatives designated as hedging instruments, refer to Note 10 to the consolidated financial statements on pages 164 to 168 in our 2015 Form 10-K. Fair Value Hedges We have entered into interest-rate swap agreements to modify our interest revenue from certain available-for-sale investment securities from a fixed rate to a floating rate. The hedged AFS investment securities included hedged trusts that had a weighted-average life of approximately 4.8 years as of September 30, 2016, compared to 5.4 years as of December 31, 2015. We have entered into interest-rate swap agreements to modify our interest expense on eight senior notes and two subordinated notes from fixed rates to floating rates. The senior and subordinated notes are hedged with interest-rate swap contracts with notional amounts, maturities and fixed-rate coupon terms that align with the hedged notes. The table below summarizes the maturities and the paid fixed interest rates for the hedged senior and subordinated notes:
We have entered into foreign exchange swap contracts to hedge the change in fair value attributable to foreign exchange movements in our foreign currency denominated investment securities and deposits. These forward contracts convert the foreign currency risk to U.S. dollars, thereby mitigating our exposure to fluctuations in the fair value of the securities and deposits attributable to changes in foreign exchange rates. Cash Flow Hedges We have entered into foreign exchange contracts to hedge the change in cash flows attributable to foreign exchange movements in foreign currency denominated investment securities. These foreign exchange contracts convert the foreign currency risk to U.S. dollars, thereby mitigating our exposure to fluctuations in the cash flows of the securities attributable to changes in foreign exchange rates. Net Investment Hedges We have entered into foreign exchange contracts to protect the net investment in our foreign operations against adverse changes in exchange rates. These forward contracts convert the foreign currency risk to U.S. dollars, thereby mitigating our exposure to fluctuations in the fair value of our net investments in our foreign operations attributable to changes in foreign exchange rates. Effectiveness of net investment hedges is based on the overall changes in the fair value of the forward contracts. The following table presents the aggregate contractual, or notional, amounts of derivative financial instruments entered into in connection with our trading and asset-and-liability management activities as of the dates indicated:
(1) Primarily composed of positions held by a consolidated sponsored investment fund, more fully described in Note 11. (2) Represents grants of deferred value awards to employees; refer to Note 12 in the 2015 Form 10-K , "Derivatives Not Designated as Hedging Instruments" for additional information. In connection with our asset-and-liability management activities, we have entered into interest-rate contracts designated as fair value hedges to manage our interest-rate risk. The following tables present the aggregate notional amounts of these interest-rate contracts and the related assets or liabilities being hedged as of the dates indicated:
(2) As of September 30, 2016, these fair value hedges increased the carrying value of long-term debt presented in our consolidated statement of condition by $376 million. As of December 31, 2015, these fair value hedges increased the carrying value of long-term debt presented in our consolidated statement of condition by $105 million. The following table presents the contractual and weighted-average interest rates for long-term debt, which include the effects of the fair value hedges presented in the table above, for the periods indicated:
The following tables present the fair value of derivative financial instruments, excluding the impact of master netting agreements, recorded in our consolidated statement of condition as of the dates indicated. The impact of master netting agreements is disclosed in Note 8.
(1) Derivative assets are included within other assets in our consolidated statement of condition.
(1) Derivative liabilities are included within other liabilities in our consolidated statement of condition. The following tables present the impact of our use of derivative financial instruments on our consolidated statement of income for the periods indicated:
(2) For the nine months ended September 30, 2016 and 2015, $9 million and $9 million, respectively, of unrealized losses on AFS investment securities designated in fair value hedges was recognized in OCI. Differences between the gains (losses) on the derivative and the gains (losses) on the hedged item, excluding any amounts recorded in net interest revenue, represent hedge ineffectiveness.
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Offsetting Arrangements |
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Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting Arrangements | Offsetting Arrangements We manage credit and counterparty risk by entering into enforceable netting agreements and other collateral arrangements with counterparties to derivative contracts and secured financing transactions, including resale and repurchase agreements, and principal securities borrowing and lending agreements. These netting agreements mitigate our counterparty credit risk by providing for a single net settlement with a counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement. In limited cases, a netting agreement may also provide for the periodic netting of settlement payments with respect to multiple different transaction types in the normal course of business. For additional information on offsetting arrangements, refer to Note 11 to the consolidated financial statements on pages 169 to 172 in our 2015 Form 10-K. As of September 30, 2016 and December 31, 2015, the fair value of securities received as collateral where we are permitted to transfer or re-pledge the securities totaled $2.26 billion and $3.05 billion, respectively, and the fair value of the portion that had been transferred or re-pledged as of the same date was $287 million and $262 million, respectively. The following tables present information about the offsetting of assets related to derivative contracts and secured financing transactions, as of the dates indicated:
NA: Not applicable. (1) Amounts include all transactions regardless of whether or not they are subject to an enforceable netting arrangement. (2) Derivative amounts are carried at fair value and securities financing amounts are carried at amortized cost, except for securities collateral which are also carried at fair value. Refer to Note 1 to the consolidated financial statements on pages 129 to 132 in our 2015 Form 10-K for additional information on the measurement basis of these instruments. (3) Amounts subject to netting arrangements which have been determined to be legally enforceable and eligible for netting in the consolidated statement of condition. (4) Included in the $26,153 million as of September 30, 2016 were $2,442 million of resale agreements and $23,711 million of collateral provided related to securities borrowing. Included in the $23,525 million as of December 31, 2015 were $3,404 million of resale agreements and $20,121 million of collateral provided related to securities borrowing. Resale agreements and collateral provided related to securities borrowing were recorded in securities purchased under resale agreements and other assets, respectively, in our consolidated statement of condition. Refer to Note 9 for additional information with respect to principal securities finance transactions.
(2) Includes amounts secured by collateral not determined to be subject to enforceable netting arrangements. The following tables present information about the offsetting of liabilities related to derivative contracts and secured financing transactions, as of the dates indicated:
NA: Not applicable. (1) Amounts include all transactions regardless of whether or not they are subject to an enforceable netting arrangement. (2) Derivative amounts are carried at fair value and securities financing amounts are carried at amortized cost, except for securities collateral which are also carried at fair value. Refer to Note 1 to the consolidated financial statements on pages 129 to 132 in our 2015 Form 10-K for additional information on the measurement basis of these instruments. (3) Amounts subject to netting arrangements which have been determined to be legally enforceable and eligible for netting in the consolidated statement of condition. (4) Included in the $9,783 million as of September 30, 2016 were $4,364 million of repurchase agreements and $5,419 million of collateral received related to securities lending. Included in the $7,769 million as of December 31, 2015 were $4,499 million of repurchase agreements and $3,270 million of collateral received related to securities lending. Repurchase agreements and collateral received related to securities lending were recorded in securities sold under repurchase agreements and accrued expenses and other liabilities, respectively, in our consolidated statement of condition. Refer to Note 9 for additional information with respect to principal securities finance transactions.
(2) Includes amounts secured by collateral not determined to be subject to enforceable netting arrangements. The securities transferred under resale and repurchase agreements typically are U.S. Treasury, agency and agency mortgage-backed securities. In our principal securities borrowing and lending arrangements, the securities transferred in exchange for the collateral are predominantly equity securities and some corporate debt securities. The fair value of the securities transferred may increase in value to an amount greater than the amount received under our repurchase and securities lending arrangements, which exposes the Company with counterparty risk. We require the review of the price of the underlying securities in relation to the carrying value of the repurchase agreements and securities lending arrangements on a daily basis and when appropriate, adjust the cash or security to be obtained or returned to counterparties that is reflective of the required collateral levels. The following tables summarize our repurchase agreements and securities lending transactions by category of collateral pledged and remaining maturity of these agreements as of the periods indicated:
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Commitments and Guarantees |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Guarantees | Commitments and Guarantees For additional information regarding our commitments and guarantees, refer to Note 12 in the consolidated financial statements on pages 173 to 174 in our 2015 Form 10-K. Commitments: We had unfunded off-balance sheet commitments to extend credit generally through lines of credit and short-duration advance facilities totaling $21.72 billion and $22.58 billion as of September 30, 2016 and December 31, 2015, respectively. The maximum possible losses associated with these commitments, excluding the value of any collateral, equal the gross contractual amounts. As of September 30, 2016, approximately 75% of our unfunded commitments to extend credit expire within one year. Since many of these commitments are expected to expire or renew without being drawn upon, the gross contractual amounts do not necessarily represent our future cash requirements. Guarantees: Off-balance sheet guarantees comprise indemnified securities financing, stable value protection, asset purchase agreements, and standby letters of credit. The following table, which presents the aggregate gross contractual amounts of our off-balance sheet guarantees as of the dates indicated, does not consider the value of any collateral, which may mitigate any potential loss. Amounts presented do not reflect participations to independent third parties.
