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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Massachusetts
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04-2456637
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(State or other jurisdiction of incorporation)
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(I.R.S. Employer Identification No.)
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One Lincoln Street
Boston, Massachusetts
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02111
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(Address of principal executive office)
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(Zip Code)
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617-786-3000
(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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(Title of Each Class)
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(Name of each exchange on which registered)
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Common Stock, $1 par value per share
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New York Stock Exchange
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Depositary Shares, each representing a 1/4,000th ownership interest in a share of Non-Cumulative Perpetual Preferred Stock, Series C, without par value per share
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New York Stock Exchange
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Depositary Shares, each representing a 1/4,000th ownership interest in a share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, without par value per share
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New York Stock Exchange
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Depositary Shares, each representing a 1/4,000th ownership interest in a share of Non-Cumulative Perpetual Preferred Stock, Series E, without par value per share
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New York Stock Exchange
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Depositary Shares, each representing a 1/4,000th ownership interest in a share of Non-Cumulative Perpetual Preferred Stock, Series G, without par value per share
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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(Do not check if a smaller reporting company)
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PART I
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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PART II
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Item 5
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Item 6
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Item 7
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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PART III
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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PART IV
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Item 15
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Exhibits
, Financial Statement Schedules
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Item 16
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Form 10-K Summary
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EXHIBIT INDEX
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SIGNATURES
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•
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Adds requirements for a minimum common equity tier 1 risk-based capital ratio of 4.5% and a minimum supplementary leverage ratio of 3% for advanced approaches banking organizations;
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Raises the minimum tier 1 risk-based capital ratio from 4% under Basel I and Basel II to 6%;
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Leaves the existing, minimum total capital ratio at 8%;
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Implements the capital conservation and countercyclical capital buffers, referenced below, as well as a G-SIB surcharge
included under "Capital" in "Financial Condition" included under Item 7, Management's Discussion and Analysis, of this Form 10-K;
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Implements the previously described standardized approach to replace the calculation of RWA under Basel I; and
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Implements the advanced approaches for the calculation of RWA.
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Method 1: Assesses systemic importance based upon five equally-weighted components: size, interconnectedness, complexity, cross-jurisdictional activity and substitutability;
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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
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the financial strength of the counterparties with which we or our clients do business and to which we have investment, credit or financial exposures that our clients have as a result of our acts as their agent, including an asset manager;
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increases in the volatility of, or declines in the level of, our NII, changes in the composition or valuation of the assets recorded in our consolidated statement of condition (and our
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the liquidity of the U.S. and international securities markets, particularly the markets for fixed-income securities and inter-bank credits; the liquidity of the assets on our balance sheet and changes or volatility in the sources of such funding, particularly the deposits of our clients; and demands upon our liquidity, including the liquidity demands and requirements of our clients;
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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; and the impact of monetary and fiscal policy in the U.S. and internationally on prevailing rates of interest and currency exchange rates in the markets in which we provide services to our clients;
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the credit quality, credit-agency ratings and fair values of the securities in our investment securities portfolio, a deterioration or downgrade of which could lead to other-than-temporary impairment of the respective securities and the recognition of an impairment loss in our consolidated statement of income;
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our ability to attract deposits and other low-cost, short-term funding, our ability to manage the level and pricing 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;
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the manner and timing with which the Federal Reserve and other U.S. and foreign regulators implement or reevaluate the regulatory framework applicable to our operations (as well as changes to that framework), including implementation or modification of the Dodd-Frank Act and related stress testing and resolution planning requirements, implementation of international standards applicable to financial institutions, such as those proposed by the Basel Committee and European legislation (such as the AIFMD, UCITS, the Money Market Funds Regulation and MiFID II
/ MiFIR); among other consequences, these regulatory changes impact the levels of regulatory capital and liquidity we must maintain, acceptable levels of credit exposure to third parties, margin requirements applicable to derivatives, restrictions on banking and financial activities and the manner in which
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adverse changes in the regulatory ratios that we are, or will be, required to meet, whether arising under the Dodd-Frank Act or implementation of international standards applicable to financial institutions, such as those proposed by the Basel Committee, 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 or liquidity ratios that cause changes in those ratios as they are measured from period to period;
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requirements to obtain the prior approval or non-objection of the Federal Reserve or other U.S. and non-U.S. regulators for the use, allocation or distribution of our capital or other specific capital actions or corporate activities, including, without limitation, acquisitions, investments in subsidiaries, dividends and stock purchases, without which our growth plans, distributions to shareholders, share repurchase programs or other capital or corporate initiatives may be restricted;
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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;
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economic or financial market disruptions in the U.S. or internationally, including those which may result from recessions or political instability; for example, the U.K.'s decision to exit from the European Union may continue to disrupt financial markets or economic growth in Europe or potential changes in bi-lateral and multi-lateral trade agreements proposed by the U.S.;
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our ability to create cost efficiencies through changes in our operational processes and to
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our ability to promote a strong culture of risk management, operating controls, compliance oversight, ethical behavior and governance that meets 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;
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the impact on our compliance and controls enhancement programs associated with the appointment of a monitor under the deferred prosecution agreement with the DOJ and compliance consultant appointed under a settlement with the SEC, including the potential for such monitor and compliance consultant to require changes to our programs or to identify other issues that require substantial expenditures, changes in our operations, or payments to clients or reporting to U.S. authorities;
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the results of our review of our billing practices, including additional findings or amounts we may be required to reimburse clients, as well as potential consequences of such review, including damage to our client relationships or our reputation and adverse actions by governmental authorities;
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the results of, and costs associated with, governmental or regulatory inquiries and investigations, litigation and similar claims, disputes, or civil or criminal proceedings;
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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;
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the large institutional clients on which we focus are often able to exert considerable market influence and have diverse investment activities, and this, combined with strong competitive market forces, subjects us to significant pressure to reduce the fees we charge, to potentially significant changes in our AUCA or our AUM in the event of the acquisition or loss of a client, in whole or in part, and to potentially significant changes in our fee revenue in the event a client re-balances or changes its investment approach or otherwise re-directs assets to lower- or higher-fee asset classes;
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the potential for losses arising from our investments in sponsored investment funds;
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the possibility that our clients will incur substantial losses in investment pools for which we act as agent, the possibility of significant reductions in the liquidity or valuation of assets underlying those pools and the potential that clients will seek to hold us liable for such losses;
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our ability to anticipate and manage the level and timing of redemptions and withdrawals from our collateral pools and other collective investment products;
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the credit agency ratings of our debt and depositary obligations and investor and client perceptions of our financial strength;
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adverse publicity
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whether specific to State Street or regarding other industry participants or industry-wide factors, or other reputational harm;
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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;
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our ability to expand our use of technology to enhance the efficiency, accuracy and reliability of our operations and our dependencies on information technology and our ability to control related risks, including cyber-crime and other threats to our information technology infrastructure and systems (including those of our third-party service providers) and their effective operation both independently and with external systems, and complexities and costs of protecting the security of such systems and data;
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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;
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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;
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the risks that our acquired businesses and joint ventures will not achieve their anticipated financial, operational and product innovation benefits or will not be integrated successfully
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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
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our ability to recognize evolving 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
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and the potential for new products and services to impose additional costs on us and expose us to increased operational risk;
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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;
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changes in accounting standards and practices; and
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the impact of the U.S. tax legislation enacted in 2017, 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.
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Short-term credit
. The degree of client demand for short-term credit tends to increase during periods of market turbulence, which may expose us to further counterparty- related risks. For example, investors in collective investment vehicles for which we act as custodian may experience significant redemption activity due to adverse market or economic news. Our relationship with our clients and the nature of the settlement process for some types of payments may result in the extension of short-term credit in such circumstances. We also provide committed lines of credit to support such activity. For some types of clients, we provide credit to allow them to leverage their portfolios, which may expose us to potential loss if the client experiences investment losses or other credit difficulties.
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Industry and country risks
. In addition to our exposure to financial institutions, we are from time to time exposed to concentrated credit risk at an industry or country level. This concentration risk also applies to groups of unrelated counterparties that may have similar investment strategies involving one or more particular industries, regions, or other
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Subcustodian risks
. Our use of unaffiliated subcustodians exposes us to credit risk, in addition to other risks, such as operational risk, dependencies on credit extensions and risks of the legal systems of the jurisdictions in which the subcustodians operate, each of which may be material. These risks are amplified due to changing regulatory requirements with respect to our financial exposures in the event those subcustodians are unable to return a client’s assets, including, in some regulatory regimes, such as the E.U.'s UCITS and AIFM directives, requirements that we be responsible for resulting losses suffered by our clients.
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Settlement risks
. We are exposed to settlement risks, particularly in our payments and foreign exchange activities. Those activities may lead to extension of credit and consequent losses in the event of a counterparty breach, failure to provide credit extensions or an operational error. Due to our membership in several industry clearing or settlement exchanges, we may be required to guarantee obligations and liabilities, or provide financial support, in the event that other members do not honor their obligations or default. Moreover, not all of our counterparty exposure is secured, and even when our exposure is secured, the realizable value of the collateral may have declined by the time we exercise our rights against that
collateral. This risk may be particularly acute if we are required to sell the collateral into an illiquid or temporarily-impaired market or with respect to clients protected by sovereign immunity. We are exposed to risk of short-term credit or overdraft of our clients in connection with the process to facilitate settlement of trades and related foreign exchange activities, particularly when contractual settlement has been agreed with our clients. The occurrence of overdrafts at peak volatility could create significant credit exposure to our clients depending upon the value of such clients' collateral at the time.
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Securities lending and repurchase agreement indemnification
. On behalf of clients enrolled in our securities lending program, we lend securities to banks, broker/dealers and other institutions. In the event of a failure of the borrower to return such securities, we typically agree to indemnify our clients for the amount by which the fair market value of those securities exceeds the proceeds of the disposition of the collateral recalled from the borrower in connection with such transaction. We also lend and borrow securities as riskless principal, and in connection with those transactions receive a security interest in securities from the borrowers of securities and advances as collateral to securities lenders. Borrowers are generally required to provide collateral equal to a contractually agreed percentage equal to or in excess of the fair market value of the loaned securities. As the fair market value of the loaned securities or collateral changes, additional collateral is provided by the borrower or collateral is returned to the borrower. In addition, our agency securities lending clients often purchase securities or other financial instruments from financial counterparties, including broker/dealers, under repurchase arrangements, frequently as a method of reinvesting the cash collateral they receive from lending their securities. Under these arrangements, the counterparty is obligated to repurchase these securities or financial instruments from the client at the same price (plus an agreed rate of return) at some point in the future. The value of the collateral is intended to exceed the counterparty's payment obligation, and collateral is adjusted daily to account for shortfall under, or excess over, the agreed-upon collateralization level. As with the securities lending program, we agree to indemnify our clients from any loss that would arise on a default by the counterparty under these repurchase arrangements if the proceeds from the disposition of the securities or other financial assets held as collateral are less than the amount of the repayment obligation by the client's counterparty. In such instances of counterparty default, for both securities lending and repurchase agreements, we, rather than our client, are exposed to the risks associated with collateral value.
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Stable value arrangements
. We provide benefit-responsive contracts, known as wraps, to defined contribution plans that offer a stable value option to their participants. During the financial crisis, the book value of
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U.S. municipal obligations remarketing credit facilities
. We provide credit facilities in connection with the remarketing of U.S. municipal obligations, potentially exposing us to credit exposure to the municipalities issuing such bonds and to their increased liquidity demands. In the current economic environment, where municipalities are subject to increased investor concern, the risks associated with such businesses increase.
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Senior secured bank loans
. In recent years, we have increased our investment in senior secured bank loans, both in the U.S. and in Europe. We invest in these loans to non-investment grade borrowers through participation in loan syndications in the non-investment grade lending market. We rate these loans as "speculative" under our internal risk-rating framework, and these loans have significant exposure to credit losses relative to higher-rated loans. We are therefore at a higher risk of default with respect to these investments relative to other of our investments activities. In addition, unlike other financial institutions that may have an active role in managing individual loan compliance, our investment in these loans is generally as a passive investor with limited control. As this portfolio grows and becomes more seasoned, our allowance for loan losses related to these loans may increase through additional provisions for credit losses.
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Unavailability of netting
. We are generally not able to net exposures across counterparties that are affiliated entities and may not be able in all circumstances to net exposures to the same legal entity across multiple products. As a consequence, we may incur a loss in relation to one entity or product even though our exposure to an entity's affiliates or across product types is over-collateralized.
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Asset class concentration
. Our investment portfolio continues to have significant concentrations in several classes of securities, including agency residential MBS, commercial MBS and other ABS, and securities with concentrated exposure to consumers. These classes and types of securities experienced significant liquidity, valuation and credit quality deterioration
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Effects of market conditions
. If market conditions deteriorate, our investment portfolio could experience a decline in market value, whether due to a decline in liquidity or an increase in the yield required by investors to hold such securities, regardless of our credit view of our portfolio holdings. For example, we recorded significant losses not related to credit in connection with the consolidation of our off-balance sheet asset-backed commercial paper conduits in 2009 and the repositioning of our investment portfolio in 2010. In addition, in general, deterioration in credit quality, or changes in management's expectations regarding repayment timing or in management's investment intent to hold securities to maturity, in each case with respect to our portfolio holdings, could result in OTTI. Similarly, if a material portion of our investment portfolio were to experience credit deterioration, our capital ratios as calculated pursuant to the Basel III final rule could be adversely affected. This risk is greater with portfolios of investment securities that contain credit risk than with holdings of U.S. Treasury securities.
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Effects of interest rates
. Our investment portfolio is further subject to changes in both U.S. and non-U.S. (primarily in Europe) interest rates, and could be negatively affected by changes in those rates, whether or not expected. This is particularly true in the case of a quicker-than-anticipated increase in interest rates, which would decrease market values in the near-term, or monetary policy that results in persistently low or negative rates of interest on certain investments. The latter has been the case, for example, with respect to ECB monetary policy, including negative interest rates in
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meet clients' demands for return of their deposits;
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extend credit to our clients in connection with our investor services businesses; and
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fund the pool of long- and intermediate-term assets that are included in the investment securities carried in our consolidated statement of condition.
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Principal Properties
(1)
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City
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State/
Country
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Owned/
Leased
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U.S. and Canada:
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State Street Financial Center
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Boston
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MA
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Leased
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Channel Center
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Boston
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MA
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Leased
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Summer Street
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Boston
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MA
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Leased
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Crown Colony Drive
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Quincy
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MA
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Leased
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Heritage Drive
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Quincy
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MA
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Leased
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John Adams Building
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Quincy
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MA
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Owned
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Josiah Quincy Building
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Quincy
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MA
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Leased
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Grafton Data Center
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Grafton
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MA
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Owned
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Westborough Data Center
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Westborough
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MA
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Owned
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Summer Street
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Stamford
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CT
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Leased
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Pennsylvania Avenue
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Kansas City
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MO
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Leased
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College Road East
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Princeton
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NJ
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Leased
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Avenue of the Americas
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New York
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NY
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Leased
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Adelaide Street East
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Toronto
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Canada
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Leased
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Europe, Middle East and Africa:
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Churchill Place
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London
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England
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Leased
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Herriotstrasse
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Frankfurt
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Germany
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Leased
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Brienner Strasse
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Munich
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Germany
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Leased
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Sir John Rogerson's Quay
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Dublin
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Ireland
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Leased
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Via Ferrante Aporti
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Milan
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Italy
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Leased
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Kirchberg
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Luxembourg
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Luxembourg
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Leased
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Titanium Tower
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Gdansk
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Poland
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Leased
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Bonarka
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Krakow
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Poland
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Leased
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CBK
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Krakow
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Poland
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Leased
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Ferry Road
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Edinburgh
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Scotland
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Leased
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Asia Pacific:
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George Street
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Sydney
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Australia
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Leased
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San Dun
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Hangzhou
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China
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Leased
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Tian Tang
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Hangzhou
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China
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Leased
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Ecoworld 6B
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Bangalore
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India
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Leased
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Knowledge City Salarpuria
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Hyderabad
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India
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Leased
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Name
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Age
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Position
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Joseph L. Hooley
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60
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Chairman and Chief Executive Officer
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Eric W. Aboaf
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53
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Executive Vice President and Chief Financial Officer
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Jeffrey N. Carp
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61
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Executive Vice President, Chief Legal Officer and Secretary
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Jeff D. Conway
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52
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Executive Vice President, Global Head of Operations and Business Transformation
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Andrew J. Erickson
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48
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Executive Vice President, Head of Global Services
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Hannah M. Grove
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54
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Executive Vice President and Chief Marketing Officer
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Kathryn M. Horgan
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52
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Executive Vice President and Chief Human Resources and Citizenship Officer
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Karen C. Keenan
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55
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Executive Vice President and Chief Administrative Officer
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Andrew P. Kuritzkes
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57
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Executive Vice President and Chief Risk Officer
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Louis D. Maiuri
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53
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Executive Vice President, Head of Global Markets and Global Exchange
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Elizabeth Nolan
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55
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Executive Vice President, Chief Executive Officer for Europe, Middle East and Africa
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Ronald P. O'Hanley
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61
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President and Chief Operating Officer
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Elizabeth Schaefer
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43
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Senior Vice President, Deputy Controller and Chief Accounting Officer (interim)
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Wai-Kwong Seck
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62
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Executive Vice President, Chief Executive Officer for Asia Pacific
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Antoine Shagoury
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47
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Executive Vice President and Global Chief Information Officer
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George E. Sullivan
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57
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Executive Vice President, Head of Alternative Investment Solutions
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Cyrus Taraporevala
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51
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President and Chief Executive Officer, State Street Global Advisors
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(Dollars in millions, except per share amounts; shares in thousands)
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Total Number of Shares Purchased
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Program
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Approximate Dollar Value of Shares That May Yet be Purchased Under Publicly Announced Program
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||||||
Period:
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||||||
October 1 - October 31, 2017
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|
—
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|
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$
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—
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|
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—
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|
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$
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1,050
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November 1 - November 30, 2017
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1,479
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|
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92.52
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1,479
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|
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913
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December 1 - December 31, 2017
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2,177
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|
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97.88
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2,177
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|
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700
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Total
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3,656
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|
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$
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95.71
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|
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3,656
|
|
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$
|
700
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|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
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||||||||||||
State Street Corporation
|
$
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100
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|
|
$
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159
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|
|
$
|
172
|
|
|
$
|
148
|
|
|
$
|
178
|
|
|
$
|
227
|
|
S&P 500 Index
|
100
|
|
|
132
|
|
|
151
|
|
|
153
|
|
|
171
|
|
|
208
|
|
||||||
S&P Financial Index
|
100
|
|
|
136
|
|
|
156
|
|
|
154
|
|
|
189
|
|
|
230
|
|
||||||
KBW Bank Index
|
100
|
|
|
138
|
|
|
151
|
|
|
151
|
|
|
195
|
|
|
231
|
|
(Dollars in millions, except per share amounts or where otherwise noted)
|
|
|
|
|
|
|
|
|
|
||||||||||
YEARS ENDED DECEMBER 31:
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Total fee revenue
|
$
|
8,905
|
|
|
$
|
8,116
|
|
|
$
|
8,278
|
|
|
$
|
8,010
|
|
|
$
|
7,570
|
|
Net interest income
|
2,304
|
|
|
2,084
|
|
|
2,088
|
|
|
2,260
|
|
|
2,303
|
|
|||||
Gains (losses) related to investment securities, net
|
(39
|
)
|
|
7
|
|
|
(6
|
)
|
|
4
|
|
|
(9
|
)
|
|||||
Total revenue
|
11,170
|
|
|
10,207
|
|
|
10,360
|
|
|
10,274
|
|
|
9,864
|
|
|||||
Provision for loan losses
|
2
|
|
|
10
|
|
|
12
|
|
|
10
|
|
|
6
|
|
|||||
Total expenses
|
8,269
|
|
|
8,077
|
|
|
8,050
|
|
|
7,827
|
|
|
7,192
|
|
|||||
Income before income tax expense
|
2,899
|
|
|
2,120
|
|
|
2,298
|
|
|
2,437
|
|
|
2,666
|
|
|||||
Income tax expense (benefit)
|
722
|
|
|
(22
|
)
|
|
318
|
|
|
415
|
|
|
616
|
|
|||||
Net income from non-controlling interest
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
$
|
2,177
|
|
|
$
|
2,143
|
|
|
$
|
1,980
|
|
|
$
|
2,022
|
|
|
$
|
2,050
|
|
Adjustments to net income
(1)
|
(184
|
)
|
|
(175
|
)
|
|
(132
|
)
|
|
(64
|
)
|
|
(34
|
)
|
|||||
Net income available to common shareholders
|
$
|
1,993
|
|
|
$
|
1,968
|
|
|
$
|
1,848
|
|
|
$
|
1,958
|
|
|
$
|
2,016
|
|
PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
5.32
|
|
|
$
|
5.03
|
|
|
$
|
4.53
|
|
|
$
|
4.62
|
|
|
$
|
4.52
|
|
Diluted
|
5.24
|
|
|
4.97
|
|
|
4.47
|
|
|
4.53
|
|
|
4.43
|
|
|||||
Cash dividends declared
|
1.60
|
|
|
1.44
|
|
|
1.32
|
|
|
1.16
|
|
|
1.04
|
|
|||||
Closing market price (at year end)
|
$
|
97.61
|
|
|
$
|
77.72
|
|
|
$
|
66.36
|
|
|
$
|
78.50
|
|
|
$
|
73.39
|
|
AS OF DECEMBER 31:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities
|
$
|
97,579
|
|
|
$
|
97,167
|
|
|
$
|
100,022
|
|
|
$
|
112,636
|
|
|
$
|
116,914
|
|
Average total interest-earning assets
|
191,235
|
|
|
199,184
|
|
|
220,456
|
|
|
209,054
|
|
|
178,101
|
|
|||||
Total assets
|
238,425
|
|
|
242,698
|
|
|
245,155
|
|
|
274,089
|
|
|
243,262
|
|
|||||
Deposits
|
184,896
|
|
|
187,163
|
|
|
191,627
|
|
|
209,040
|
|
|
182,268
|
|
|||||
Long-term debt
|
11,620
|
|
|
11,430
|
|
|
11,497
|
|
|
10,012
|
|
|
9,670
|
|
|||||
Total shareholders' equity
|
22,317
|
|
|
21,219
|
|
|
21,103
|
|
|
21,328
|
|
|
20,248
|
|
|||||
Assets under custody and administration (in billions)
|
33,119
|
|
|
28,771
|
|
|
27,508
|
|
|
28,188
|
|
|
27,427
|
|
|||||
Assets under management (in billions)
|
2,782
|
|
|
2,468
|
|
|
2,245
|
|
|
2,448
|
|
|
2,345
|
|
|||||
Number of employees
|
36,643
|
|
|
33,783
|
|
|
32,356
|
|
|
29,970
|
|
|
29,430
|
|
|||||
RATIOS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average common shareholders' equity
|
10.6
|
%
|
|
10.5
|
%
|
|
9.8
|
%
|
|
9.8
|
%
|
|
10.2
|
%
|
|||||
Return on average assets
|
0.99
|
|
|
0.93
|
|
|
0.79
|
|
|
0.85
|
|
|
0.99
|
|
|||||
Common dividend payout
|
29.89
|
|
|
28.46
|
|
|
28.99
|
|
|
25.03
|
|
|
22.89
|
|
|||||
Average common equity to average total assets
|
8.6
|
|
|
8.2
|
|
|
7.6
|
|
|
8.4
|
|
|
9.6
|
|
|||||
Net interest margin, fully taxable-equivalent basis
|
1.29
|
|
|
1.13
|
|
|
1.03
|
|
|
1.16
|
|
|
1.37
|
|
|||||
Common equity tier 1 ratio
(2)
|
12.3
|
|
|
11.7
|
|
|
12.5
|
|
|
12.4
|
|
|
15.3
|
|
|||||
Tier 1 capital ratio
(2)
|
15.5
|
|
|
14.8
|
|
|
15.3
|
|
|
14.5
|
|
|
17.1
|
|
|||||
Total capital ratio
(2)
|
16.5
|
|
|
16.0
|
|
|
17.4
|
|
|
16.4
|
|
|
19.5
|
|
|||||
Tier 1 leverage ratio
(2)
|
7.3
|
|
|
6.5
|
|
|
6.9
|
|
|
6.3
|
|
|
6.8
|
|
|||||
Supplementary leverage ratio
(3)
|
6.5
|
|
|
5.9
|
|
|
6.2
|
|
|
5.6
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
Net Interest Income
|
|
Significant Accounting Estimates
|
|
•
|
accounting for fair value measurements;
|
•
|
other-than-temporary impairment of investment securities;
|
•
|
impairment of goodwill and other intangible assets; and
|
•
|
contingencies.
|
TABLE 1: OVERVIEW OF FINANCIAL RESULTS
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Total fee revenue
|
$
|
8,905
|
|
|
$
|
8,116
|
|
|
$
|
8,278
|
|
Net interest income
|
2,304
|
|
|
2,084
|
|
|
2,088
|
|
|||
Gains (losses) related to investment securities, net
|
(39
|
)
|
|
7
|
|
|
(6
|
)
|
|||
Total revenue
|
11,170
|
|
|
10,207
|
|
|
10,360
|
|
|||
Provision for loan losses
|
2
|
|
|
10
|
|
|
12
|
|
|||
Total expenses
|
8,269
|
|
|
8,077
|
|
|
8,050
|
|
|||
Income before income tax expense
|
2,899
|
|
|
2,120
|
|
|
2,298
|
|
|||
Income tax expense (benefit)
|
722
|
|
|
(22
|
)
|
|
318
|
|
|||
Net income from non-controlling interest
|
—
|
|
|
1
|
|
|
—
|
|
|||
Net income
|
$
|
2,177
|
|
|
$
|
2,143
|
|
|
$
|
1,980
|
|
Adjustments to net income:
|
|
|
|
|
|
||||||
Dividends on preferred stock
(1)
|
$
|
(182
|
)
|
|
$
|
(173
|
)
|
|
$
|
(130
|
)
|
Earnings allocated to participating securities
(2)
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
Net income available to common shareholders
|
$
|
1,993
|
|
|
$
|
1,968
|
|
|
$
|
1,848
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.32
|
|
|
$
|
5.03
|
|
|
$
|
4.53
|
|
Diluted
|
5.24
|
|
|
4.97
|
|
|
4.47
|
|
|||
Average common shares outstanding (in thousands):
|
|
|
|
|
|
||||||
Basic
|
374,793
|
|
|
391,485
|
|
407,856
|
|||||
Diluted
|
380,213
|
|
|
396,090
|
|
413,638
|
|||||
Cash dividends declared per common share
|
$
|
1.60
|
|
|
$
|
1.44
|
|
|
$
|
1.32
|
|
Return on average common equity
|
10.6
|
%
|
|
10.5
|
%
|
|
9.8
|
%
|
|
|
•
|
EPS of
$5.24
in
2017
increased
5%
compared to
$4.97
in
2016
.
|
◦
|
Both
2017
and
2016
include the impact of notable items. The
2017
results include a one-time estimated net impact of
$270 million
associated with the Tax Cuts and Jobs Act (TCJA). This impact consisted of a one-time estimated tax expense of approximately
$250 million
and a one-time reduction of approximately
$20 million
in revenue.
|
▪
|
Actual effects of the TCJA may differ from these estimates, among other things, due to additional tax and regulatory guidance and changes in our assumptions and interpretations.
|
◦
|
The
2016
results include an acceleration of compensation expense of
$249 million
(
$161 million
after-tax) and tax benefits of
$211 million
resulting from a reduction in accrued tax expense attributable to retained foreign earnings and tax benefits from capital actions involving our overseas affiliates.
|
•
|
2017
ROE of
10.6%
increased from
10.5%
in
2016
.
|
•
|
Pre-tax margin of
26.0%
in
2017
increased from
20.8%
in
2016
.
|
•
|
Total revenue and fee revenue increased
9%
and
10%
, respectively, in
2017
compared to
2016
, primarily driven by strength in servicing fees, management fees, processing and other fees, and the impact of the weaker U.S. dollar, partially offset by lower trading services revenue.
|
•
|
Servicing fee revenue increased
6%
in
2017
compared to
2016
, primarily due to market appreciation and net new business, partially offset by continued hedge fund outflows and the impact of the businesses we exited in
2017
.
|
•
|
Management fee revenue increased
25%
in
2017
compared to
2016
, primarily due to the GEAM business acquired in 2016, continued strength in global equity markets, and ETF flows.
|
•
|
NII increased
11%
in
2017
compared to
2016
, driven by higher market interest rates in the U.S. and loan portfolio growth, partially offset by a smaller balance sheet.
|
•
|
Total expenses increased
2%
in
2017
compared to
2016
, primarily due to higher restructuring charges, information systems and communications costs, and compensation and employee benefit costs, partially offset by approximately $150 million of Beacon savings. Total Beacon program-to-date savings were approximately $325 million through December 31, 2017.
|
•
|
In
2017
, we recorded restructuring charges of
$245 million
related to Beacon. We expect Beacon target savings of
$550 million
to be realized by mid-2019, 18 months ahead of schedule.
|
•
|
AUCA increased
15%
in
2017
compared to
2016
, primarily due to strength in equity markets, flows, and new business. In
2017
, we secured new asset servicing mandates of approximately
$445 billion
. Our AUCA pipeline of asset servicing mandates remaining to be installed in future periods totaled approximately
$350 billion
as of
December 31, 2017
.
|
•
|
AUM increased
13%
in
2017
compared to
2016
, primarily driven by strength in equity markets, weaker U.S. dollar, and positive ETF flows.
|
•
|
We declared aggregate common stock dividends of
$1.60
per share, totaling approximately
$596 million
in
2017
, compared to
$1.44
per share, totaling
$559 million
in
2016
, representing an increase of approximately
11%
on a per share basis.
|
•
|
In
2017
, we acquired
16.8 million
shares of common stock at an average per-share cost of
$86.37
and an aggregate cost of approximately
$1,450 million
under common stock purchase programs approved by our Board.
|
•
|
CET1 capital ratio under the Basel III standardized approach increased to
11.9%
as of
December 31, 2017
, compared to
11.6%
as of December 31, 2016.
|
•
|
Tier 1 leverage ratio increased to
7.3%
as of
December 31, 2017
, compared to
6.5%
as of December 31, 2016.
|
|
|
•
|
A
10%
increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our servicing and management fees are calculated, would result in a corresponding change in our total servicing and management fee revenues of approximately
3%
; and
|
•
|
A
10%
increase or decrease in worldwide fixed income markets, on a weighted average basis, over the relevant periods for which our servicing and management fees are calculated, would result in a corresponding change in our total servicing and management fee revenues of approximately
1%
.
|
|
|
|
|
|
|
TABLE 5: AVERAGE BALANCES AND INTEREST RATES - FULLY TAXABLE-EQUIVALENT BASIS
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
Years Ended December 31,
|
|||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||||
(Dollars in millions; fully taxable-equivalent basis)
|
Average
Balance
|
|
Interest
Revenue/
Expense
|
|
Rate
|
|
Average
Balance
|
|
Interest
Revenue/
Expense
|
|
Rate
|
|
Average
Balance |
|
Interest
Revenue/ Expense |
|
Rate
|
|||||||||||||||
Interest-bearing deposits with banks
|
$
|
47,514
|
|
|
$
|
180
|
|
|
.38
|
%
|
|
$
|
53,091
|
|
|
$
|
126
|
|
|
.24
|
%
|
|
$
|
69,753
|
|
|
$
|
208
|
|
|
.30
|
%
|
Securities purchased under resale agreements
(1)
|
2,131
|
|
|
264
|
|
|
12.38
|
|
|
2,558
|
|
|
146
|
|
|
5.70
|
|
|
3,233
|
|
|
62
|
|
|
1.92
|
|
||||||
Trading account assets
|
1,011
|
|
|
(1
|
)
|
|
(.12
|
)
|
|
921
|
|
|
—
|
|
|
—
|
|
|
1,194
|
|
|
1
|
|
|
.08
|
|
||||||
Investment securities
|
95,779
|
|
|
1,891
|
|
|
1.97
|
|
|
100,738
|
|
|
1,962
|
|
|
1.95
|
|
|
105,611
|
|
|
2,069
|
|
|
1.96
|
|
||||||
Loans and leases
|
21,916
|
|
|
519
|
|
|
2.37
|
|
|
19,013
|
|
|
384
|
|
|
2.02
|
|
|
17,948
|
|
|
311
|
|
|
1.73
|
|
||||||
Other interest-earning assets
|
22,884
|
|
|
222
|
|
|
.97
|
|
|
22,863
|
|
|
61
|
|
|
.27
|
|
|
22,717
|
|
|
10
|
|
|
.04
|
|
||||||
Average total interest-earning assets
|
$
|
191,235
|
|
|
$
|
3,075
|
|
|
1.61
|
|
|
$
|
199,184
|
|
|
$
|
2,679
|
|
|
1.34
|
|
|
$
|
220,456
|
|
|
$
|
2,661
|
|
|
1.21
|
|
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S.
|
$
|
30,623
|
|
|
$
|
96
|
|
|
.31
|
%
|
|
$
|
30,107
|
|
|
$
|
132
|
|
|
.44
|
%
|
|
$
|
30,819
|
|
|
$
|
51
|
|
|
.16
|
%
|
Non-U.S.
