Regulatory Capital

6 Months Ended

Jun. 30, 2020

Banking and Thrift, Other Disclosures [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 162 in Note 16 to the consolidated financial statements included under Item 8, Financial Statements and Supplementary Data, in our 2019 Form 10-K.

As of June 30, 2020, we and State Street Bank exceeded all regulatory capital adequacy requirements to which we were subject. As of June 30, 2020, 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 June 30, 2020 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, calculated under the advanced approaches and standardized approach provisions of the Basel III final rule as of the dates indicated:

					State Street Corporation												State Street Bank
(Dollars in millions)					Basel III Advanced Approaches June 30, 2020			Basel III Standardized Approach June 30, 2020			Basel III Advanced Approaches December 31, 2019			Basel III Standardized Approach December 31, 2019			Basel III Advanced Approaches June 30, 2020			Basel III Standardized Approach June 30, 2020			Basel III Advanced Approaches December 31, 2019			Basel III Standardized Approach December 31, 2019
Common shareholders' equity:
Common stock and related surplus					$	10,683		$	10,683		$	10,636		$	10,636		$	12,893		$	12,893		$	12,893		$	12,893
Retained earnings					22,794			22,794			21,918			21,918			13,103			13,103			13,218			13,218
Accumulated other comprehensive income (loss)					(430		)	(430		)	(870		)	(870		)	(174		)	(174		)	(654		)	(654		)
Treasury stock, at cost					(10,645		)	(10,645		)	(10,209		)	(10,209		)	—			—			—			—
Total					22,402			22,402			21,475			21,475			25,822			25,822			25,457			25,457
Regulatory capital adjustments:
Goodwill and other intangible assets, net of associated deferred tax liabilities					(8,973		)	(8,973		)	(9,112		)	(9,112		)	(8,705		)	(8,705		)	(8,839		)	(8,839		)
Other adjustments(1)					(261		)	(261		)	(150		)	(150		)	(119		)	(119		)	(1		)	(1		)
Common equity tier 1 capital					13,168			13,168			12,213			12,213			16,998			16,998			16,617			16,617
Preferred stock					2,471			2,471			2,962			2,962			—			—			—			—
Tier 1 capital					15,639			15,639			15,175			15,175			16,998			16,998			16,617			16,617
Qualifying subordinated long-term debt					964			964			1,095			1,095			969			969			1,099			1,099
Allowance for credit losses					47			163			5			90			55			163			3			90
Total capital					$	16,650		$	16,766		$	16,275		$	16,360		$	18,022		$	18,130		$	17,719		$	17,806
Risk-weighted assets:
Credit risk(2)					$	57,975		$	105,276		$	54,763		$	102,367		$	54,016		$	101,462		$	51,610		$	98,979
Operational risk(3)					44,225			NA			47,963			NA			43,738			NA			44,138			NA
Market risk					1,563			1,563			1,638			1,638			1,563			1,563			1,638			1,638
Total risk-weighted assets					$	103,763		$	106,839		$	104,364		$	104,005		$	99,317		$	103,025		$	97,386		$	100,617
Adjusted quarterly average assets					$	256,418		$	256,418		$	219,624		$	219,624		$	252,725		$	252,725		$	216,397		$	216,397
Capital Ratios:	2020 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge		2019 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge
Common equity tier 1 capital	8.0	%	8.5	%	12.7		%	12.3		%	11.7		%	11.7		%	17.1		%	16.5		%	17.1		%	16.5		%
Tier 1 capital	9.5		10.0		15.1			14.6			14.5			14.6			17.1			16.5			17.1			16.5
Total capital	11.5		12.0		16.0			15.7			15.6			15.7			18.1			17.6			18.2			17.7

⁽¹⁾ 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.

⁽²⁾ 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.

⁽³⁾  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.

^NA Not applicable