Indemnified Securities Financing On behalf of our clients, we lend their securities, as agent, to brokers and other institutions. In most circumstances, we indemnify our clients for the fair market value of those securities against a failure of the borrower to return such securities. The following table summarizes the aggregate fair values of indemnified securities financing and related collateral, as well as collateral invested in indemnified repurchase agreements, as of the dates indicated:
In certain cases, we participate in securities finance transactions as a principal. As a principal, we borrow securities from the lending client and then lend such securities to the subsequent borrower, either a State Street client or a broker/dealer. Collateral provided and received in connection with such transactions is recorded in other assets and accrued expenses and other liabilities, respectively, in our consolidated statement of condition. As of September 30, 2016 and December 31, 2015, we had approximately $23.71 billion and $20.12 billion, respectively, of collateral provided and approximately $5.42 billion and $3.27 billion, respectively, of collateral received from clients in connection with our participation in principal securities finance transactions. Stable Value Protection In the normal course of our business, we offer products that provide book-value protection, primarily to plan participants in stable value funds managed by non-affiliated investment managers of post-retirement defined contribution benefit plans, particularly 401(k) plans. The book-value protection is provided on portfolios of intermediate investment grade fixed-income securities, and is intended to provide safety and stable growth of principal invested. The protection is intended to cover any shortfall in the event that a significant number of plan participants withdraw funds when book value exceeds market value and the liquidation of the assets is not sufficient to redeem the participants. The investment parameters of the underlying portfolios, combined with structural protections, are designed to provide cushion and guard against payments even under extreme stress scenarios. These contingencies are individually accounted for as derivative financial instruments. The notional amounts of the stable value contracts are presented as “derivatives not designated as hedging instruments” in the table of aggregate notional amounts of derivative financial instruments provided in Note 7. We have not made a payment under these contingencies that we consider material to our consolidated financial condition, and management believes that the probability of payment under these contingencies in the future, that we would consider material to our consolidated financial condition, is remote. |
Contingencies |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies | Contingencies Legal and Regulatory Matters: In the ordinary course of business, we and our subsidiaries are involved in disputes, litigation, and governmental or regulatory inquiries and investigations, both pending and threatened. These matters, if resolved adversely against us or settled, may result in monetary damages, fines and penalties or require changes in our business practices. The resolution or settlement of these matters is inherently difficult to predict. Based on our assessment of these pending matters, we do not believe that the amount of any judgment, settlement or other action arising from any pending matter is likely to have a material adverse effect on our consolidated financial condition. However, an adverse outcome in certain of the matters described below could have a material adverse effect on our consolidated results of operations for the period in which such matter is resolved, or an accrual is determined to be required, on our consolidated financial condition, or on our reputation. We evaluate our needs for accruals of loss contingencies related to legal proceedings on a case-by-case basis. When we have a liability that we deem probable and that we deem can be reasonably estimated as of the date of our consolidated financial statements, we accrue for our estimate of the loss. We also consider a loss probable and establish an accrual when we make, or intend to make, an offer of settlement. Once established, an accrual is subject to subsequent adjustment as a result of additional information. The resolution of proceedings and the reasonably estimable loss (or range thereof) are inherently difficult to predict, especially in the early stages of proceedings. Even if a loss is probable, due to many complex factors, such as speed of discovery and the timing of court decisions or rulings, a loss or range of loss might not be reasonably estimated until the later stages of the proceeding. As of September 30, 2016, our aggregate accruals for legal loss contingencies and regulatory matters totaled approximately $622 million (excluding our accrual in connection with errors in invoicing certain of our Investment Servicing clients, described below). To the extent that we have established accruals in our consolidated statement of condition for probable loss contingencies, such accruals may not be sufficient to cover our ultimate financial exposure associated with any settlements or judgments. We may be subject to proceedings in the future that, if adversely resolved, would have a material adverse effect on our businesses or on our future consolidated financial statements. Except where otherwise noted below, we have not established accruals with respect to the claims discussed and do not believe that potential exposure is probable and can be reasonably estimated. The following discussion provides information with respect to significant legal and regulatory matters. Foreign Exchange We offer our custody clients and their investment managers the option to route foreign exchange transactions to our foreign exchange desk through our asset servicing operation. We record as revenue an amount approximately equal to the difference between the rates we set for those trades and indicative interbank market rates at the time of settlement of the trade. As discussed more fully below, claims have been asserted on behalf of certain current and former custody clients, and future claims may be asserted, alleging that our indirect foreign exchange rates (including the differences between those rates and indicative interbank market rates at the time we executed the trades) were not adequately disclosed or were otherwise improper, and seeking to recover, among other things, the full amount of the revenue we obtained from our indirect foreign exchange trading with them. Attorneys general and other government authorities from a number of jurisdictions, as well as U.S. Attorney's offices, the U.S. Department of Labor and the SEC, have requested information or issued subpoenas in connection with inquiries into the pricing of our indirect foreign exchange trading. In February 2011, a putative class action was filed in federal court in Boston seeking unspecified damages, including treble damages, on behalf of all custodial clients that executed certain foreign exchange transactions with State Street from 1998 to 2009. The putative class action alleges, among other things, that the rates at which State Street executed foreign currency trades constituted an unfair and deceptive practice under Massachusetts law and a breach of the duty of loyalty. Two other putative class actions are currently pending in federal court in Boston alleging various violations of ERISA on behalf of all ERISA plans custodied with us that executed indirect foreign exchange trades with State Street from 1998 onward. The complaints allege that State Street caused class members to pay unfair and unreasonable rates on indirect foreign exchange trades with State Street. The complaints seek unspecified damages, disgorgement of profits, and other equitable relief. Other claims may be asserted in the future, including in response to developments in the actions discussed above or governmental proceedings. If these matters were to proceed to trial, we expect that plaintiffs would seek to recover their share of all or a portion of the revenue that we have recorded from indirect foreign exchange trades. We cannot predict whether a court, in the event of an adverse resolution, would consider our revenue to be the appropriate measure of damages. The following table summarizes our estimated total revenue worldwide from indirect foreign exchange trading for the periods indicated:
We believe that the amount of our revenue from such trading has been of a similar or lesser order of magnitude for many years prior to 2008. Our revenue calculations related to indirect foreign exchange trading reflect a judgment concerning the relationship between the rates we charge for indirect foreign exchange execution and indicative interbank market rates near in time to execution. Our revenue from foreign exchange trading generally depends on the difference between the rates we set for those indirect trades and indicative interbank market rates at the time of settlement of the trade. As of September 30, 2016, we have accrued a total of $565 million associated with our indirect foreign exchange business. On July 26, 2016, we announced that we have negotiated settlement agreements which we expect, subject to final approval, to resolve these matters. Settlements have been reached with the Department of Justice, the Department of Labor and the Massachusetts Attorney General and, subject to court approval, the class plaintiffs. State Street has also reached an agreement in principle with the Securities and Exchange Commission. Each of these agreements depend upon certification, for settlement purposes, of a class of State Street's U.S. custody customers that executed indirect foreign exchange transactions with State Street between 1998 and 2009, and final approval by the United States District Court for the District of Massachusetts of the settlement agreement between State Street and the class. On November 2, 2016, the Court entered an order certifying the settlement class and approving the class settlement. The settlement approval order will become final in 30 days if it is not appealed. If the order becomes final, our settlements with the various government agencies will also become final. Although our current legal accrual is sufficient to satisfy our obligations under these settlements if they become final, there can be no assurance that the settlements will become final or that other, potentially material, claims relating to our indirect foreign exchange business will not be asserted against us in the United States or elsewhere. These settlements or an adverse outcome with respect to one or more other currently unasserted claims, relating to our indirect foreign exchange business could have a material adverse effect on our reputation, and any additional claims not currently asserted could have a material adverse effect on our consolidated results of operations for the period in which the adverse outcome occurs (or an accrual is determined to be required), or on our consolidated financial condition. Transition Management In January 2014, we entered into a settlement with the U.K. FCA, pursuant to which we paid a fine of £22.9 million (approximately $37.8 million), as a result of our having charged six clients of our U.K. transition management business during 2010 and 2011 amounts in excess of the contractual terms. The SEC and the U.S. Attorney are conducting separate investigations into this matter. In April 2016, the U.S. Attorney’s office in Boston charged two former employees in our transition management business with criminal fraud in connection with their alleged role in this matter, and, in May 2016, the SEC commenced a parallel civil enforcement proceeding against one of these individuals. Any action by the SEC or U.S. Attorney with respect to State Street could include civil or criminal proceedings and could involve significant fines or other sanctions, any of which could have a material adverse effect on our reputation or on client demand for our products and services. We are in discussions with the SEC and the U.S. Attorney regarding a possible resolution of this matter. As of September 30, 2016, we had accrued $44 million in connection with these discussions and for indemnification costs associated with this matter. GovEx We are cooperating in an ongoing inquiry by the SEC relating to the GovEx electronic trading platform, which was offered and operated by State Street Global Markets, LLC from September 2009 to July 2015. The subjects of the inquiry are our communications related to volume, pricing and functionalities of the platform. We are currently engaged in discussions with the SEC concerning a possible resolution of this matter. As of