(2)
|
91,937
|
|
|
67
|
|
|
.07
|
|
|
95,551
|
|
|
(47
|
)
|
|
(.05
|
)
|
|
102,491
|
|
|
46
|
|
|
.05
|
|
||||||
Total interest-bearing deposits
(2)
|
122,560
|
|
|
163
|
|
|
.13
|
|
|
125,658
|
|
|
85
|
|
|
.07
|
|
|
133,310
|
|
|
97
|
|
|
.07
|
|
||||||
Securities sold under repurchase agreements
|
3,683
|
|
|
2
|
|
|
.05
|
|
|
4,113
|
|
|
1
|
|
|
.02
|
|
|
8,875
|
|
|
1
|
|
|
.01
|
|
||||||
Federal funds purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
||||||
Other short-term borrowings
|
1,313
|
|
|
10
|
|
|
.80
|
|
|
1,666
|
|
|
7
|
|
|
.40
|
|
|
3,826
|
|
|
6
|
|
|
.15
|
|
||||||
Long-term debt
|
11,595
|
|
|
308
|
|
|
2.66
|
|
|
11,401
|
|
|
260
|
|
|
2.29
|
|
|
10,301
|
|
|
250
|
|
|
2.43
|
|
||||||
Other interest-bearing liabilities
|
4,607
|
|
|
121
|
|
|
2.63
|
|
|
5,394
|
|
|
75
|
|
|
1.39
|
|
|
6,471
|
|
|
46
|
|
|
.71
|
|
||||||
Average total interest-bearing liabilities
|
$
|
143,758
|
|
|
$
|
604
|
|
|
.42
|
|
|
$
|
148,263
|
|
|
$
|
428
|
|
|
.29
|
|
|
$
|
162,804
|
|
|
$
|
400
|
|
|
.25
|
|
Interest-rate spread
|
|
|
|
|
1.19
|
%
|
|
|
|
|
|
1.05
|
%
|
|
|
|
|
|
.96
|
%
|
||||||||||||
Net interest income—fully taxable-equivalent basis
|
|
|
$
|
2,471
|
|
|
|
|
|
|
$
|
2,251
|
|
|
|
|
|
|
$
|
2,261
|
|
|
|
|||||||||
Net interest margin—fully taxable-equivalent basis
|
|
|
|
|
1.29
|
%
|
|
|
|
|
|
1.13
|
%
|
|
|
|
|
|
1.03
|
%
|
||||||||||||
Tax-equivalent adjustment
|
|
|
(167
|
)
|
|
|
|
|
|
(167
|
)
|
|
|
|
|
|
(173
|
)
|
|
|
||||||||||||
Net interest income—GAAP basis
|
|
|
$
|
2,304
|
|
|
|
|
|
|
$
|
2,084
|
|
|
|
|
|
|
$
|
2,088
|
|
|
|
|
|
TABLE 6: EXPENSES
|
|||||||||||||||||
|
Years Ended December 31,
|
|
% Change 2017
vs. 2016 |
|
% Change 2016
vs. 2015 |
||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Compensation and employee benefits
|
$
|
4,394
|
|
|
$
|
4,353
|
|
|
$
|
4,061
|
|
|
1
|
%
|
|
7
|
%
|
Information systems and communications
|
1,167
|
|
|
1,105
|
|
|
1,022
|
|
|
6
|
|
|
8
|
|
|||
Transaction processing services
|
838
|
|
|
800
|
|
|
793
|
|
|
5
|
|
|
1
|
|
|||
Occupancy
|
461
|
|
|
440
|
|
|
444
|
|
|
5
|
|
|
(1
|
)
|
|||
Acquisition costs
|
21
|
|
|
69
|
|
|
20
|
|
|
(70
|
)
|
|
245
|
|
|||
Restructuring charges, net
|
245
|
|
|
140
|
|
|
5
|
|
|
75
|
|
|
nm
|
|
|||
Other:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Professional services
|
340
|
|
|
379
|
|
|
490
|
|
|
(10
|
)
|
|
(23
|
)
|
|||
Amortization of other intangible assets
|
214
|
|
|
207
|
|
|
197
|
|
|
3
|
|
|
5
|
|
|||
Regulatory fees and assessments
|
106
|
|
|
82
|
|
|
115
|
|
|
29
|
|
|
(29
|
)
|
|||
Other
|
483
|
|
|
502
|
|
|
824
|
|
|
(4
|
)
|
|
(39
|
)
|
|||
Total other
|
1,143
|
|
|
1,170
|
|
|
1,626
|
|
|
(2
|
)
|
|
(28
|
)
|
|||
Total expenses
|
$
|
8,269
|
|
|
$
|
8,077
|
|
|
$
|
7,971
|
|
|
2
|
|
|
1
|
|
Number of employees at year-end
|
36,643
|
|
|
33,783
|
|
|
32,356
|
|
|
8
|
|
|
4
|
|
|
|
TABLE 7: RESTRUCTURING CHARGES
|
|||||||||||||||
(In millions)
|
Employee
Related Costs |
|
Real Estate
Actions |
|
Asset and Other Write-offs
|
|
Total
|
||||||||
Accrual Balance at December 31, 2014
|
$
|
39
|
|
|
$
|
23
|
|
|
$
|
7
|
|
|
$
|
69
|
|
Accruals for Business Operations and IT
|
(5
|
)
|
|
(3
|
)
|
|
13
|
|
|
5
|
|
||||
Payments and other adjustments
|
(25
|
)
|
|
(9
|
)
|
|
(17
|
)
|
|
(51
|
)
|
||||
Accrual Balance at December 31, 2015
|
$
|
9
|
|
|
$
|
11
|
|
|
$
|
3
|
|
|
$
|
23
|
|
Accruals for Business Operations and IT
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Accruals for Beacon
|
94
|
|
|
18
|
|
|
30
|
|
|
142
|
|
||||
Payments and other adjustments
|
(64
|
)
|
|
(12
|
)
|
|
(31
|
)
|
|
(107
|
)
|
||||
Accrual Balance at December 31, 2016
|
$
|
37
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
56
|
|
Accruals for Beacon
|
186
|
|
|
32
|
|
|
27
|
|
|
245
|
|
||||
Payments and Other Adjustments
|
(57
|
)
|
|
(17
|
)
|
|
(26
|
)
|
|
(100
|
)
|
||||
Accrual Balance at December 31, 2017
|
$
|
166
|
|
|
$
|
32
|
|
|
$
|
3
|
|
|
$
|
201
|
|
TABLE 8: INVESTMENT SERVICING LINE OF BUSINESS RESULTS
|
|||||||||||||||||
|
Years Ended December 31,
|
|
% Change 2017 vs. 2016
|
|
% Change 2016 vs. 2015
|
||||||||||||
(Dollars in millions, except where otherwise noted)
|
2017
|
|
2016
|
|
2015
|
|
|||||||||||
Servicing fees
|
$
|
5,365
|
|
|
$
|
5,073
|
|
|
$
|
5,153
|
|
|
6
|
%
|
|
(2
|
)%
|
Trading services
|
999
|
|
|
1,038
|
|
|
1,091
|
|
|
(4
|
)
|
|
(5
|
)
|
|||
Securities finance
|
606
|
|
|
562
|
|
|
496
|
|
|
8
|
|
|
13
|
|
|||
Processing fees and other
|
240
|
|
|
119
|
|
|
342
|
|
|
102
|
|
|
(65
|
)
|
|||
Total fee revenue
|
7,210
|
|
|
6,792
|
|
|
7,082
|
|
|
6
|
|
|
(4
|
)
|
|||
Net interest income
|
2,309
|
|
|
2,081
|
|
|
2,086
|
|
|
11
|
|
|
—
|
|
|||
Gains (losses) related to investment securities, net
|
(39
|
)
|
|
7
|
|
|
(6
|
)
|
|
nm
|
|
|
nm
|
|
|||
Total revenue
|
9,480
|
|
|
8,880
|
|
|
9,162
|
|
|
7
|
|
|
(3
|
)
|
|||
Provision for loan losses
|
2
|
|
|
10
|
|
|
12
|
|
|
(80
|
)
|
|
(17
|
)
|
|||
Total expenses
|
6,717
|
|
|
6,660
|
|
|
6,990
|
|
|
1
|
|
|
(5
|
)
|
|||
Income before income tax expense
|
$
|
2,761
|
|
|
$
|
2,210
|
|
|
$
|
2,160
|
|
|
25
|
|
|
2
|
|
Pre-tax margin
|
29
|
%
|
|
25
|
%
|
|
24
|
%
|
|
|
|
|
|
||||
Average assets (in billions)
|
$
|
214.0
|
|
|
$
|
225.3
|
|
|
$
|
246.6
|
|
|
|
|
|
|
|
|
TABLE 9: ASSETS UNDER CUSTODY AND ADMINISTRATION BY PRODUCT
|
|
|
|
|
|||||||||||||||||||||
|
As of December 31,
|
|
2016-2017 Annual Growth Rate
|
|
2013-2017 Compound Annual Growth Rate
|
||||||||||||||||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
||||||||||||||
Mutual funds
|
$
|
7,603
|
|
|
$
|
6,841
|
|
|
$
|
6,768
|
|
|
$
|
6,992
|
|
|
$
|
6,811
|
|
|
11
|
%
|
|
3
|
%
|
Collective funds
|
9,707
|
|
|
7,501
|
|
|
7,088
|
|
|
6,949
|
|
|
6,428
|
|
|
29
|
|
|
11
|
|
|||||
Pension products
|
6,704
|
|
|
5,584
|
|
|
5,510
|
|
|
5,746
|
|
|
5,851
|
|
|
20
|
|
|
3
|
|
|||||
Insurance and other products
|
9,105
|
|
|
8,845
|
|
|
8,142
|
|
|
8,501
|
|
|
8,337
|
|
|
3
|
|
|
2
|
|
|||||
Total
|
$
|
33,119
|
|
|
$
|
28,771
|
|
|
$
|
27,508
|
|
|
$
|
28,188
|
|
|
$
|
27,427
|
|
|
15
|
|
|
5
|
|
TABLE 10: ASSETS UNDER CUSTODY AND ADMINISTRATION BY ASSET CLASS
|
|
|
|
|
|||||||||||||||||||||
|
As of December 31,
|
|
2016-2017 Annual Growth Rate
|
|
2013-2017 Compound Annual Growth Rate
|
||||||||||||||||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
||||||||||||||
Equities
|
$
|
19,214
|
|
|
$
|
16,189
|
|
|
$
|
14,888
|
|
|
$
|
15,876
|
|
|
$
|
15,050
|
|
|
19
|
%
|
|
6
|
%
|
Fixed-income
|
10,070
|
|
|
9,231
|
|
|
9,264
|
|
|
8,739
|
|
|
9,072
|
|
|
9
|
|
|
3
|
|
|||||
Short-term and other investments
|
3,835
|
|
|
3,351
|
|
|
3,356
|
|
|
3,573
|
|
|
3,305
|
|
|
14
|
|
|
4
|
|
|||||
Total
|
$
|
33,119
|
|
|
$
|
28,771
|
|
|
$
|
27,508
|
|
|
$
|
28,188
|
|
|
$
|
27,427
|
|
|
15
|
|
|
5
|
|
TABLE 11: ASSETS UNDER CUSTODY AND ADMINISTRATION BY GEOGRAPHY
(1)
|
|||||||||||||||||||
|
As of December 31,
|
||||||||||||||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
North America
|
$
|
24,418
|
|
|
$
|
21,544
|
|
|
$
|
20,842
|
|
|
$
|
21,217
|
|
|
$
|
20,764
|
|
Europe/Middle East/Africa
|
7,028
|
|
|
5,734
|
|
|
5,387
|
|
|
5,633
|
|
|
5,511
|
|
|||||
Asia/Pacific
|
1,673
|
|
|
1,493
|
|
|
1,279
|
|
|
1,338
|
|
|
1,152
|
|
|||||
Total
|
$
|
33,119
|
|
|
$
|
28,771
|
|
|
$
|
27,508
|
|
|
$
|
28,188
|
|
|
$
|
27,427
|
|
|
|
•
|
Direct sales and trading
: Represent FX transactions at negotiated rates with clients and investment managers that contact our trading desk directly. These principal market-making activities include transactions for funds serviced by third party custodians or prime brokers, as well as those funds under custody at State Street.
|
•
|
Indirect FX trading
: Represent FX transactions with clients or their investment managers routed to our FX desk through our asset-servicing operation; in which all cases, we are the funds' custodian. We execute indirect FX trades as a principal at rates disclosed to our clients.
|
•
|
Electronic FX services
: Our clients may choose to execute FX transactions through one of our electronic trading platforms. These transactions generate revenue through a “click” fee.
|
•
|
Other trading, transition management and brokerage revenue
: As our clients look to State Street to enhance and preserve portfolio values, they may choose to utilize our Transition or Currency Management capabilities or transact with our Equity Trade execution group. These transactions generate revenue via commissions charged for trades transacted during the management of these portfolios.
|
TABLE 12: INVESTMENT MANAGEMENT LINE OF BUSINESS RESULTS
|
|||||||||||||||||
|
Years Ended December 31,
|
|
% Change 2017 vs. 2016
|
|
% Change 2016 vs. 2015
|
||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
|
||||||||||
Management fees
|
$
|
1,616
|
|
|
$
|
1,292
|
|
|
$
|
1,174
|
|
|
25
|
%
|
|
10
|
%
|
Trading services
(1)
|
72
|
|
|
61
|
|
|
55
|
|
|
18
|
|
|
11
|
|
|||
Processing fees and other
|
7
|
|
|
(29
|
)
|
|
(33
|
)
|
|
(124
|
)
|
|
(12
|
)
|
|||
Total fee revenue
|
1,695
|
|
|
1,324
|
|
|
1,196
|
|
|
28
|
|
|
11
|
|
|||
Net interest income
|
(5
|
)
|
|
3
|
|
|
2
|
|
|
nm
|
|
|
50
|
|
|||
Total revenue
|
1,690
|
|
|
1,327
|
|
|
1,198
|
|
|
27
|
|
|
11
|
|
|||
Total expenses
|
1,286
|
|
|
1,218
|
|
|
962
|
|
|
6
|
|
|
27
|
|
|||
Income before income tax expense
|
$
|
404
|
|
|
$
|
109
|
|
|
$
|
236
|
|
|
271
|
|
|
(54
|
)
|
Pre-tax margin
|
24
|
%
|
|
8
|
%
|
|
20
|
%
|
|
|
|
|
|||||
Average assets
(in billions)
|
$
|
5.4
|
|
|
$
|
4.4
|
|
|
$
|
3.9
|
|
|
|
|
|
|
|
TABLE 13: ASSETS UNDER MANAGMENT BY ASSET CLASS AND INVESTMENT APPROACH
|
|||||||||||||||||||||||||
|
As of December 31,
|
|
2016-2017 Annual Growth Rate
|
|
2013-2017 Compound Annual Growth Rate
|
||||||||||||||||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
||||||||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Active
|
$
|
95
|
|
|
$
|
73
|
|
|
$
|
32
|
|
|
$
|
39
|
|
|
$
|
42
|
|
|
30
|
%
|
|
23
|
%
|
Passive
|
1,650
|
|
|
1,401
|
|
|
1,294
|
|
|
1,436
|
|
|
1,334
|
|
|
18
|
|
|
5
|
|
|||||
Total Equity
|
1,745
|
|
|
1,474
|
|
|
1,326
|
|
|
1,475
|
|
|
1,376
|
|
|
18
|
|
|
6
|
|
|||||
Fixed-Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Active
|
77
|
|
|
70
|
|
|
18
|
|
|
17
|
|
|
16
|
|
|
10
|
|
|
48
|
|
|||||
Passive
|
337
|
|
|
308
|
|
|
294
|
|
|
302
|
|
|
311
|
|
|
9
|
|
|
2
|
|
|||||
Total Fixed-Income
|
414
|
|
|
378
|
|
|
312
|
|
|
319
|
|
|
327
|
|
|
10
|
|
|
6
|
|
|||||
Cash
(1)
|
330
|
|
|
333
|
|
|
368
|
|
|
399
|
|
|
385
|
|
|
(1
|
)
|
|
(4
|
)
|
|||||
Multi-Asset-Class Solutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Active
|
18
|
|
|
19
|
|
|
17
|
|
|
30
|
|
|
23
|
|
|
(5
|
)
|
|
(6
|
)
|
|||||
Passive
|
129
|
|
|
107
|
|
|
86
|
|
|
97
|
|
|
110
|
|
|
21
|
|
|
4
|
|
|||||
Total Multi-Asset-Class Solutions
|
147
|
|
|
126
|
|
|
103
|
|
|
127
|
|
|
133
|
|
|
17
|
|
|
3
|
|
|||||
Alternative Investments
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Active
|
23
|
|
|
28
|
|
|
17
|
|
|
17
|
|
|
14
|
|
|
(18
|
)
|
|
13
|
|
|||||
Passive
|
123
|
|
|
129
|
|
|
119
|
|
|
111
|
|
|
110
|
|
|
(5
|
)
|
|
3
|
|
|||||
Total Alternative Investments
|
146
|
|
|
157
|
|
|
136
|
|
|
128
|
|
|
124
|
|
|
(7
|
)
|
|
4
|
|
|||||
Total
|
$
|
2,782
|
|
|
$
|
2,468
|
|
|
$
|
2,245
|
|
|
$
|
2,448
|
|
|
$
|
2,345
|
|
|
13
|
|
|
4
|
|
|
|
TABLE 14: EXCHANGE - TRADED FUNDS BY ASSET CLASS
(1)
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
As of December 31,
|
|
2016-2017 Annual Growth Rate
|
|
2013-2017 Compound Annual Growth Rate
|
||||||||||||||||||||
(In billions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
||||||||||||||
Alternative Investments
(2)
|
$
|
48
|
|
|
$
|
42
|
|
|
$
|
34
|
|
|
$
|
38
|
|
|
$
|
39
|
|
|
14
|
%
|
|
5
|
%
|
Cash
|
2
|
|
|
2
|
|
|
3
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
19
|
|
|||||
Equity
|
531
|
|
|
426
|
|
|
350
|
|
|
388
|
|
|
325
|
|
|
25
|
|
|
13
|
|
|||||
Fixed-income
|
63
|
|
|
51
|
|
|
41
|
|
|
39
|
|
|
34
|
|
|
24
|
|
|
17
|
|
|||||
Total Exchange-Traded Funds
|
$
|
644
|
|
|
$
|
521
|
|
|
$
|
428
|
|
|
$
|
466
|
|
|
$
|
399
|
|
|
24
|
|
|
13
|
|
|
|
|
|
TABLE 16: ACTIVITY IN ASSETS UNDER MANAGEMENT BY PRODUCT CATEGORY
|
|||||||||||||||||||||||
(In billions)
|
Equity
|
|
Fixed-Income
|
|
Cash
(1)
|
|
Multi-Asset-Class Solutions
|
|
Alternative Investments
(2)
|
|
Total
|
||||||||||||
Balance as of December 31, 2014
|
$
|
1,475
|
|
|
$
|
319
|
|
|
$
|
399
|
|
|
$
|
127
|
|
|
$
|
128
|
|
|
$
|
2,448
|
|
Long-term institutional inflows
(1)
|
277
|
|
|
62
|
|
|
—
|
|
|
51
|
|
|
33
|
|
|
423
|
|
||||||
Long-term institutional outflows
(1)
|
(363
|
)
|
|
(70
|
)
|
|
—
|
|
|
(59
|
)
|
|
(31
|
)
|
|
(523
|
)
|
||||||
Long-term institutional flows, net
|
(86
|
)
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
2
|
|
|
(100
|
)
|
||||||
ETF flows, net
|
(29
|
)
|
|
5
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
(24
|
)
|
||||||
Cash fund flows, net
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||||
Total flows, net
|
(115
|
)
|
|
(3
|
)
|
|
(26
|
)
|
|
(8
|
)
|
|
1
|
|
|
(151
|
)
|
||||||
Market appreciation
|
(13
|
)
|
|
3
|
|
|
—
|
|
|
(12
|
)
|
|
16
|
|
|
(6
|
)
|
||||||
Foreign exchange impact
|
(21
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(9
|
)
|
|
(46
|
)
|
||||||
Total market/foreign exchange impact
|
(34
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|
(16
|
)
|
|
7
|
|
|
(52
|
)
|
||||||
Balance as of December 31, 2015
|
$
|
1,326
|
|
|
$
|
312
|
|
|
$
|
368
|
|
|
$
|
103
|
|
|
$
|
136
|
|
|
$
|
2,245
|
|
Long-term institutional inflows
(3)
|
244
|
|
|
90
|
|
|
—
|
|
|
48
|
|
|
13
|
|
|
395
|
|
||||||
Long-term institutional outflows
(3)
|
(301
|
)
|
|
(96
|
)
|
|
—
|
|
|
(34
|
)
|
|
(21
|
)
|
|
(452
|
)
|
||||||
Long-term institutional flows, net
|
(57
|
)
|
|
(6
|
)
|
|
—
|
|
|
14
|
|
|
(8
|
)
|
|
(57
|
)
|
||||||
ETF flows, net
|
37
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
52
|
|
||||||
Cash fund flows, net
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
||||||
Total flows, net
|
(20
|
)
|
|
3
|
|
|
(37
|
)
|
|
14
|
|
|
(2
|
)
|
|
(42
|
)
|
||||||
Market appreciation
|
140
|
|
|
10
|
|
|
—
|
|
|
9
|
|
|
14
|
|
|
173
|
|
||||||
Foreign exchange impact
|
(10
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(20
|
)
|
||||||
Total market/foreign exchange impact
|
130
|
|
|
7
|
|
|
(2
|
)
|
|
6
|
|
|
12
|
|
|
153
|
|
||||||
Acquisitions and transfers
(4)
|
38
|
|
|
56
|
|
|
4
|
|
|
3
|
|
|
11
|
|
|
112
|
|
||||||
Balance as of December 31, 2016
|
$
|
1,474
|
|
|
$
|
378
|
|
|
$
|
333
|
|
|
$
|
126
|
|
|
$
|
157
|
|
|
$
|
2,468
|
|
Long-term institutional inflows
(3)
|
270
|
|
|
94
|
|
|
—
|
|
|
56
|
|
|
20
|
|
|
440
|
|
||||||
Long-term institutional outflows
(3)
|
(344
|
)
|
|
(92
|
)
|
|
—
|
|
|
(52
|
)
|
|
(41
|
)
|
|
(529
|
)
|
||||||
Long-term institutional flows, net
|
(74
|
)
|
|
2
|
|
|
—
|
|
|
4
|
|
|
(21
|
)
|
|
(89
|
)
|
||||||
ETF flows, net
|
26
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
37
|
|
||||||
Cash fund flows, net
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||||
Total flows, net
|
(48
|
)
|
|
12
|
|
|
(8
|
)
|
|
4
|
|
|
(20
|
)
|
|
(60
|
)
|
||||||
Market appreciation
|
293
|
|
|
15
|
|
|
1
|
|
|
12
|
|
|
3
|
|
|
324
|
|
||||||
Foreign exchange impact
|
26
|
|
|
9
|
|
|
3
|
|
|
5
|
|
|
6
|
|
|
49
|
|
||||||
Total market/foreign exchange impact
|
319
|
|
|
24
|
|
|
4
|
|
|
17
|
|
|
9
|
|
|
373
|
|
||||||
Balance as of December 31, 2017
|
$
|
1,745
|
|
|
$
|
414
|
|
|
$
|
329
|
|
|
$
|
147
|
|
|
$
|
146
|
|
|
$
|
2,782
|
|
|
|
TABLE 17: AVERAGE STATEMENT OF CONDITION
(1)
|
|||||||||||
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
Average Balance
|
|
Average Balance
|
|
Average Balance
|
||||||
Assets:
|
|
|
|
|
|
||||||
Interest-bearing deposits with banks
|
$
|
47,514
|
|
|
$
|
53,091
|
|
|
$
|
69,753
|
|
Securities purchased under resale agreements
|
2,131
|
|
|
2,558
|
|
|
3,233
|
|
|||
Trading account assets
|
1,011
|
|
|
921
|
|
|
1,194
|
|
|||
Investment securities
|
95,779
|
|
|
100,738
|
|
|
105,611
|
|
|||
Loans and leases
|
21,916
|
|
|
19,013
|
|
|
17,948
|
|
|||
Other interest-earning assets
|
22,884
|
|
|
22,863
|
|
|
22,717
|
|
|||
Average total interest-earning assets
|
191,235
|
|
|
199,184
|
|
|
220,456
|
|
|||
Cash and due from banks
|
3,097
|
|
|
3,157
|
|
|
2,460
|
|
|||
Other non-interest-earning assets
|
25,118
|
|
|
27,386
|
|
|
27,516
|
|
|||
Average total assets
|
$
|
219,450
|
|
|
$
|
229,727
|
|
|
$
|
250,432
|
|
|
|
|
|
|
|
||||||
Liabilities and shareholders’ equity:
|
|
|
|
|
|||||||
Interest-bearing deposits:
|
|
|
|
|
|
||||||
U.S.
|
$
|
30,623
|
|
|
$
|
30,107
|
|
|
$
|
30,819
|
|
Non-U.S.
|
91,937
|
|
|
95,551
|
|
|
102,491
|
|
|||
Total interest-bearing deposits
|
122,560
|
|
|
125,658
|
|
|
133,310
|
|
|||
Securities sold under repurchase agreements
|
3,683
|
|
|
4,113
|
|
|
8,875
|
|
|||
Federal funds purchased
|
—
|
|
|
31
|
|
|
21
|
|
|||
Other short-term borrowings
|
1,313
|
|
|
1,666
|
|
|
3,826
|
|
|||
Long-term debt
|
11,595
|
|
|
11,401
|
|
|
10,301
|
|
|||
Other interest-bearing liabilities
|
4,607
|
|
|
5,394
|
|
|
6,471
|
|
|||
Average total interest-bearing liabilities
|
143,758
|
|
|
148,263
|
|
|
162,804
|
|
|||
Non-interest-bearing deposits
|
41,248
|
|
|
44,827
|
|
|
51,675
|
|
|||
Other non-interest-bearing liabilities
|
12,379
|
|
|
14,742
|
|
|
14,626
|
|
|||
Preferred shareholders’ equity
|
3,197
|
|
|
3,060
|
|
|
2,418
|
|
|||
Common shareholders’ equity
|
18,868
|
|
|
18,835
|
|
|
18,909
|
|
|||
Average total liabilities and shareholders’ equity
|
$
|
219,450
|
|
|
$
|
229,727
|
|
|
$
|
250,432
|
|
|
|
TABLE 18: CARRYING VALUES OF INVESTMENT SECURITIES
|
|||||||
|
As of December 31,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Available-for-sale:
|
|||||||
U.S. Treasury and federal agencies:
|
|||||||
Direct obligations
|
$
|
223
|
|
|
$
|
4,263
|
|
Mortgage-backed securities
|
10,872
|
|
|
13,257
|
|
||
Total U.S. Treasury and federal agencies
|
11,095
|
|
|
17,520
|
|
||
Asset-backed securities:
|
|
|
|
||||
Student loans
(1)
|
3,358
|
|
|
5,596
|
|
||
Credit cards
|
1,542
|
|
|
1,351
|
|
||
Sub-prime
|
—
|
|
|
272
|
|
||
Other
|
1,447
|
|
|
905
|
|
||
Total asset-backed securities
|
6,347
|
|
|
8,124
|
|
||
Non-U.S. debt securities:
|
|
|
|
||||
Mortgage-backed securities
|
6,695
|
|
|
6,535
|
|
||
Asset-backed securities
|
2,947
|
|
|
2,516
|
|
||
Government securities
|
10,721
|
|
|
5,836
|
|
||
Other
|
6,108
|
|
|
5,613
|
|
||
Total non-U.S. debt securities
|
26,471
|
|
|
20,500
|
|
||
State and political subdivisions
|
9,151
|
|
|
10,322
|
|
||
Collateralized mortgage obligations
|
1,054
|
|
|
2,593
|
|
||
Other U.S. debt securities
|
2,560
|
|
|
2,469
|
|
||
U.S. equity securities
|
46
|
|
|
42
|
|
||
Non-U.S. equity securities
|
—
|
|
|
3
|
|
||
U.S. money-market mutual funds
|
397
|
|
|
409
|
|
||
Non-U.S. money-market mutual funds
|
—
|
|
|
16
|
|
||
Total
|
$
|
57,121
|
|
|
$
|
61,998
|
|
|
|
|
|
||||
Held-to-maturity
(2)
:
|
|
|
|
||||
U.S. Treasury and federal agencies:
|
|||||||
Direct obligations
|
$
|
17,028
|
|
|
$
|
17,527
|
|
Mortgage-backed securities
|
16,651
|
|
|
10,334
|
|
||
Total U.S. Treasury and federal agencies
|
33,679
|
|
|
27,861
|
|
||
Asset-backed securities:
|
|
|
|
||||
Student loans
(1)
|
3,047
|
|
|
2,883
|
|
||
Credit cards
|
798
|
|
|
897
|
|
||
Other
|
1
|
|
|
35
|
|
||
Total asset-backed securities
|
3,846
|
|
|
3,815
|
|
||
Non-U.S. debt securities:
|
|
|
|
||||
Mortgage-backed securities
|
939
|
|
|
1,150
|
|
||
Asset-backed securities
|
263
|
|
|
531
|
|
||
Government securities
|
474
|
|
|
286
|
|
||
Other
|
48
|
|
|
113
|
|
||
Total non-U.S. debt securities
|
1,724
|
|
|
2,080
|
|
||
Collateralized mortgage obligations
|
1,209
|
|
|
1,413
|
|
||
Total
|
$
|
40,458
|
|
|
$
|
35,169
|
|
|
|
TABLE 19: INVESTMENT PORTFOLIO BY EXTERNAL CREDIT RATING
|
|||||
|
December 31, 2017
|
|
December 31, 2016
|
||
AAA
(1)
|
74
|
%
|
|
78
|
%
|
AA
|
16
|
|
|
13
|
|
A
|
6
|
|
|
5
|
|
BBB
|
4
|
|
|
3
|
|
Below BBB
|
—
|
|
|
1
|
|
|
100
|
%
|
|
100
|
%
|
|
|
TABLE 20: INVESTMENT PORTFOLIO BY ASSET CLASS
|
|||||
|
December 31, 2017
|
|
December 31, 2016
|
||
US Treasuries
|
17
|
%
|
|
23
|
%
|
US Agency MBS
|
26
|
|
|
23
|
|
ABS
|
22
|
|
|
23
|
|
Foreign Sovereign
|
12
|
|
|
6
|
|
Other Credit
|
23
|
|
|
25
|
|
|
100
|
%
|
|
100
|
%
|
TABLE 21: NON-U.S. DEBT SECURITIES
|
|||||||
|
As of December 31,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Available-for-sale:
|
|
|
|
||||
United Kingdom
|
$
|
5,721
|
|
|
$
|
5,093
|
|
Australia
|
4,717
|
|
|
4,272
|
|
||
Canada
|
3,066
|
|
|
2,989
|
|
||
France
|
2,500
|
|
|
1,013
|
|
||
Italy
|
1,645
|
|
|
676
|
|
||
Spain
|
1,413
|
|
|
266
|
|
||
Japan
|
1,319
|
|
|
1,388
|
|
||
Belgium
|
1,193
|
|
|
360
|
|
||
Netherlands
|
1,175
|
|
|
1,283
|
|
||
Ireland
|
787
|
|
|
85
|
|
||
Hong Kong
|
666
|
|
|
664
|
|
||
Sweden
|
538
|
|
|
188
|
|
||
Germany
|
529
|
|
|
713
|
|
||
Norway
|
514
|
|
|
508
|
|
||
Finland
|
299
|
|
|
223
|
|
||
Austria
|
234
|
|
|
57
|
|
||
South Korea
|
19
|
|
|
634
|
|
||
Other
(1)
|
136
|
|
|
88
|
|
||
Total
|
$
|
26,471
|
|
|
$
|
20,500
|
|
Held-to-maturity:
|
|
|
|
||||
United Kingdom
|
$
|
410
|
|
|
$
|
504
|
|
Netherlands
|
372
|
|
|
473
|
|
||
Singapore
|
353
|
|
|
180
|
|
||
Australia
|
235
|
|
|
374
|
|
||
Germany
|
127
|
|
|
329
|
|
||
Spain
|
104
|
|
|
98
|
|
||
Other
(2)
|
123
|
|
|
122
|
|
||
Total
|
$
|
1,724
|
|
|
$
|
2,080
|
|
|
|
•
|
a pre-tax net unrealized gain of
$35 million
, composed of gross unrealized gains of
$95 million
and gross unrealized losses of
$60 million
, associated with non-U.S. debt securities available-for-sale and;
|
•
|
a pre-tax net unrealized gain of
$79 million
, composed of gross unrealized gains of
$85 million
and gross unrealized losses of
$6 million
, associated with non-U.S. debt securities held-to-maturity.
