Regulatory Capital

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Regulatory Capital

Regulatory Capital

For additional information on our regulatory capital, including the regulatory capital requirements administered by federal banking agencies, and to which we are subject, refer to page 70 in Note 16 to the consolidated financial statements included under Item 8, Financial Statements and Supplementary Data, in the 2018 Annual Financial Statements.

As of September 30, 2019, we and State Street Bank exceeded all regulatory capital adequacy requirements to which we were subject. As of September 30, 2019, 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, 2019 that have changed the capital categorization of State Street Bank.

The following table presents the regulatory capital structure, total RWA, related regulatory capital ratios and the minimum required regulatory capital ratios for us 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 were phased in, the ratios presented in the table for each period-end are not directly comparable. Refer to the footnotes following the table.

					State Street Corporation												State Street Bank
(Dollars in millions)					Basel III Advanced Approaches September 30, 2019			Basel III Standardized Approach September 30, 2019(2)			Basel III Advanced Approaches December 31, 2018(1)			Basel III Standardized Approach December 31, 2018(2)			Basel III Advanced Approaches September 30, 2019			Basel III Standardized Approach September 30, 2019(2)			Basel III Advanced Approaches December 31, 2018(1)			Basel III Standardized Approach December 31, 2018(2)
Common shareholders' equity:
Common stock and related surplus					$	10,621		$	10,621		$	10,565		$	10,565		$	12,878		$	12,878		$	12,894		$	12,894
Retained earnings					21,612			21,612			20,606			20,606			14,194			14,194			14,261			14,261
Accumulated other comprehensive income (loss)					(1,000		)	(1,000		)	(1,332		)	(1,332		)	(761		)	(761		)	(1,112		)	(1,112		)
Treasury stock, at cost					(9,729		)	(9,729		)	(8,715		)	(8,715		)	—			—			—			—
Total					21,504			21,504			21,124			21,124			26,311			26,311			26,043			26,043
Regulatory capital adjustments:
Goodwill and other intangible assets, net of associated deferred tax liabilities					(9,117		)	(9,117		)	(9,350		)	(9,350		)	(8,845		)	(8,845		)	(9,073		)	(9,073		)
Other adjustments(2)					(158		)	(158		)	(194		)	(194		)	—			—			(29		)	(29		)
Common equity tier 1 capital					12,229			12,229			11,580			11,580			17,466			17,466			16,941			16,941
Preferred stock					3,690			3,690			3,690			3,690			—			—			—			—
Tier 1 capital					15,919			15,919			15,270			15,270			17,466			17,466			16,941			16,941
Qualifying subordinated long-term debt					607			607			778			778			604			604			776			776
Allowance for loan and lease losses and other					4			86			14			83			3			86			11			83
Total capital					$	16,530		$	16,612		$	16,062		$	16,131		$	18,073		$	18,156		$	17,728		$	17,800
Risk-weighted assets:
Credit risk(3)					$	51,726		$	107,013		$	47,738		$	97,303		$	49,183		$	104,242		$	45,565		$	94,776
Operational risk(4)					46,913			NA			46,060			NA			44,125			NA			44,494			NA
Market risk					1,688			1,688			1,517			1,517			1,688			1,688			1,517			1,517
Total risk-weighted assets					$	100,327		$	108,701		$	95,315		$	98,820		$	94,996		$	105,930		$	91,576		$	96,293
Adjusted quarterly average assets					$	213,997		$	213,997		$	211,924		$	211,924		$	210,625		$	210,625		$	209,413		$	209,413
Capital Ratios:	2019 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(5)		2018 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(6)
Common equity tier 1 capital	8.5	%	7.5	%	12.2		%	11.3		%	12.1		%	11.7		%	18.4		%	16.5		%	18.5		%	17.6		%
Tier 1 capital	10.0		9.0		15.9			14.6			16.0			15.5			18.4			16.5			18.5			17.6
Total capital	12.0		11.0		16.5			15.3			16.9			16.3			19.0			17.1			19.4			18.5

⁽¹⁾  Under the applicable bank regulatory rules, we are not required to and, accordingly, did not revise previously-filed reported capital metrics and ratios following the change in accounting for LIHTC.

⁽²⁾ Other adjustments within CET1 primarily include the overfunded portion of the firm’s defined benefit pension plan obligation net of associated deferred tax liabilities, disallowed deferred tax assets, and other required credit risk based deductions.

⁽³⁾ Includes a CVA which reflects the risk of potential fair value adjustments for credit risk reflected in our valuation of OTC derivative contracts. We used a simple CVA approach in conformity with the Basel III advanced approaches.

⁽⁴⁾  Under the current advanced approaches rules and regulatory guidance concerning operational risk models, RWA attributable to operational risk can vary substantially from period-to-period, without direct correlation to the effects of a particular loss event on our results of operations and financial condition and impacting dates and periods that may differ from the dates and periods as of and during which the loss event is reflected in our financial statements, with the timing and categorization dependent on the processes for model updates and, if applicable, model revalidation and regulatory review and related supervisory processes. An individual loss event can have a significant effect on the output of our operational RWA under the advanced approaches depending on the severity of the loss event and its categorization among the seven Basel-defined UOMs.

⁽⁵⁾ Minimum requirements were phased in with full implementation beginning on January 1, 2019; minimum requirements listed are as of September 30, 2019.

⁽⁶⁾ Minimum requirements were phased in with full implementation beginning on January 1, 2019; minimum requirements listed are as of December 31, 2018.

^NA Not applicable