September 30, 2016, we had accrued $1 million for this matter. Federal Reserve/Massachusetts Division of Banks Written Agreement On June 1, 2015, we entered into a written agreement with the Federal Reserve and the Massachusetts Division of Banks relating to deficiencies identified in its compliance programs with the requirements of the Bank Secrecy Act, AML regulations and U.S. economic sanctions regulations promulgated by OFAC. As part of this enforcement action, State Street is required to, among other things, implement improvements to our compliance programs and to retain an independent firm to conduct a review of account and transaction activity covering a prior three-month period to evaluate whether any suspicious activity not previously reported should have been identified and reported in accordance with applicable regulatory requirements. If deficiencies in our historical reporting are identified as a result of the transaction review or if we fail to comply with the terms of the written agreement, we may become subject to fines and other regulatory sanctions, which may have a material adverse effect on us. Invoicing Matter In December 2015, we announced a review of the manner in which we invoiced certain expenses to certain of our Investment Servicing clients, primarily in the United States, during an 18-year period going back to 1998 and our determination that we had incorrectly invoiced clients for certain expenses. We have informed our clients that we will pay to them the expenses we concluded were incorrectly invoiced to them, plus interest. Through September 30, 2016, we had identified approximately $292 million (excluding interest), of such expenses and we are continuing to reimburse affected clients. In conjunction with that review, we are evaluating other aspects of invoicing relating to billing our Investment Servicing clients, including calculation of asset-based fees. We are in communication with certain governmental authorities about these matters, including the Department of Justice, the SEC, the Department of Labor and the Massachusetts Attorney General. In April 2016, the Massachusetts Secretary of State commenced an administrative enforcement proceeding against State Street Global Markets, LLC, alleging that our allegedly unethical behavior concerning expense invoices caused State Street Global Markets, LLC to violate state law governing the securities industry by virtue of our alleged control of State Street Global Markets, LLC. The complaint seeks to impose a censure, a fine and to provide for reimbursement or other relief. In addition, we have received a purported class action demand letter alleging that our invoicing practices were unfair and deceptive under Massachusetts law. It is possible that we may be required to reimburse clients for additional amounts, potentially including double or treble damages under Massachusetts law, clients or governmental authorities may assert other theories of liability, or we may become subject to other regulatory proceedings and litigation in connection with these matters, any of which could have a material adverse effect on our reputation or business, including on client demand for our products and services. Income Taxes: In determining our provision for income taxes, we make certain judgments and interpretations with respect to tax laws in jurisdictions in which we have business operations. Because of the complex nature of these laws, in the normal course of our business, we are subject to challenges from U.S. and non-U.S. income tax authorities regarding the amount of income taxes due. These challenges may result in adjustments to the timing or amount of taxable income or deductions or the allocation of taxable income among tax jurisdictions. We recognize a tax benefit when it is more likely than not that our position will result in a tax deduction or credit. Unrecognized tax benefits have increased from approximately $63 million as of December 31, 2015 to $66 million as of September 30, 2016. We are presently under audit by a number of tax authorities and the Internal Revenue Service is currently reviewing our U.S. income tax returns for the tax years 2012 and 2013. The earliest tax year open to examination in jurisdictions where we have material operations is 2009. Management believes that we have sufficiently accrued liabilities as of September 30, 2016 for tax exposures. |
Variable Interest Entities |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities For additional information on our VIEs, refer to Note 14 to the consolidated financial statements on pages 176 to 177 in our 2015 Form 10-K. Tax-Exempt Investment Program: In the normal course of our business, we structure and sell certificated interests in pools of tax-exempt investment-grade assets, principally to our mutual fund clients. We structure these pools as partnership trusts, and the assets and liabilities of the trusts are recorded in our consolidated statement of condition as AFS investment securities and other short-term borrowings. As of September 30, 2016 and December 31, 2015, we carried AFS investment securities, composed of securities related to state and political subdivisions, with a fair value of $1.76 billion and $2.10 billion, respectively, and other short-term borrowings of $1.39 billion and $1.75 billion, respectively, in our consolidated statement of condition in connection with these trusts. The interest revenue and interest expense generated by the investments and certificated interests, respectively, are recorded as components of net interest revenue when earned or incurred. The trusts had a weighted-average life of approximately 4.8 years as of September 30, 2016, compared to approximately 5.4 years as of December 31, 2015. Under separate legal agreements, we provide standby bond-purchase agreements to these trusts and, with respect to certain securities, letters of credit. As of September 30, 2016, our commitments to the trusts under these standby bond-purchase agreements and letters of credit totaled $1.62 billion and $530 million, respectively, and $81 million of the standby bond-purchase agreements were utilized. Interests in Sponsored Investment Funds: As of September 30, 2016, the aggregate assets and liabilities of our consolidated sponsored investment funds totaled $409 million and $327 million, respectively. As of December 31, 2015, the aggregate assets and liabilities of our consolidated sponsored investment funds totaled $321 million and $228 million, respectively. As of September 30, 2016, our potential maximum total exposure associated with the consolidated sponsored investment funds totaled $51 million and represented the value of our economic ownership interest in the fund. Subsequently, we divested our interests in the funds as of October 31, 2016 and no longer consolidate the sponsored investment funds. As of September 30, 2016 and December 31, 2015, we managed certain sponsored investment funds, considered VIEs, in which we held a variable interest but for which we were not deemed to be the primary beneficiary. Our potential maximum loss exposure related to these unconsolidated funds totaled $92 million and $75 million as of September 30, 2016 and December 31, 2015, respectively, and represented the carrying value of our seed capital investment, which is recorded in either AFS investment securities or other assets in our consolidated statement of condition. The amount of loss we may recognize during any period is limited to the carrying amount of our seed capital investment in the unconsolidated fund. |
Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Shareholders' Equity Preferred Stock: The following table summarizes selected terms of each of the series of the preferred stock issued and outstanding as of September 30, 2016:
(1) On the redemption date, or any dividend declaration date thereafter, the preferred stock and corresponding depositary shares may be redeemed by us, in whole or in part, at the liquidation price per share and liquidation price per depositary share plus any declared and unpaid dividends, without accumulation of any undeclared dividends. (2) The preferred stock and corresponding depositary shares may be redeemed at our option in whole, but not in part, prior to the redemption date upon the occurrence of a regulatory capital treatment event, as defined in the certificate of designation, at a redemption price equal to the liquidation price per share and liquidation price per depositary share plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The following tables present the dividends declared for each of the series of preferred stock issued and outstanding for the periods indicated:
(1) Dividends were paid in September 2016. Common Stock: In June 2016, our Board approved a common stock purchase program authorizing the purchase of up to $1.4 billion of our common stock through June 30, 2017 (the 2016 Program). In March 2015, our Board approved a common stock purchase program authorizing the purchase of up to $1.8 billion of our common stock through June 30, 2016 (the 2015 Program). The table below presents the activity under both the 2016 Program and the 2015 Program during the periods indicated.
The table below presents the dividends declared on common stock for the periods indicated:
Accumulated Other Comprehensive Income (Loss): The following table presents the after-tax components of AOCI as of the dates indicated:
The following tables present changes in AOCI by component, net of related taxes, for the periods indicated:
The following tables present after-tax reclassifications into (out of) earnings for the periods indicated:
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Regulatory Capital |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital | Regulatory Capital We are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum regulatory capital requirements can initiate certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial condition. Under current regulatory capital adequacy guidelines, we must meet specified capital requirements that involve quantitative measures of our consolidated assets, liabilities and off-balance sheet exposures calculated in conformity with regulatory accounting practices. Our capital components and their classifications are subject to qualitative judgments by regulators about components, risk weightings and other factors. For additional information on regulatory capital, and the requirements to which we are subject, refer to Note 16 to the consolidated financial statements on pages 180 and 181 in our 2015 Form 10-K. As required by the Dodd-Frank Act, State Street and State Street Bank, as advanced approaches banking organizations, are subject to a permanent "capital floor" in the calculation and assessment of their regulatory capital adequacy by U.S. banking regulators. Beginning on January 1, 2015, we were required to calculate our risk-based capital ratios using both the advanced approaches and the standardized approach. As a result, from January 1, 2015 going forward, our risk-based capital ratios for regulatory assessment purposes are the lower of each ratio calculated under the standardized approach and the advanced approaches. The methods for the calculation of our and State Street Bank's risk-based capital ratios will change as the provisions of the Basel III final rule related to the numerator (capital) and denominator (risk-weighted assets) are phased in, and as we begin calculating our risk-weighted assets using the advanced approaches. These ongoing methodological changes will result in differences in our reported capital ratios from one reporting period to the next that are independent of applicable changes to our capital base, our asset composition, our off-balance sheet exposures or our risk profile. As of September 30, 2016, State Street and State Street Bank exceeded all regulatory capital adequacy requirements to which they were subject. As of September 30, 2016, State Street Bank was categorized as “well capitalized” under the applicable regulatory capital adequacy framework, and exceeded all “well capitalized” ratio guidelines to which it was subject. Management believes that no conditions or events have occurred since September 30, 2016 that have changed the capital categorization of State Street Bank. The following table presents the regulatory capital structure, total risk-weighted assets, related regulatory capital ratios and the minimum required regulatory capital ratios for State Street and State Street Bank as of the dates indicated. As a result of changes in the methodologies used to calculate our regulatory capital ratios from period to period as the provisions of the Basel III final rule are phased in, the ratios presented in the table for each period-end are not directly comparable. Refer to the footnotes following the table.