|
TABLE 22: STATE AND MUNICIPAL OBLIGORS
(1)
|
||||||||||||||
(Dollars in millions)
|
Total Municipal
Securities
|
|
Credit and
Liquidity
Facilities
(2)
|
|
Total
|
|
% of Total Municipal
Exposure
|
|||||||
As of December 31, 2017
|
|
|
|
|
|
|
||||||||
State of Issuer:
|
|
|
|
|
|
|
||||||||
Texas
|
$
|
1,713
|
|
|
$
|
1,622
|
|
|
$
|
3,335
|
|
|
18
|
%
|
California
|
415
|
|
|
2,237
|
|
|
2,652
|
|
|
14
|
|
|||
New York
|
742
|
|
|
1,288
|
|
|
2,030
|
|
|
11
|
|
|||
Massachusetts
|
859
|
|
|
991
|
|
|
1,850
|
|
|
10
|
|
|||
Washington
|
623
|
|
|
366
|
|
|
989
|
|
|
5
|
|
|||
Total
|
$
|
4,352
|
|
|
$
|
6,504
|
|
|
$
|
10,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
As of December 31, 2016
|
|
|
|
|
|
|
||||||||
State of Issuer:
|
|
|
|
|
|
|
||||||||
Texas
|
$
|
1,781
|
|
|
$
|
1,685
|
|
|
$
|
3,466
|
|
|
18
|
%
|
California
|
523
|
|
|
2,298
|
|
|
2,821
|
|
|
14
|
|
|||
New York
|
740
|
|
|
1,293
|
|
|
2,033
|
|
|
10
|
|
|||
Massachusetts
|
916
|
|
|
1,071
|
|
|
1,987
|
|
|
10
|
|
|||
Washington
|
708
|
|
|
234
|
|
|
942
|
|
|
5
|
|
|||
Maryland
|
488
|
|
|
411
|
|
|
899
|
|
|
5
|
|
|||
Total
|
$
|
5,156
|
|
|
$
|
6,992
|
|
|
$
|
12,148
|
|
|
|
|
|
|
|
TABLE 23: CONTRACTUAL MATURITIES AND YIELDS
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2017
|
|
Under 1 Year
|
|
1 to 5 Years
|
|
6 to 10 Years
|
|
Over 10 Years
|
||||||||||||||||||||
(Dollars in millions)
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
||||||||||||
Available-for-sale
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct obligations
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
12
|
|
|
1.85
|
%
|
|
$
|
6
|
|
|
3.75
|
%
|
|
$
|
205
|
|
|
3.30
|
%
|
Mortgage-backed securities
|
|
96
|
|
|
2.99
|
|
|
762
|
|
|
3.39
|
|
|
3,123
|
|
|
3.06
|
|
|
6,891
|
|
|
3.26
|
|
||||
Total U.S. treasury and federal agencies
|
|
96
|
|
|
|
|
774
|
|
|
|
|
3,129
|
|
|
|
|
7,096
|
|
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
|
289
|
|
|
2.12
|
|
|
1,044
|
|
|
2.10
|
|
|
685
|
|
|
2.10
|
|
|
1,340
|
|
|
2.53
|
|
||||
Credit cards
|
|
—
|
|
|
—
|
|
|
1,290
|
|
|
1.68
|
|
|
252
|
|
|
2.24
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
350
|
|
|
2.09
|
|
|
956
|
|
|
1.68
|
|
|
141
|
|
|
2.08
|
|
||||
Total asset-backed securities
|
|
289
|
|
|
|
|
2,684
|
|
|
|
|
1,893
|
|
|
|
|
1,481
|
|
|
|
||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
|
551
|
|
|
1.51
|
|
|
4,502
|
|
|
0.99
|
|
|
602
|
|
|
2.11
|
|
|
1,040
|
|
|
2.42
|
|
||||
Asset-backed securities
|
|
205
|
|
|
0.38
|
|
|
2,185
|
|
|
0.75
|
|
|
557
|
|
|
0.68
|
|
|
—
|
|
|
—
|
|
||||
Government securities
|
|
2,195
|
|
|
3.65
|
|
|
3,201
|
|
|
1.56
|
|
|
4,448
|
|
|
2.57
|
|
|
877
|
|
|
1.71
|
|
||||
Other
|
|
1,078
|
|
|
2.75
|
|
|
4,235
|
|
|
1.12
|
|
|
758
|
|
|
1.81
|
|
|
37
|
|
|
2.68
|
|
||||
Total non-U.S. debt securities
|
|
4,029
|
|
|
|
|
14,123
|
|
|
|
|
6,365
|
|
|
|
|
1,954
|
|
|
|
||||||||
State and political subdivisions
(2)
|
|
474
|
|
|
5.59
|
|
|
2,415
|
|
|
6.25
|
|
|
4,724
|
|
|
6.73
|
|
|
1,538
|
|
|
6.74
|
|
||||
Collateralized mortgage obligations
|
|
3
|
|
|
3.05
|
|
|
145
|
|
|
2.81
|
|
|
170
|
|
|
3.25
|
|
|
736
|
|
|
3.33
|
|
||||
Other U.S. debt securities
|
|
296
|
|
|
5.34
|
|
|
1,097
|
|
|
2.84
|
|
|
1,107
|
|
|
2.55
|
|
|
60
|
|
|
3.07
|
|
||||
Total
|
|
$
|
5,187
|
|
|
|
|
$
|
21,238
|
|
|
|
|
$
|
17,388
|
|
|
|
|
$
|
12,865
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Held-to-maturity
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct obligations
|
|
$
|
1,988
|
|
|
1.33
|
%
|
|
$
|
14,968
|
|
|
2.16
|
%
|
|
$
|
14
|
|
|
1.66
|
%
|
|
$
|
58
|
|
|
1.58
|
%
|
Mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
162
|
|
|
2.57
|
|
|
1,605
|
|
|
3.04
|
|
|
14,884
|
|
|
3.12
|
|
||||
Total U.S. treasury and federal agencies
|
|
1,988
|
|
|
|
|
15,130
|
|
|
|
|
1,619
|
|
|
|
|
14,942
|
|
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
|
35
|
|
|
1.66
|
|
|
245
|
|
|
1.87
|
|
|
265
|
|
|
1.93
|
|
|
2,502
|
|
|
2.10
|
|
||||
Credit cards
|
|
178
|
|
|
2.22
|
|
|
620
|
|
|
1.88
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2.46
|
|
||||
Total asset-backed securities
|
|
213
|
|
|
|
|
865
|
|
|
|
|
265
|
|
|
|
|
2,503
|
|
|
|
||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
|
132
|
|
|
0.52
|
|
|
217
|
|
|
0.48
|
|
|
45
|
|
|
2.70
|
|
|
545
|
|
|
1.10
|
|
||||
Asset-backed securities
|
|
26
|
|
|
0.18
|
|
|
237
|
|
|
0.99
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Government securities
|
|
353
|
|
|
3.54
|
|
|
121
|
|
|
0.25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
48
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total non-U.S. debt securities
|
|
511
|
|
|
|
|
623
|
|
|
|
|
45
|
|
|
|
|
545
|
|
|
|
||||||||
Collateralized mortgage obligations
|
|
8
|
|
|
3.12
|
|
|
144
|
|
|
2.49
|
|
|
343
|
|
|
2.25
|
|
|
714
|
|
|
2.50
|
|
||||
Total
|
|
$
|
2,720
|
|
|
|
|
$
|
16,762
|
|
|
|
|
$
|
2,272
|
|
|
|
|
$
|
18,704
|
|
|
|
|
|
|
|
TABLE 24: U.S. AND NON- U.S. LOANS AND LEASES
|
|||||||||||||||||||
|
As of December 31,
|
||||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Domestic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and financial
|
$
|
18,696
|
|
|
$
|
16,412
|
|
|
$
|
15,899
|
|
|
$
|
14,515
|
|
|
$
|
10,305
|
|
Commercial real estate
|
98
|
|
|
27
|
|
|
28
|
|
|
28
|
|
|
209
|
|
|||||
Lease financing
|
267
|
|
|
338
|
|
|
337
|
|
|
335
|
|
|
339
|
|
|||||
Total domestic
|
19,061
|
|
|
16,777
|
|
|
16,264
|
|
|
14,878
|
|
|
10,853
|
|
|||||
Non-U.S.:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and financial
|
3,837
|
|
|
2,476
|
|
|
1,957
|
|
|
2,653
|
|
|
1,877
|
|
|||||
Lease financing
|
396
|
|
|
504
|
|
|
578
|
|
|
668
|
|
|
756
|
|
|||||
Total non-U.S.
|
4,233
|
|
|
2,980
|
|
|
2,535
|
|
|
3,321
|
|
|
2,633
|
|
|||||
Total loans and leases
|
$
|
23,294
|
|
|
$
|
19,757
|
|
|
$
|
18,799
|
|
|
$
|
18,199
|
|
|
$
|
13,486
|
|
Average loans and leases
|
$
|
21,916
|
|
|
$
|
19,013
|
|
|
$
|
17,948
|
|
|
$
|
15,912
|
|
|
$
|
13,781
|
|
TABLE 25: CONTRACTUAL MATURITIES FOR LOANS AND LEASES
|
|||||||||||||||
|
As of December 31, 2017
|
||||||||||||||
(In millions)
|
Total
|
|
Under 1 Year
|
|
1 to 5 Years
|
|
Over 5 Years
|
||||||||
Domestic:
|
|
|
|
|
|
|
|
||||||||
Commercial and financial
|
$
|
18,696
|
|
|
$
|
11,517
|
|
|
$
|
4,863
|
|
|
$
|
2,316
|
|
Commercial real estate
|
98
|
|
|
—
|
|
|
—
|
|
|
98
|
|
||||
Lease financing
|
267
|
|
|
144
|
|
|
—
|
|
|
123
|
|
||||
Total domestic
|
19,061
|
|
|
11,661
|
|
|
4,863
|
|
|
2,537
|
|
||||
Non-U.S.:
|
|
|
|
|
|
|
|
||||||||
Commercial and financial
|
3,837
|
|
|
1,878
|
|
|
1,544
|
|
|
415
|
|
||||
Lease financing
|
397
|
|
|
123
|
|
|
91
|
|
|
183
|
|
||||
Total non-U.S.
|
4,234
|
|
|
2,001
|
|
|
1,635
|
|
|
598
|
|
||||
Total loans and leases
|
$
|
23,295
|
|
|
$
|
13,662
|
|
|
$
|
6,498
|
|
|
$
|
3,135
|
|
TABLE 26: CLASSIFICATION OF LOAN AND LEASE BALANCES DUE AFTER ONE YEAR
|
|
||
(In millions)
|
As of December 31, 2017
|
||
Loans and leases with predetermined interest rates
|
$
|
494
|
|
Loans and leases with floating or adjustable interest rates
|
9,138
|
|
|
Total
|
$
|
9,632
|
|
TABLE 27: ALLOWANCE FOR LOAN AND LEASE LOSSES
|
|||||||||||||||||||
|
Years Ended December 31,
|
||||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Allowance for loan and lease losses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning balance
|
$
|
53
|
|
|
$
|
46
|
|
|
$
|
38
|
|
|
$
|
28
|
|
|
$
|
22
|
|
Provision for loan and lease losses
(1)
|
2
|
|
|
10
|
|
|
12
|
|
|
10
|
|
|
6
|
|
|||||
Charge-offs
(2)
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||||
Ending balance
|
$
|
54
|
|
|
$
|
53
|
|
|
$
|
46
|
|
|
$
|
38
|
|
|
$
|
28
|
|
|
|
TABLE 28: CROSS-BORDER OUTSTANDINGS
(1)
|
|||||||||||
(In millions)
|
Investment Securities and Other Assets
|
|
Derivatives and Securities on Loan
|
|
Total Cross-Border Outstandings
|
||||||
December 31, 2017
|
|
|
|
|
|
|
|||||
Germany
|
$
|
18,201
|
|
|
$
|
295
|
|
|
$
|
18,496
|
|
Japan
|
15,250
|
|
|
549
|
|
|
15,799
|
|
|||
United Kingdom
|
12,051
|
|
|
1,253
|
|
|
13,304
|
|
|||
Australia
|
5,278
|
|
|
390
|
|
|
5,668
|
|
|||
Canada
|
4,215
|
|
|
707
|
|
|
4,922
|
|
|||
France
|
2,684
|
|
|
344
|
|
|
3,028
|
|
|||
December 31, 2016
|
|
|
|
|
|
|
|
||||
United Kingdom
|
$
|
18,712
|
|
|
$
|
1,761
|
|
|
$
|
20,473
|
|
Japan
|
17,922
|
|
|
1,171
|
|
|
19,093
|
|
|||
Germany
|
13,812
|
|
|
484
|
|
|
14,296
|
|
|||
Australia
|
5,122
|
|
|
986
|
|
|
6,108
|
|
|||
Luxembourg
|
3,389
|
|
|
762
|
|
|
4,151
|
|
|||
Canada
|
3,179
|
|
|
781
|
|
|
3,960
|
|
|||
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
|
|
|
|
•
|
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.
|
•
|
A culture of risk awareness that extends across all of our business activities;
|
•
|
The identification, classification and quantification of State Street's material risks;
|
•
|
The establishment of our risk appetite and associated limits and policies, and our compliance with these limits;
|
•
|
The establishment of a risk management structure at the “top of the house” that enables the control and coordination of risk-taking across the business lines;
|
•
|
The implementation of stress testing practices and a dynamic risk-assessment capability;
|
•
|
A direct link between risk and strategic-decision making processes and incentive compensation practices; and
|
•
|
The overall flexibility to adapt to the ever-changing business and market conditions.
|
|
Form 10-K Page Number
|
Information Technology Risk Management
|
|
Management Risk Governance Committee Structure
|
|||||||||
|
|
|
|
|
|
|
|
|
|
Executive Management Committees:
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
Management Risk and Capital Committee
(MRAC) |
|
Business Conduct Risk Committee
(BCRC) |
|
Technology and Operational Risk Committee
(TORC) |
|||||
|
|
|
|
|
|
|
|
|
|
Risk Committees:
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
Asset-Liability Committee (ALCO)
|
|
Credit Risk and Policy Committee
(CRPC) |
|
Fiduciary Review Committee
|
|
Operational Risk Committee
|
|
Technology Risk Governance Committee
|
|
|
|
|
|
|
|
|
|
|
|
Trading and Market Risk Committee (TMRC)
|
|
Basel Oversight Committee
(BOC) |
|
New Business and Product Approval Committee
|
|
Executive Continuity Steering Committee
|
|
Executive Information Security Committee
|
|
|
|
|
|
|
|
|
|
|
|
Recovery and Resolution Planning Executive Review Board
|
|
Model Risk Committee
(MRC) |
|
Compliance and Ethics Committee
|
|
Third Party Risk Management Steering Committee
|
|
Access Control Board
|
|
|
|
|
|
|
|
|
|
|
|
CCAR Steering Committee
|
|
SSGA Risk Committee
|
|
Legal Entity Oversight Committee
|
|
Business Controls Steering Committee
|
|
Global Transitions Oversight Committee
|
|
|
|
|
|
|
|
|
|
|
|
Country Risk Committee
|
|
|
|
Conduct Standards Committee
|
|
Data Governance Board
|
|
|
•
|
“Vertical” business unit-aligned risk groups that support business managers with risk management, measurement and monitoring activities;
|
•
|
“Horizontal” risk groups that monitor the risks that cross all of our business units (for example, credit and operational risk); and
|
•
|
Risk oversight for international activities, which combines intersecting “Verticals” and “Horizontals” through a hub and spoke model to provide important regional and legal entity perspectives to the global risk framework.
|
•
|
The approval of the policies of our global risk, capital and liquidity management frameworks, including our risk appetite framework;
|
•
|
The monitoring and assessment of our capital adequacy based on internal policies and regulatory requirements;
|
•
|
The oversight of our firm-wide risk identification, model risk governance, stress testing and Recovery and Resolution Plan programs; and
|
•
|
The ongoing monitoring and review of risks undertaken within the businesses, and our senior management oversight and approval of risk strategies and tactics.
|
•
|
ALCO is the senior corporate oversight and decision-making body for balance sheet strategy, Global Treasury business activities and risk management for interest rate risk, liquidity risk and non-trading market risk. ALCO’s roles and responsibilities are designed to be complementary to, and in coordination with the MRAC, which approves the corporate risk appetite and associated balance sheet strategy.
|
•
|
CRPC has primary responsibility for the oversight and review of credit and counterparty risk across business units, as well as oversight, review and approval of the credit risk policies and guidelines; the Committee consists of senior executives within ERM, and reviews policies and guidelines related to all aspects of our business which give rise to credit risk; our business units are also represented on the CRPC; credit risk policies and guidelines are reviewed periodically, but at least annually;
|
•
|
TMRC reviews the effectiveness of, and approves, the market risk framework at least annually; it is the senior oversight and decision-making committee for risk management within our global markets businesses; the TMRC is responsible for the formulation of guidelines, strategies and workflows with respect to the measurement, monitoring and control of our trading market risk, and also approves market risk tolerance limits, collateral and margin policies, and trading authorities; the TMRC meets regularly to monitor the management of our trading market risk activities;
|
•
|
BOC provides oversight and governance over Basel related regulatory requirements, assesses compliance with respect to Basel regulations and approves all material methodologies and changes, policies and reporting;
|
•
|
The Recovery and Resolution Planning Executive Review Board oversees the development of recovery and resolution plans as required by banking regulators;
|
•
|
MRC monitors the overall level of model risk and provides oversight of the model governance process pertaining to financial
|
•
|
The CCAR Steering Committee provides primary supervision of the stress tests performed in conformity with the Federal Reserve's CCAR process and the Dodd-Frank Act, and is responsible for the overall management, review, and approval of all material assumptions, methodologies, and results of each stress scenario;
|
•
|
The SSGA Risk Committee is the most senior oversight and decision making committee for risk management within SSGA; the committee is responsible for overseeing the alignment of SSGA's strategy, and risk appetite, as well as alignment with State Street corporate-wide strategies and risk management standards; and
|
•
|
The Country Risk Committee oversees the identification, assessment, monitoring, reporting and mitigation, where necessary, of country risks.
|
•
|
The Fiduciary Review Committee reviews and assesses the fiduciary risk management programs of those units in which we serve in a fiduciary capacity;
|
•
|
The New Business and Product Approval Committee provides oversight of the evaluation of the risk inherent in proposed new products or services and new business, and extensions of existing products or services, evaluations including economic justification, material risk, compliance, regulatory and legal considerations, and capital and liquidity analyses;
|
•
|
The Compliance and Ethics Committee provides review and oversight of our compliance programs, including its culture of compliance and high standards of ethical behavior; and
|
•
|
The Legal Entity Oversight Committee establishes standards with respect to the governance of State Street legal entities, monitors adherence to those standards, and oversees the ongoing evaluation of our legal entity structure, including the formation, maintenance and dissolution of legal entities.
|
•
|
The Conduct Standards Committee provides oversight of our enforcement of employee conduct standards.
|
•
|
The Operational Risk Committee, along with the support of regional business or entity-specific working groups and committees, is responsible for oversight of our operational risk programs, including determining that the implementation of those programs is designed to identify, manage, and control operational risk in an effective and consistent manner across the firm;
|
•
|
The Technology Risk Governance Committee provides regular reporting to TORC and escalates technology risk issues to TORC, as appropriate;
|
•
|
The Executive Continuity Steering Committee reviews overall business continuity program performance, provides for executive accountability for compliance with the business continuity program and standards, and reviews and approves major changes or exceptions to program policy and standards;
|
•
|
The Executive Information Security Committee is responsible for managing the Enterprise Information Security posture and program, including cyber security protections, provides enterprise-wide oversight of the Information Security Program to provide that controls are measured and managed, and serves as an escalation point for issues identified during the execution of information technology activities and risk mitigation;
|
•
|
The Third Party Risk Management Steering Committee provides oversight over the vendor management program, approves policies, and serves as an escalation path for program compliance exceptions;
|
•
|
The Access Control Board establishes and provides appropriate governance and controls over our access control security framework;
|
•
|
The Business Controls Steering Committee is responsible for overseeing and monitoring the execution and ongoing monitoring of our program of enhanced business controls practices across the organization;
|
•
|
The Global Transitions Oversight Committee is responsible for establishing a framework to monitor and oversee transitions between and among State Street legal entities against State Street resolvability principles, to monitor compliance with that framework to support optimization of State Street’s global
|
•
|
The Data Governance Board is responsible for overseeing State Street’s data governance vision, strategies and priorities and ensuring alignment of data governance policies and practices with corporate strategy and with State Street’s obligations to comply with data-related regulations.
|
•
|
Default risk - the risk that a counterparty fails to meet its contractual payment obligations;
|
•
|
Country risk - the risk that we may suffer a loss, in any given country, due to any of the following reasons: deterioration of economic conditions, political and social upheaval, nationalization and appropriation of assets, government repudiation of indebtedness, exchange controls, and disruptive currency depreciation or devaluation; and
|
•
|
Settlement risk - the risk that the settlement or clearance of transactions will fail, which arises whenever the exchange of cash, securities and/or other assets is not simultaneous.
|
•
|
We measure and consolidate credit risks to each counterparty, or group of counterparties, in accordance with a “one-obligor” principle that aggregates risks across our business units;
|
•
|
ERM reviews and approves all extensions of credit, or material changes to extensions of credit (such as changes in term, collateral structure or covenants), in accordance with assigned credit-approval authorities;
|
•
|
Credit-approval authorities are assigned to individuals according to their qualifications, experience and training, and these authorities are periodically reviewed. Our largest exposures require approval by the Credit Committee, a sub-committee of the CRPC. With respect to small and low-risk extensions of credit to certain types of counterparties, approval authority is granted to individuals outside of ERM;
|
•
|
We seek to avoid or limit undue concentrations of risk. Counterparty (or groups of counterparties), industry, country and product-specific concentrations of risk are subject to frequent review and approval in accordance with our risk appetite;
|
•
|
We determine the creditworthiness of counterparties through a detailed risk assessment, including the use of comprehensive internal risk-rating methodologies;
|
•
|
We review all extensions of credit and the creditworthiness of counterparties at least annually. The nature and extent of these reviews are determined by the size, nature and term of the extensions of credit and the creditworthiness of the counterparty; and
|
•
|
We subject all corporate policies and guidelines to annual review as an integral part of our periodic assessment of our risk appetite.
|
•
|
The assessment of the creditworthiness of new counterparties and, in conjunction with our risk appetite statement, the development of appropriate credit limits for our products and services, including loans, foreign exchange, securities finance, placements and repurchase agreements;
|
•
|
The use of an automated process for limit approvals for certain low-risk counterparties, as defined in our credit risk guidelines, based on the counterparty’s probability-of-default, or PD, rating class;
|
•
|
The development of approval authority matrices based on PD; riskier counterparties with higher ratings require higher levels of approval for a comparable PD and limit size compared to less risky counterparties with lower ratings;
|
•
|
The analysis of risk concentration trends using historical PD and exposure-at-default, or EAD, data;
|
•
|
The standardization of rating integrity testing by GCR using rating parameters;
|
•
|
The determination of the level of management review of short-duration
|
•
|
The monitoring of credit facility utilization levels using EAD values and the identification of instances where counterparties have exceeded limits;
|
•
|
The aggregation and comparison of counterparty exposures with risk appetite levels to determine if businesses are maintaining appropriate risk levels; and
|
•
|
The determination of our regulatory capital requirements for the AIRB provided in the Basel framework.
|
•
|
Annual Reviews.
A formal review of counterparties is conducted at least annually and includes a thorough review of operating performance, primary risk factors and our internal credit risk rating. This annual review also includes a review of current and proposed credit limits, an assessment of our ongoing risk appetite and verification that supporting legal documentation remains effective.
|
•
|
Interim Monitoring.
Periodic monitoring of our largest and riskiest counterparties is undertaken more frequently, utilizing financial information, market indicators and other relevant credit and performance measures. The nature and extent of this interim monitoring is individually tailored to certain counterparties and/or industry sectors to identify material changes to the risk profile of a counterparty (or group of counterparties) and assign an updated internal risk rating in a timely manner.
|
•
|
Separate and objective assessments of our credit and counterparty exposures to determine the nature and extent of risk undertaken by the business units;
|
•
|
Periodic credit process and credit product reviews, focusing on and assessing credit analysis, policy compliance, prudent transaction structure and underwriting standards, administration and documentation, risk-rating integrity, and relevant trends;
|
•
|
Identification and monitoring of developing counterparty, market and/or industry sector trends to limit risk of loss and protect capital;
|
•
|
Regular and formal reporting of reviews, including findings and requisite actions to remedy identified deficiencies;
|
•
|
Allocation of resources for specialized risk assessments (on an as-needed basis);
|
•
|
Assessment of the level of the allowance for loan and lease losses and OTTI; and
|
•
|
Liaison with auditors and regulatory personnel on matters relating to risk rating, reporting, and measurement.
|
•
|
Structural liquidity management addresses liquidity by monitoring and directing the composition of our consolidated statement of condition. Structural liquidity is measured by metrics such as the percentage of total wholesale funds to consolidated total assets, and the percentage of non-government investment securities to client deposits. In addition, on a regular basis and as described below, our structural liquidity is evaluated under various stress scenarios.
|
•
|
Tactical liquidity management addresses our day-to-day funding requirements and is largely driven by changes in our primary source of funding, which are client deposits. Fluctuations in client deposits may be supplemented with short-term borrowings, which generally include commercial paper and certificates of deposit.
|
•
|
Stress testing and contingent funding planning are longer-term strategic liquidity risk management practices. Regular and ad hoc liquidity stress testing are performed under various severe but plausible scenarios at the consolidated level and at significant subsidiaries, including State Street Bank. These tests contemplate severe market and State Street-specific events under various time horizons and severities. Tests contemplate the impact of material changes in key funding sources, credit ratings,
|
TABLE 29: COMPONENTS OF AVERAGE HQLA BY TYPE OF ASSET
|
||||||||
(In millions)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Excess Central Bank Balances
|
|
$
|
33,584
|
|
|
$
|
48,407
|
|
U.S. Treasuries
|
|
10,278
|
|
|
17,770
|
|
||
Other Investment securities
|
|
13,422
|
|
|
15,442
|
|
||
Foreign government
|
|
8,064
|
|
|
5,585
|
|
||
Total
|
|
$
|
65,348
|
|
|
$
|
87,204
|
|
TABLE 30: TOTAL DEPOSITS
|
|||||||||||||||
|
|
|
Average Balance
|
||||||||||||
|
December 31
|
|
Years Ended December 31,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Client deposits
|
$
|
180,149
|
|
|
$
|
176,693
|
|
|
$
|
158,996
|
|
|
$
|
156,029
|
|
Wholesale CDs
|
4,747
|
|
|
10,470
|
|
|
4,812
|
|
|
14,456
|
|
||||
Total deposits
|
$
|
184,896
|
|
|
$
|
187,163
|
|
|
$
|
163,808
|
|
|
$
|
170,485
|
|
|
•
|
diverse and stable core earnings;
|
•
|
relative market position;
|
•
|
strong risk management;
|
•
|
strong capital ratios;
|
•
|
diverse liquidity sources, including the global capital markets and client deposits;
|
•
|
strong liquidity monitoring procedures; and
|
•
|
preparedness for current or future regulatory developments.
|
•
|
providing assurance for unsecured funding and depositors;
|
•
|
increasing the potential market for our debt and improving our ability to offer products;
|
•
|
serving markets; and
|
•
|
engaging in transactions in which clients value high credit ratings.
|
TABLE 31: CREDIT RATINGS
|
|||||
|
As of December 31, 2017
|
||||
|
Standard &
Poor’s |
|
Moody’s
Investors Service |
|
Fitch
|
State Street:
|
|
|
|
|
|
Senior debt
|
A
|
|
A1
|
|
AA-
|
Subordinated debt
|
A-
|
|
A2
|
|
A+
|
Junior subordinated debt
|
BBB
|
|
A3
|
|
BBB+
|
Preferred stock
|
BBB
|
|
Baa1
|
|
BBB
|
Outlook
|
Stable
|
|
Stable
|
|
Stable
|
State Street Bank:
|
|
|
|
|
|
Short-term deposits
|
A-1+
|
|
P-1
|
|
F1+
|
Long-term deposits
|
AA-
|
|
Aa1
|
|
AA+
|
Senior debt/Long-term issuer
|
AA-
|
|
Aa3
|
|
AA
|
Subordinated debt
|
A
|
|
Aa3
|
|
A+
|
Outlook
|
Stable
|
|
Stable
|
|
Stable
|
TABLE 32: LONG-TERM CONTRACTUAL CASH OBLIGATIONS
|
|||||||||||||||||||
|
|
||||||||||||||||||
December 31, 2017
|
PAYMENTS DUE BY PERIOD
|
||||||||||||||||||
(In millions)
|
Total
|
|
Less than 1
year
|
|
1-3
years
|
|
4-5
years
|
|
Over 5
years
|
||||||||||
Long-term debt
(1)(2)
|
$
|
11,370
|
|
|
$
|
1,408
|
|
|
$
|
3,141
|
|
|
$
|
2,742
|
|
|
$
|
4,079
|
|
Operating leases
|
1,131
|
|
|
197
|
|
|
329
|
|
|
269
|
|
|
336
|
|
|||||
Capital lease obligations
(2)
|
267
|
|
|
53
|
|
|
90
|
|
|
90
|
|
|
34
|
|
|||||
Total contractual cash obligations
|
$
|
12,768
|
|
|
$
|
1,658
|
|
|
$
|
3,560
|
|
|
$
|
3,101
|
|
|
$
|
4,449
|
|
|
|
|
|
•
|
Obligations which will be settled in cash, primarily in less than one year, such as client deposits, federal funds purchased, securities sold under repurchase agreements and other short-term borrowings. Additional information about deposits, federal funds purchased, securities sold under repurchase agreements and other short-term borrowings is provided in Note
8
to the consolidated financial statements included under Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
|
•
|
Obligations related to derivative instruments because the derivative-related amounts
|
TABLE 33: OTHER COMMERCIAL COMMITMENTS
|
|
|
|
|
|||||||||||||||
|
DURATION OF COMMITMENT AS OF DECEMBER 31, 2017
|
||||||||||||||||||
(In millions)
|
Total amounts
committed
(1)
|
|
Less than
1 year
|
|
1-3
years
|
|
4-5
years
|
|
Over 5
years
|
||||||||||
Indemnified securities financing
|
$
|
381,817
|
|
|
$
|
381,817
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Stable value protection
(2)
|
26,653
|
|
|
26,653
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unfunded credit facilities
|
26,488
|
|
|
16,998
|
|
|
5,834
|
|
|
3,395
|
|
|
261
|
|
|||||
Standby letters of credit
|
3,158
|
|
|
1,596
|
|
|
1,424
|
|
|
138
|
|
|
—
|
|
|||||
Purchase obligations
(3)
|
282
|
|
|
74
|
|
|
100
|
|
|
57
|
|
|
51
|
|
|||||
Total commercial commitments
|
$
|
438,398
|
|
|
$
|
427,138
|
|
|
$
|
7,358
|
|
|
$
|
3,590
|
|
|
$
|
312
|
|
|
|
|
|
•
|
A common understanding of operational risk management and its supporting processes;
|
•
|
The clarification of responsibilities for the management of operational risk across State Street;
|
•
|
The alignment of business priorities with risk management objectives;
|
•
|
The active management of risk and early identification of emerging risks;
|
•
|
The consistent application of policies and the collection of data for risk management and measurement; and
|
•
|
The estimation of our operational risk capital requirement.
|
•
|
The global head of Operational Risk, a member of the CRO’s executive management team, leads ERM’s corporate ORM group. ORM is responsible for the strategy, evolution and consistent implementation of our operational risk guidelines, framework and supporting tools across State Street. ORM reviews and analyzes operational key risk information, events, metrics and indicators at the business unit and corporate level for purposes of risk
|
•
|
ERM’s Corporate Risk Analytics group develops and maintains operational risk capital estimation models, and ORM's Capital Analysis group calculates State Street's required capital for operational risk;
|
•
|
ERM’s MVG independently validates the quantitative models used to measure operational risk, and ORM performs validation checks on the output of the model;
|
•
|
CIS establishes the framework, policies and related programs to measure, monitor and report on information security risks, including the effectiveness of cyber security program protections. CIS defines and manages the enterprise-wide information security program. CIS coordinates with Information Technology, control functions and business units to support the confidentiality, integrity and availability of corporate information assets. CIS identifies and employs a risk-based methodology consistent with applicable regulatory cyber security requirements and monitors the compliance of our systems with information security policies; and
|
•
|
Corporate Audit performs separate reviews of the application of operational risk management practices and methodologies utilized across State Street.
|
•
|
The RCSA program seeks to understand the risks associated with day-to-day activities, and the effectiveness of controls intended to manage potential exposures arising from these activities. These risks are typically frequent in nature but generally not severe in terms of exposure;
|
•
|
The Material Risk Identification process utilizes a bottom-up approach to identify State Street’s most significant risk exposures across all on- and off-balance sheet risk-taking activities. The program is specifically designed to consider risks that could have a material impact irrespective of their likelihood or frequency. This can include risks that may have an impact on longer-term business objectives, such as significant change management activities or long-term strategic initiatives;
|
•
|
The Scenario Analysis program focuses on the set of risks with the highest severity and most relevance from a capital perspective. These are generally referred to as “tail risks," and serve as important benchmarks for our loss distribution approach model (see below); they also provide inputs into stress testing; and
|
•
|
Business-specific programs to identify, assess and measure risk, including new business and product review and approval, new client screening, and, as deemed appropriate, targeted risk assessments.
|
•
|
Internal loss event data is collected from across State Street in conformity with our operating loss policy that establishes the requirements for collecting and reporting individual loss events. We categorize the data into seven Basel-defined event types and further subdivide the data by business unit, as deemed appropriate. Each of these loss events are represented in a UOM which is used to estimate a specific amount of capital required for the types of loss events that fall into each specific category. Some UOMs are measured at the corporate level because they are not “business specific,” such as damage to physical assets, where the cause of an event is not primarily driven by the behavior of a single business unit.
|
•
|
External loss event data provides information with respect to loss event severity from other financial institutions to inform our capital estimation process of events in similar business units at other banking organizations. This information supplements the data pool available for use in our LDA model. Assessments of the sufficiency of internal data and the relevance of external data are completed before pooling the two data sources for use in our LDA model.
|
•
|
Scenario analysis workshops are conducted across State Street to inform management of the less frequent but most severe, or “tail,” risks that the organization faces. The workshops are attended by senior business unit managers, other support and control partners and business-aligned risk management staff. The workshops are designed to capture information about the significant risks and to estimate potential exposures for individual risks should a loss event occur. The results of these workshops are used to make a comparison to our LDA model results to determine that our calculation of required capital considers relevant risk-related information.
|
•
|
Business environment and internal control factors are gathered as part of our scenario analysis program to inform the scenario
|
•
|
Third party vendor risk
|
•
|
Business disruption and technology resiliency risk
|
•
|
Cyber and information security risk
|
•
|
Technology asset and configuration risk
|
•
|
Technology obsolescence risk
|
•
|
Coordinating various risk assessment and risk management activities, including ERM operational risk programs;
|
•
|
Establishing, through TORC and the Technology Committee of the Board, the enterprise level technology risk and cyber risk appetite and limits;
|
•
|
Producing enterprise level risk reporting, aggregation, dashboards, profiles and risk appetite statements;
|
•
|
Validating appropriateness of reporting of information technology risks and risk acceptance to senior management risk committees and the Board;
|
•
|
Promoting a strong technology risk culture through communication;
|
•
|
Serving as an escalation and challenge point for technology risk policy guidance, expectations and clarifications;
|
•
|
Assessing effectiveness of key enterprise information technology risk and internal control remediation programs; and
|
•
|
Providing risk oversight, challenge and monitoring for the Global Continuity and Third Party Vendor Management Program, including the collection of risk appetite, metrics and KRIs, and reviewing issue management processes and consistent program adoption.
|
•
|
A trading market risk management process led by ERM, separate from the business units' discrete activities;
|
•
|
Clearly defined responsibilities and authorities for the primary groups involved in trading market risk management;
|
•
|
A trading market risk measurement methodology that captures correlation effects and allows aggregation of market risk across risk types, markets and business lines;
|
•
|
Daily monitoring, analysis, and reporting of market risk exposures associated with trading activities against market risk limits;
|
•
|
A defined limit structure and escalation process in the event of a market risk limit excess;
|
•
|
Use of VaR models to measure the one-day market risk exposure of trading positions;
|
•
|
Use of VaR as a ten-day-based regulatory capital measure of the market risk exposure of trading positions;
|
•
|
Use of non-VaR-based limits and other controls;
|
•
|
Use of stressed-VaR models, stress-testing analysis and scenario analysis to support the trading market risk measurement and management process by assessing how portfolios and global business lines perform under extreme market conditions;
|
•
|
Use of back-testing as a diagnostic tool to assess the accuracy of VaR models and other risk management techniques; and
|
•
|
A new product approval process that requires market risk teams to assess trading-related market risks and apply risk tolerance limits to
|
•
|
Compared to a shorter observation period, a two-year observation period is slower to reflect increases in market volatility (although temporary increases in market volatility will affect the calculation of VaR for a longer period); consequently, in periods of sudden increases in volatility or increasing volatility, in each case relative to the prior two-year period, the calculation of VaR may understate current risk;
|
•
|
Compared to a longer observation period, a two-year observation period may not reflect as many past periods of volatility in the markets, because such past volatility is no longer in the observation period; consequently, historical market scenarios of high volatility, even if similar to current or likely future market circumstances, may fall outside the two-year observation period, resulting in a potential understatement of current risk;
|
•
|
The VaR-based measure is calibrated to a specified level of confidence and does not indicate the potential magnitude of losses beyond this confidence level;
|
•
|
In certain cases, VaR-based measures approximate the impact of changes in risk factors on the values of positions and portfolios; this may happen because the number of inputs included in the VaR model is necessarily limited; for example, yield curve risk factors do not exist for all future dates;
|
•
|
The use of historical market information may not be predictive of future events, particularly those that are extreme in nature; this “backward-looking” limitation can cause VaR to understate or overstate risk;
|
•
|
The effect of extreme and rare market movements is difficult to estimate; this may result from non-linear risk sensitivities as well as the potential for actual volatility and correlation levels to differ from assumptions implicit in the VaR calculations; and
|
•
|
Intra-day risk is not captured.
|
TABLE 34: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS
|
|||||||||||||||||||||||||||||||
|
Quarter Ended December 31, 2017
|
|
Quarter Ended December 31, 2016
|
|
As of December 31, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||||||
(In thousands)
|
Average
|
|
Maximum
|
|
Minimum
|
|
Average
|
|
Maximum
|
|
Minimum
|
|
VaR
|
|
VaR
|
||||||||||||||||
Global Markets
|
$
|
8,148
|
|
|
$
|
13,502
|
|
|
$
|
3,402
|
|
|
$
|
8,307
|
|
|
$
|
15,847
|
|
|
$
|
3,048
|
|
|
$
|
5,719
|
|
|
$
|
4,088
|
|
Global Treasury
|
650
|
|
|
1,767
|
|
|
126
|
|
|
527
|
|
|
756
|
|
|
333
|
|
|
1,346
|
|
|
756
|
|
||||||||
Total VaR
|
$
|
8,123
|
|
|
$
|
13,306
|
|
|
$
|
3,410
|
|
|
$
|
8,285
|
|
|
$
|
15,723
|
|
|
$
|
2,970
|
|
|
$
|
5,562
|
|
|
$
|
3,938
|
|
TABLE 35: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS
|
|||||||||||||||||||||||||||||||
|
Quarter Ended December 31, 2017
|
|
Quarter Ended December 31, 2016
|
|
As of December 31, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||||||
(In thousands)
|
Average
|
|
Maximum
|
|
Minimum
|
|
Average
|
|
Maximum
|
|
Minimum
|
|
Stressed VaR
|
|
Stressed VaR
|
||||||||||||||||
Global Markets
|
$
|
27,185
|
|
|
$
|
41,908
|
|
|
$
|
14,408
|
|
|
$
|
36,168
|
|
|
$
|
52,057
|
|
|
$
|
18,883
|
|
|
$
|
31,512
|
|
|
$
|
26,811
|
|
Global Treasury
|
8,761
|
|
|
17,460
|
|
|
2,560
|
|
|
10,275
|
|
|
13,868
|
|
|
7,030
|
|
|
12,042
|
|
|
11,342
|
|
||||||||
Total Stressed VaR
|
$
|
27,789
|
|
|
$
|
42,527
|
|
|
$
|
14,320
|
|
|
$
|
38,645
|
|
|
$
|
55,899
|
|
|
$
|
20,646
|
|
|
$
|
29,649
|
|
|
$
|
28,624
|
|
TABLE 36: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR
(1)
|
|||||||||||||||||||||||
|
As of December 31, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||
(In thousands)
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Volatility Risk
|
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Volatility Risk
|
||||||||||||
By component:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Global Markets
|
$
|
6,149
|
|
|
$
|
5,546
|
|
|
$
|
3
|
|
|
$
|
3,279
|
|
|
$
|
3,281
|
|
|
$
|
102
|
|
Global Treasury
|
100
|
|
|
1,372
|
|
|
—
|
|
|
220
|
|
|
737
|
|
|
—
|
|
||||||
Total VaR
|
$
|
6,250
|
|
|
$
|
5,840
|
|
|
$
|
3
|
|
|
$
|
3,269
|
|
|
$
|
3,004
|
|
|
$
|
102
|
|
TABLE 37: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR
(1)
|
|||||||||||||||||||||||
|
As of December 31, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||
(In thousands)
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Volatility Risk
|
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Volatility Risk
|
||||||||||||
By component:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Global Markets
|
$
|
15,975
|
|
|
$
|
27,161
|
|
|
$
|
3
|
|
|
$
|
5,026
|
|
|
$
|
36,563
|
|
|
$
|
111
|
|
Global Treasury
|
153
|
|
|
12,192
|
|
|
—
|
|
|
258
|
|
|
11,597
|
|
|
—
|
|
||||||
Total Stressed VaR
|
$
|
16,105
|
|
|
$
|
25,177
|
|
|
$
|
3
|
|
|
$
|
5,056
|
|
|
$
|
36,592
|
|
|
$
|
111
|
|
|
|
|
TABLE 38: NII SENSITIVITY
|
||||||||
(In millions)
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Rate change:
|
|
Benefit / (Exposure)
|
||||||
+100 bps shock
|
|
$
|
435
|
|
|
$
|
585
|
|
–100 bps shock
|
|
(294
|
)
|
|
(265
|
)
|
||
+100 bps ramp
|
|
177
|
|
|
284
|
|
||
–100 bps ramp
|
|
(122
|
)
|
|
(161
|
)
|
TABLE 39: EVE SENSITIVITY
|
||||||||
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
(In millions)
|
|
|
|
|
||||
Rate change:
|
|
Benefit / (Exposure)
|
||||||
+200 bps shock
|
|
$
|
(1,507
|
)
|
|
$
|
(1,092
|
)
|
–200 bps shock
|
|
11
|
|
|
877
|
|
•
|
A model risk governance program that defines roles and responsibilities, including the authority to restrict model usage, provides policies and guidance, monitors compliance, and reports regularly to the Board on the overall degree of model risk across the corporation;
|
•
|
A model development process that focuses on sound design and computational accuracy, and includes activities designed to test for robustness, stability, and sensitivity to assumptions; and
|
•
|
An independent model validation function designed to verify that models are conceptually sound, computationally accurate, are performing as expected, and are in line with their design objectives.
|
•
|
Risk Management - identification, measurement, monitoring and forecasting of different types of risk and their combined impact on capital adequacy;
|
•
|
Capital Management - determination of optimal capital levels; and
|
•
|
Business Management - strategic planning, budgeting, forecasting, and performance management.
|
TABLE 40: BASEL III FINAL RULES TRANSITION ARRANGEMENTS AND MINIMUM RISK-BASED CAPITAL RATIOS
(1)
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|||||
Capital conservation buffer (CET1)
|
|
—
|
%
|
|
0.625
|
%
|
|
1.250
|
%
|
|
1.875
|
%
|
|
2.500
|
%
|
G-SIB surcharge (CET1)
(2)
|
|
—
|
|
|
0.375
|
|
|
0.750
|
|
|
1.125
|
|
|
1.500
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Minimum CET1
(3)
|
|
4.500
|
|
|
5.500
|
|
|
6.500
|
|
|
7.500
|
|
|
8.500
|
|
Minimum tier 1 capital
(3)
|
|
6.000
|
|
|
7.000
|
|
|
8.000
|
|
|
9.000
|
|
|
10.000
|
|
Minimum total capital
(3)
|
|
8.000
|
|
|
9.000
|
|
|
10.000
|
|
|
11.000
|
|
|
12.000
|
|
|
|
|
|
TABLE 41: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS
|
|||||||||||||||||||||||||||||||||||
|
State Street
|
|
State Street Bank
|
||||||||||||||||||||||||||||||||
(In millions)
|
Basel III Advanced Approaches December 31, 2017
(1)
|
|
Basel III Standardized Approach December 31, 2017
(2)
|
|
Basel III Advanced Approaches December 31, 2016
(1)
|
|
Basel III Standardized Approach December 31, 2016
(2)
|
|
Basel III Advanced Approaches December 31, 2017
(1)
|
|
Basel III Standardized Approach December 31, 2017
(2)
|
|
Basel III Advanced Approaches December 31, 2016
(1)
|
|
Basel III Standardized Approach December 31, 2016
(2)
|
||||||||||||||||||||
Common shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Common stock and related surplus
|
$
|
10,302
|
|
|
$
|
10,302
|
|
|
$
|
10,286
|
|
|
$
|
10,286
|
|
|
$
|
11,612
|
|
|
$
|
11,612
|
|
|
$
|
11,376
|
|
|
$
|
11,376
|
|
||||
Retained earnings
|
18,856
|
|
|
18,856
|
|
|
17,459
|
|
|
17,459
|
|
|
12,312
|
|
|
12,312
|
|
|
12,285
|
|
|
12,285
|
|
||||||||||||
Accumulated other comprehensive income (loss)
|
(972
|
)
|
|
(972
|
)
|
|
(1,936
|
)
|
|
(1,936
|
)
|
|
(809
|
)
|
|
(809
|
)
|
|
(1,648
|
)
|
|
(1,648
|
)
|
||||||||||||
Treasury stock, at cost
|
(9,029
|
)
|
|
(9,029
|
)
|
|
(7,682
|
)
|
|
(7,682
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total
|
19,157
|
|
|
19,157
|
|
|
18,127
|
|
|
18,127
|
|
|
23,115
|
|
|
23,115
|
|
|
22,013
|
|
|
22,013
|
|
||||||||||||
Regulatory capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
(3)
|
(6,877
|
)
|
|
(6,877
|
)
|
|
(6,348
|
)
|
|
(6,348
|
)
|
|
(6,579
|
)
|
|
(6,579
|
)
|
|
(6,060
|
)
|
|
(6,060
|
)
|
||||||||||||
Other adjustments
|
(76
|
)
|
|
(76
|
)
|
|
(155
|
)
|
|
(155
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
(148
|
)
|
|
(148
|
)
|
||||||||||||
CET1 capital
|
12,204
|
|
|
12,204
|
|
|
11,624
|
|
|
11,624
|
|
|
16,531
|
|
|
16,531
|
|
|
15,805
|
|
|
15,805
|
|
||||||||||||
Preferred stock
|
3,196
|
|
|
3,196
|
|
|
3,196
|
|
|
3,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Trust preferred capital securities subject to phase-out from tier 1 capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Other adjustments
|
(18
|
)
|
|
(18
|
)
|
|
(103
|
)
|
|
(103
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Tier 1 capital
|
15,382
|
|
|
15,382
|
|
|
14,717
|
|
|
14,717
|
|
|
16,531
|
|
|
16,531
|
|
|
15,805
|
|
|
15,805
|
|
||||||||||||
Qualifying subordinated long-term debt
|
980
|
|
|
980
|
|
|
1,172
|
|
|
1,172
|
|
|
983
|
|
|
983
|
|
|
1,179
|
|
|
1,179
|
|
||||||||||||
Trust preferred capital securities phased out of tier 1 capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
ALLL and other
|
4
|
|
|
72
|
|
|
19
|
|
|
77
|
|
|
—
|
|
|
72
|
|
|
15
|
|
|
77
|
|
||||||||||||
Other adjustments
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total capital
|
$
|
16,367
|
|
|
$
|
16,435
|
|
|
$
|
15,909
|
|
|
$
|
15,967
|
|
|
$
|
17,514
|
|
|
$
|
17,586
|
|
|
$
|
16,999
|
|
|
$
|
17,061
|
|
||||
Risk-weighted assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Credit risk
|
$
|
49,976
|
|
|
$
|
101,349
|
|
|
$
|
50,900
|
|
|
$
|
98,125
|
|
|
$
|
47,448
|
|
|
$
|
98,433
|
|
|
$
|
47,383
|
|
|
$
|
94,413
|
|
||||
Operational risk
(4)
|
45,822
|
|
|
NA
|
|
|
44,579
|
|
|
NA
|
|
|
45,295
|
|
|
NA
|
|
|
44,043
|
|
|
NA
|
|
||||||||||||
Market risk
(5)
|
3,358
|
|
|
1,334
|
|
|
3,822
|
|
|
1,751
|
|
|
3,375
|
|
|
1,334
|
|
|
3,822
|
|
|
1,751
|
|
||||||||||||
Total risk-weighted assets
|
$
|
99,156
|
|
|
$
|
102,683
|
|
|
$
|
99,301
|
|
|
$
|
99,876
|
|
|
$
|
96,118
|
|
|
$
|
99,767
|
|
|
$
|
95,248
|
|
|
$
|
96,164
|
|
||||
Adjusted quarterly average assets
|
$
|
209,328
|
|
|
$
|
209,328
|
|
|
$
|
226,310
|
|
|
$
|
226,310
|
|
|
$
|
206,070
|
|
|
$
|
206,070
|
|
|
$
|
222,584
|
|
|
$
|
222,584
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Capital Ratios
(1)
:
|
2017 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge
(6)
|
2016 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
CET1 capital
|
6.5
|
%
|
5.5
|
%
|
12.3
|
%
|
|
11.9
|
%
|
|
11.7
|
%
|
|
11.6
|
%
|
|
17.2
|
%
|
|
16.6
|
%
|
|
16.6
|
%
|
|
16.4
|
%
|
||||||||
Tier 1 capital
|
8.0
|
|
7.0
|
|
15.5
|
|
|
15.0
|
|
|
14.8
|
|
|
14.7
|
|
|
17.2
|
|
|
16.6
|
|
|
16.6
|
|
|
16.4
|
|
||||||||
Total capital
|
10.0
|
|
9.0
|
|
16.5
|
|
|
16.0
|
|
|
16.0
|
|
|
16.0
|
|
|
18.2
|
|
|
17.6
|
|
|
17.8
|
|
|
17.7
|
|
||||||||
Tier 1 leverage
|
4.0
|
|
4.0
|
|
7.3
|
|
|
7.3
|
|
|
6.5
|
|
|
6.5
|
|
|
8.0
|
|
|
8.0
|
|
|
7.1
|
|
|
7.1
|
|
|
|
|
|
TABLE 42: CAPITAL ROLL-FORWARD
|
||||||||||||
|
State Street
|
|||||||||||
(In millions)
|
Basel III Advanced Approaches December 31, 2017
|
Basel III Standardized Approach December 31, 2017
|
Basel III Advanced Approaches December 31, 2016
|
Basel III Standardized Approach December 31, 2016
|
||||||||
CET1 capital:
|
|
|
|
|||||||||
CET1 capital balance, beginning of period
|
$
|
11,624
|
|
$
|
11,624
|
|
$
|
12,433
|
|
$
|
12,433
|
|
Net income
|
2,177
|
|
2,177
|
|
2,143
|
|
2,143
|
|
||||
Changes in treasury stock, at cost
|
(1,347
|
)
|
(1,347
|
)
|
(1,225
|
)
|
(1,225
|
)
|
||||
Dividends declared
|
(778
|
)
|
(778
|
)
|
(732
|
)
|
(732
|
)
|
||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
|
(529
|
)
|
(529
|
)
|
(421
|
)
|
(421
|
)
|
||||
Effect of certain items in accumulated other comprehensive income (loss)
|
964
|
|
964
|
|
(514
|
)
|
(514
|
)
|
||||
Other adjustments
|
93
|
|
93
|
|
(60
|
)
|
(60
|
)
|
||||
Changes in CET1 capital
|
580
|
|
580
|
|
(809
|
)
|
(809
|
)
|
||||
CET1 capital balance, end of period
|
12,204
|
|
12,204
|
|
11,624
|
|
11,624
|
|
||||
Additional tier 1 capital:
|
|
|
|
|||||||||
Tier 1 capital balance, beginning of period
|
14,717
|
|
14,717
|
|
15,264
|
|
15,264
|
|
||||
Change in CET1 capital
|
580
|
|
580
|
|
(809
|
)
|
(809
|
)
|
||||
Net issuance of preferred stock
|
—
|
|
—
|
|
493
|
|
493
|
|
||||
Trust preferred capital securities phased out of tier 1 capital
|
—
|
|
—
|
|
(237
|
)
|
(237
|
)
|
||||
Other adjustments
|
85
|
|
85
|
|
6
|
|
6
|
|
||||
Changes in tier 1 capital
|
665
|
|
665
|
|
(547
|
)
|
(547
|
)
|
||||
Tier 1 capital balance, end of period
|
15,382
|
|
15,382
|
|
14,717
|
|
14,717
|
|
||||
Tier 2 capital:
|
|
|
|
|
||||||||
Tier 2 capital balance, beginning of period
|
1,192
|
|
1,250
|
|
2,085
|
|
2,139
|
|
||||
Net issuance and changes in long-term debt qualifying as
tier 2
|
(192
|
)
|
(192
|
)
|
(186
|
)
|
(186
|
)
|
||||
Trust preferred capital securities phased into tier 2 capital
|
—
|
|
—
|
|
(713
|
)
|
(713
|
)
|
||||
Changes in ALLL and other
|
(15
|
)
|
(5
|
)
|
7
|
|
11
|
|
||||
Change in other adjustments
|
—
|
|
—
|
|
(1
|
)
|
(1
|
)
|
||||
Changes in tier 2 capital
|
(207
|
)
|
(197
|
)
|
(893
|
)
|
(889
|
)
|
||||
Tier 2 capital balance, end of period
|
985
|
|
1,053
|
|
1,192
|
|
1,250
|
|
||||
Total capital:
|
|
|
|
|
||||||||
Total capital balance, beginning of period
|
15,909
|
|
15,967
|
|
17,349
|
|
17,403
|
|
||||
Changes in tier 1 capital
|
665
|
|
665
|
|
(547
|
)
|
(547
|
)
|
||||
Changes in tier 2 capital
|
(207
|
)
|
(197
|
)
|
(893
|
)
|
(889
|
)
|
||||
Total capital balance, end of period
|
$
|
16,367
|
|
$
|
16,435
|
|
$
|
15,909
|
|
$
|
15,967
|
|
TABLE 43: ADVANCED APPROACHES RWA ROLL-FORWARD
|
||||||||
|
|
State Street
|
||||||
(In millions)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Total risk-weighted assets, beginning of period
|
|
$
|
99,301
|
|
|
$
|
99,552
|
|
Changes in credit risk-weighted assets:
|
|
|
|
|
||||
Net increase (decrease) in investment securities-wholesale
|
|
2,914
|
|
|
(1,027
|
)
|
||
Net increase (decrease) in loans and leases
|
|
30
|
|
|
575
|
|
||
Net increase (decrease) in securitization exposures
|
|
(683
|
)
|
|
(3,246
|
)
|
||
Net increase (decrease) in repo-style transaction exposures
|
|
440
|
|
|
606
|
|
||
Net increase (decrease) in OTC derivatives exposures
|
|
(1,082
|
)
|
|
1,812
|
|
||
Net increase (decrease) in all
other
(1)
|
|
(2,543
|
)
|
|
447
|
|
||
Net increase (decrease) in credit risk-weighted assets
|
|
(924
|
)
|
|
(833
|
)
|
||
Net increase (decrease) in credit valuation adjustment
|
|
(47
|
)
|
|
512
|
|
||
Net increase (decrease) in market risk-weighted assets
|
|
(417
|
)
|
|
(627
|
)
|
||
Net increase (decrease) in operational risk-weighted assets
|
|
1,243
|
|
|
697
|
|
||
Total risk-weighted assets, end of period
|
|
$
|
99,156
|
|
|
$
|
99,301
|
|
|
|
|
TABLE 44: STANDARDIZED APPROACH RWA ROLL-FORWARD
|
||||||||
|
State Street
|
|||||||
(In millions)
|
|
December 31,
2017 |
|
December 31, 2016
|
||||
Total estimated risk-weighted assets, beginning of period
(1)
|
|
$
|
99,876
|
|
|
$
|
95,893
|
|
Changes in credit risk-weighted assets:
|
|
|
|
|
||||
Net increase (decrease) in investment securities-wholesale
|
|
1,729
|
|
|
(1,471
|
)
|
||
Net increase (decrease) in loans and leases
|
|
2,589
|
|
|
998
|
|
||
Net increase (decrease) in securitization exposures
|
|
(690
|
)
|
|
(3,144
|
)
|
||
Net increase (decrease) in repo-style transaction exposures
|
|
2,058
|
|
|
4,994
|
|
||
Net increase (decrease) in OTC derivatives exposures
|
|
(1,709
|
)
|
|
3,462
|
|
||
Net increase (decrease) in all other
(2)
|
|
(753
|
)
|
|
(229
|
)
|
||
Net increase (decrease) in credit risk-weighted assets
|
|
3,224
|
|
|
4,610
|
|
||
Net increase (decrease) in market risk-weighted assets
|
|
(417
|
)
|
|
(627
|
)
|
||
Total risk-weighted assets, end of period
|
|
$
|
102,683
|
|
|
$
|
99,876
|
|
|
|
|
TABLE 45: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS - STATE STREET
|
||||||||||||||||||||||||||||||
December 31, 2017
(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
|
|
$
|
19,157
|
|
|
$
|
(23
|
)
|
|
$
|
19,134
|
|
|
$
|
19,157
|
|
|
$
|
(23
|
)
|
|
$
|
19,134
|
|
||||||
Regulatory capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
|
|
(6,877
|
)
|
|
(279
|
)
|
|
(7,156
|
)
|
|
(6,877
|
)
|
|
(279
|
)
|
|
(7,156
|
)
|
||||||||||||
Other adjustments
|
|
(76
|
)
|
|
(18
|
)
|
|
(94
|
)
|
|
(76
|
)
|
|
(18
|
)
|
|
(94
|
)
|
||||||||||||
CET1 capital
|
|
12,204
|
|
|
(320
|
)
|
|
11,884
|
|
|
12,204
|
|
|
(320
|
)
|
|
11,884
|
|
||||||||||||
Additional tier 1 capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Preferred stock
|
|
|
|
|
3,196
|
|
|
—
|
|
|
3,196
|
|
|
3,196
|
|
|
—
|
|
|
3,196
|
|
|||||||||
Trust preferred capital securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Other adjustments