NA: Not applicable. (1) Common equity tier 1 capital, tier 1 capital and total capital ratios as of September 30, 2016 and December 31, 2015 were calculated in conformity with the advanced approaches provisions of the Basel III final rule. Tier 1 leverage ratio as of September 30, 2016 and December 31, 2015 were calculated in conformity with the Basel III final rule. (2) Common equity tier 1 capital, tier 1 capital and total capital ratios as of September 30, 2016 and December 31, 2015 were calculated in conformity with the standardized approach provisions of the Basel III final rule. Tier 1 leverage ratio as of September 30, 2016 and December 31, 2015 were calculated in conformity with the Basel III final rule. (3) Amounts for State Street and State Street Bank as of September 30, 2016 consisted of goodwill, net of associated deferred tax liabilities, and 60% of other intangible assets, net of associated deferred tax liabilities. Amounts for State Street and State Street Bank as of December 31, 2015 consisted of goodwill, net of deferred tax liabilities and 40% of other intangible assets, net of associated deferred tax liabilities. Intangible assets, net of associated deferred tax liabilities is phased in as a deduction from capital, in conformity with the Basel III final rule. (4) Market risk risk-weighted assets reported in conformity with the Basel III advanced approaches included a CVA which reflected the risk of potential fair-value adjustments for credit risk reflected in our valuation of over-the-counter derivative contracts. The CVA was not provided for in the final market risk capital rule; however, it was required by the advanced approaches provisions of the Basel III final rule. State Street used the simple CVA approach in conformity with the Basel III advanced approaches. (5) Minimum requirements will be phased in up to full implementation beginning on January 1, 2019; minimum requirements listed are as of September 30, 2016. (6) Minimum requirements will be phased in up to full implementation beginning on January 1, 2019; minimum requirements listed are as of December 31, 2015. |
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Net Interest Revenue | Net Interest Revenue The following table presents the components of interest revenue and interest expense, and related net interest revenue, for the periods indicated:
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Expenses |
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Other Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses | Expenses The following table presents the components of other expenses for the periods indicated:
Acquisition Costs We recorded acquisition costs of $33 million in the third quarter of 2016 compared to $7 million in the third quarter of 2015, and $47 million in the nine months ended September 30, 2016 compared to $15 million during the nine months ended September 30, 2015. These amounts include approximately $29 million related to our acquisition of GEAM on July 1, 2016. As of September 30, 2016, we have recorded approximately $29 million in acquisition costs associated with the acquisition of GEAM. For further information on the GEAM acquisition, refer to Note 1. Restructuring Charges We expect to incur aggregate pre-tax restructuring charges of approximately $300 million to $400 million beginning in 2016 through December 31, 2020 to implement State Street Beacon, our previously announced multi-year transformation program to fully digitize our business, deliver significant value and innovation for our clients and lower expenses across the organization. We estimate those charges will include approximately $250 million to $300 million in severance and benefits costs associated with targeted staff reductions (a substantial portion of which will result in future cash expenditures) and approximately $50 million to $100 million in information technology application rationalization and real estate actions. In the third quarter and nine months ended September 30, 2016, we recorded net restructuring charges of $10 million and $120 million, respectively, due to State Street Beacon. The following table presents aggregate restructuring activity for the periods indicated.
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Earnings Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share Basic EPS is calculated pursuant to the “two-class” method, by dividing net income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted EPS is calculated pursuant to the two-class method, by dividing net income available to common shareholders by the total weighted-average number of common shares outstanding for the period plus the shares representing the dilutive effect of common stock options and other equity-based awards. The effect of common stock options and other equity-based awards is excluded from the calculation of diluted EPS in periods in which their effect would be anti-dilutive. The two-class method requires the allocation of undistributed net income between common and participating shareholders. Net income available to common shareholders, presented separately in our consolidated statement of income, is the basis for the calculation of both basic and diluted EPS. Participating securities are composed of unvested restricted stock and fully vested deferred director stock awards, which are equity-based awards that contain non-forfeitable rights to dividends, and are considered to participate with the common stock in undistributed earnings. The following table presents the computation of basic and diluted earnings per common share for the periods indicated:
(1) Represents the portion of net income available to common equity allocated to participating securities, composed of fully vested deferred director stock and unvested restricted stock that contain non-forfeitable rights to dividends during the vesting period on a basis equivalent to dividends paid to common shareholders. (2) Represents common stock options and other equity-based awards outstanding but not included in the computation of diluted average common shares, because their effect was anti-dilutive. (3) Calculations reflect allocation of earnings to participating securities using the two-class method, as this computation is more dilutive than the treasury stock method. |
Line of Business Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Information | Line of Business Information Our operations are organized for management reporting purposes into two lines of business: Investment Servicing and Investment Management, which are defined based on products and services provided. The results of operations for these lines of business are not necessarily comparable with those of other companies, including companies in the financial services industry. For information about our two lines of business, as well as revenues, expenses and capital allocation methodologies associated with them, refer to Note 24 to the consolidated financial statements on pages 188 to 189 in our 2015 Form 10-K. The following is a summary of our line-of-business results for the periods indicated. The “Other” column represents costs incurred that are not allocated to a specific line of business, including certain severance and restructuring costs, acquisition costs and certain provisions for legal contingencies.
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Non-U.S. Activities |
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Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-U.S. Activities | Non-U.S. Activities We define our non-U.S. activities as those revenue-producing business activities that arise from clients which are generally serviced or managed outside the U.S. Due to the integrated nature of our business, precise segregation of our U.S. and non-U.S. activities is not possible. Subjective estimates, assumptions and other judgments are applied to quantify the financial results and assets related to our non-U.S. activities, including our application of funds transfer pricing, our asset-and-liability management policies and our allocation of certain indirect corporate expenses. Management periodically reviews and updates its processes for quantifying the financial results and assets related to our non-U.S. activities. The following table presents our U.S. and non-U.S. financial results for the periods indicated:
Non-U.S. assets were $86.7 billion and $63.3 billion as of September 30, 2016 and 2015, respectively. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation: The accounting and financial reporting policies of State Street Corporation conform to U.S. GAAP. State Street Corporation, the parent company, is a financial holding company headquartered in Boston, Massachusetts. Unless otherwise indicated or unless the context requires otherwise, all references in these notes to consolidated financial statements to “State Street,” “we,” “us,” “our” or similar references mean State Street Corporation and its subsidiaries on a consolidated basis. Our principal banking subsidiary is State Street Bank. The accompanying Consolidated Financial Statements should be read in conjunction with the financial and risk factor information included in our 2015 Form 10-K, which we previously filed with the SEC. |
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Consolidation | The consolidated financial statements accompanying these condensed notes are unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the consolidated results of operations in these financial statements, have been made. Certain previously reported amounts presented in this Form 10-Q have been reclassified to conform to current-period presentation. Events occurring subsequent to the date of our consolidated statement of condition were evaluated for potential recognition or disclosure in our consolidated financial statements through the date we filed this Form 10-Q with the SEC. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the application of certain of our significant accounting policies that may materially affect the reported amounts of assets, liabilities, equity, revenue, and expenses. As a result of unanticipated events or circumstances, actual results could differ from those estimates. These accounting estimates reflect the best judgment of management, but actual results could differ. Our consolidated statement of condition as of December 31, 2015 included in the accompanying consolidated financial statements was derived from the audited financial statements as of that date, but does not include all notes required by U.S. GAAP for a complete set of consolidated financial statements. Acquisition |
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Recent Accounting Developments | Recent Accounting Developments:
Relevant standards that were adopted during the nine months ended September 30, 2016: We adopted ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, effective January 1, 2016. The implementation of the new standard did not result in any changes to our previous consolidation conclusions. We adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, effective January 1, 2016 with retrospective application for all prior periods presented. The implementation of this standard resulted in debt issuance costs of $40 million and $37 million as of September 30, 2016 and December 31, 2015, respectively, being netted against long-term debt in our consolidated statement of condition. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Developments |
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Fair Value (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present information with respect to our financial assets and liabilities carried at fair value in our consolidated statement of condition on a recurring basis as of the dates indicated. No transfers of financial assets or liabilities between levels 1 and 2 occurred in the nine months ended September 30, 2016 or the year ended December 31, 2015.
(2) As of September 30, 2016, the fair value of other asset-backed securities was primarily composed of $1.27 billion of collateralized loan obligations. (3) As of September 30, 2016, the fair value of other non-U.S. debt securities was primarily composed of $3.98 billion of covered bonds and $981 million of corporate bonds.
(1) Represents counterparty netting against level 2 financial assets and liabilities where a legally enforceable master netting agreement exists between State Street and the counterparty. Netting also reflects asset and liability reductions of $776 million and $1.12 billion, respectively, for cash collateral received from and provided to derivative counterparties. (2) As of December 31, 2015, the fair value of other asset-backed securities was primarily composed of $1.76 billion of collateralized loan obligations. (3) As of December 31, 2015, the fair value of other non-U.S. debt securities was primarily composed of $3.18 billion of covered bonds and $613 million of corporate bonds. |
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation |
The following tables present activity related to our level-3 financial assets and liabilities during the three and nine months ended September 30, 2016 and 2015, respectively. Transfers into and out of level 3 are reported as of the beginning of the period presented. During the three and nine months ended September 30, 2016 and 2015, transfers out of level 3 were mainly related to certain mortgage- and asset-backed securities, including non-U.S. debt securities, for which fair value was measured using prices for which observable market information became available.