|
|
|
|
|
(18
|
)
|
|
18
|
|
|
—
|
|
|
(18
|
)
|
|
18
|
|
|
—
|
|
|||||||||
Additional tier 1 capital
|
|
|
|
|
3,178
|
|
|
18
|
|
|
3,196
|
|
|
3,178
|
|
|
18
|
|
|
3,196
|
|
|||||||||
Tier 1 capital
|
|
|
|
|
15,382
|
|
|
(302
|
)
|
|
15,080
|
|
|
15,382
|
|
|
(302
|
)
|
|
15,080
|
|
|||||||||
Tier 2 capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Qualifying subordinated long-term debt
|
|
980
|
|
|
1
|
|
|
981
|
|
|
980
|
|
|
1
|
|
|
981
|
|
||||||||||||
Trust preferred capital securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
ALLL and other
|
|
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
72
|
|
|
—
|
|
|
72
|
|
|||||||||
Other
|
|
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||||||
Tier 2 capital
|
|
|
|
|
985
|
|
|
—
|
|
|
985
|
|
|
1,053
|
|
|
—
|
|
|
1,053
|
|
|||||||||
Total capital
|
|
|
|
|
$
|
16,367
|
|
|
$
|
(302
|
)
|
|
$
|
16,065
|
|
|
$
|
16,435
|
|
|
$
|
(302
|
)
|
|
$
|
16,133
|
|
|||
Risk weighted assets
|
|
|
|
|
$
|
99,156
|
|
|
$
|
(42
|
)
|
|
$
|
99,114
|
|
|
$
|
102,683
|
|
|
$
|
(40
|
)
|
|
$
|
102,643
|
|
|||
Adjusted average assets
|
|
|
|
|
209,328
|
|
|
(220
|
)
|
|
209,108
|
|
|
209,328
|
|
|
(220
|
)
|
|
209,108
|
|
|||||||||
Total assets for SLR
|
|
|
|
|
236,986
|
|
|
(278
|
)
|
|
236,708
|
|
|
236,986
|
|
|
(278
|
)
|
|
236,708
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Capital ratios
(1)
:
|
Minimum Requirement
|
Minimum Requirement Including Capital Conservation Buffer and G-SIB Surcharge 2017
|
Minimum Requirement Including Capital Conservation Buffer and G-SIB Surcharge 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
CET1 capital
(2)
|
4.5
|
%
|
6.5
|
%
|
8.5
|
%
|
|
12.3
|
%
|
|
|
|
12.0
|
%
|
|
11.9
|
%
|
|
|
|
11.6
|
%
|
||||||||
Tier 1 capital
|
6.0
|
|
8.0
|
|
10.0
|
|
|
15.5
|
|
|
|
|
15.2
|
|
|
15.0
|
|
|
|
|
14.7
|
|
||||||||
Total capital
|
8.0
|
|
10.0
|
|
12.0
|
|
|
16.5
|
|
|
|
|
16.2
|
|
|
16.0
|
|
|
|
|
15.7
|
|
||||||||
Tier 1 leverage
|
4.0
|
|
NA
|
|
NA
|
|
|
7.3
|
|
|
|
|
7.2
|
|
|
7.3
|
|
|
|
|
7.2
|
|
||||||||
SLR
|
5.0
|
|
NA
|
|
NA
|
|
|
6.5
|
|
|
|
|
6.4
|
|
|
6.5
|
|
|
|
|
6.4
|
|
|
|
|
|
|
TABLE 46: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS - STATE STREET BANK
|
||||||||||||||||||||||||||||||
December 31, 2017
(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
|
|
$
|
23,115
|
|
|
$
|
(21
|
)
|
|
$
|
23,094
|
|
|
$
|
23,115
|
|
|
$
|
(21
|
)
|
|
$
|
23,094
|
|
||||||
Regulatory capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
|
|
(6,579
|
)
|
|
(270
|
)
|
|
(6,849
|
)
|
|
(6,579
|
)
|
|
(270
|
)
|
|
(6,849
|
)
|
||||||||||||
Other adjustments
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||||||||||
CET1 capital
|
|
16,531
|
|
|
(291
|
)
|
|
16,240
|
|
|
16,531
|
|
|
(291
|
)
|
|
16,240
|
|
||||||||||||
Additional tier 1 capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Other adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Additional tier 1 capital
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Tier 1 capital
|
|
16,531
|
|
|
(291
|
)
|
|
16,240
|
|
|
16,531
|
|
|
(291
|
)
|
|
16,240
|
|
||||||||||||
Tier 2 capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Qualifying subordinated long-term debt
|
|
983
|
|
|
—
|
|
|
983
|
|
|
983
|
|
|
—
|
|
|
983
|
|
||||||||||||
ALLL and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
||||||||||||
Tier 2 capital
|
|
983
|
|
|
—
|
|
|
983
|
|
|
1,055
|
|
|
—
|
|
|
1,055
|
|
||||||||||||
Total capital
|
|
$
|
17,514
|
|
|
$
|
(291
|
)
|
|
$
|
17,223
|
|
|
$
|
17,586
|
|
|
$
|
(291
|
)
|
|
$
|
17,295
|
|
||||||
Risk weighted assets
|
|
$
|
96,118
|
|
|
$
|
(88
|
)
|
|
$
|
96,030
|
|
|
$
|
99,767
|
|
|
$
|
(83
|
)
|
|
$
|
99,684
|
|
||||||
Adjusted average assets
|
|
206,070
|
|
|
(214
|
)
|
|
205,856
|
|
|
206,070
|
|
|
(214
|
)
|
|
205,856
|
|
||||||||||||
Total assets for SLR
|
|
233,790
|
|
|
(271
|
)
|
|
233,519
|
|
|
233,790
|
|
|
(271
|
)
|
|
233,519
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Capital ratios
(1)
:
|
Minimum Requirement
|
Minimum Requirement Including Capital Conservation Buffer and G-SIB Surcharge 2017
|
Minimum Requirement Including Capital Conservation Buffer and G-SIB Surcharge 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
CET 1 capital
(2)
|
4.5
|
%
|
6.5
|
%
|
8.5
|
%
|
|
17.2
|
%
|
|
|
|
16.9
|
%
|
|
16.6
|
%
|
|
|
|
16.3
|
%
|
||||||||
Tier 1 capital
|
6.0
|
|
8.0
|
|
10.0
|
|
|
17.2
|
|
|
|
|
16.9
|
|
|
16.6
|
|
|
|
|
16.3
|
|
||||||||
Total capital
|
8.0
|
|
10.0
|
|
12.0
|
|
|
18.2
|
|
|
|
|
17.9
|
|
|
17.6
|
|
|
|
|
17.3
|
|
||||||||
Tier 1 leverage
|
4.0
|
|
NA
|
|
NA
|
|
|
8.0
|
|
|
|
|
7.9
|
|
|
8.0
|
|
|
|
|
7.9
|
|
||||||||
SLR
|
6.0
|
|
NA
|
|
NA
|
|
|
7.1
|
|
|
|
|
7.0
|
|
|
7.1
|
|
|
|
|
7.0
|
|
|
|
|
|
|
TABLE 47: SUPPLEMENTARY LEVERAGE RATIO
|
||||||||||||
December 31, 2017
|
|
Transitional SLR
|
|
Phase-In Provisions
|
|
Fully Phased-in Pro-Forma SLR Estimate
|
||||||
(Dollars in millions)
|
|
|
|
|||||||||
State Street:
|
|
|
|
|
|
|
||||||
Tier 1 capital
|
|
$
|
15,382
|
|
|
$
|
(302
|
)
|
|
$
|
15,080
|
|
|
|
|
|
|
|
|
||||||
On-and off-balance sheet leverage exposure
|
|
243,958
|
|
|
—
|
|
|
243,958
|
|
|||
Less: regulatory deductions
|
|
(6,972
|
)
|
|
(278
|
)
|
|
(7,250
|
)
|
|||
Total assets for SLR
|
|
$
|
236,986
|
|
|
$
|
(278
|
)
|
|
$
|
236,708
|
|
Supplementary leverage ratio
|
|
6.5
|
%
|
|
(0.1
|
)%
|
|
6.4
|
%
|
|||
|
|
|
|
|
|
|
||||||
State Street Bank:
|
|
|
|
|
|
|
||||||
Tier 1 capital
|
|
$
|
16,531
|
|
|
$
|
(291
|
)
|
|
$
|
16,240
|
|
|
|
|
|
|
|
|
||||||
On-and off-balance sheet leverage exposure
|
|
240,373
|
|
|
—
|
|
|
240,373
|
|
|||
Less: regulatory deductions
|
|
(6,583
|
)
|
|
(271
|
)
|
|
(6,854
|
)
|
|||
Total assets for SLR
|
|
$
|
233,790
|
|
|
$
|
(271
|
)
|
|
$
|
233,519
|
|
Supplementary leverage ratio
|
|
7.1
|
%
|
|
(0.1
|
)%
|
|
7.0
|
%
|
TABLE 48: 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 49: PREFERRED STOCK DIVIDENDS
|
|||||||||||||||||||||||
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
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
|
$
|
5,250
|
|
|
$
|
1.32
|
|
|
$
|
26
|
|
|
$
|
5,250
|
|
|
$
|
1.32
|
|
|
$
|
26
|
|
Series D
|
5,900
|
|
|
1.48
|
|
|
44
|
|
|
5,900
|
|
|
1.48
|
|
|
44
|
|
||||||
Series E
|
6,000
|
|
|
1.52
|
|
|
45
|
|
|
6,000
|
|
|
1.52
|
|
|
45
|
|
||||||
Series F
|
5,250
|
|
|
52.50
|
|
|
40
|
|
|
5,250
|
|
|
52.50
|
|
|
40
|
|
||||||
Series G
|
5,352
|
|
|
1.32
|
|
|
27
|
|
|
3,626
|
|
|
0.90
|
|
|
18
|
|
||||||
Total
|
|
|
|
|
$
|
182
|
|
|
|
|
|
|
$
|
173
|
|
TABLE 50: SHARES REPURCHASED
|
||||||||||
|
Shares Acquired
(In millions) |
|
Average Cost per Share
|
|
Total Acquired
(In millions) |
|||||
2016 Program
(1)
|
9.4
|
|
|
$
|
79.93
|
|
|
$
|
750
|
|
2017 Program
|
7.4
|
|
|
94.54
|
|
|
700
|
|
||
Total
|
16.8
|
|
|
$
|
86.37
|
|
|
$
|
1,450
|
|
|
|
|
|
TABLE 51: COMMON STOCK DIVIDENDS
|
|||||||||||||||
|
Years Ended December 31,
|
||||||||||||||
|
Dividends Declared per Share
|
|
Total
(In millions)
|
|
Dividends Declared per Share
|
|
Total
(In millions)
|
||||||||
|
2017
|
|
2016
|
||||||||||||
Common Stock
|
$
|
1.60
|
|
|
$
|
596
|
|
|
$
|
1.44
|
|
|
$
|
559
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Fee revenue:
|
|
|
|
|
|
||||||
Servicing fees
|
$
|
5,365
|
|
|
$
|
5,073
|
|
|
$
|
5,153
|
|
Management fees
|
1,616
|
|
|
1,292
|
|
|
1,174
|
|
|||
Trading services
|
1,071
|
|
|
1,099
|
|
|
1,146
|
|
|||
Securities finance
|
606
|
|
|
562
|
|
|
496
|
|
|||
Processing fees and other
|
247
|
|
|
90
|
|
|
309
|
|
|||
Total fee revenue
|
8,905
|
|
|
8,116
|
|
|
8,278
|
|
|||
Net interest income:
|
|
|
|
|
|
||||||
Interest income
|
2,908
|
|
|
2,512
|
|
|
2,488
|
|
|||
Interest expense
|
604
|
|
|
428
|
|
|
400
|
|
|||
Net interest income
|
2,304
|
|
|
2,084
|
|
|
2,088
|
|
|||
Gains (losses) related to investment securities, net:
|
|
|
|
|
|
||||||
Gains (losses) from sales of available-for-sale securities, net
|
(39
|
)
|
|
10
|
|
|
(5
|
)
|
|||
Losses from other-than-temporary impairment
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Losses reclassified (from) to other comprehensive income
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Gains (losses) related to investment securities, net
|
(39
|
)
|
|
7
|
|
|
(6
|
)
|
|||
Total revenue
|
11,170
|
|
|
10,207
|
|
|
10,360
|
|
|||
Provision for loan losses
|
2
|
|
|
10
|
|
|
12
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Compensation and employee benefits
|
4,394
|
|
|
4,353
|
|
|
4,061
|
|
|||
Information systems and communications
|
1,167
|
|
|
1,105
|
|
|
1,022
|
|
|||
Transaction processing services
|
838
|
|
|
800
|
|
|
793
|
|
|||
Occupancy
|
461
|
|
|
440
|
|
|
444
|
|
|||
Acquisition and restructuring costs
|
266
|
|
|
209
|
|
|
25
|
|
|||
Professional services
|
340
|
|
|
379
|
|
|
490
|
|
|||
Amortization of other intangible assets
|
214
|
|
|
207
|
|
|
197
|
|
|||
Other
|
589
|
|
|
584
|
|
|
1,018
|
|
|||
Total expenses
|
8,269
|
|
|
8,077
|
|
|
8,050
|
|
|||
Income before income tax expense (benefit)
|
2,899
|
|
|
2,120
|
|
|
2,298
|
|
|||
Income tax expense (benefit)
|
722
|
|
|
(22
|
)
|
|
318
|
|
|||
Net income from non-controlling interest
|
—
|
|
|
1
|
|
|
—
|
|
|||
Net income
|
$
|
2,177
|
|
|
$
|
2,143
|
|
|
$
|
1,980
|
|
Net income available to common shareholders
|
$
|
1,993
|
|
|
$
|
1,968
|
|
|
$
|
1,848
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.32
|
|
|
$
|
5.03
|
|
|
$
|
4.53
|
|
Diluted
|
5.24
|
|
|
4.97
|
|
|
4.47
|
|
|||
Average common shares outstanding (in thousands):
|
|
|
|
|
|
||||||
Basic
|
374,793
|
|
|
391,485
|
|
|
407,856
|
|
|||
Diluted
|
380,213
|
|
|
396,090
|
|
|
413,638
|
|
|||
Cash dividends declared per common share
|
$
|
1.60
|
|
|
$
|
1.44
|
|
|
$
|
1.32
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
2,177
|
|
|
$
|
2,143
|
|
|
$
|
1,980
|
|
Other comprehensive income (loss), net of related taxes:
|
|
|
|
|
|
||||||
Foreign currency translation, net of related taxes of $21, ($11) and ($101), respectively
|
900
|
|
|
(372
|
)
|
|
(735
|
)
|
|||
Net unrealized gains (losses) on available-for-sale securities, net of reclassification adjustment and net of related taxes of $272, ($119), and ($195), respectively
|
367
|
|
|
(181
|
)
|
|
(331
|
)
|
|||
Net unrealized gains (losses) on available-for-sale securities designated in fair value hedges, net of related taxes of $16, $16 and $5, respectively
|
22
|
|
|
23
|
|
|
12
|
|
|||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of $3, $5 and $8, respectively
|
3
|
|
|
7
|
|
|
13
|
|
|||
Net unrealized gains (losses) on cash flow hedges, net of related taxes of ($181), ($42) and $24, respectively
|
(285
|
)
|
|
(64
|
)
|
|
17
|
|
|||
Net unrealized gains (losses) on retirement plans, net of related taxes of $8, $1 and $51, respectively
|
24
|
|
|
(11
|
)
|
|
89
|
|
|||
Other comprehensive income (loss)
|
1,031
|
|
|
(598
|
)
|
|
(935
|
)
|
|||
Total comprehensive income
|
$
|
3,208
|
|
|
$
|
1,545
|
|
|
$
|
1,045
|
|
|
December 31
|
||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
||||
Assets:
|
|
|
|
||||
Cash and due from banks
|
$
|
2,107
|
|
|
$
|
1,314
|
|
Interest-bearing deposits with banks
|
67,227
|
|
|
70,935
|
|
||
Securities purchased under resale agreements
|
3,241
|
|
|
1,956
|
|
||
Trading account assets
|
1,093
|
|
|
1,024
|
|
||
Investment securities available-for-sale
|
57,121
|
|
|
61,998
|
|
||
Investment securities held-to-maturity (fair value of $40,255 and $34,994)
|
40,458
|
|
|
35,169
|
|
||
Loans and leases (less allowance for losses of $54 and $53)
|
23,240
|
|
|
19,704
|
|
||
Premises and equipment (net of accumulated depreciation of $3,881 and $3,333)
|
2,186
|
|
|
2,062
|
|
||
Accrued interest and fees receivable
|
3,099
|
|
|
2,644
|
|
||
Goodwill
|
6,022
|
|
|
5,814
|
|
||
Other intangible assets
|
1,613
|
|
|
1,750
|
|
||
Other assets
|
31,018
|
|
|
38,328
|
|
||
Total assets
|
$
|
238,425
|
|
|
$
|
242,698
|
|
Liabilities:
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Non-interest-bearing
|
$
|
47,175
|
|
|
$
|
59,397
|
|
Interest-bearing—U.S.
|
50,139
|
|
|
30,911
|
|
||
Interest-bearing—non-U.S.
|
87,582
|
|
|
96,855
|
|
||
Total deposits
|
184,896
|
|
|
187,163
|
|
||
Securities sold under repurchase agreements
|
2,842
|
|
|
4,400
|
|
||
Other short-term borrowings
|
1,144
|
|
|
1,585
|
|
||
Accrued expenses and other liabilities
|
15,606
|
|
|
16,901
|
|
||
Long-term debt
|
11,620
|
|
|
11,430
|
|
||
Total liabilities
|
216,108
|
|
|
221,479
|
|
||
Commitments, guarantees and contingencies (Notes 12 and 13)
|
|
|
|
||||
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
|
|
|
493
|
|
||
Common stock, $1 par, 750,000,000 shares authorized:
|
|
|
|
||||
503,879,642 and 503,879,642 shares issued
|
504
|
|
|
504
|
|
||
Surplus
|
9,799
|
|
|
9,782
|
|
||
Retained earnings
|
18,856
|
|
|
17,459
|
|
||
Accumulated other comprehensive income (loss)
|
(1,009
|
)
|
|
(2,040
|
)
|
||
Treasury stock, at cost (136,229,784 and 121,940,502 shares)
|
(9,029
|
)
|
|
(7,682
|
)
|
||
Total shareholders’ equity
|
22,317
|
|
|
21,219
|
|
||
Total liabilities and shareholders' equity
|
$
|
238,425
|
|
|
$
|
242,698
|
|
(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
|
|
|
|
|
|
|
|
|
1,980
|
|
|
|
|
|
|
|
|
1,980
|
|
||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
(935
|
)
|
|
|
|
|
|
(935
|
)
|
||||||||||||||
Preferred stock issued
|
742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
742
|
|
||||||||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Common stock - $1.32 per share
|
|
|
|
|
|
|
|
|
(536
|
)
|
|
|
|
|
|
|
|
(536
|
)
|
||||||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
(130
|
)
|
|
|
|
|
|
|
|
(130
|
)
|
||||||||||||||
Common stock acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
20,521
|
|
|
(1,520
|
)
|
|
(1,520
|
)
|
|||||||||||||
Common stock awards and options exercised, including income tax benefit of $70
|
|
|
|
|
|
|
(41
|
)
|
|
|
|
|
|
(4,976
|
)
|
|
221
|
|
|
180
|
|
||||||||||||
Other
|
|
|
|
|
|
|
(4
|
)
|
|
(2
|
)
|
|
|
|
(2
|
)
|
|
|
|
(6
|
)
|
||||||||||||
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
|
|
|
|
|
|
|
|
|
2,143
|
|
|
|
|
|
|
|
|
2,143
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
(598
|
)
|
|
|
|
|
|
(598
|
)
|
||||||||||||||
Preferred stock issued
|
493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
493
|
|
||||||||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock - $1.44 per share
|
|
|
|
|
|
|
|
|
(559
|
)
|
|
|
|
|
|
|
|
(559
|
)
|
||||||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
(173
|
)
|
|
|
|
|
|
|
|
(173
|
)
|
||||||||||||||
Common stock acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
21,098
|
|
|
(1,365
|
)
|
|
(1,365
|
)
|
|||||||||||||
Common stock awards and options exercised, including income tax benefit of $13
|
|
|
|
|
|
|
36
|
|
|
|
|
|
|
(3,369
|
)
|
|
139
|
|
|
175
|
|
||||||||||||
Other
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
(16
|
)
|
|
1
|
|
|
—
|
|
||||||||||||
Balance as of December 31, 2016
|
$
|
3,196
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
9,782
|
|
|
$
|
17,459
|
|
|
$
|
(2,040
|
)
|
|
121,941
|
|
|
$
|
(7,682
|
)
|
|
$
|
21,219
|
|
Net income
|
|
|
|
|
|
|
|
|
2,177
|
|
|
|
|
|
|
|
|
|
2,177
|
|
|||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
1,031
|
|
|
|
|
|
|
1,031
|
|
||||||||||||||
Preferred stock issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock - $1.60 per share
|
|
|
|
|
|
|
|
|
(596
|
)
|
|
|
|
|
|
|
|
(596
|
)
|
||||||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
(182
|
)
|
|
|
|
|
|
|
|
(182
|
)
|
||||||||||||||
Common stock acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
16,788
|
|
|
(1,450
|
)
|
|
(1,450
|
)
|
|||||||||||||
Common stock awards exercised
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
(2,503
|
)
|
|
104
|
|
|
120
|
|
||||||||||||
Other
|
|
|
|
|
|
|
1
|
|
|
(2
|
)
|
|
|
|
4
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||||||||
Balance as of December 31, 2017
|
$
|
3,196
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
9,799
|
|
|
$
|
18,856
|
|
|
$
|
(1,009
|
)
|
|
136,230
|
|
|
$
|
(9,029
|
)
|
|
$
|
22,317
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,177
|
|
|
$
|
2,143
|
|
|
$
|
1,980
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Deferred income tax (benefit)
|
95
|
|
|
(358
|
)
|
|
(168
|
)
|
|||
Amortization of other intangible assets
|
214
|
|
|
207
|
|
|
197
|
|
|||
Other non-cash adjustments for depreciation, amortization and accretion, net
|
871
|
|
|
722
|
|
|
604
|
|
|||
Losses (gains) related to investment securities, net
|
39
|
|
|
(7
|
)
|
|
6
|
|
|||
Change in trading account assets, net
|
(69
|
)
|
|
(175
|
)
|
|
75
|
|
|||
Change in accrued interest and fees receivable, net
|
(455
|
)
|
|
(298
|
)
|
|
(104
|
)
|
|||
Change in collateral deposits, net
|
1,819
|
|
|
(18
|
)
|
|
(6,662
|
)
|
|||
Change in unrealized losses on foreign exchange derivatives, net
|
3,267
|
|
|
(1,057
|
)
|
|
982
|
|
|||
Change in other assets, net
|
(1,341
|
)
|
|
1,772
|
|
|
1,156
|
|
|||
Change in accrued expenses and other liabilities, net
|
9
|
|
|
(1,147
|
)
|
|
(48
|
)
|
|||
Other, net
|
307
|
|
|
506
|
|
|
579
|
|
|||
Net cash provided by (used in) operating activities
|
6,933
|
|
|
2,290
|
|
|
(1,403
|
)
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Net decrease in interest-bearing deposits with banks
|
3,708
|
|
|
4,403
|
|
|
18,185
|
|
|||
Net (increase) decrease in securities purchased under resale agreements
|
(1,285
|
)
|
|
1,448
|
|
|
(1,014
|
)
|
|||
Proceeds from sales of available-for-sale securities
|
12,439
|
|
|
1,401
|
|
|
12,309
|
|
|||
Proceeds from maturities of available-for-sale securities
|
28,878
|
|
|
30,070
|
|
|
28,025
|
|
|||
Purchases of available-for-sale securities
|
(34,841
|
)
|
|
(30,162
|
)
|
|
(25,397
|
)
|
|||
Proceeds from maturities of held-to-maturity securities
|
4,028
|
|
|
7,942
|
|
|
3,842
|
|
|||
Purchases of held-to-maturity securities
|
(8,772
|
)
|
|
(8,425
|
)
|
|
(9,398
|
)
|
|||
Net (increase) in loans and leases
|
(3,511
|
)
|
|
(924
|
)
|
|
(561
|
)
|
|||
Business acquisitions
|
—
|
|
|
(437
|
)
|
|
—
|
|
|||
Purchases of equity investments and other long-term assets
|
(233
|
)
|
|
(643
|
)
|
|
(366
|
)
|
|||
Purchases of premises and equipment, net
|
(637
|
)
|
|
(613
|
)
|
|
(703
|
)
|
|||
Proceeds from sale of joint venture investment
|
172
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
102
|
|
|
170
|
|
|
73
|
|
|||
Net cash provided by investing activities
|
48
|
|
|
4,230
|
|
|
24,995
|
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Net (decrease) increase in time deposits
|
(15,306
|
)
|
|
8,488
|
|
|
(9,878
|
)
|
|||
Net increase (decrease) in all other deposits
|
13,040
|
|
|
(12,952
|
)
|
|
(7,535
|
)
|
|||
Net (decrease) in other short-term borrowings
|
(1,999
|
)
|
|
(268
|
)
|
|
(7,074
|
)
|
|||
Proceeds from issuance of long-term debt, net of issuance costs
|
747
|
|
|
1,492
|
|
|
2,983
|
|
|||
Payments for long-term debt and obligations under capital leases
|
(493
|
)
|
|
(1,441
|
)
|
|
(1,155
|
)
|
|||
Proceeds from issuance of preferred stock, net
|
—
|
|
|
493
|
|
|
742
|
|
|||
Proceeds from exercises of common stock options
|
—
|
|
|
—
|
|
|
4
|
|
|||
Purchases of common stock
|
(1,292
|
)
|
|
(1,365
|
)
|
|
(1,520
|
)
|
|||
Excess tax benefit related to stock-based compensation
|
—
|
|
|
13
|
|
|
70
|
|
|||
Repurchases of common stock for employee tax withholding
|
(126
|
)
|
|
(122
|
)
|
|
(222
|
)
|
|||
Payments for cash dividends
|
(768
|
)
|
|
(723
|
)
|
|
(655
|
)
|
|||
Other, net
|
9
|
|
|
(28
|
)
|
|
—
|
|
|||
Net cash (used in) financing activities
|
(6,188
|
)
|
|
(6,413
|
)
|
|
(24,240
|
)
|
|||
Net increase (decrease)
|
793
|
|
|
107
|
|
|
(648
|
)
|
|||
Cash and due from banks at beginning of period
|
1,314
|
|
|
1,207
|
|
|
1,855
|
|
|||
Cash and due from banks at end of period
|
$
|
2,107
|
|
|
$
|
1,314
|
|
|
$
|
1,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 14. Variable Interest Entities
|
|
|
|
Note 15. Shareholders’ Equity
|
|
|
|
Note 16. Regulatory Capital
|
|
|
|
Note 17. Net Interest Income
|
|
|
|
|
|
|
|
|
|
Note 21. Expenses
|
|
|
|
|
|
Note 23. Earnings Per Common Share
|
|
|
|
Note 24. Line of Business Information
|
|
|
|
Note 25. Non-U.S. Activities
|
|
|
|
Note
|
2
|
|
Page
|
||
Note
|
3
|
|
Page
|
||
Note
|
4
|
|
Page
|
||
Note
|
5
|
|
Page
|
||
Note
|
10
|
|
Page
|
||
Note
|
11
|
|
Page
|
||
Note
|
13
|
|
Page
|
||
Note
|
14
|
|
Page
|
||
Note
|
16
|
|
Page
|
||
Note
|
18
|
|
Page
|
||
Note
|
22
|
|
Page
|
||
Note
|
23
|
|
Page
|
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 expand the disclosure requirements for revenue arrangements with customers. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.
The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method).
|
January 1, 2018
|
The timing and amount of our material revenue streams, including servicing fees, management fees, trading services, and securities finance, remain substantially unchanged as these revenues will continue to be recognized over time. Specifically, under the new standard we will recognize revenue related to these activities ratably over the term of the related agreements with customers as the customer simultaneously benefits from the services as they are performed.
The standard does not apply to revenue associated with financial instruments, including loans and securities, or revenue recognized under other U.S. GAAP standards. Therefore NII, securities gains/ losses and revenue related to derivative instruments are not impacted by the standard.
The new standard modified the principal and agent guidance requiring certain costs previously presented on a net basis to be presented on a gross basis, which we expect will increase 2018 revenue and expenses by an estimated $225 million, the majority reflected in Investment Management.
We have adopted the new standard as of January 1, 2018, using the modified retrospective method of adoption. No material adjustment to retained earnings was required.
|
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
|
Upon adoption of the standard on January 1, 2018, we reclassified approximately $443 million of equity securities classified as available for sale to equity securities held at fair value through profit and loss. The cumulative-effect transition adjustment recognized in retained earnings on January 1, 2018 was immaterial to the 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, primarily real estate leases for office space, as well as additional disclosure on all of our lease obligations.
|
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
The standard requires immediate recognition of expected credit losses for financial assets carried at amortized cost, including trade and other receivables, loans and commitments, held-to-maturity debt securities, and other financial assets, held at the reporting date to be measured based on historical experience, current conditions, and reasonable supportable forecasts. Credit losses on available for sale securities will be recorded as an allowance versus a write-down of the amortized cost basis of the security and will allow for a reversal of impairment loss when the credit of the issuer improves.
|
January 1, 2020
|
We are currently assessing the impact of the standard on our consolidated financial statements, and a significant implementation project is in place to ensure that expected credit losses are calculated in accordance with the standard. We have established a steering committee to provide cross-functional governance over the project plan and key decisions, and are currently developing key accounting policies, assessing existing credit loss models against the new guidance and processes and identifying a complete set of data requirements and sources. We have commenced the development of new or modified credit loss models and based on our analysis to date, we expect the timing of the allowance for credit losses to accelerate under the new standard. We are continuing to assess the extent of the impact on the allowance for credit losses.
|
•
|
Quoted prices for similar assets or liabilities in active markets;
|
•
|
Quoted prices for identical or similar assets or liabilities in non-active markets;
|
•
|
Pricing models whose inputs are observable for substantially the full term of the asset or liability; and
|
•
|
Pricing models whose inputs are derived principally from, or corroborated by, observable market information through correlation or other means for substantially the full term of the asset or liability.
|
•
|
The fair value of our investment securities categorized in level 3 is measured using information obtained from third-party sources, typically non-binding broker or dealer quotes, or through the use of internally-developed pricing models. Management has evaluated its methodologies used to measure fair value, but has considered the level of observable market information to be insufficient to categorize the securities in level 2.