(1) There were no transfers of assets into level 3 during the three months ended September 30, 2016.
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation |
(1) There were no transfers of assets into level 3 during the nine months ended September 30, 2016. (2) There were no transfers of liabilities into or out of level 3 during the nine months ended September 30, 2016.
(1) There were no transfers of liabilities into or out of level 3 during the nine months ended September 30, 2015.
(1) There were no transfers of assets into level 3 during the three months ended September 30, 2015. (2) There were no transfers of liabilities into or out of level 3 during the three months ended September 30, 2015. |
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Level 3 Total Realized And Unrealized Gains And Losses Recorded In Revenue | The following table presents total realized and unrealized gains and losses for our level-3 financial assets and liabilities and where they are presented in our consolidated statement of income for the periods indicated:
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Fair Value Inputs, Assets, Quantitative Information | The following table presents quantitative information, as of the dates indicated, about the valuation techniques and significant unobservable inputs used in the valuation of our level-3 financial assets and liabilities measured at fair value on a recurring basis for which we use internally-developed pricing models. The significant unobservable inputs for our level-3 financial assets and liabilities whose fair value is measured using pricing information from non-binding broker or dealer quotes are not included in the table, as the specific inputs applied are not provided by the broker/dealer.
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Fair Value Inputs, Liabilities, Quantitative Information | The following table presents quantitative information, as of the dates indicated, about the valuation techniques and significant unobservable inputs used in the valuation of our level-3 financial assets and liabilities measured at fair value on a recurring basis for which we use internally-developed pricing models. The significant unobservable inputs for our level-3 financial assets and liabilities whose fair value is measured using pricing information from non-binding broker or dealer quotes are not included in the table, as the specific inputs applied are not provided by the broker/dealer.
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Schedule of Availability of Significant Unobservable Inputs by Balance Sheet Classification | The following tables present information with respect to the composition of our level-3 financial assets and liabilities, by availability of significant unobservable inputs, as of the dates indicated:
(1) Information with respect to these model-priced financial assets are provided in a separate table. (2) Fair value for these financial assets is measured using non-binding broker or dealer quotes.
(2) Fair value for these financial assets is measured using non-binding broker or dealer quotes. |
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Carrying Value and Estimated Fair Value of Financial Instruments by Fair Value Hierarchy | The following tables present the reported amounts and estimated fair values of the financial assets and liabilities not carried at fair value on a recurring basis, as they would be categorized within the fair-value hierarchy, as of the dates indicated.
(1) Includes $14 million of loans classified as held-for-sale that were measured at fair value on a non-recurring basis as of September 30, 2016 .
(1) Includes $14 million of loans classified as held-for-sale that were measured at fair value on a non-recurring basis as of December 31, 2015 . |
Investment Securities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | The following table presents the amortized cost and fair value, and associated unrealized gains and losses, of investment securities as of the dates indicated:
(1) Primarily composed of securities guaranteed by the federal government with respect to at least 97% of defaulted principal and accrued interest on the underlying loans. (2) As of September 30, 2016 and December 31, 2015, the fair value of other ABS was primarily composed of $1.27 billion and $1.76 billion, respectively, of collateralized loan obligations. (3) As of September 30, 2016 and December 31, 2015, the fair value of other non-U.S. debt securities was primarily composed of $3.98 billion and $3.18 billion, respectively, of covered bonds and $981 million and $613 million, as of September 30, 2016 and December 31, 2015, respectively, of corporate bonds. |
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Schedule of Gross Pre-tax Unrealized Losses on Investment Securities | The following tables present the aggregate fair values of investment securities that have been in a continuous unrealized loss position for less than 12 months, and those that have been in a continuous unrealized loss position for 12 months or longer, as of the dates indicated:
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Investments Classified by Contractual Maturity Date | The following table presents contractual maturities of debt investment securities by carrying amount as of September 30, 2016. The maturities of certain asset-backed securities, mortgage-backed securities, and collateralized mortgage obligations are based on expected principal payments. Actual maturities may differ from these expected maturities since certain borrowers have the right to prepay obligations with or without prepayment penalties.
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Schedule of Credit-Related Loss Activity Recognized in Earnings | The following table presents a roll-forward with respect to net impairment losses that have been recognized in income for the periods indicated.
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Loans and Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loans | The following table presents our recorded investment in loans and leases, by segment and class, as of the dates indicated:
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Recorded Investment in Each Class of Total Loans and Leases by Credit Quality Indicator | The following tables present our recorded investment in each class of loans and leases by credit quality indicator as of the dates indicated:
(1) Investment-grade loans and leases consist of counterparties with strong credit quality and low expected credit risk and probability of default. Ratings apply to counterparties with a strong capacity to support the timely repayment of any financial commitment. (2) Speculative loans and leases consist of counterparties that face ongoing uncertainties or exposure to business, financial, or economic downturns. However, these counterparties may have financial flexibility or access to financial alternatives, which allow for financial commitments to be met. (3) Special mention loans and leases consist of counterparties with potential weaknesses that, if uncorrected, may result in deterioration of repayment prospects. (4) Substandard loans and leases consist of counterparties with well-defined weakness that jeopardizes repayment with the possibility we will sustain some loss. |
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Schedule of Loans and Leases Receivable by Impairment Methodology | The following table presents our recorded investment in loans and leases, disaggregated based on our impairment methodology, as of the dates indicated:
(1) For those portfolios where there are a small number of loans each with a large balance, we review each loan annually for indicators of impairment. For those loans where no such indicators are identified, the loans are collectively evaluated for impairment. As of September 30, 2016 and December 31, 2015, zero of the allowance for loan and lease loss related to institutional loans individually evaluated for impairment. As of September 30, 2016 and December 31, 2015, all of the allowance for loan and lease loss related to institutional loans collectively evaluated for impairment. |
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Impaired Loans | The following table presents information related to our recorded investment in impaired loans and leases for the dates or periods indicated:
(1) As of September 30, 2016 and December 31, 2015, all of the allowance for loan and lease losses of $51 million and $46 million, respectively, related to loans that were not impaired. |
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Schedule of Activity in the Allowance for Loan Losses | The following table presents activity in the allowance for loan and lease losses for the periods indicated:
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Goodwill and Other Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes In The Carrying Amount Of Goodwill | The following table presents changes in the carrying amount of goodwill during the periods indicated:
(1) Amounts for 2016 reflect our acquisition of GEAM, which is more fully described in Note 1. |
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Schedule of Finite-Lived Intangible Assets | The following table presents changes in the net carrying amount of other intangible assets during the periods indicated:
(1) Amounts for 2016 reflect our acquisition of GEAM, which is more fully described in Note 1. The following table presents the gross carrying amount, accumulated amortization and net carrying amount of other intangible assets by type as of the dates indicated:
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Other Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Other Assets | The following table presents the components of other assets as of the dates indicated:
(1) Includes amounts held in escrow accounts at third parties related to the negotiated settlements in the indirect foreign exchange legal matter (see Note 10). |
Derivative Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Derivatives | The table below summarizes the maturities and the paid fixed interest rates for the hedged senior and subordinated notes:
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Schedule of Outstanding Hedges: (Notional Amount) | The following table presents the aggregate contractual, or notional, amounts of derivative financial instruments entered into in connection with our trading and asset-and-liability management activities as of the dates indicated:
(1) Primarily composed of positions held by a consolidated sponsored investment fund, more fully described in Note 11. (2) Represents grants of deferred value awards to employees; refer to Note 12 in the 2015 Form 10-K , "Derivatives Not Designated as Hedging Instruments" for additional information. |
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Notional Amount of Interest Rate Swap Agreements Designated as Fair Value and Cash Flow Hedges | The following tables present the aggregate notional amounts of these interest-rate contracts and the related assets or liabilities being hedged as of the dates indicated:
(2) As of September 30, 2016, these fair value hedges increased the carrying value of long-term debt presented in our consolidated statement of condition by $376 million. As of December 31, 2015, these fair value hedges increased the carrying value of long-term debt presented in our consolidated statement of condition by $105 million. |
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Contractual and Weighted-Average Interest Rates, Which Include the Effects of Hedges Related to Financial Instruments | The following table presents the contractual and weighted-average interest rates for long-term debt, which include the effects of the fair value hedges presented in the table above, for the periods indicated:
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Schedule of the Fair Values of Derivative Financial Instruments | The following tables present the fair value of derivative financial instruments, excluding the impact of master netting agreements, recorded in our consolidated statement of condition as of the dates indicated. The impact of master netting agreements is disclosed in Note 8.
(1) Derivative assets are included within other assets in our consolidated statement of condition.
(1) Derivative liabilities are included within other liabilities in our consolidated statement of condition. |
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Impact of Derivatives on Consolidated Statement of Income | The following tables present the impact of our use of derivative financial instruments on our consolidated statement of income for the periods indicated:
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Schedule of Differences Between the Gains (Losses) on the Derivative and the Gains (Losses) on the Hedged Item |
(2) For the nine months ended September 30, 2016 and 2015, $9 million and $9 million, respectively, of unrealized losses on AFS investment securities designated in fair value hedges was recognized in OCI. Differences between the gains (losses) on the derivative and the gains (losses) on the hedged item, excluding any amounts recorded in net interest revenue, represent hedge ineffectiveness.