|
•
|
The fair value of certain foreign exchange contracts, primarily options, is measured using an option-pricing model. Because of a limited number of observable transactions, certain model inputs are not observable, such
|
|
Fair Value Measurements on a Recurring Basis
|
||||||||||||||||||
|
as of December 31, 2017
|
||||||||||||||||||
(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
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
39
|
|
||
Non-U.S. government securities
|
389
|
|
|
93
|
|
|
—
|
|
|
|
|
482
|
|
||||||
Other
|
44
|
|
|
528
|
|
|
—
|
|
|
|
|
572
|
|
||||||
Total trading account assets
|
472
|
|
|
621
|
|
|
—
|
|
|
|
|
1,093
|
|
||||||
AFS investment securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct obligations
|
11
|
|
|
212
|
|
|
—
|
|
|
|
|
223
|
|
||||||
Mortgage-backed securities
|
—
|
|
|
10,872
|
|
|
—
|
|
|
|
|
10,872
|
|
||||||
Total U.S. Treasury and federal agencies
|
11
|
|
|
11,084
|
|
|
—
|
|
|
|
|
11,095
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
—
|
|
|
3,358
|
|
|
—
|
|
|
|
|
3,358
|
|
||||||
Credit cards
|
—
|
|
|
1,542
|
|
|
—
|
|
|
|
|
1,542
|
|
||||||
Other
(2)
|
—
|
|
|
89
|
|
|
1,358
|
|
|
|
|
1,447
|
|
||||||
Total asset-backed securities
|
—
|
|
|
4,989
|
|
|
1,358
|
|
|
|
|
6,347
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
—
|
|
|
6,576
|
|
|
119
|
|
|
|
|
6,695
|
|
||||||
Asset-backed securities
|
—
|
|
|
2,545
|
|
|
402
|
|
|
|
|
2,947
|
|
||||||
Government securities
|
—
|
|
|
10,721
|
|
|
—
|
|
|
|
|
10,721
|
|
||||||
Other
(3)
|
—
|
|
|
5,904
|
|
|
204
|
|
|
|
|
6,108
|
|
||||||
Total non-U.S. debt securities
|
—
|
|
|
25,746
|
|
|
725
|
|
|
|
|
26,471
|
|
||||||
State and political subdivisions
|
—
|
|
|
9,108
|
|
|
43
|
|
|
|
|
9,151
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
1,054
|
|
|
—
|
|
|
|
|
1,054
|
|
||||||
Other U.S. debt securities
|
—
|
|
|
2,560
|
|
|
—
|
|
|
|
|
2,560
|
|
||||||
U.S. equity securities
|
—
|
|
|
46
|
|
|
—
|
|
|
|
|
46
|
|
||||||
U.S. money-market mutual funds
|
—
|
|
|
397
|
|
|
—
|
|
|
|
|
397
|
|
||||||
Total AFS investment securities
|
11
|
|
|
54,984
|
|
|
2,126
|
|
|
|
|
57,121
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
—
|
|
|
11,596
|
|
|
1
|
|
|
$
|
(7,593
|
)
|
|
4,004
|
|
||||
Interest-rate contracts
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Other derivative contracts
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Total derivative instruments
|
9
|
|
|
11,596
|
|
|
1
|
|
|
(7,593
|
)
|
|
4,013
|
|
|||||
Total assets carried at fair value
|
$
|
492
|
|
|
$
|
67,201
|
|
|
$
|
2,127
|
|
|
$
|
(7,593
|
)
|
|
$
|
62,227
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued expenses and other liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading account liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
—
|
|
|
11,467
|
|
|
1
|
|
|
(5,970
|
)
|
|
5,498
|
|
|||||
Interest-rate contracts
|
—
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|||||
Other derivative contracts
|
1
|
|
|
283
|
|
|
—
|
|
|
—
|
|
|
284
|
|
|||||
Total derivative instruments
|
1
|
|
|
11,850
|
|
|
1
|
|
|
(5,970
|
)
|
|
5,882
|
|
|||||
Total liabilities carried at fair value
|
$
|
40
|
|
|
$
|
11,850
|
|
|
$
|
1
|
|
|
$
|
(5,970
|
)
|
|
$
|
5,921
|
|
|
|
|
|
|
Fair Value Measurements on a Recurring Basis
|
||||||||||||||||||
|
as of December 31, 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
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
30
|
|
||
Non-U.S. government securities
|
495
|
|
|
174
|
|
|
—
|
|
|
|
|
669
|
|
||||||
Other
|
—
|
|
|
325
|
|
|
—
|
|
|
|
|
325
|
|
||||||
Total trading account assets
|
525
|
|
|
499
|
|
|
—
|
|
|
|
|
1,024
|
|
||||||
AFS investment securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct obligations
|
3,824
|
|
|
439
|
|
|
—
|
|
|
|
|
4,263
|
|
||||||
Mortgage-backed securities
|
—
|
|
|
13,257
|
|
|
—
|
|
|
|
|
13,257
|
|
||||||
Total U.S. Treasury and federal agencies
|
3,824
|
|
|
13,696
|
|
|
—
|
|
|
|
|
17,520
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
—
|
|
|
5,499
|
|
|
97
|
|
|
|
|
5,596
|
|
||||||
Credit cards
|
—
|
|
|
1,351
|
|
|
—
|
|
|
|
|
1,351
|
|
||||||
Sub-prime
|
—
|
|
|
272
|
|
|
—
|
|
|
|
|
272
|
|
||||||
Other
(2)
|
—
|
|
|
—
|
|
|
905
|
|
|
|
|
905
|
|
||||||
Total asset-backed securities
|
—
|
|
|
7,122
|
|
|
1,002
|
|
|
|
|
8,124
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
—
|
|
|
6,535
|
|
|
—
|
|
|
|
|
6,535
|
|
||||||
Asset-backed securities
|
—
|
|
|
2,484
|
|
|
32
|
|
|
|
|
2,516
|
|
||||||
Government securities
|
—
|
|
|
5,836
|
|
|
—
|
|
|
|
|
5,836
|
|
||||||
Other
(3)
|
—
|
|
|
5,365
|
|
|
248
|
|
|
|
|
5,613
|
|
||||||
Total non-U.S. debt securities
|
—
|
|
|
20,220
|
|
|
280
|
|
|
|
|
20,500
|
|
||||||
State and political subdivisions
|
—
|
|
|
10,283
|
|
|
39
|
|
|
|
|
10,322
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
2,577
|
|
|
16
|
|
|
|
|
2,593
|
|
||||||
Other U.S. debt securities
|
—
|
|
|
2,469
|
|
|
—
|
|
|
|
|
2,469
|
|
||||||
U.S. equity securities
|
—
|
|
|
42
|
|
|
—
|
|
|
|
|
42
|
|
||||||
Non-U.S. equity securities
|
—
|
|
|
3
|
|
|
—
|
|
|
|
|
3
|
|
||||||
U.S. money-market mutual funds
|
—
|
|
|
409
|
|
|
—
|
|
|
|
|
409
|
|
||||||
Non-U.S. money-market mutual funds
|
—
|
|
|
16
|
|
|
—
|
|
|
|
|
16
|
|
||||||
Total AFS investment securities
|
3,824
|
|
|
56,837
|
|
|
1,337
|
|
|
|
|
61,998
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
—
|
|
|
16,476
|
|
|
8
|
|
|
$
|
(9,163
|
)
|
|
7,321
|
|
||||
Interest-rate contracts
|
—
|
|
|
68
|
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|||||
Total derivative instruments
|
—
|
|
|
16,544
|
|
|
8
|
|
|
(9,231
|
)
|
|
7,321
|
|
|||||
Total assets carried at fair value
|
$
|
4,349
|
|
|
$
|
73,880
|
|
|
$
|
1,345
|
|
|
$
|
(9,231
|
)
|
|
$
|
70,343
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued expenses and other liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
15,948
|
|
|
$
|
8
|
|
|
$
|
(10,456
|
)
|
|
$
|
5,500
|
|
Interest-rate contracts
|
—
|
|
|
348
|
|
|
—
|
|
|
(226
|
)
|
|
122
|
|
|||||
Other derivative contracts
|
—
|
|
|
380
|
|
|
—
|
|
|
—
|
|
|
380
|
|
|||||
Total derivative instruments
|
—
|
|
|
16,676
|
|
|
8
|
|
|
(10,682
|
)
|
|
6,002
|
|
|||||
Total liabilities carried at fair value
|
$
|
—
|
|
|
$
|
16,676
|
|
|
$
|
8
|
|
|
$
|
(10,682
|
)
|
|
$
|
6,002
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs
|
||||||||||||||||||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||||||||||||||||||
|
Fair Value as of December 31, 2015
|
|
Total Realized and
Unrealized Gains (Losses) |
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers
out of Level 3 |
|
Fair Value as of December 31,
2016 (2) |
|
Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of December 31, 2016
|
||||||||||||||||||||
(In millions)
|
Recorded
in Revenue (1) |
|
Recorded
in Other Comprehensive Income (1) |
|
|||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
AFS Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury and federal agencies, mortgage-backed securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(325
|
)
|
|
$
|
—
|
|
|
|
||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Student loans
|
189
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
(96
|
)
|
|
97
|
|
|
|
|||||||||
Other
|
1,764
|
|
|
31
|
|
|
(23
|
)
|
|
469
|
|
|
(82
|
)
|
|
(1,254
|
)
|
|
—
|
|
|
905
|
|
|
|
||||||||||
Total asset-backed securities
|
1,953
|
|
|
32
|
|
|
(20
|
)
|
|
469
|
|
|
(82
|
)
|
|
(1,254
|
)
|
|
(96
|
)
|
|
1,002
|
|
|
|
||||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
|
||||||||||
Asset-backed securities
|
174
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
(60
|
)
|
|
(278
|
)
|
|
32
|
|
|
|
||||||||||
Other
|
255
|
|
|
—
|
|
|
—
|
|
|
222
|
|
|
—
|
|
|
(7
|
)
|
|
(222
|
)
|
|
248
|
|
|
|
||||||||||
Total non-U.S. debt securities
|
429
|
|
|
—
|
|
|
—
|
|
|
508
|
|
|
—
|
|
|
(67
|
)
|
|
(590
|
)
|
|
280
|
|
|
|
||||||||||
State and political subdivisions
|
33
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
39
|
|
|
|
||||||||||
Collateralized mortgage obligations
|
39
|
|
|
—
|
|
|
2
|
|
|
89
|
|
|
(66
|
)
|
|
(27
|
)
|
|
(21
|
)
|
|
16
|
|
|
|
||||||||||
Other U.S. debt securities
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
|
||||||||||
Total AFS investment securities
|
2,464
|
|
|
32
|
|
|
(9
|
)
|
|
1,391
|
|
|
(148
|
)
|
|
(1,361
|
)
|
|
(1,032
|
)
|
|
1,337
|
|
|
|
||||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign exchange contracts
|
5
|
|
|
9
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
8
|
|
|
$
|
5
|
|
||||||||
Total derivative instruments
|
5
|
|
|
9
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
8
|
|
|
5
|
|
|||||||||
Total assets carried at fair value
|
$
|
2,469
|
|
|
$
|
41
|
|
|
$
|
(9
|
)
|
|
$
|
1,394
|
|
|
$
|
(148
|
)
|
|
$
|
(1,370
|
)
|
|
$
|
(1,032
|
)
|
|
$
|
1,345
|
|
|
$
|
5
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||||||||
|
Fair Value
|
|
|
|
|
|
Weighted-Average
|
||||||||||
(Dollars in millions)
|
As of December 31, 2017
|
|
As of December 31, 2016
|
|
Valuation Technique
|
|
Significant
Unobservable Input (1) |
|
As of December 31, 2017
|
|
As of December 31, 2016
|
||||||
Significant unobservable inputs readily available to State Street:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Asset-backed securities, other
|
$
|
—
|
|
|
$
|
1
|
|
|
Discounted cash flows
|
|
Credit spread
|
|
—
|
%
|
|
0.3
|
%
|
State and political subdivisions
|
—
|
|
|
39
|
|
|
Discounted cash flows
|
|
Credit spread
|
|
—
|
|
|
1.8
|
|
||
Derivative instruments, foreign exchange contracts
|
1
|
|
|
8
|
|
|
Option model
|
|
Volatility
|
|
7.2
|
|
|
14.4
|
|
||
Total
|
$
|
1
|
|
|
$
|
48
|
|
|
|
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative instruments, foreign exchange contracts
|
$
|
1
|
|
|
$
|
8
|
|
|
Option model
|
|
Volatility
|
|
7.2
|
|
|
14.4
|
|
Total
|
$
|
1
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
For financial instruments that have quoted market prices, those quoted prices are used to estimate fair value.
|
•
|
For financial instruments that have no defined maturity, have a remaining maturity of 180 days or less, or reprice frequently to a market rate, we assume that the fair value of these instruments approximates their reported value, after taking into consideration any applicable credit risk.
|
•
|
For financial instruments for which no quoted market prices are available, fair value is estimated using information obtained from independent third parties, or by discounting the expected cash flows using an estimated current market interest rate for the financial instrument.
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
(In millions)
|
|
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)
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
|
$
|
2,107
|
|
|
$
|
2,107
|
|
|
$
|
2,107
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits with banks
|
|
67,227
|
|
|
67,227
|
|
|
—
|
|
|
67,227
|
|
|
—
|
|
|||||
Securities purchased under resale agreements
|
|
3,241
|
|
|
3,241
|
|
|
—
|
|
|
3,241
|
|
|
—
|
|
|||||
Investment securities held-to-maturity
|
|
40,458
|
|
|
40,255
|
|
|
16,814
|
|
|
23,318
|
|
|
123
|
|
|||||
Net loans (excluding leases)
(1)
|
|
22,577
|
|
|
22,482
|
|
|
—
|
|
|
22,431
|
|
|
51
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-interest-bearing
|
|
$
|
47,175
|
|
|
$
|
47,175
|
|
|
$
|
—
|
|
|
$
|
47,175
|
|
|
$
|
—
|
|
Interest-bearing - U.S.
|
|
50,139
|
|
|
50,139
|
|
|
—
|
|
|
50,139
|
|
|
—
|
|
|||||
Interest-bearing - non-U.S.
|
|
87,582
|
|
|
87,582
|
|
|
—
|
|
|
87,582
|
|
|
—
|
|
|||||
Securities sold under repurchase agreements
|
|
2,842
|
|
|
2,842
|
|
|
—
|
|
|
2,842
|
|
|
—
|
|
|||||
Other short-term borrowings
|
|
1,144
|
|
|
1,144
|
|
|
—
|
|
|
1,144
|
|
|
—
|
|
|||||
Long-term debt
|
|
11,620
|
|
|
11,919
|
|
|
—
|
|
|
11,639
|
|
|
280
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
(In millions)
|
|
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)
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
|
$
|
1,314
|
|
|
$
|
1,314
|
|
|
$
|
1,314
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits with banks
|
|
70,935
|
|
|
70,935
|
|
|
—
|
|
|
70,935
|
|
|
—
|
|
|||||
Securities purchased under resale agreements
|
|
1,956
|
|
|
1,956
|
|
|
—
|
|
|
1,956
|
|
|
—
|
|
|||||
Investment securities held-to-maturity
|
|
35,169
|
|
|
34,994
|
|
|
17,400
|
|
|
17,439
|
|
|
155
|
|
|||||
Net loans (excluding leases)
|
|
18,862
|
|
|
18,877
|
|
|
—
|
|
|
18,781
|
|
|
96
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-interest-bearing
|
|
$
|
59,397
|
|
|
$
|
59,397
|
|
|
$
|
—
|
|
|
$
|
59,397
|
|
|
$
|
—
|
|
Interest-bearing - U.S.
|
|
30,911
|
|
|
30,911
|
|
|
—
|
|
|
30,911
|
|
|
—
|
|
|||||
Interest-bearing - non-U.S.
|
|
96,855
|
|
|
96,855
|
|
|
—
|
|
|
96,855
|
|
|
—
|
|
|||||
Securities sold under repurchase agreements
|
|
4,400
|
|
|
4,400
|
|
|
—
|
|
|
4,400
|
|
|
—
|
|
|||||
Other short-term borrowings
|
|
1,585
|
|
|
1,585
|
|
|
—
|
|
|
1,585
|
|
|
—
|
|
|||||
Long-term debt
|
|
11,430
|
|
|
11,618
|
|
|
—
|
|
|
11,282
|
|
|
336
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
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
|
$
|
222
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
223
|
|
|
$
|
4,265
|
|
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
4,263
|
|
Mortgage-backed securities
|
10,975
|
|
|
26
|
|
|
129
|
|
|
10,872
|
|
|
13,340
|
|
|
76
|
|
|
159
|
|
|
13,257
|
|
||||||||
Total U.S. Treasury and federal agencies
|
11,197
|
|
|
28
|
|
|
130
|
|
|
11,095
|
|
|
17,605
|
|
|
83
|
|
|
168
|
|
|
17,520
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Student loans
(1)
|
3,325
|
|
|
37
|
|
|
4
|
|
|
3,358
|
|
|
5,659
|
|
|
12
|
|
|
75
|
|
|
5,596
|
|
||||||||
Credit cards
|
1,565
|
|
|
2
|
|
|
25
|
|
|
1,542
|
|
|
1,377
|
|
|
—
|
|
|
26
|
|
|
1,351
|
|
||||||||
Sub-prime
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
289
|
|
|
1
|
|
|
18
|
|
|
272
|
|
||||||||
Other
(2)
|
1,440
|
|
|
7
|
|
|
—
|
|
|
1,447
|
|
|
895
|
|
|
10
|
|
|
—
|
|
|
905
|
|
||||||||
Total asset-backed securities
|
6,330
|
|
|
46
|
|
|
29
|
|
|
6,347
|
|
|
8,220
|
|
|
23
|
|
|
119
|
|
|
8,124
|
|
||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
6,664
|
|
|
36
|
|
|
5
|
|
|
6,695
|
|
|
6,506
|
|
|
35
|
|
|
6
|
|
|
6,535
|
|
||||||||
Asset-backed securities
|
2,942
|
|
|
5
|
|
|
—
|
|
|
2,947
|
|
|
2,513
|
|
|
4
|
|
|
1
|
|
|
2,516
|
|
||||||||
Government securities
|
10,754
|
|
|
16
|
|
|
49
|
|
|
10,721
|
|
|
5,834
|
|
|
8
|
|
|
6
|
|
|
5,836
|
|
||||||||
Other
(3)
|
6,076
|
|
|
38
|
|
|
6
|
|
|
6,108
|
|
|
5,587
|
|
|
31
|
|
|
5
|
|
|
5,613
|
|
||||||||
Total non-U.S. debt securities
|
26,436
|
|
|
95
|
|
|
60
|
|
|
26,471
|
|
|
20,440
|
|
|
78
|
|
|
18
|
|
|
20,500
|
|
||||||||
State and political subdivisions
|
8,929
|
|
|
245
|
|
|
23
|
|
|
9,151
|
|
|
10,233
|
|
|
201
|
|
|
112
|
|
|
10,322
|
|
||||||||
Collateralized mortgage obligations
|
1,060
|
|
|
3
|
|
|
9
|
|
|
1,054
|
|
|
2,610
|
|
|
18
|
|
|
35
|
|
|
2,593
|
|
||||||||
Other U.S. debt securities
|
2,563
|
|
|
12
|
|
|
15
|
|
|
2,560
|
|
|
2,481
|
|
|
18
|
|
|
30
|
|
|
2,469
|
|
||||||||
U.S. equity securities
|
40
|
|
|
8
|
|
|
2
|
|
|
46
|
|
|
39
|
|
|
6
|
|
|
3
|
|
|
42
|
|
||||||||
Non-U.S. equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||||
U.S. money-market mutual funds
|
397
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
409
|
|
|
—
|
|
|
—
|
|
|
409
|
|
||||||||
Non-U.S. money-market mutual funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||||
Total
|
$
|
56,952
|
|
|
$
|
437
|
|
|
$
|
268
|
|
|
$
|
57,121
|
|
|
$
|
62,056
|
|
|
$
|
427
|
|
|
$
|
485
|
|
|
$
|
61,998
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct obligations
|
$
|
17,028
|
|
|
$
|
—
|
|
|
$
|
143
|
|
|
$
|
16,885
|
|
|
$
|
17,527
|
|
|
$
|
17
|
|
|
$
|
58
|
|
|
$
|
17,486
|
|
Mortgage-backed securities
|
16,651
|
|
|
22
|
|
|
225
|
|
|
16,448
|
|
|
10,334
|
|
|
20
|
|
|
221
|
|
|
10,133
|
|
||||||||
Total U.S. Treasury and federal agencies
|
33,679
|
|
|
22
|
|
|
368
|
|
|
33,333
|
|
|
27,861
|
|
|
37
|
|
|
279
|
|
|
27,619
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Student loans
(1)
|
3,047
|
|
|
32
|
|
|
9
|
|
|
3,070
|
|
|
2,883
|
|
|
5
|
|
|
30
|
|
|
2,858
|
|
||||||||
Credit cards
|
798
|
|
|
2
|
|
|
—
|
|
|
800
|
|
|
897
|
|
|
2
|
|
|
—
|
|
|
899
|
|
||||||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
35
|
|
||||||||
Total asset-backed securities
|
3,846
|
|
|
34
|
|
|
9
|
|
|
3,871
|
|
|
3,815
|
|
|
7
|
|
|
30
|
|
|
3,792
|
|
||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
939
|
|
|
82
|
|
|
6
|
|
|
1,015
|
|
|
1,150
|
|
|
70
|
|
|
15
|
|
|
1,205
|
|
||||||||
Asset-backed securities
|
263
|
|
|
1
|
|
|
—
|
|
|
264
|
|
|
531
|
|
|
—
|
|
|
—
|
|
|
531
|
|
||||||||
Government securities
|
474
|
|
|
2
|
|
|
—
|
|
|
476
|
|
|
286
|
|
|
3
|
|
|
—
|
|
|
289
|
|
||||||||
Other
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
113
|
|
|
1
|
|
|
—
|
|
|
114
|
|
||||||||
Total non-U.S. debt securities
|
1,724
|
|
|
85
|
|
|
6
|
|
|
1,803
|
|
|
2,080
|
|
|
74
|
|
|
15
|
|
|
2,139
|
|
||||||||
Collateralized mortgage obligations
|
1,209
|
|
|
45
|
|
|
6
|
|
|
1,248
|
|
|
1,413
|
|
|
42
|
|
|
11
|
|
|
1,444
|
|
||||||||
Total
|
$
|
40,458
|
|
|
$
|
186
|
|
|
$
|
389
|
|
|
$
|
40,255
|
|
|
$
|
35,169
|
|
|
$
|
160
|
|
|
$
|
335
|
|
|
$
|
34,994
|
|
|
|
|
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
December 31, 2017
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
1
|
|
|
$
|
67
|
|
|
$
|
1
|
|
Mortgage-backed securities
|
5,161
|
|
|
31
|
|
|
3,341
|
|
|
98
|
|
|
8,502
|
|
|
129
|
|
||||||
Total U.S. Treasury and federal agencies
|
5,161
|
|
|
31
|
|
|
3,408
|
|
|
99
|
|
|
8,569
|
|
|
130
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
—
|
|
|
—
|
|
|
769
|
|
|
4
|
|
|
769
|
|
|
4
|
|
||||||
Credit cards
|
1,289
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
1,289
|
|
|
25
|
|
||||||
Total asset-backed securities
|
1,289
|
|
|
25
|
|
|
769
|
|
|
4
|
|
|
2,058
|
|
|
29
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
1,059
|
|
|
4
|
|
|
469
|
|
|
1
|
|
|
1,528
|
|
|
5
|
|
||||||
Government securities
|
7,629
|
|
|
48
|
|
|
68
|
|
|
1
|
|
|
7,697
|
|
|
49
|
|
||||||
Other
|
816
|
|
|
4
|
|
|
289
|
|
|
2
|
|
|
1,105
|
|
|
6
|
|
||||||
Total non-U.S. debt securities
|
9,504
|
|
|
56
|
|
|
826
|
|
|
4
|
|
|
10,330
|
|
|
60
|
|
||||||
State and political subdivisions
|
734
|
|
|
6
|
|
|
901
|
|
|
17
|
|
|
1,635
|
|
|
23
|
|
||||||
Collateralized mortgage obligations
|
399
|
|
|
5
|
|
|
136
|
|
|
4
|
|
|
535
|
|
|
9
|
|
||||||
Other U.S. debt securities
|
1,007
|
|
|
8
|
|
|
345
|
|
|
7
|
|
|
1,352
|
|
|
15
|
|
||||||
U.S. equity securities
|
—
|
|
|
—
|
|
|
6
|
|
|
2
|
|
|
6
|
|
|
2
|
|
||||||
Total
|
$
|
18,094
|
|
|
$
|
131
|
|
|
$
|
6,391
|
|
|
$
|
137
|
|
|
$
|
24,485
|
|
|
$
|
268
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct obligations
|
$
|
14,439
|
|
|
$
|
109
|
|
|
$
|
2,447
|
|
|
$
|
34
|
|
|
$
|
16,886
|
|
|
$
|
143
|
|
Mortgage-backed securities
|
6,785
|
|
|
38
|
|
|
5,988
|
|
|
187
|
|
|
12,773
|
|
|
225
|
|
||||||
Total U.S. Treasury and federal agencies
|
21,224
|
|
|
147
|
|
|
8,435
|
|
|
221
|
|
|
29,659
|
|
|
368
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
440
|
|
|
3
|
|
|
423
|
|
|
6
|
|
|
863
|
|
|
9
|
|
||||||
Total asset-backed securities
|
440
|
|
|
3
|
|
|
423
|
|
|
6
|
|
|
863
|
|
|
9
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
239
|
|
|
6
|
|
|
239
|
|
|
6
|
|
||||||
Total non-U.S. debt securities
|
—
|
|
|
—
|
|
|
239
|
|
|
6
|
|
|
239
|
|
|
6
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
—
|
|
|
276
|
|
|
6
|
|
|
276
|
|
|
6
|
|
||||||
Total
|
$
|
21,664
|
|
|
$
|
150
|
|
|
$
|
9,373
|
|
|
$
|
239
|
|
|
$
|
31,037
|
|
|
$
|
389
|
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
December 31, 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
|
$
|
651
|
|
|
$
|
8
|
|
|
$
|
180
|
|
|
$
|
1
|
|
|
$
|
831
|
|
|
$
|
9
|
|
Mortgage-backed securities
|
7,072
|
|
|
131
|
|
|
1,114
|
|
|
28
|
|
|
8,186
|
|
|
159
|
|
||||||
Total U.S. Treasury and federal agencies
|
7,723
|
|
|
139
|
|
|
1,294
|
|
|
29
|
|
|
9,017
|
|
|
168
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
54
|
|
|
—
|
|
|
3,745
|
|
|
75
|
|
|
3,799
|
|
|
75
|
|
||||||
Credit cards
|
795
|
|
|
1
|
|
|
494
|
|
|
25
|
|
|
1,289
|
|
|
26
|
|
||||||
Sub-prime
|
1
|
|
|
—
|
|
|
252
|
|
|
18
|
|
|
253
|
|
|
18
|
|
||||||
Other
|
75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
—
|
|
||||||
Total asset-backed securities
|
925
|
|
|
1
|
|
|
4,491
|
|
|
118
|
|
|
5,416
|
|
|
119
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
442
|
|
|
1
|
|
|
893
|
|
|
5
|
|
|
1,335
|
|
|
6
|
|
||||||
Asset-backed securities
|
253
|
|
|
—
|
|
|
276
|
|
|
1
|
|
|
529
|
|
|
1
|
|
||||||
Government securities
|
1,314
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
1,314
|
|
|
6
|
|
||||||
Other
|
670
|
|
|
4
|
|
|
218
|
|
|
1
|
|
|
888
|
|
|
5
|
|
||||||
Total non-U.S. debt securities
|
2,679
|
|
|
11
|
|
|
1,387
|
|
|
7
|
|
|
4,066
|
|
|
18
|
|
||||||
State and political subdivisions
|
3,390
|
|
|
102
|
|
|
304
|
|
|
10
|
|
|
3,694
|
|
|
112
|
|
||||||
Collateralized mortgage obligations
|
1,259
|
|
|
31
|
|
|
162
|
|
|
4
|
|
|
1,421
|
|
|
35
|
|
||||||
Other U.S. debt securities
|
944
|
|
|
24
|
|
|
157
|
|
|
6
|
|
|
1,101
|
|
|
30
|
|
||||||
U.S. equity securities
|
8
|
|
|
—
|
|
|
5
|
|
|
3
|
|
|
13
|
|
|
3
|
|
||||||
Total
|
$
|
16,928
|
|
|
$
|
308
|
|
|
$
|
7,800
|
|
|
$
|
177
|
|
|
$
|
24,728
|
|
|
$
|
485
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct obligations
|
$
|
8,891
|
|
|
$
|
57
|
|
|
$
|
86
|
|
|
$
|
1
|
|
|
$
|
8,977
|
|
|
$
|
58
|
|
Mortgage-backed securities
|
6,838
|
|
|
221
|
|
|
—
|
|
|
—
|
|
|
6,838
|
|
|
221
|
|
||||||
Total U.S. Treasury and federal agencies
|
15,729
|
|
|
278
|
|
|
86
|
|
|
1
|
|
|
15,815
|
|
|
279
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
705
|
|
|
9
|
|
|
1,235
|
|
|
21
|
|
|
1,940
|
|
|
30
|
|
||||||
Credit cards
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||||
Other
|
18
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
27
|
|
|
—
|
|
||||||
Total asset-backed securities
|
756
|
|
|
9
|
|
|
1,244
|
|
|
21
|
|
|
2,000
|
|
|
30
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
54
|
|
|
2
|
|
|
330
|
|
|
13
|
|
|
384
|
|
|
15
|
|
||||||
Asset-backed securities
|
28
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
63
|
|
|
—
|
|
||||||
Government securities
|
180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
180
|
|
|
—
|
|
||||||
Total non-U.S. debt securities
|
262
|
|
|
2
|
|
|
365
|
|
|
13
|
|
|
627
|
|
|
15
|
|
||||||
Collateralized mortgage obligations
|
537
|
|
|
4
|
|
|
204
|
|
|
7
|
|
|
741
|
|
|
11
|
|
||||||
Total
|
$
|
17,284
|
|
|
$
|
293
|
|
|
$
|
1,899
|
|
|
$
|
42
|
|
|
$
|
19,183
|
|
|
$
|
335
|
|
December 31, 2017
|
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
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
6
|
|
|
$
|
205
|
|
|
$
|
223
|
|
Mortgage-backed securities
|
96
|
|
|
762
|
|
|
3,123
|
|
|
6,891
|
|
|
10,872
|
|
|||||
Total U.S. Treasury and federal agencies
|
96
|
|
|
774
|
|
|
3,129
|
|
|
7,096
|
|
|
11,095
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
289
|
|
|
1,044
|
|
|
685
|
|
|
1,340
|
|
|
3,358
|
|
|||||
Credit cards
|
—
|
|
|
1,290
|
|
|
252
|
|
|
—
|
|
|
1,542
|
|
|||||
Other
|
—
|
|
|
350
|
|
|
956
|
|
|
141
|
|
|
1,447
|
|
|||||
Total asset-backed securities
|
289
|
|
|
2,684
|
|
|
1,893
|
|
|
1,481
|
|
|
6,347
|
|
|||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
551
|
|
|
4,502
|
|
|
602
|
|
|
1,040
|
|
|
6,695
|
|
|||||
Asset-backed securities
|
205
|
|
|
2,185
|
|
|
557
|
|
|
—
|
|
|
2,947
|
|
|||||
Government securities
|
2,195
|
|
|
3,201
|
|
|
4,448
|
|
|
877
|
|
|
10,721
|
|
|||||
Other
|
1,078
|
|
|
4,235
|
|
|
758
|
|
|
37
|
|
|
6,108
|
|
|||||
Total non-U.S. debt securities
|
4,029
|
|
|
14,123
|
|
|
6,365
|
|
|
1,954
|
|
|
26,471
|
|
|||||
State and political subdivisions
|
474
|
|
|
2,415
|
|
|
4,724
|
|
|
1,538
|
|
|
9,151
|
|
|||||
Collateralized mortgage obligations
|
3
|
|
|
145
|
|
|
170
|
|
|
736
|
|
|
1,054
|
|
|||||
Other U.S. debt securities
|
296
|
|
|
1,097
|
|
|
1,107
|
|
|
60
|
|
|
2,560
|
|
|||||
Total
|
$
|
5,187
|
|
|
$
|
21,238
|
|
|
$
|
17,388
|
|
|
$
|
12,865
|
|
|
$
|
56,678
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct obligations
|
$
|
1,988
|
|
|
$
|
14,968
|
|
|
$
|
14
|
|
|
$
|
58
|
|
|
$
|
17,028
|
|
Mortgage-backed securities
|
—
|
|
|
162
|
|
|
1,605
|
|
|
14,884
|
|
|
16,651
|
|
|||||
Total U.S. Treasury and federal agencies
|
1,988
|
|
|
15,130
|
|
|
1,619
|
|
|
14,942
|
|
|
33,679
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Student loans
|
35
|
|
|
245
|
|
|
265
|
|
|
2,502
|
|
|
3,047
|
|
|||||
Credit cards
|
178
|
|
|
620
|
|
|
—
|
|
|
—
|
|
|
798
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Total asset-backed securities
|
213
|
|
|
865
|
|
|
265
|
|
|
2,503
|
|
|
3,846
|
|
|||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
132
|
|
|
217
|
|
|
45
|
|
|
545
|
|
|
939
|
|
|||||
Asset-backed securities
|
26
|
|
|
237
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|||||
Government securities
|
353
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
474
|
|
|||||
Other
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|||||
Total non-U.S. debt securities
|
511
|
|
|
623
|
|
|
45
|
|
|
545
|
|
|
1,724
|
|
|||||
Collateralized mortgage obligations
|
8
|
|
|
144
|
|
|
343
|
|
|
714
|
|
|
1,209
|
|
|||||
Total
|
$
|
2,720
|
|
|
$
|
16,762
|
|
|
$
|
2,272
|
|
|
$
|
18,704
|
|
|
$
|
40,458
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Gross realized gains from sales of AFS investment securities
|
|
$
|
74
|
|
|
$
|
15
|
|
|
$
|
57
|
|
Gross realized losses from sales of AFS investment securities
|
|
(113
|
)
|
|
(5
|
)
|
|
(62
|
)
|
|||
Net impairment losses:
|
|
|
|
|
|
|
||||||
Gross losses from OTTI
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Losses reclassified (from) to other comprehensive income
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Net impairment losses
(1)
|
|
—
|
|
|
(3
|
)
|
|
(1
|
)
|
|||
Gains (losses) related to investment securities, net
|
|
$
|
(39
|
)
|
|
$
|
7
|
|
|
$
|
(6
|
)
|
(1)
Net impairment losses, recognized in our consolidated statement of income, were composed of the following:
|
|
|
|
|
|
|
||||||
Impairment associated with expected credit losses
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Impairment associated with adverse changes in timing of expected future cash flows
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Net impairment losses
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, beginning of period
|
|
$
|
66
|
|
|
$
|
92
|
|
|
$
|
115
|
|
Additions:
|
|
|
|
|
|
|
||||||
Losses for which OTTI was previously recognized
|
|
—
|
|
|
2
|
|
|
1
|
|
|||
Deductions:
|
|
|
|
|
|
|
||||||
Previously recognized losses related to securities sold or matured
|
|
(2
|
)
|
|
(28
|
)
|
|
(24
|
)
|
|||
Balance, end of period
|
|
$
|
64
|
|
|
$
|
66
|
|
|
$
|
92
|
|
•
|
the identification and evaluation of securities that have indications of potential OTTI, such as issuer-specific concerns, including deteriorating financial condition or bankruptcy;
|
•
|
the analysis of expected future cash flows of securities, based on quantitative and qualitative factors;
|
•
|
the analysis of the collectability of those future cash flows, including information about past events, current conditions, and reasonable and supportable forecasts;
|
•
|
the analysis of the underlying collateral for MBS and ABS;
|
•
|
the analysis of individual impaired securities, including consideration of the length of time the security has been in an unrealized loss position, the anticipated recovery period, and the magnitude of the overall price decline;
|
•
|
evaluation of factors or triggers that could cause individual securities to be deemed OTTI and those that would not support OTTI; and
|
•
|
documentation of the results of these analyses.
|
•
|
certain macroeconomic drivers;
|
•
|
certain industry-specific drivers;
|
•
|
the length of time the security has been impaired;
|
•
|
the severity of the impairment;
|
•
|
the cause of the impairment and the financial condition and near-term prospects of the issuer;
|
•
|
activity in the market with respect to the issuer's securities, which may indicate adverse credit conditions; and
|
•
|
our intention not to sell, and the likelihood that we will not be required to sell, the security for a period of time sufficient to allow for its recovery in value.
|
(In millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Domestic:
|
|
|
|
||||
Commercial and financial:
|
|
|
|
||||
Loans to investment funds
|
$
|
13,618
|
|
|
$
|
11,734
|
|
Senior secured bank loans
|
2,923
|
|
|
3,256
|
|
||
Loans to municipalities
|
2,105
|
|
|
1,352
|
|
||
Other
|
50
|
|
|
70
|
|
||
Commercial real estate
|
98
|
|
|
27
|
|
||
Lease financing
|
267
|
|
|
338
|
|
||
Total domestic
|
19,061
|
|
|
16,777
|
|
||
Non-U.S.:
|
|
|
|
||||
Commercial and financial:
|
|
|
|
||||
Loans to investment funds
|
3,213
|
|
|
2,224
|
|
||
Senior secured bank loans
|
624
|
|
|
252
|
|
||
Lease financing
|
396
|
|
|
504
|
|
||
Total non-U.S.
|
4,233
|
|
|
2,980
|
|
||
Total loans and leases
|
23,294
|
|
|
19,757
|
|
||
Allowance for loan and lease losses
|
(54
|
)
|
|
(53
|
)
|
||
Loans and leases, net of allowance
|
$
|
23,240
|
|
|
$
|
19,704
|
|
(In millions)
|
2017
|
|
2016
|
||||
Net rental income receivable
|
$
|
808
|
|
|
$
|
1,039
|
|
Estimated residual values
|
89
|
|
|
89
|
|
||
Unearned income
|
(234
|
)
|
|
(286
|
)
|
||
Investment in leveraged lease financing
|
663
|
|
|
842
|
|
||
Less: related deferred income tax liabilities
|
(184
|
)
|
|
(313
|
)
|
||
Net investment in leveraged lease financing
|
$
|
479
|
|
|
$
|
529
|
|
|
|
|
|
||||||||||||
December 31, 2017
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Lease
Financing
|
|
Total Loans and Leases
|
||||||||
(In millions)
|
|||||||||||||||
Investment grade
(1)
|
$
|
17,866
|
|
|
$
|
98
|
|
|
$
|
663
|
|
|
$
|
18,627
|
|
Speculative
(2)
|
4,638
|
|
|
—
|
|
|
—
|
|
|
4,638
|
|
||||
Special mention
(3)
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||
Total
|
$
|
22,533
|
|
|
$
|
98
|
|
|
$
|
663
|
|
|
$
|
23,294
|
|
December 31, 2016
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Lease
Financing
|
|
Total Loans and Leases
|
||||||||
(In millions)
|
|||||||||||||||
Investment grade
(1)
|
$
|
14,889
|
|
|
$
|
27
|
|
|
$
|
842
|
|
|
$
|
15,758
|
|
Speculative
(2)
|
3,984
|
|
|
—
|
|
|
—
|
|
|
3,984
|
|
||||
Substandard
(4)
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Total
|
$
|
18,888
|
|
|
$
|
27
|
|
|
$
|
842
|
|
|
$
|
19,757
|
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
(In millions)
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Lease Financing
|
|
Total Loans and Leases
|
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Lease Financing
|
|
Total Loans and Leases
|
||||||||||||||||
Loans and leases
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Individually evaluated for impairment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Collectively evaluated for impairment
|
22,533
|
|
|
98
|
|
|
663
|
|
|
23,294
|
|
|
18,873
|
|
|
27
|
|
|
842
|
|
|
19,742
|
|
||||||||
Total
|
$
|
22,533
|
|
|
$
|
98
|
|
|
$
|
663
|
|
|
$
|
23,294
|
|
|
$
|
18,888
|
|
|
$
|
27
|
|
|
$
|
842
|
|
|
$
|
19,757
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
Total Loans and Leases
|
|
Total Loans and Leases
|
|
Total Loans and Leases
|
||||||
Allowance for loan and lease losses
(1)
:
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
53
|
|
|
$
|
46
|
|
|
$
|
38
|
|
Provision for loan and lease losses
|
2
|
|
|
10
|
|
|
12
|
|
|||
Charge-offs
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|||
Ending balance
|
$
|
54
|
|
|
$
|
53
|
|
|
$
|
46
|
|
|
|
|
|
(In millions)
|
Investment
Servicing
|
|
Investment
Management
|
|
Total
|
||||||
Goodwill:
|
|
|
|
|
|
||||||
Ending balance December 31, 2015
|
$
|
5,641
|
|
|
$
|
30
|
|
|
$
|
5,671
|
|
Acquisitions
(1)
|
—
|
|
|
236
|
|
|
236
|
|
|||
Divestitures and other reductions
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||
Foreign currency translation
|
(80
|
)
|
|
(2
|
)
|
|
(82
|
)
|
|||
Ending balance December 31, 2016
|
$
|
5,550
|
|
|
$
|
264
|
|
|
$
|
5,814
|
|
Acquisitions
|
17
|
|
|
—
|
|
|
17
|
|
|||
Divestitures and other reductions
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||
Foreign currency translation
|
194
|
|
|
6
|
|
|
200
|
|
|||
Ending balance December 31, 2017
|
$
|
5,752
|
|
|
$
|
270
|
|
|
$
|
6,022
|
|
|
|
|
|
(In millions)
|
Investment
Servicing
|
|
Investment
Management
|
|
Total
|
||||||
Other intangible assets:
|
|
|
|
|
|
||||||
Ending balance December 31, 2015
|
$
|
1,753
|
|
|
$
|
15
|
|
|
$
|
1,768
|
|
Acquisitions
(1)
|
—
|
|
|
217
|
|
|
217
|
|
|||
Divestitures
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||
Amortization
|
(186
|
)
|
|
(21
|
)
|
|
(207
|
)
|
|||
Foreign currency translation and other, net
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|||
Ending balance December 31, 2016
|
$
|
1,539
|
|
|
$
|
211
|
|
|
$
|
1,750
|
|
Acquisitions
|
16
|
|
|
—
|
|
|
16
|
|
|||
Divestitures
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||
Amortization
|
(183
|
)
|
|
(31
|
)
|
|
(214
|
)
|
|||
Foreign currency translation and other, net
|
71
|
|
|
1
|
|
|
72
|
|
|||
Ending balance December 31, 2017
|
$
|
1,432
|
|
|
$
|
181
|
|
|
$
|
1,613
|
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In millions)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Client relationships
|
$
|
2,669
|
|
|
$
|
(1,470
|
)
|
|
$
|
1,199
|
|
|
$
|
2,620
|
|
|
$
|
(1,306
|
)
|
|
$
|
1,314
|
|
Core deposits
|
686
|
|
|
(320
|
)
|
|
366
|
|
|
661
|
|
|
(277
|
)
|
|
384
|
|
||||||
Other
|
142
|
|
|
(94
|
)
|
|
48
|
|
|
132
|
|
|
(80
|
)
|
|
52
|
|
||||||
Total
|
$
|
3,497
|
|
|
$
|
(1,884
|
)
|
|
$
|
1,613
|
|
|
$
|
3,413
|
|
|
$
|
(1,663
|
)
|
|
$
|
1,750
|
|
(In millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Receivable - securities lending
(1)
|
$
|
19,404
|
|
|
$
|
21,204
|
|
Derivative instruments, net
|
4,013
|
|
|
7,321
|
|
||
Bank-owned life insurance
|
3,242
|
|
|
3,158
|
|
||
Investments in joint ventures and other unconsolidated entities
|
2,259
|
|
|
2,363
|
|
||
Collateral, net
|
473
|
|
|
2,236
|
|
||
Prepaid expenses
|
364
|
|
|
333
|
|
||
Accounts receivable
|
348
|
|
|
886
|
|
||
Receivable for securities settlement
|
188
|
|
|
40
|
|
||
Deposits with clearing organizations
|
120
|
|
|
132
|
|
||
Deferred tax assets, net of valuation allowance
(2)
|
113
|
|
|
210
|
|
||
Income taxes receivable
|
97
|
|
|
106
|
|
||
Other
(3)
|
397
|
|
|
339
|
|
||
Total
|
$
|
31,018
|
|
|
$
|
38,328
|
|
|
|
|
Securities Sold Under
Repurchase Agreements
|
|
Federal Funds Purchased
|
|
Tax-Exempt
Investment Program
|
||||||||||||||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Balance as of December 31
|
$
|
2,842
|
|
|
$
|
4,400
|
|
|
$
|
4,499
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
1,078
|
|
|
$
|
1,158
|
|
|
$
|
1,748
|
|
Maximum outstanding as of any month-end
|
4,302
|
|
|
5,572
|
|
|
10,977
|
|
|
—
|
|
|
29
|
|
|
29
|
|
|
1,158
|
|
|
1,726
|
|
|
1,865
|
|
|||||||||
Average outstanding during the year
|
3,683
|
|
|
4,113
|
|
|
8,875
|
|
|
1
|
|
|
31
|
|
|
21
|
|
|
1,127
|
|
|
1,512
|
|
|
1,807
|
|
|||||||||
Weighted-average interest rate as of year-end
|
.03
|
%
|
|
.04
|
%
|
|
.02
|
%
|
|
.00
|
%
|
|
.00
|
%
|
|
.03
|
%
|
|
1.45
|
%
|
|
.67
|
%
|
|
.03
|
%
|
|||||||||
Weighted-average interest rate during the year
|
.05
|
|
|
.02
|
|
|
.01
|
|
|
.00
|
|
|
.17
|
|
|
.01
|
|
|
.79
|
|
|
.36
|
|
|
.06
|
|
|
U.S. Government
Securities Sold
|
|
Repurchase
Agreements
(1)
|
||||||||
(In millions)
|
Amortized
Cost
|
|
Fair Value
|
|
Amortized
Cost
|
||||||
Overnight maturity
|
$
|
2,928
|
|
|
$
|
2,899
|
|
|
$
|
2,842
|
|
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|||||||
Issuance Date
|
|
Maturity Date
|
|
Coupon Rate
|
|
Seniority
|
|
Interest Due Dates
|
|
2017
|
|
2016
|
|||||
Parent Company And Non-Banking Subsidiary Issuances
|
|
|
|
|
|||||||||||||
August 18, 2015
|
|
August 18, 2025
|
|
3.55
|
%
|
|
Senior notes
|
|
2/18; 8/18
(1)
|
|
1,287
|
|
|
1,293
|
|
||
August 18, 2015
|
|
August 18, 2020
|
|
2.55
|
%
|
|
Senior notes
|
|
2/18; 8/18
(1)
|
|
1,184
|
|
|
1,192
|
|
||
November 19, 2013
|
|
November 20, 2023
|
|
3.7
|
%
|
|
Senior notes
|
|
5/20; 11/20
(1)
|
|
1,021
|
|
|
1,033
|
|
||
December 15, 2014
|
|
December 16, 2024
|
|
3.3
|
%
|
|
Senior notes
|
|
6/16; 12/16
(1)
|
|
993
|
|
|
999
|
|
||
May 15, 2013
|
|
May 15, 2023
(2)
|
|
3.1
|
%
|
|
Subordinated notes
|
|
5/15; 11/15
(1)
|
|
981
|
|
|
987
|
|
||
April 30, 2007
|
|
June 15, 2047
|
|
Floating-rate
|
|
Junior subordinated debentures
|
|
3/15; 6/15; 9/15; 12/15
|
|
793
|
|
|
793
|
|
|||
May 15, 2017
|
|
May 15, 2023
|
|
2.653
|
%
|
|
Fixed to Floating Rate Senior notes
|
|
5/15; 11/15
(1)
|
|
740
|
|
|
—
|
|
||
March 7, 2011
|
|
March 7, 2021
|
|
4.375
|
%
|
|
Senior notes
|
|
3/7; 9/7
(1)
|
|
734
|
|
|
738
|
|
||
May 19, 2016
|
|
May 19, 2021
|
|
1.95
|
%
|
|
Senior notes
|
|
5/19; 11/19
(1)
|
|
724
|
|
|
726
|
|
||
May 19, 2016
|
|
May 19, 2026
|
|
2.65
|
%
|
|
Senior notes
|
|
5/19; 11/19
(1)
|
|
706
|
|
|
704
|
|
||
February 11, 2011
|
|
March 15, 2018
(3)
|
|
4.956
|
%
|
|
Junior subordinated debentures
|
|
3/15; 9/15
|
|
502
|
|
|
511
|
|
||
August 18, 2015
|
|
August 18, 2020
|
|
Floating-rate
|
|
Senior notes
|
|
2/18; 5/18; 8/18; 11/18
|
|
499
|
|
|
499
|
|
|||
May 15, 2013
|
|
May 15, 2018
|
|
1.35
|
%
|
|
Senior notes
|
|
5/15; 11/15
|
|
499
|
|
|
497
|
|
||
May 15, 1998
|
|
May 15, 2028
|
|
Floating-rate
|
|
Junior subordinated debentures
|
|
2/15; 5/15; 8/15; 11/15
|
|
150
|
|
|
150
|
|
|||
June 21, 1996
|
|
June 15, 2026
(4)
|
|
7.35
|
%
|
|
Senior notes
|
|
6/15; 12/15
|
|
150
|
|
|
150
|
|
||
April 30, 2007
|
|
April 30, 2017
|
|
5.375
|
%
|
|
Senior notes
|
|
4/30; 10/30
|
|
—
|
|
|
450
|
|
||
Parent Company
|
|
|
|
|
|
|
|
|
|||||||||
Long-term capital leases
|
|
|
|
|
|
|
|
250
|
|
|
293
|
|
|||||
State Street Bank issuances
|
|
|
|||||||||||||||
September 24, 2003
|
|
October 15, 2018
(2)
|
|
5.25
|
%
|
|
Subordinated notes
|
|
4/15; 10/15
|
|
407
|
|
|
415
|
|
||
Total long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
11,620
|
|
|
$
|
11,430
|
|
|
|
|
|
(1)
|
We have entered into interest-rate swap agreements, recorded as fair value hedges, to modify our interest expense on these senior and subordinated notes from a fixed rate to a floating rate. As of
December 31, 2017
and
December 31, 2016
, the carrying value of long-term debt associated with these fair value hedges decreased
$87 million
and
$15 million
, respectively. Refer to Note
10
for additional information about fair value hedges.
|
(2)
|
The subordinated notes qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.
|
(3)
|
We do not have the right to redeem the debenture prior to maturity other than upon the occurrence of specified events. Such redemption is subject to federal regulatory approval. The junior subordinated debentures qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.
|
(4)
|
We may not redeem notes prior to their maturity.
|
December 31, 2017
|
|
Maturity
|
|
Paid Fixed Interest Rate
|
Senior Notes
|
|
|
|
|
|
|
2020
|
|
2.55%
|
|
|
2021
|
|
4.38
|
|
|
2021
|
|
1.95
|
|
|
2022
|
|
2.65
|
|
|
2023
|
|
3.70
|
|
|
2024
|
|
3.30
|
|
|
2025
|
|
3.55
|
|
|
2026
|
|
2.65
|
|
|
|
|
|
Subordinated Notes
|
|
|
|
|
|
|
2023
|
|
3.10
|
(In millions)
|
December 31,
2017 |
|
December 31,
2016 |
||
Derivatives not designated as hedging instruments:
|
|
|
|
||
Interest-rate contracts:
|
|
|
|
||
Futures
|
2,392
|
|
|
13,455
|
|
Foreign exchange contracts:
|
|
|
|
||
Forward, swap and spot
|
1,679,976
|
|
|
1,414,765
|
|
Options purchased
|
350
|
|
|
337
|
|
Options written
|
302
|
|
|
202
|
|
Futures
|
50
|
|
|
—
|
|
Commodity and equity contracts:
|
|
|
|||
Commodity
(1)
|
16
|
|
|
—
|
|
Equity
(1)
|
50
|
|
|
—
|
|
Other:
|
|
|
|
||
Stable value contracts
|
26,653
|
|
|
27,182
|
|
Deferred value awards
(2)(3)
|
473
|
|
|
409
|
|
Derivatives designated as hedging instruments:
|
|
|
|
||
Interest-rate contracts:
|
|
|
|
||
Swap agreements
|
11,047
|
|
|
10,169
|
|
Foreign exchange contracts:
|
|
|
|
||
Forward and swap
|
28,913
|
|
|
8,564
|
|
|
|
|
December 31, 2017
|
||||||||||
(In millions)
|
Fair Value Hedges
|
|
Cash
Flow Hedges (1) |
|
Total
|
||||||
Investment securities available for sale
|
$
|
1,254
|
|
|
$
|
—
|
|
|
$
|
1,254
|
|
Long-term debt
(2)
|
8,493
|
|
|
—
|
|
|
8,493
|
|
|||
Floating rate loans
|
—
|
|
|
1,300
|
|
|
1,300
|
|
|||
Total
|
$
|
9,747
|
|
|
$
|
1,300
|
|
|
$
|
11,047
|
|
|
December 31, 2016
|
||||||||||
(In millions)
|
Fair Value Hedges
|
|
Cash
Flow Hedges |
|
Total
|
||||||
Investment securities available for sale
|
$
|
1,444
|
|
|
$
|
—
|
|
|
$
|
1,444
|
|
Long-term debt
(2)
|
8,725
|
|
|
—
|
|
|
8,725
|
|
|||
Floating rate loans
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
10,169
|
|
|
$
|
—
|
|
|
$
|
10,169
|
|
|
|
|
|
|
|
|
Location of Gain (Loss) on
Derivative in Consolidated
Statement of Income
|
|
Amount of Gain (Loss) on Derivative Recognized in Consolidated Statement of Income
|
||||||||||
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|||||||
Foreign exchange contracts
|
Trading services revenue
|
|
$
|
632
|
|
|
$
|
662
|
|
|
$
|
686
|
|
Interest-rate contracts
|
Processing fees and other revenue
|
|
—
|
|
|
1
|
|
|
—
|
|
|||
Foreign exchange contracts
|
Processing fees and other revenue
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|||
Interest-rate contracts
|
Trading services revenue
|
|
8
|
|
|
(7
|
)
|
|
(2
|
)
|
|||
Credit derivative contracts
|
Trading services revenue
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Other derivative contracts
|
Trading services revenue
|
|
—
|
|
|
(2
|
)
|
|
8
|
|
|||
Other derivative contracts
|
Compensation and employee benefits
|
|
(143
|
)
|
|
(448
|
)
|
|
(149
|
)
|
|||
Total
|
|
|
$
|
474
|
|
|
$
|
205
|
|
|
$
|
542
|
|
|
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
|
||||||||||||||||||||
|
|
|
Years Ended December 31,
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||||
(In millions)
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Foreign exchange contracts
|
Processing fees and
other revenue |
|
$
|
18
|
|
|
$
|
(6
|
)
|
|
$
|
(101
|
)
|
|
Investment securities
|
|
Processing fees and
other revenue |
|
$
|
(18
|
)
|
|
$
|
6
|
|
|
$
|
101
|
|
Foreign exchange contracts
|
Processing fees and other revenue
|
|
626
|
|
|
221
|
|
|
(241
|
)
|
|
FX deposit
|
|
Processing fees and other revenue
|
|
(626
|
)
|
|
(221
|
)
|
|
241
|
|
||||||
Interest-rate contracts
|
Processing fees and
other revenue
|
|
39
|
|
|
43
|
|
|
16
|
|
|
Available-for-sale securities
|
|
Processing fees and
other revenue
(1)
|
|
(37
|
)
|
|
(40
|
)
|
|
(17
|
)
|
||||||
Interest-rate contracts
|
Processing fees and
other revenue |
|
(38
|
)
|
|
(98
|
)
|
|
61
|
|
|
Long-term debt
|
|
Processing fees and
other revenue |
|
39
|
|
|
100
|
|
|
(54
|
)
|
||||||
Total
|
|
|
$
|
645
|
|
|
$
|
160
|
|
|
$
|
(265
|
)
|
|
|
|
|
|
$
|
(642
|
)
|
|
$
|
(155
|
)
|
|
$
|
271
|
|
|
|
|
|
|
|
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
|
||||||||||||||||||||||||||||||
|
Years Ended December 31,
|
|
|
|
Years Ended December 31,
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest-rate contracts
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Net interest income
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
Net interest income
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
(104
|
)
|
|
(39
|
)
|
|
55
|
|
|
Net interest income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net interest income
|
|
24
|
|
|
24
|
|
|
10
|
|
|||||||||
Total
|
$
|
(118
|
)
|
|
$
|
(39
|
)
|
|
$
|
55
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
|
|
$
|
26
|
|
|
$
|
24
|
|
|
$
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign exchange contracts
|
$
|
(160
|
)
|
|
$
|
109
|
|
|
$
|
—
|
|
|
Gains (Losses) related to investment securities, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Gains (Losses) related to investment securities, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
(160
|
)
|
|
$
|
109
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Assets:
|
|
December 31, 2017
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(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
|
|
Cash and Securities Received
(4)
|
|
Net Amount
(5)
|
||||||||||
Derivatives:
|
|
|
|
|
|
|
||||||||||||||
Foreign exchange contracts
|
|
$
|
11,597
|
|
|
$
|
(5,548
|
)
|
|
$
|
6,049
|
|
|
|
|
$
|
6,049
|
|
||
Interest-rate contracts
(6)
|
|
8
|
|
|
—
|
|
|
8
|
|
|
|
|
8
|
|
||||||
Other derivative contracts
|
|
1
|
|
|
—
|
|
|
1
|
|
|
|
|
1
|
|
||||||
Cash collateral and securities netting
|
|
NA
|
|
|
(2,045
|
)
|
|
(2,045
|
)
|
|
$
|
(124
|
)
|
|
(2,169
|
)
|
||||
Total derivatives
|
|
11,606
|
|
|
(7,593
|
)
|
|
4,013
|
|
|
(124
|
)
|
|
3,889
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
||||||||||||||
Resale agreements and securities borrowing
(7)
|
|
70,079
|
|
|
(47,434
|
)
|
|
22,645
|
|
|
(22,645
|
)
|
|
—
|
|
|||||
Total derivatives and other financial instruments
|
|
$
|
81,685
|
|
|
$
|
(55,027
|
)
|
|
$
|
26,658
|
|
|
$
|
(22,769
|
)
|
|
$
|
3,889
|
|
Assets:
|
|
December 31, 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(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
|
|
Cash and Securities Received
(4)
|
|
Net Amount
(5)
|
||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
|
$
|
16,484
|
|
|
$
|
(8,257
|
)
|
|
$
|
8,227
|
|
|
|
|
$
|
8,227
|
|
||
Interest-rate contracts
|
|
68
|
|
|
(68
|
)
|
|
—
|
|
|
|
|
—
|
|
||||||
Cash collateral and securities netting
|
|
NA
|
|
|
(906
|
)
|
|
(906
|
)
|
|
$
|
(247
|
)
|
|
(1,153
|
)
|
||||
Total derivatives
|
|
16,552
|
|
|
(9,231
|
)
|
|
7,321
|
|
|
(247
|
)
|
|
7,074
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Resale agreements and securities borrowing
(7)
|
|
58,677
|
|
|
(35,517
|
)
|
|
23,160
|
|
|
(22,939
|
)
|
|
221
|
|
|||||
Total derivatives and other financial instruments
|
|
$
|
75,229
|
|
|
$
|
(44,748
|
)
|
|
$
|
30,481
|
|
|
$
|
(23,186
|
)
|
|
$
|
7,295
|
|
|
|
|
|
|
Liabilities:
|
|
December 31, 2017
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(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
|
|
Cash and Securities Provided
(4)
|
|
Net Amount
(5)
|
||||||||||
Derivatives:
|
|
|
|
|
|
|
||||||||||||||
Foreign exchange contracts
|
|
$
|
11,467
|
|
|
$
|
(5,548
|
)
|
|
$
|
5,919
|
|
|
|
|
$
|
5,919
|
|
||
Interest-rate contracts
(6)
|
|
100
|
|
|
—
|
|
|
100
|
|
|
|
|
100
|
|
||||||
Other derivative contracts
|
|
285
|
|
|
—
|
|
|
285
|
|
|
|
|
285
|
|
||||||
Cash collateral and securities netting
|
|
NA
|
|
|
(422
|
)
|
|
(422
|
)
|
|
$
|
(450
|
)
|
|
(872
|
)
|
||||
Total derivatives
|
|
11,852
|
|
|
(5,970
|
)
|
|
5,882
|
|
|
(450
|
)
|
|
5,432
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
|
|||||||||||||
Repurchase agreements and securities lending
(7)
|
|
54,127
|
|
|
(47,434
|
)
|
|
6,693
|
|
|
(4,299
|
)
|
|
2,394
|
|
|||||
Total derivatives and other financial instruments
|
|
$
|
65,979
|
|
|
$
|
(53,404
|
)
|
|
$
|
12,575
|
|
|
$
|
(4,749
|
)
|
|
$
|
7,826
|
|
Liabilities:
|
|
December 31, 2016
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(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
|
|
Cash and Securities Provided
(4)
|
|
Net Amount
(5)
|
||||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
|
$
|
15,956
|
|
|
$
|
(8,253
|
)
|
|
$
|
7,703
|
|
|
|
|
$
|
7,703
|
|
||
Interest-rate contracts
|
|
348
|
|
|
(73
|
)
|
|
275
|
|
|
|
|
275
|
|
||||||
Other derivative contracts
|
|
380
|
|
|
—
|
|
|
380
|
|
|
|
|
380
|
|
||||||
Cash collateral and securities netting
|
|
NA
|
|
|
(2,356
|
)
|
|
(2,356
|
)
|
|
$
|
(180
|
)
|
|
(2,536
|
)
|
||||
Total derivatives
|
|
16,684
|
|
|
(10,682
|
)
|
|
6,002
|
|
|
(180
|
)
|
|
5,822
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Resale agreements and securities lending
(7)
|
|
44,933
|
|
|
(35,517
|
)
|
|
9,416
|
|
|
(7,059
|
)
|
|
2,357
|
|
|||||
Total derivatives and other financial instruments
|
|
$
|
61,617
|
|
|
$
|
(46,199
|
)
|
|
$
|
15,418
|
|
|
$
|
(7,239
|
)
|
|
$
|
8,179
|
|
|
|
|
|
|
|
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||
|
|
As of December 31, 2017
|
||||||||||||||
(In millions)
|
|
Overnight and Continuous
|
|
Up to 30 days
|
|
30 – 90 days
|
|
Total
|
||||||||
Repurchase agreements:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
|
$
|
43,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,072
|
|
Total
|
|
43,072
|
|
|
—
|
|
|
—
|
|
|
43,072
|
|
||||
Securities lending transactions:
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
|
35
|
|
|
—
|
|
|
—
|
|
|
35
|
|
||||
Equity securities
|
|
11,020
|
|
|
—
|
|
|
—
|
|
|
11,020
|
|
||||
Non-U.S. sovereign debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
11,055
|
|
|
—
|
|
|
—
|
|
|
11,055
|
|
||||
Gross amount of recognized liabilities for repurchase agreements and securities lending
|
|
$
|
54,127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,127
|
|
|
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||
|
|
As of December 31, 2016
|
||||||||||||||
(In millions)
|
|
Overnight and Continuous
|
|
Up to 30 days
|
|
30 – 90 days
|
|
Total
|
||||||||
Repurchase agreements:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
|
$
|
35,509
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,509
|
|
Total
|
|
35,509
|
|
|
—
|
|
|
—
|
|
|
35,509
|
|
||||
Securities lending transactions:
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||
Equity securities
|
|
8,337
|
|
|
—
|
|
|
1,034
|
|
|
9,371
|
|
||||
Total
|
|
8,390
|
|
|
—
|
|
|
1,034
|
|
|
9,424
|
|
||||
Gross amount of recognized liabilities for repurchase agreements and securities lending
|
|
$
|
43,899
|
|
|
$
|
—
|
|
|
$
|
1,034
|
|
|
$
|
44,933
|
|
(In millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Commitments:
|
|
|
|
||||
Unfunded credit facilities
|
$
|
26,488
|
|
|
$
|
26,993
|
|
|
|
|
|
||||
Guarantees
(1)
:
|
|
|
|
||||
Indemnified securities financing
|
$
|
381,817
|
|
|
$
|
360,452
|
|
Stable value protection
|
26,653
|
|
|
27,182
|
|
||
Standby letters of credit
|
3,158
|
|
|
3,459
|
|
|
|
(In millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Fair value of indemnified securities financing
|
$
|
381,817
|
|
|
$
|
360,452
|
|
Fair value of cash and securities held by us, as agent, as collateral for indemnified securities financing
|
400,828
|
|
|
377,919
|
|
||
Fair value of collateral for indemnified securities financing invested in indemnified repurchase agreements
|
61,270
|
|
|
60,003
|
|
||
Fair value of cash and securities held by us or our agents as collateral for investments in indemnified repurchase agreements
|
65,272
|
|
|
63,959
|
|
|
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
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
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
|
$
|
5,250
|
|
|
$
|
1.32
|
|
|
$
|
26
|
|
|
$
|
5,250
|
|
|
$
|
1.32
|
|
|
$
|
26
|
|
Series D
|
5,900
|
|
|
1.48
|
|
|
44
|
|
|
5,900
|
|
|
1.48
|
|
|
44
|
|
||||||
Series E
|
6,000
|
|
|
1.52
|
|
|
45
|
|
|
6,000
|
|
|
1.52
|
|
|
45
|
|
||||||
Series F
|
5,250
|
|
|
52.50
|
|
|
40
|
|
|
5,250
|
|
|
52.50
|
|
|
40
|
|
||||||
Series G
|
5,352
|
|
|
1.32
|
|
|
27
|
|
|
3,626
|
|
|
0.90
|
|
|
18
|
|
||||||
Total
|
|
|
|
|
$
|
182
|
|
|
|
|
|
|
$
|
173
|
|
|
Shares Acquired
(In millions) |
|
Average Cost per Share
|
|
Total Acquired
(In millions) |
|||||
2016 Program
(1)
|
9.4
|
|
|
$
|
79.93
|
|
|
$
|
750
|
|
2017 Program
|
7.4
|
|
|
94.54
|
|
|
700
|
|
||
Total
|
16.8
|
|
|
$
|
86.37
|
|
|
$
|
1,450
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Dividends Declared per Share
|
|
Total
(In millions)
|
|
Dividends Declared per Share
|
|
Total
(In millions)
|
||||||||
Common Stock
|
$
|
1.60
|
|
|
$
|
596
|
|
|
$
|
1.44
|
|
|
$
|
559
|
|
|
December 31
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net unrealized gains (losses) on cash flow hedges
|
$
|
(56
|
)
|
|
$
|
229
|
|
|
$
|
293
|
|
Net unrealized gains (losses) on available-for-sale securities portfolio
|
148
|
|
|
(225
|
)
|
|
9
|
|
|||
Net unrealized gains (losses) related to reclassified available-for-sale securities
|
19
|
|
|
25
|
|
|
(28
|
)
|
|||
Net unrealized gains (losses) on available-for-sale securities
|
167
|
|
|
(200
|
)
|
|
(19
|
)
|
|||
Net unrealized losses on available-for-sale securities designated in fair value hedges
|
(64
|
)
|
|
(86
|
)
|
|
(109
|
)
|
|||
Net unrealized gains (losses) on hedges of net investments in non-U.S. subsidiaries
|
(65
|
)
|
|
95
|
|
|
(14
|
)
|
|||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit
|
(6
|
)
|
|
(9
|
)
|
|
(16
|
)
|
|||
Net unrealized losses on retirement plans
|
(170
|
)
|
|
(194
|
)
|
|
(183
|
)
|
|||
Foreign currency translation
|
(815
|
)
|
|
(1,875
|
)
|
|
(1,394
|
)
|
|||
Total
|
$
|
(1,009
|
)
|
|
$
|
(2,040
|
)
|
|
$
|
(1,442
|
)
|
(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
|
(64
|
)
|
|
(164
|
)
|
|
109
|
|
|
8
|
|
|
—
|
|
|
(478
|
)
|
|
(589
|
)
|
|||||||
Amounts reclassified into (out of) earnings
|
—
|
|
|
6
|
|
|
—
|
|
|
(1
|
)
|
|
(11
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|||||||
Other comprehensive income (loss)
|
(64
|
)
|
|
(158
|
)
|
|
109
|
|
|
7
|
|
|
(11
|
)
|
|
(481
|
)
|
|
(598
|
)
|
|||||||
Balance as of December 31, 2016
|
$
|
229
|
|
|
$
|
(286
|
)
|
|
$
|
95
|
|
|
$
|
(9
|