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Offsetting Arrangements (Tables) |
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting Assets | The following tables present information about the offsetting of assets related to derivative contracts and secured financing transactions, as of the dates indicated:
NA: Not applicable. (1) Amounts include all transactions regardless of whether or not they are subject to an enforceable netting arrangement. (2) Derivative amounts are carried at fair value and securities financing amounts are carried at amortized cost, except for securities collateral which are also carried at fair value. Refer to Note 1 to the consolidated financial statements on pages 129 to 132 in our 2015 Form 10-K for additional information on the measurement basis of these instruments. (3) Amounts subject to netting arrangements which have been determined to be legally enforceable and eligible for netting in the consolidated statement of condition. (4) Included in the $26,153 million as of September 30, 2016 were $2,442 million of resale agreements and $23,711 million of collateral provided related to securities borrowing. Included in the $23,525 million as of December 31, 2015 were $3,404 million of resale agreements and $20,121 million of collateral provided related to securities borrowing. Resale agreements and collateral provided related to securities borrowing were recorded in securities purchased under resale agreements and other assets, respectively, in our consolidated statement of condition. Refer to Note 9 for additional information with respect to principal securities finance transactions.
(2) Includes amounts secured by collateral not determined to be subject to enforceable netting arrangements. |
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Offsetting Liabilities | The following tables present information about the offsetting of liabilities related to derivative contracts and secured financing transactions, as of the dates indicated:
NA: Not applicable. (1) Amounts include all transactions regardless of whether or not they are subject to an enforceable netting arrangement. (2) Derivative amounts are carried at fair value and securities financing amounts are carried at amortized cost, except for securities collateral which are also carried at fair value. Refer to Note 1 to the consolidated financial statements on pages 129 to 132 in our 2015 Form 10-K for additional information on the measurement basis of these instruments. (3) Amounts subject to netting arrangements which have been determined to be legally enforceable and eligible for netting in the consolidated statement of condition. (4) Included in the $9,783 million as of September 30, 2016 were $4,364 million of repurchase agreements and $5,419 million of collateral received related to securities lending. Included in the $7,769 million as of December 31, 2015 were $4,499 million of repurchase agreements and $3,270 million of collateral received related to securities lending. Repurchase agreements and collateral received related to securities lending were recorded in securities sold under repurchase agreements and accrued expenses and other liabilities, respectively, in our consolidated statement of condition. Refer to Note 9 for additional information with respect to principal securities finance transactions.
(2) Includes amounts secured by collateral not determined to be subject to enforceable netting arrangements. |
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Securities Sold and Securities Loaned Under Repurchase Agreements | The following tables summarize our repurchase agreements and securities lending transactions by category of collateral pledged and remaining maturity of these agreements as of the periods indicated:
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Commitments and Guarantees (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Guarantor Obligations | The following table, which presents the aggregate gross contractual amounts of our off-balance sheet guarantees as of the dates indicated, does not consider the value of any collateral, which may mitigate any potential loss. Amounts presented do not reflect participations to independent third parties.
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Schedule of Repurchase Agreements | The following table summarizes the aggregate fair values of indemnified securities financing and related collateral, as well as collateral invested in indemnified repurchase agreements, as of the dates indicated:
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Contingencies (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Total Worldwide Revenue from Foreign Exchanges | The following table summarizes our estimated total revenue worldwide from indirect foreign exchange trading for the periods indicated:
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Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Preferred Shares | The following table summarizes selected terms of each of the series of the preferred stock issued and outstanding as of September 30, 2016:
(1) On the redemption date, or any dividend declaration date thereafter, the preferred stock and corresponding depositary shares may be redeemed by us, in whole or in part, at the liquidation price per share and liquidation price per depositary share plus any declared and unpaid dividends, without accumulation of any undeclared dividends. (2) The preferred stock and corresponding depositary shares may be redeemed at our option in whole, but not in part, prior to the redemption date upon the occurrence of a regulatory capital treatment event, as defined in the certificate of designation, at a redemption price equal to the liquidation price per share and liquidation price per depositary share plus any declared and unpaid dividends, without accumulation of any undeclared dividends. |
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Dividends Declared | The table below presents the dividends declared on common stock for the periods indicated:
The following tables present the dividends declared for each of the series of preferred stock issued and outstanding for the periods indicated:
(1) Dividends were paid in September 2016. |
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Stock Repurchase Program | The table below presents the activity under both the 2016 Program and the 2015 Program during the periods indicated.
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Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the after-tax components of AOCI as of the dates indicated:
The following tables present changes in AOCI by component, net of related taxes, for the periods indicated:
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Schedule of Reclassifications Out of AOCI | The following tables present after-tax reclassifications into (out of) earnings for the periods indicated:
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Regulatory Capital (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Regulatory Capital | The following table presents the regulatory capital structure, total risk-weighted assets, related regulatory capital ratios and the minimum required regulatory capital ratios for State Street and State Street Bank as of the dates indicated. As a result of changes in the methodologies used to calculate our regulatory capital ratios from period to period as the provisions of the Basel III final rule are phased in, the ratios presented in the table for each period-end are not directly comparable. Refer to the footnotes following the table.
NA: Not applicable. (1) Common equity tier 1 capital, tier 1 capital and total capital ratios as of September 30, 2016 and December 31, 2015 were calculated in conformity with the advanced approaches provisions of the Basel III final rule. Tier 1 leverage ratio as of September 30, 2016 and December 31, 2015 were calculated in conformity with the Basel III final rule. (2) Common equity tier 1 capital, tier 1 capital and total capital ratios as of September 30, 2016 and December 31, 2015 were calculated in conformity with the standardized approach provisions of the Basel III final rule. Tier 1 leverage ratio as of September 30, 2016 and December 31, 2015 were calculated in conformity with the Basel III final rule. (3) Amounts for State Street and State Street Bank as of September 30, 2016 consisted of goodwill, net of associated deferred tax liabilities, and 60% of other intangible assets, net of associated deferred tax liabilities. Amounts for State Street and State Street Bank as of December 31, 2015 consisted of goodwill, net of deferred tax liabilities and 40% of other intangible assets, net of associated deferred tax liabilities. Intangible assets, net of associated deferred tax liabilities is phased in as a deduction from capital, in conformity with the Basel III final rule. (4) Market risk risk-weighted assets reported in conformity with the Basel III advanced approaches included a CVA which reflected the risk of potential fair-value adjustments for credit risk reflected in our valuation of over-the-counter derivative contracts. The CVA was not provided for in the final market risk capital rule; however, it was required by the advanced approaches provisions of the Basel III final rule. State Street used the simple CVA approach in conformity with the Basel III advanced approaches. (5) Minimum requirements will be phased in up to full implementation beginning on January 1, 2019; minimum requirements listed are as of September 30, 2016. (6) Minimum requirements will be phased in up to full implementation beginning on January 1, 2019; minimum requirements listed are as of December 31, 2015. |
Net Interest Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Interest Revenue and Interest Expense | The following table presents the components of interest revenue and interest expense, and related net interest revenue, for the periods indicated:
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Expenses (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Expenses | The following table presents the components of other expenses for the periods indicated:
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Restructuring and Related Costs | The following table presents aggregate restructuring activity for the periods indicated.
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Earnings Per Common Share (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table presents the computation of basic and diluted earnings per common share for the periods indicated:
(1) Represents the portion of net income available to common equity allocated to participating securities, composed of fully vested deferred director stock and unvested restricted stock that contain non-forfeitable rights to dividends during the vesting period on a basis equivalent to dividends paid to common shareholders. (2) Represents common stock options and other equity-based awards outstanding but not included in the computation of diluted average common shares, because their effect was anti-dilutive. (3) Calculations reflect allocation of earnings to participating securities using the two-class method, as this computation is more dilutive than the treasury stock method. |
Line of Business Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Line of Business Results | The following is a summary of our line-of-business results for the periods indicated. The “Other” column represents costs incurred that are not allocated to a specific line of business, including certain severance and restructuring costs, acquisition costs and certain provisions for legal contingencies.
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Non-U.S. Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Results from Non-U.S. Operations | The following table presents our U.S. and non-U.S. financial results for the periods indicated:
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Summary of Significant Accounting Policies - Basis of Presentation (Details) - GEAM - USD ($) $ in Millions |
Jul. 01, 2016 |
Sep. 30, 2016 |
---|---|---|
Business Acquisition [Line Items] | ||
Purchase price | $ 437 | |
Maximum additional consideration tied to incremental opportunities | $ 46 | |
Assets under management | $ 112,000 |
Summary of Significant Accounting Policies - New Accounting Pronouncement (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounting Standards Update 2015-03 | Long-term debt | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs | $ 40 | $ 37 |
Fair Value - Narrative (Details) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Assets, level 1 to level 2 transfers | $ 0 | $ 0 |
Assets, level 2 to level 1 transfers | 0 | 0 |
Liabilities, level 1 to level 2 transfers | 0 | 0 |
Liabilities, level 2 to level 1 transfers | $ 0 | $ 0 |
Investment Securities - Narrative (Details) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2016
USD ($)
security
|
Sep. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | |||
Pledged securities not separately reported | $ 35,690 | $ 34,180 | |
OTTI on investments | 2 | $ 1 | |
Unrealized gain (loss), excluding OTTI | $ (366) | ||
Number of securities in loss position | security | 962 |
Investment Securities - Schedule of Credit-Related Loss Activity Recognized In Earnings (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||
Balance, beginning of period | $ 92 | $ 115 |
Losses for which OTTI was previously recognized | 2 | 1 |
Previously recognized losses related to securities sold or matured | (26) | (22) |
Balance, end of period | $ 68 | $ 94 |
Loans and Leases - Schedule of Activity In The Allowance For Loan Losses (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Beginning balance | $ 51 | $ 43 | $ 46 | $ 37 | |
Provision for loan losses | 0 | 5 | 8 | 11 | |
Charge-offs | 0 | 0 | (3) | 0 | |
Ending balance | 51 | $ 48 | 51 | $ 48 | |
Loans and leases, allowance for losses | 51 | 51 | $ 46 | ||
Commercial and Financial | Senior Secured Bank Loans | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and leases, allowance for losses | 43 | 43 | $ 35 | ||
Commercial and Financial | Other Loans | |||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||
Loans and leases, allowance for losses | $ 8 | $ 8 |
Goodwill and Other Intangible Assets - Changes In The Carrying Amount Of Goodwill (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 5,671 | $ 5,826 |
Acquisitions | 236 | 0 |
Divestitures and other reductions | (11) | 0 |
Foreign currency translation | 15 | (155) |
Ending balance | 5,911 | 5,671 |
Investment Servicing | ||
Goodwill [Roll Forward] | ||
Beginning balance | 5,641 | 5,793 |
Acquisitions | 0 | 0 |
Divestitures and other reductions | (11) | 0 |
Foreign currency translation | 15 | (152) |
Ending balance | 5,645 | 5,641 |
Investment Management | ||
Goodwill [Roll Forward] | ||
Beginning balance | 30 | 33 |
Acquisitions | 236 | 0 |
Divestitures and other reductions | 0 | 0 |
Foreign currency translation | 0 | (3) |
Ending balance | $ 266 | $ 30 |
Goodwill and Other Intangible Assets - Changes In The Carrying Amount Of Other Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Finite-lived Intangible Assets [Roll Forward] | |||||
Beginning balance | $ 1,768 | $ 2,025 | $ 2,025 | ||
Acquisitions | 217 | 16 | |||
Amortization | $ (55) | $ (48) | (153) | (147) | (197) |
Foreign currency translation and other, net | 17 | (76) | |||
Ending balance | 1,849 | 1,849 | 1,768 | ||
Investment Servicing | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Beginning balance | 1,753 | 1,998 | 1,998 | ||
Acquisitions | 0 | 16 | |||
Amortization | (141) | (187) | |||
Foreign currency translation and other, net | 17 | (74) | |||
Ending balance | 1,629 | 1,629 | 1,753 | ||
Investment Management | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Beginning balance | 15 | $ 27 | 27 | ||
Acquisitions | 217 | 0 | |||
Amortization | (12) | (10) | |||
Foreign currency translation and other, net | 0 | (2) | |||
Ending balance | $ 220 | $ 220 | $ 15 |
Goodwill and Other Intangible Assets - Gross Carrying Amount, Accumulated Amortization And Net Carrying Amount Of Other Intangible Assets (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 3,534 | $ 3,300 | |
Accumulated Amortization | (1,685) | (1,532) | |
Net Carrying Amount | 1,849 | 1,768 | $ 2,025 |
Client relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 2,703 | 2,486 | |
Accumulated Amortization | (1,312) | (1,198) | |
Net Carrying Amount | 1,391 | 1,288 | |
Core deposits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 673 | 667 | |
Accumulated Amortization | (273) | (246) | |
Net Carrying Amount | 400 | 421 | |
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 158 | 147 | |
Accumulated Amortization | (100) | (88) | |
Net Carrying Amount | $ 58 | $ 59 |
Other Assets (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Other Assets [Abstract] | ||
Collateral deposits, net | $ 24,458 | $ 21,465 |
Derivative instruments, net | 3,503 | 4,777 |
Bank-owned life insurance | 3,137 | 3,078 |
Investments in joint ventures and other unconsolidated entities | 2,235 | 2,034 |
Receivable for securities settlement | 598 | 311 |
Accounts receivable | 454 | 1,018 |
Prepaid expenses | 363 | 284 |
Income taxes receivable | 219 | 154 |
Deferred tax assets, net of valuation allowance | 215 | 182 |
Deposits with clearing organizations | 138 | 127 |
Other | 1,000 | 473 |
Total | $ 36,320 | $ 33,903 |
Derivative Financial Instruments - Narrative (Details) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016
USD ($)
security
|
Dec. 31, 2015
USD ($)
|
|
Derivative [Line Items] | ||
Cash collateral received for derivative instruments | $ 1,700 | $ 1,400 |
Cash collateral provided for derivative instruments | 971 | 1,650 |
Fair value of derivative liabilities | $ 8,240 | $ 11,153 |
Securities weighted average life | 4 years 9 months 20 days | 5 years 5 months 10 days |
Credit swap agreements | ||
Derivative [Line Items] | ||
Fair value of derivative liabilities | $ 757 | |
Fair value of collateral posted | 2 | |
Maximum additional amount of payments related to termination events | $ 755 | |
Interest rate swap | Fair Value Hedges | Senior notes | ||
Derivative [Line Items] | ||
Number of securities | security | 8 | |
Interest rate swap | Fair Value Hedges | Subordinated note | ||
Derivative [Line Items] | ||
Number of securities | security | 2 |
Derivative Financial Instruments - Notional Amount of Interest Rate Swap Agreements Designated as Fair Value and Cash Flow Hedges (Details) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016
USD ($)
contract
|
Dec. 31, 2015
USD ($)
contract
|
|
Fair Value Hedges | ||
Derivative [Line Items] | ||
Total | $ 10,276 | $ 9,398 |
Increase in carrying value of long-term debt | 376 | 105 |
Fair Value Hedges | Investment securities available for sale | ||
Derivative [Line Items] | ||
Investment securities available-for-sale | 1,551 | 1,698 |
Fair Value Hedges | Long-term debt | ||
Derivative [Line Items] | ||
Long-term debt | $ 8,725 | $ 7,700 |
Interest-rate contracts | Cash Flow Hedges | ||
Derivative [Line Items] | ||
Number of instruments held | contract | 0 | 0 |
Derivative Financial Instruments - Contractual and Weighted-Average Interest Rates, Which Include the Effects of Hedges Related to Financial Instruments (Details) - Long-term debt |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Derivative [Line Items] | ||||
Contractual rates | 3.37% | 3.59% | 3.41% | 3.60% |
Rate including impact of hedges | 2.27% | 2.35% | 2.24% | 2.51% |
Offsetting Arrangements - Narrative (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Offsetting [Abstract] | ||
Fair Value of securities received as collateral that can be resold or repledged | $ 2,260 | $ 3,050 |
Fair Value of securities received as collateral that have been resold or repledged | $ 287 | $ 262 |
Offsetting Arrangements - Assets With Enforceable Netting Arrangements (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Offsetting [Abstract] | ||
Derivatives, net amount of assets presented in statement of condition | $ 3,503 | $ 4,777 |
Derivatives, counterparty netting | 0 | 0 |
Derivatives, cash and securities received | (159) | (405) |
Derivatives, net amount | 3,344 | 4,372 |
Resale agreements and securities borrowing, resale agreements and securities borrowing, net amount of assets presented in statement of condition | 26,153 | 23,525 |
Resale agreements and securities borrowing, counterparty netting | (120) | (63) |
Resale agreements and securities borrowing, cash and securities received | (25,783) | (22,812) |
Resale agreements and securities borrowing, net amount | 250 | 650 |
Total, net amounts of assets presented in statement of condition | 29,656 | 28,302 |
Total, counterparty netting | (120) | (63) |
Total, cash and securities received | (25,942) | (23,217) |
Total, net amount | $ 3,594 | $ 5,022 |
Offsetting Arrangements - Liabilities With Enforceable Netting Arrangements (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Offsetting [Abstract] | ||
Derivative, net amount of liabilities presented in statement of condition | $ 3,562 | $ 4,132 |
Derivative, counterparty netting | 0 | 0 |
Derivative, collateral provided | (8) | (64) |
Derivative, net amount | 3,554 | 4,068 |
Repurchase agreements and securities lending, net amount of liabilities presented in statement of condition | 9,783 | 7,769 |
Repurchase agreements and securities lending, counterparty netting | (120) | (63) |
Repurchase agreements and securities lending, collateral provided | (7,461) | (5,287) |
Repurchase agreements and securities lending, net amount | 2,202 | 2,419 |
Total, net amount of liabilities presented in statement of condition | 13,345 | 11,901 |
Total, counterparty netting | (120) | (63) |
Total, collateral provided | (7,469) | (5,351) |
Total, net amount | $ 5,756 | $ 6,487 |
Commitments and Guarantees - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Loss Contingencies [Line Items] | ||
Unfunded commitments to extend credit | $ 21,720 | $ 22,580 |
Unfunded commitments to extend credit, short term | 75.00% | |
Term of unfunded commitment | 1 year | |
Cash collateral provided for securities lending | $ 23,710 | 20,120 |
Accrued expenses and other liabilities | ||
Loss Contingencies [Line Items] | ||
Cash collateral received in connection to securities finance activities | $ 5,420 | $ 3,270 |
Commitments and Guarantees - Contractual Amounts of Credit-Related Off-Balance Sheet Financial Instruments (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Indemnified securities financing | $ 344,191 | $ 320,436 |
Stable value protection | 27,319 | 24,583 |
Asset purchase agreements | 4,989 | 3,990 |
Standby letters of credit | $ 3,597 | $ 4,700 |
Commitments and Guarantees - Schedule Of Repurchase Agreements (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Fair value of indemnified securities financing | $ 344,191 | $ 320,436 |
Fair value of cash and securities held by us, as agent, as collateral for indemnified securities financing | 359,107 | 335,420 |
Fair value of collateral for indemnified securities financing invested in indemnified repurchase agreements | 64,982 | 63,055 |
Fair value of cash and securities held by us or our agents as collateral for investments in indemnified repurchase agreements | $ 69,031 | $ 67,016 |
Contingencies - Narrative (Details) £ in Millions, $ in Millions |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 31, 2014
USD ($)
claim
|
Jan. 31, 2014
GBP (£)
claim
|
Dec. 31, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
claim
|
|
Loss Contingencies [Line Items] | ||||
Unrecognized tax benefits | $ 63.0 | $ 66.0 | ||
Transition Management | ||||
Loss Contingencies [Line Items] | ||||
Claims settled | claim | 6 | 6 | ||
Litigation reserve | $ 44.0 | |||
Putative Class Action | ||||
Loss Contingencies [Line Items] | ||||
Number of pending claims | claim | 2 | |||
Foreign Exchange | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ 565.0 | |||
GovEx Inquiry | ||||
Loss Contingencies [Line Items] | ||||
Litigation reserve | 1.0 | |||
Legal Reserve | Transition Management | ||||
Loss Contingencies [Line Items] | ||||
Legal reserves | 622.0 | |||
Regulatory Matter | Transition Management | ||||
Loss Contingencies [Line Items] | ||||
Settlement, amount | $ 37.8 | £ 22.9 | ||
Cumulative Adjustment for Incorrect Revenue Recognition | ||||
Loss Contingencies [Line Items] | ||||
Cumulative adjustment to revenue | $ 292.0 | |||
Revenue recognition period | 18 years |
Contingencies - Schedule of Estimated Indirect Foreign Exchange Revenue (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
Dec. 31, 2011 |
Dec. 31, 2010 |
Dec. 31, 2009 |
Dec. 31, 2008 |
|
Commitments and Contingencies Disclosure [Abstract] | |||||||||
Estimated indirect foreign exchange revenue | $ 201 | $ 280 | $ 246 | $ 285 | $ 248 | $ 331 | $ 336 | $ 369 | $ 462 |
Variable Interest Entities (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investment securities related to state and political subdivisions | $ 1,760 | $ 2,100 |
Variable interest entity, other short-term borrowings | $ 1,390 | $ 1,750 |
Weighted average life of trusts | 4 years 9 months 20 days | 5 years 5 months 10 days |
Total standby bond-purchase agreement committed to trusts | $ 1,620 | |
Total letters of credit committed to trusts | 530 | |
Standby purchase agreements and letters of credit commitments utilized | 81 | |
VIE - primary beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 409 | $ 321 |
Liabilities | 327 | 228 |
Potential maximum loss exposure of unconsolidated funds | 51 | |
VIE - not primary beneficiary | ||
Variable Interest Entity [Line Items] | ||
Potential maximum loss exposure of unconsolidated funds | $ 92 | $ 75 |
Stockholders' Equity - Schedule of Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Equity [Abstract] | ||
Net unrealized gains on cash flow hedges | $ 80 | $ 293 |
Net unrealized gains (losses) on available-for-sale securities portfolio | 542 | 9 |
Net unrealized gains (losses) related to reclassified available-for-sale securities | (28) | (28) |
Net unrealized gains (losses) on available-for-sale securities | 514 | (19) |
Net unrealized losses on available-for-sale securities designated in fair value hedges | (118) | (109) |
Net unrealized gains (losses) on hedges of net investments in non-U.S. subsidiaries | 41 | (14) |
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit | (11) | (16) |
Net unrealized losses on retirement plans | (182) | (183) |
Foreign currency translation | (1,317) | (1,394) |
Total | $ (993) | $ (1,442) |
Net Interest Revenue - Components of Interest Revenue and Interest Expenses (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Banking and Thrift [Abstract] | ||||
Deposits with banks | $ 29 | $ 53 | $ 101 | $ 161 |
U.S. Treasury and federal agencies | 200 | 178 | 620 | 537 |
State and political subdivisions | 55 | 57 | 162 | 173 |
Other investments | 208 | 227 | 580 | 733 |
Securities purchased under resale agreements | 40 | 18 | 112 | 45 |
Trading account assets | 0 | 0 | 1 | 0 |
Loans and leases | 97 | 79 | 281 | 229 |
Other interest-earning assets | 18 | 2 | 39 | 7 |
Total interest revenue | 647 | 614 | 1,896 | 1,885 |
Deposits | 20 | 28 | 73 | 67 |
Securities sold under repurchase agreements | 0 | 0 | 1 | 0 |
Short-term borrowings | 2 | 1 | 4 | 5 |
Long-term debt | 68 | 62 | 191 | 185 |
Other interest-bearing liabilities | 20 | 10 | 57 | 34 |
Total interest expense | 110 | 101 | 326 | 291 |
Net interest revenue | $ 537 | $ 513 | $ 1,570 | $ 1,594 |
Expenses - Schedule of Expenses (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Other Expenses [Abstract] | ||||
Litigation | $ 47 | $ (7) | $ 47 | $ 396 |
Insurance | 31 | 33 | 74 | 98 |
Regulatory fees and assessments | 28 | 31 | 65 | 90 |
Securities processing | 10 | 40 | 20 | 75 |
Other | 71 | 44 | 231 | 186 |
Total other expenses | $ 187 | $ 141 | $ 437 | $ 845 |
Expenses - Restructuring Reserve (Details) - State Street Beacon - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Sep. 30, 2016 |
|
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 82 | $ 108 | $ 23 | $ 23 |
Accruals for State Street Beacon | 10 | 13 | 97 | 120 |
Payments and Other Adjustments | (18) | (39) | (12) | |
Ending balance | 74 | 82 | 108 | 74 |
Employee Related Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 55 | 91 | 9 | 9 |
Accruals for State Street Beacon | 8 | (1) | 86 | |
Payments and Other Adjustments | (14) | (35) | (4) | |
Ending balance | 49 | 55 | 91 | 49 |
Real Estate Consolidation | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 22 | 10 | 11 | 11 |
Accruals for State Street Beacon | 3 | 15 | 0 | |
Payments and Other Adjustments | (3) | (3) | (1) | |
Ending balance | 22 | 22 | 10 | 22 |
Asset and Other Write-offs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 5 | 7 | 3 | 3 |
Accruals for State Street Beacon | (1) | (1) | 11 | |
Payments and Other Adjustments | (1) | (1) | (7) | |
Ending balance | $ 3 | $ 5 | $ 7 | $ 3 |
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 563 | $ 581 | $ 1,550 | $ 1,404 |
Preferred stock dividends | (55) | (42) | (137) | (102) |
Dividends and undistributed earnings allocated to participating securities | (1) | 0 | (2) | (1) |
Net income available to common shareholders | $ 507 | $ 539 | $ 1,411 | $ 1,301 |
Basic average common shares | 388,358 | 406,612 | 393,959 | 409,816 |
Effect of dilutive securities: common stock options and common stock awards (in shares) | 4,854 | 5,555 | 4,454 | 5,956 |
Diluted average common shares | 393,212 | 412,167 | 398,413 | 415,772 |
Anti-dilutive securities (in shares) | 2,166 | 619 | 3,027 | 675 |
Earnings per Common Share: | ||||
Basic (in USD per share) | $ 1.31 | $ 1.33 | $ 3.58 | $ 3.18 |
Diluted (in USD per share) | $ 1.29 | $ 1.31 | $ 3.54 | $ 3.13 |
Line of Business Information - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
line_of_business
| |
Segment Reporting [Abstract] | |
Number of lines of business | 2 |
Non-U.S. Activities - Schedule Of Results From Non-U.S. Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 2,620 | $ 2,614 | $ 7,677 | $ 7,822 |
Income before income taxes | 636 | 647 | 1,775 | 1,618 |
Non-U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 1,117 | 1,088 | 3,278 | 3,385 |
Income before income taxes | 314 | 255 | 835 | 946 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 1,503 | 1,526 | 4,399 | 4,437 |
Income before income taxes | $ 322 | $ 392 | $ 940 | $ 672 |
Non-U.S. Activities - Narrative (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
---|---|---|---|
Segment Reporting Information [Line Items] | |||
Assets | $ 256,140 | $ 245,155 | |
Non-U.S. | |||
Segment Reporting Information [Line Items] | |||
Assets | $ 86,700 | $ 63,300 |
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