)
|
|
$
|
(194
|
)
|
|
$
|
(1,875
|
)
|
|
$
|
(2,040
|
)
|
Other comprehensive income (loss) before reclassifications
|
(285
|
)
|
|
412
|
|
|
(160
|
)
|
|
3
|
|
|
—
|
|
|
1,059
|
|
|
1,029
|
|
|||||||
Amounts reclassified into (out of) earnings
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
24
|
|
|
1
|
|
|
2
|
|
|||||||
Other comprehensive income (loss)
|
(285
|
)
|
|
389
|
|
|
(160
|
)
|
|
3
|
|
|
24
|
|
|
1,060
|
|
|
1,031
|
|
|||||||
Balance as of December 31, 2017
|
$
|
(56
|
)
|
|
$
|
103
|
|
|
$
|
(65
|
)
|
|
$
|
(6
|
)
|
|
$
|
(170
|
)
|
|
$
|
(815
|
)
|
|
$
|
(1,009
|
)
|
|
Years Ended December 31,
|
|
|
||||||
|
2017
|
|
2016
|
|
|
||||
(In millions)
|
Amounts Reclassified into
(out of) Earnings
|
|
Affected Line Item in Consolidated Statement of Income
|
||||||
Available-for-sale securities:
|
|
|
|
|
|
||||
Net realized gains (losses) from sales of available-for-sale securities, net of related taxes of $16 and ($4), respectively
|
$
|
(23
|
)
|
|
$
|
6
|
|
|
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 $0 and $1, respectively
|
—
|
|
|
(1
|
)
|
|
Losses reclassified (from) to other comprehensive income
|
||
Retirement plans:
|
|
|
|
|
|
||||
Amortization of actuarial losses, net of related taxes of ($8) and ($1), respectively
|
24
|
|
|
(11
|
)
|
|
Compensation and employee benefits expenses
|
||
Foreign currency translation:
|
|
|
|
|
|
||||
Sales of non-U.S. entities, net of related taxes of $0 and ($2), respectively
|
1
|
|
|
(3
|
)
|
|
Processing fees and other revenue
|
||
Total reclassifications (out of) into AOCI
|
$
|
2
|
|
|
$
|
(9
|
)
|
|
|
|
|
|
State Street
|
|
State Street Bank
|
||||||||||||||||||||||||||||||
(In millions)
|
|
Basel III Advanced Approaches December 31, 2017
(1)
|
|
Basel III Standardized Approach December 31, 2017
(2)
|
|
Basel III Advanced Approaches December 31, 2016
(1)
|
|
Basel III Standardized Approach December 31, 2016
(2)
|
|
Basel III Advanced Approaches December 31, 2017
(1)
|
|
Basel III Standardized Approach December 31, 2017
(2)
|
|
Basel III Advanced Approaches December 31, 2016
(1)
|
|
Basel III Standardized Approach December 31, 2016
(2)
|
|||||||||||||||||||
Common shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Common stock and related surplus
|
$
|
10,302
|
|
|
$
|
10,302
|
|
|
$
|
10,286
|
|
|
$
|
10,286
|
|
|
$
|
11,612
|
|
|
$
|
11,612
|
|
|
$
|
11,376
|
|
|
$
|
11,376
|
|
||||
Retained earnings
|
|
18,856
|
|
|
18,856
|
|
|
17,459
|
|
|
17,459
|
|
|
12,312
|
|
|
12,312
|
|
|
12,285
|
|
|
12,285
|
|
|||||||||||
Accumulated other comprehensive income (loss)
|
(972
|
)
|
|
(972
|
)
|
|
(1,936
|
)
|
|
(1,936
|
)
|
|
(809
|
)
|
|
(809
|
)
|
|
(1,648
|
)
|
|
(1,648
|
)
|
||||||||||||
Treasury stock, at cost
|
|
(9,029
|
)
|
|
(9,029
|
)
|
|
(7,682
|
)
|
|
(7,682
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Total
|
|
|
19,157
|
|
|
19,157
|
|
|
18,127
|
|
|
18,127
|
|
|
23,115
|
|
|
23,115
|
|
|
22,013
|
|
|
22,013
|
|
||||||||||
Regulatory capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
(3)
|
(6,877
|
)
|
|
(6,877
|
)
|
|
(6,348
|
)
|
|
(6,348
|
)
|
|
(6,579
|
)
|
|
(6,579
|
)
|
|
(6,060
|
)
|
|
(6,060
|
)
|
||||||||||||
Other adjustments
|
|
(76
|
)
|
|
(76
|
)
|
|
(155
|
)
|
|
(155
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
(148
|
)
|
|
(148
|
)
|
|||||||||||
Common equity tier 1 capital
|
12,204
|
|
|
12,204
|
|
|
11,624
|
|
|
11,624
|
|
|
16,531
|
|
|
16,531
|
|
|
15,805
|
|
|
15,805
|
|
||||||||||||
Preferred stock
|
3,196
|
|
|
3,196
|
|
|
3,196
|
|
|
3,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Trust preferred capital securities subject to phase-out from tier 1 capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Other adjustments
|
|
(18
|
)
|
|
(18
|
)
|
|
(103
|
)
|
|
(103
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Tier 1 capital
|
15,382
|
|
|
15,382
|
|
|
14,717
|
|
|
14,717
|
|
|
16,531
|
|
|
16,531
|
|
|
15,805
|
|
|
15,805
|
|
||||||||||||
Qualifying subordinated long-term debt
|
980
|
|
|
980
|
|
|
1,172
|
|
|
1,172
|
|
|
983
|
|
|
983
|
|
|
1,179
|
|
|
1,179
|
|
||||||||||||
Trust preferred capital securities phased out of tier 1 capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
ALLL and other
|
4
|
|
|
72
|
|
|
19
|
|
|
77
|
|
|
—
|
|
|
72
|
|
|
15
|
|
|
77
|
|
||||||||||||
Other adjustments
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Total capital
|
$
|
16,367
|
|
|
$
|
16,435
|
|
|
$
|
15,909
|
|
|
$
|
15,967
|
|
|
$
|
17,514
|
|
|
$
|
17,586
|
|
|
$
|
16,999
|
|
|
$
|
17,061
|
|
||||
Risk-weighted assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Credit risk
|
$
|
49,976
|
|
|
$
|
101,349
|
|
|
$
|
50,900
|
|
|
$
|
98,125
|
|
|
$
|
47,448
|
|
|
$
|
98,433
|
|
|
$
|
47,383
|
|
|
$
|
94,413
|
|
||||
Operational risk
(4)
|
45,822
|
|
|
NA
|
|
|
44,579
|
|
|
NA
|
|
|
45,295
|
|
|
NA
|
|
|
44,043
|
|
|
NA
|
|
||||||||||||
Market risk
(5)
|
3,358
|
|
|
1,334
|
|
|
3,822
|
|
|
1,751
|
|
|
3,375
|
|
|
1,334
|
|
|
3,822
|
|
|
1,751
|
|
||||||||||||
Total risk-weighted assets
|
|
$
|
99,156
|
|
|
$
|
102,683
|
|
|
$
|
99,301
|
|
|
$
|
99,876
|
|
|
$
|
96,118
|
|
|
$
|
99,767
|
|
|
$
|
95,248
|
|
|
$
|
96,164
|
|
|||
Adjusted quarterly average assets
|
$
|
209,328
|
|
|
$
|
209,328
|
|
|
$
|
226,310
|
|
|
$
|
226,310
|
|
|
$
|
206,070
|
|
|
$
|
206,070
|
|
|
$
|
222,584
|
|
|
$
|
222,584
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Capital Ratios:
|
2017 Minimum Requirements Including Capital Conservation Buffer and
G-SIB Surcharge
(6)
|
2016 Minimum Requirements Including Capital Conservation Buffer and
G-SIB Surcharge
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common equity tier 1 capital
|
6.5
|
%
|
5.5
|
%
|
12.3
|
%
|
|
11.9
|
%
|
|
11.7
|
%
|
|
11.6
|
%
|
|
17.2
|
%
|
|
16.6
|
%
|
|
16.6
|
%
|
|
16.4
|
%
|
||||||||
Tier 1 capital
|
8.0
|
|
7.0
|
|
15.5
|
|
|
15.0
|
|
|
14.8
|
|
|
14.7
|
|
|
17.2
|
|
|
16.6
|
|
|
16.6
|
|
|
16.4
|
|
||||||||
Total capital
|
10.0
|
|
9.0
|
|
16.5
|
|
|
16.0
|
|
|
16.0
|
|
|
16.0
|
|
|
18.2
|
|
|
17.6
|
|
|
17.8
|
|
|
17.7
|
|
||||||||
Tier 1 leverage
|
4.0
|
|
4.0
|
|
7.3
|
|
|
7.3
|
|
|
6.5
|
|
|
6.5
|
|
|
8.0
|
|
|
8.0
|
|
|
7.1
|
|
|
7.1
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Interest income:
|
|
|
|
|
|
||||||
Deposits with banks
|
$
|
180
|
|
|
$
|
126
|
|
|
$
|
208
|
|
Investment securities:
|
|
|
|
|
|
||||||
U.S. Treasury and federal agencies
|
854
|
|
|
821
|
|
|
735
|
|
|||
State and political subdivisions
|
226
|
|
|
224
|
|
|
227
|
|
|||
Other investments
|
658
|
|
|
756
|
|
|
934
|
|
|||
Securities purchased under resale agreements
|
264
|
|
|
146
|
|
|
62
|
|
|||
Loans and leases
|
504
|
|
|
378
|
|
|
311
|
|
|||
Other interest-earning assets
|
222
|
|
|
61
|
|
|
11
|
|
|||
Total interest income
|
2,908
|
|
|
2,512
|
|
|
2,488
|
|
|||
Interest expense:
|
|
|
|
|
|
||||||
Deposits
|
163
|
|
|
85
|
|
|
97
|
|
|||
Securities sold under repurchase agreements
|
2
|
|
|
1
|
|
|
—
|
|
|||
Short-term borrowings
|
10
|
|
|
7
|
|
|
7
|
|
|||
Long-term debt
|
308
|
|
|
260
|
|
|
250
|
|
|||
Other interest-bearing liabilities
|
121
|
|
|
75
|
|
|
46
|
|
|||
Total interest expense
|
604
|
|
|
428
|
|
|
400
|
|
|||
Net interest income
|
$
|
2,304
|
|
|
$
|
2,084
|
|
|
$
|
2,088
|
|
|
Shares
(In thousands)
|
|
Weighted-Average
Exercise
Price
|
|
Weighted-Average Remaining Contractual Term (In years)
|
|
Total Intrinsic Value
(In millions)
|
|||||
Stock Appreciation Rights:
|
|
|
|
|
|
|
|
|||||
Outstanding as of December 31, 2015
|
1,206
|
|
|
$
|
76.29
|
|
|
|
|
|
||
Exercised
|
(227
|
)
|
|
70.59
|
|
|
|
|
|
|||
Forfeited or expired
|
(24
|
)
|
|
81.71
|
|
|
|
|
|
|||
Outstanding as of December 31, 2016
|
955
|
|
|
77.52
|
|
|
|
|
|
|||
Exercised
|
(595
|
)
|
|
81.71
|
|
|
|
|
|
|||
Forfeited or expired
|
(360
|
)
|
|
70.59
|
|
|
|
|
|
|||
Outstanding and exercisable as of December 31, 2017
(1)
|
—
|
|
|
$
|
—
|
|
|
0
|
|
$
|
—
|
|
|
|
|
|
|
Shares
(In thousands)
|
|
Weighted-Average
Grant Date Fair
Value
|
|||
Deferred Stock Awards:
|
|
|
|
|||
Outstanding as of December 31, 2015
|
8,736
|
|
|
$
|
61.59
|
|
Granted
|
4,336
|
|
|
52.49
|
|
|
Vested
|
(4,897
|
)
|
|
56.18
|
|
|
Forfeited
|
(361
|
)
|
|
60.12
|
|
|
Outstanding as of December 31, 2016
|
7,814
|
|
|
60.01
|
|
|
Granted
|
2,977
|
|
|
76.38
|
|
|
Vested
|
(3,686
|
)
|
|
62.88
|
|
|
Forfeited
|
(257
|
)
|
|
63.56
|
|
|
Outstanding as of December 31, 2017
|
6,848
|
|
|
$
|
65.44
|
|
|
Shares
(In thousands)
|
|
Weighted-Average
Grant Date Fair Value
|
|||
Performance Awards:
|
|
|
|
|||
Outstanding as of December 31, 2015
|
1,165
|
|
|
$
|
60.45
|
|
Granted
|
506
|
|
|
50.81
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Paid out
|
(424
|
)
|
|
49.27
|
|
|
Outstanding as of December 31, 2016
|
1,247
|
|
|
60.37
|
|
|
Granted
|
534
|
|
|
76.27
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Paid out
|
(233
|
)
|
|
58.91
|
|
|
Outstanding as of December 31, 2017
|
1,548
|
|
|
$
|
66.09
|
|
(In millions)
|
Capital
Leases
|
|
Operating
Leases
|
|
Total
|
||||||
2018
|
$
|
53
|
|
|
$
|
197
|
|
|
$
|
250
|
|
2019
|
45
|
|
|
175
|
|
|
220
|
|
|||
2020
|
45
|
|
|
154
|
|
|
199
|
|
|||
2021
|
45
|
|
|
144
|
|
|
189
|
|
|||
2022
|
45
|
|
|
125
|
|
|
170
|
|
|||
Thereafter
|
34
|
|
|
336
|
|
|
370
|
|
|||
Total minimum lease payments
|
267
|
|
|
$
|
1,131
|
|
|
$
|
1,398
|
|
|
Less amount representing interest payments
|
(56
|
)
|
|
|
|
|
|||||
Present value of minimum lease payments
|
$
|
211
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Insurance
|
$
|
118
|
|
|
$
|
93
|
|
|
$
|
126
|
|
Regulatory fees and assessments
|
106
|
|
|
82
|
|
|
115
|
|
|||
Bank operations
|
80
|
|
|
62
|
|
|
105
|
|
|||
Sales advertising public relations
|
67
|
|
|
52
|
|
|
65
|
|
|||
Litigation
|
(15
|
)
|
|
50
|
|
|
422
|
|
|||
Other
|
233
|
|
|
245
|
|
|
185
|
|
|||
Total other expenses
|
$
|
589
|
|
|
$
|
584
|
|
|
$
|
1,018
|
|
(In millions)
|
Employee
Related Costs |
|
Real Estate
Actions |
|
Asset and Other Write-offs
|
|
Total
|
||||||||
Accrual Balance at December 31, 2014
|
$
|
39
|
|
|
$
|
23
|
|
|
$
|
7
|
|
|
$
|
69
|
|
Accruals for Business Operations and IT
|
(5
|
)
|
|
(3
|
)
|
|
13
|
|
|
5
|
|
||||
Payments and other adjustments
|
(25
|
)
|
|
(9
|
)
|
|
(17
|
)
|
|
(51
|
)
|
||||
Accrual Balance at December 31, 2015
|
$
|
9
|
|
|
$
|
11
|
|
|
$
|
3
|
|
|
$
|
23
|
|
Accruals for Business Operations and IT
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Accruals for Beacon
|
94
|
|
|
18
|
|
|
30
|
|
|
142
|
|
||||
Payments and other adjustments
|
(64
|
)
|
|
(12
|
)
|
|
(31
|
)
|
|
(107
|
)
|
||||
Accrual Balance at December 31, 2016
|
$
|
37
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
56
|
|
Accruals for Beacon
|
186
|
|
|
32
|
|
|
27
|
|
|
245
|
|
||||
Payments and Other Adjustments
|
(57
|
)
|
|
(17
|
)
|
|
(26
|
)
|
|
(100
|
)
|
||||
Accrual Balance at December 31, 2017
|
$
|
166
|
|
|
$
|
32
|
|
|
$
|
3
|
|
|
$
|
201
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
229
|
|
|
$
|
(14
|
)
|
|
$
|
52
|
|
State
|
18
|
|
|
30
|
|
|
92
|
|
|||
Non-U.S.
|
380
|
|
|
320
|
|
|
342
|
|
|||
Total current expense
|
627
|
|
|
336
|
|
|
486
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
49
|
|
|
(311
|
)
|
|
(39
|
)
|
|||
State
|
65
|
|
|
38
|
|
|
40
|
|
|||
Non-U.S.
|
(19
|
)
|
|
(85
|
)
|
|
(169
|
)
|
|||
Total deferred expense (benefit)
|
95
|
|
|
(358
|
)
|
|
(168
|
)
|
|||
Total income tax expense (benefit)
|
$
|
722
|
|
|
$
|
(22
|
)
|
|
$
|
318
|
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
U.S. federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Changes from statutory rate:
|
|
|
|
|
|
|||
State taxes, net of federal benefit
|
1.9
|
|
|
2.0
|
|
|
4.2
|
|
Tax-exempt income
|
(4.5
|
)
|
|
(6.1
|
)
|
|
(5.6
|
)
|
Business tax credits
(1)
|
(6.8
|
)
|
|
(13.6
|
)
|
|
(9.4
|
)
|
Foreign tax differential
|
(7.4
|
)
|
|
(7.7
|
)
|
|
(9.6
|
)
|
Transition tax
|
15.7
|
|
|
—
|
|
|
—
|
|
Deferred tax revaluation
|
(6.8
|
)
|
|
—
|
|
|
—
|
|
Foreign designated earnings
|
(0.7
|
)
|
|
(6.8
|
)
|
|
—
|
|
Foreign capital transactions
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
Tax refund
|
—
|
|
|
—
|
|
|
(2.8
|
)
|
Litigation expense
|
—
|
|
|
1.4
|
|
|
2.7
|
|
Other, net
|
(1.5
|
)
|
|
(0.9
|
)
|
|
(0.7
|
)
|
Effective tax rate
|
24.9
|
%
|
|
(1.0
|
)%
|
|
13.8
|
%
|
|
|
|
December 31,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Unrealized losses on investment securities, net
|
$
|
17
|
|
|
$
|
157
|
|
Deferred compensation
|
159
|
|
|
285
|
|
||
Defined benefit pension plan
|
82
|
|
|
116
|
|
||
Restructuring charges and other reserves
|
132
|
|
|
199
|
|
||
Foreign currency translation
|
18
|
|
|
225
|
|
||
General business credit
|
231
|
|
|
425
|
|
||
NOL and other carryforwards
|
101
|
|
|
73
|
|
||
Other
|
27
|
|
|
32
|
|
||
Total deferred tax assets
|
767
|
|
|
1,512
|
|
||
Valuation allowance for deferred tax assets
|
(88
|
)
|
|
(66
|
)
|
||
Deferred tax assets, net of valuation allowance
|
$
|
679
|
|
|
$
|
1,446
|
|
Deferred tax liabilities:
|
|
|
|
||||
Leveraged lease financing
|
$
|
184
|
|
|
$
|
313
|
|
Fixed and intangible assets
|
755
|
|
|
886
|
|
||
Non-U.S. earnings
|
6
|
|
|
164
|
|
||
Investment basis differences
|
158
|
|
|
120
|
|
||
Total deferred tax liabilities
|
$
|
1,103
|
|
|
$
|
1,483
|
|
(In millions)
|
Deferred Tax Asset
|
|
Valuation Allowance
|
|
Expiration
|
||||
General business Credits
|
$
|
231
|
|
|
$
|
—
|
|
|
2035-2037
|
NOLs - Non-U.S.
|
47
|
|
|
(35
|
)
|
|
2018-2026 / None
|
||
Other Carryforwards
|
41
|
|
|
(41
|
)
|
|
None
|
||
NOLs - State
|
13
|
|
|
(12
|
)
|
|
2018-2036
|
|
December 31,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance
|
$
|
71
|
|
|
$
|
63
|
|
|
$
|
163
|
|
Decrease related to agreements with tax authorities
|
(14
|
)
|
|
(13
|
)
|
|
(122
|
)
|
|||
Increase related to tax positions taken during current year
|
26
|
|
|
7
|
|
|
8
|
|
|||
Increase related to tax positions taken during prior years
|
11
|
|
|
14
|
|
|
14
|
|
|||
Ending balance
|
$
|
94
|
|
|
$
|
71
|
|
|
$
|
63
|
|
|
Years Ended December 31,
|
||||||||||
(Dollars in millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
2,177
|
|
|
$
|
2,143
|
|
|
$
|
1,980
|
|
Less:
|
|
|
|
|
|
||||||
Preferred stock dividends
|
(182
|
)
|
|
(173
|
)
|
|
(130
|
)
|
|||
Dividends and undistributed earnings allocated to participating securities
(1)
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
Net income available to common shareholders
|
$
|
1,993
|
|
|
$
|
1,968
|
|
|
$
|
1,848
|
|
Average common shares outstanding (In thousands):
|
|
|
|
|
|
||||||
Basic average common shares
|
374,793
|
|
|
391,485
|
|
|
407,856
|
|
|||
Effect of dilutive securities: equity-based awards
|
5,420
|
|
|
4,605
|
|
|
5,782
|
|
|||
Diluted average common shares
|
380,213
|
|
|
396,090
|
|
|
413,638
|
|
|||
Anti-dilutive securities
(2)
|
188
|
|
|
2,143
|
|
|
661
|
|
|||
Earnings per Common Share:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.32
|
|
|
$
|
5.03
|
|
|
$
|
4.53
|
|
Diluted
(3)
|
5.24
|
|
|
4.97
|
|
|
4.47
|
|
|
|
•
|
Net acquisition and restructuring costs of
$209 million
; and
|
•
|
Net severance costs associated with staffing realignment of
$(10) million
.
|
•
|
Net acquisition and restructuring costs of
$25 million
;
|
•
|
Net severance costs associated with staffing realignment of
$73 million
.
|
|
Years Ended December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Investment
Servicing |
|
Investment
Management |
|
Other
|
|
Total
|
||||||||||||||||||||||||||||||||||||||||
(Dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
Servicing fees
|
$
|
5,365
|
|
|
$
|
5,073
|
|
|
$
|
5,153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,365
|
|
|
$
|
5,073
|
|
|
$
|
5,153
|
|
Management fees
|
—
|
|
|
—
|
|
|
—
|
|
|
1,616
|
|
|
1,292
|
|
|
1,174
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,616
|
|
|
1,292
|
|
|
1,174
|
|
||||||||||||
Trading services
|
999
|
|
|
1,038
|
|
|
1,091
|
|
|
72
|
|
|
61
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,071
|
|
|
1,099
|
|
|
1,146
|
|
||||||||||||
Securities finance
|
606
|
|
|
562
|
|
|
496
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
606
|
|
|
562
|
|
|
496
|
|
||||||||||||
Processing fees and other
|
240
|
|
|
119
|
|
|
342
|
|
|
7
|
|
|
(29
|
)
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
247
|
|
|
90
|
|
|
309
|
|
||||||||||||
Total fee revenue
|
7,210
|
|
|
6,792
|
|
|
7,082
|
|
|
1,695
|
|
|
1,324
|
|
|
1,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,905
|
|
|
8,116
|
|
|
8,278
|
|
||||||||||||
Net interest income
|
2,309
|
|
|
2,081
|
|
|
2,086
|
|
|
(5
|
)
|
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,304
|
|
|
2,084
|
|
|
2,088
|
|
||||||||||||
Gains (losses) related to investment securities, net
|
(39
|
)
|
|
7
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
7
|
|
|
(6
|
)
|
||||||||||||
Total revenue
|
9,480
|
|
|
8,880
|
|
|
9,162
|
|
|
1,690
|
|
|
1,327
|
|
|
1,198
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,170
|
|
|
10,207
|
|
|
10,360
|
|
||||||||||||
Provision for loan losses
|
2
|
|
|
10
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
10
|
|
|
12
|
|
||||||||||||
Total expenses
|
6,717
|
|
|
6,660
|
|
|
6,990
|
|
|
1,286
|
|
|
1,218
|
|
|
962
|
|
|
266
|
|
|
199
|
|
|
98
|
|
|
8,269
|
|
|
8,077
|
|
|
8,050
|
|
||||||||||||
Income before income tax expense
|
$
|
2,761
|
|
|
$
|
2,210
|
|
|
$
|
2,160
|
|
|
$
|
404
|
|
|
$
|
109
|
|
|
$
|
236
|
|
|
$
|
(266
|
)
|
|
$
|
(199
|
)
|
|
$
|
(98
|
)
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
Pre-tax margin
|
29
|
%
|
|
25
|
%
|
|
24
|
%
|
|
24
|
%
|
|
8
|
%
|
|
20
|
%
|
|
|
|
|
|
|
|
26
|
%
|
|
21
|
%
|
|
22
|
%
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Average assets (in billions)
|
$
|
214.0
|
|
|
$
|
225.3
|
|
|
$
|
246.6
|
|
|
$
|
5.4
|
|
|
$
|
4.4
|
|
|
$
|
3.9
|
|
|
|
|
|
|
|
|
$
|
219.4
|
|
|
$
|
229.7
|
|
|
$
|
250.5
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||||
(In millions)
|
Non-U.S.
|
|
U.S.
|
|
Total
|
|
Non-U.S.
|
|
U.S.
|
|
Total
|
|
Non-U.S.
|
|
U.S.
|
|
Total
|
||||||||||||||||||
Total revenue
|
$
|
4,734
|
|
|
$
|
6,436
|
|
|
$
|
11,170
|
|
|
$
|
4,419
|
|
|
$
|
5,788
|
|
|
$
|
10,207
|
|
|
$
|
4,428
|
|
|
$
|
5,932
|
|
|
$
|
10,360
|
|
Income before income taxes
|
1,230
|
|
|
1,669
|
|
|
2,899
|
|
|
1,047
|
|
|
1,073
|
|
|
2,120
|
|
|
1,193
|
|
|
1,105
|
|
|
2,298
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash dividends from consolidated banking subsidiary
|
$
|
2,224
|
|
|
$
|
640
|
|
|
$
|
585
|
|
Cash dividends from consolidated non-banking subsidiaries and unconsolidated entities
|
12
|
|
|
75
|
|
|
171
|
|
|||
Other, net
|
127
|
|
|
92
|
|
|
73
|
|
|||
Total revenue
|
2,363
|
|
|
807
|
|
|
829
|
|
|||
Interest expense
|
297
|
|
|
249
|
|
|
209
|
|
|||
Other expenses
|
94
|
|
|
107
|
|
|
310
|
|
|||
Total expenses
|
391
|
|
|
356
|
|
|
519
|
|
|||
Income tax benefit
|
(86
|
)
|
|
(47
|
)
|
|
(186
|
)
|
|||
Income before equity in undistributed income of consolidated subsidiaries and unconsolidated entities
|
2,058
|
|
|
498
|
|
|
496
|
|
|||
Equity in undistributed income of consolidated subsidiaries and unconsolidated entities:
|
|
|
|
|
|
||||||
Consolidated banking subsidiary
|
20
|
|
|
1,629
|
|
|
1,384
|
|
|||
Consolidated non-banking subsidiaries and unconsolidated entities
|
99
|
|
|
16
|
|
|
100
|
|
|||
Net income
|
$
|
2,177
|
|
|
$
|
2,143
|
|
|
$
|
1,980
|
|
|
December 31,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Assets:
|
|
|
|
||||
Interest-bearing deposits with consolidated banking subsidiary
|
$
|
532
|
|
|
$
|
3,635
|
|
Trading account assets
|
361
|
|
|
325
|
|
||
Investment securities available-for-sale
|
43
|
|
|
39
|
|
||
Investments in subsidiaries:
|
|
|
|
||||
Consolidated banking subsidiary
|
23,080
|
|
|
22,147
|
|
||
Consolidated non-banking subsidiaries
|
6,762
|
|
|
2,687
|
|
||
Unconsolidated entities
|
63
|
|
|
297
|
|
||
Notes and other receivables from:
|
|
|
|
||||
Consolidated banking subsidiary
|
2,973
|
|
|
2,743
|
|
||
Consolidated non-banking subsidiaries and unconsolidated entities
|
143
|
|
|
126
|
|
||
Other assets
|
263
|
|
|
461
|
|
||
Total assets
|
$
|
34,220
|
|
|
$
|
32,460
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accrued expenses and other liabilities
|
$
|
917
|
|
|
$
|
514
|
|
Long-term debt
|
10,986
|
|
|
10,727
|
|
||
Total liabilities
|
11,903
|
|
|
11,241
|
|
||
Shareholders’ equity
|
22,317
|
|
|
21,219
|
|
||
Total liabilities and shareholders’ equity
|
$
|
34,220
|
|
|
$
|
32,460
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operating activities
|
$
|
2,047
|
|
|
$
|
417
|
|
|
$
|
926
|
|
Investing Activities:
|
|
|
|
|
|
||||||
Net decrease (increase) in interest-bearing deposits with consolidated banking subsidiary
|
3,103
|
|
|
2,100
|
|
|
295
|
|
|||
Investments in consolidated banking and non-banking subsidiaries
|
(7,672
|
)
|
|
(7,600
|
)
|
|
(7,959
|
)
|
|||
Sale or repayment of investment in consolidated banking and non-banking subsidiaries
|
4,216
|
|
|
6,703
|
|
|
7,891
|
|
|||
Business acquisitions
|
—
|
|
|
(395
|
)
|
|
—
|
|
|||
Net increase in investments in unconsolidated affiliates
|
172
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) investing activities
|
(181
|
)
|
|
808
|
|
|
227
|
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Net increase (decrease) in commercial paper
|
—
|
|
|
—
|
|
|
(2,485
|
)
|
|||
Proceeds from issuance of long-term debt, net of issuance costs
|
748
|
|
|
1,492
|
|
|
2,983
|
|
|||
Payments for long-term debt
|
(450
|
)
|
|
(1,000
|
)
|
|
—
|
|
|||
Proceeds from issuance of preferred stock, net of issuance costs
|
—
|
|
|
493
|
|
|
742
|
|
|||
Proceeds from exercises of common stock options
|
—
|
|
|
—
|
|
|
4
|
|
|||
Purchases of common stock
|
(1,292
|
)
|
|
(1,365
|
)
|
|
(1,520
|
)
|
|||
Repurchases of common stock for employee tax withholding
|
(104
|
)
|
|
(122
|
)
|
|
(222
|
)
|
|||
Payments for cash dividends
|
(768
|
)
|
|
(723
|
)
|
|
(655
|
)
|
|||
Net cash used in financing activities
|
(1,866
|
)
|
|
(1,225
|
)
|
|
(1,153
|
)
|
|||
Net change
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and due from banks at beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and due from banks at end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Years Ended December 31,
|
|||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||||
(Dollars in millions; fully
taxable-equivalent basis)
|
Average
Balance
|
|
Interest
|
|
Average
Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Rate
|
|
Average
Balance
|
|
Interest
|
|
Average
Rate
|
|||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposits with U.S. banks
|
$
|
16,790
|
|
|
$
|
184
|
|
|
1.10
|
%
|
|
$
|
19,639
|
|
|
$
|
102
|
|
|
.52
|
%
|
|
$
|
52,135
|
|
|
$
|
136
|
|
|
.26
|
%
|
Interest-bearing deposits with non-U.S. banks
|
30,724
|
|
|
(4
|
)
|
|
(.01
|
)
|
|
33,452
|
|
|
24
|
|
|
.07
|
|
|
17,618
|
|
|
72
|
|
|
.41
|
|
||||||
Securities purchased under resale agreements
|
2,131
|
|
|
264
|
|
|
12.38
|
|
|
2,558
|
|
|
146
|
|
|
5.7
|
|
|
3,233
|
|
|
62
|
|
|
1.92
|
|
||||||
Trading account assets
|
1,011
|
|
|
(1
|
)
|
|
(.12
|
)
|
|
921
|
|
|
—
|
|
|
—
|
|
|
1,194
|
|
|
1
|
|
|
.08
|
|
||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Treasury and federal agencies
(1)
|
43,273
|
|
|
854
|
|
|
1.97
|
|
|
46,551
|
|
|
821
|
|
|
1.76
|
|
|
40,056
|
|
|
735
|
|
|
1.84
|
|
||||||
State and political subdivisions
(1)
|
9,928
|
|
|
378
|
|
|
3.80
|
|
|
10,326
|
|
|
385
|
|
|
3.73
|
|
|
10,481
|
|
|
399
|
|
|
3.81
|
|
||||||
Other investments
|
42,578
|
|
|
659
|
|
|
1.55
|
|
|
43,861
|
|
|
756
|
|
|
1.72
|
|
|
55,074
|
|
|
935
|
|
|
1.70
|
|
||||||
Loans
|
21,149
|
|
|
498
|
|
|
2.36
|
|
|
18,136
|
|
|
354
|
|
|
1.95
|
|
|
17,007
|
|
|
276
|
|
|
1.62
|
|
||||||
Lease financing
(1)
|
767
|
|
|
21
|
|
|
2.67
|
|
|
877
|
|
|
30
|
|
|
3.44
|
|
|
941
|
|
|
35
|
|
|
3.74
|
|
||||||
Other interest-earning assets
|
22,884
|
|
|
222
|
|
|
.97
|
|
|
22,863
|
|
|
61
|
|
|
.27
|
|
|
22,717
|
|
|
10
|
|
|
.04
|
|
||||||
Total interest-earning assets
(1)
|
191,235
|
|
|
3,075
|
|
|
1.61
|
|
|
199,184
|
|
|
2,679
|
|
|
1.34
|
|
|
220,456
|
|
|
2,661
|
|
|
1.21
|
|
||||||
Cash and due from banks
|
3,097
|
|
|
|
|
|
|
3,157
|
|
|
|
|
|
|
2,460
|
|
|
|
|
|
||||||||||||
Other assets
|
25,118
|
|
|
|
|
|
|
27,386
|
|
|
|
|
|
|
27,516
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
219,450
|
|
|
|
|
|
|
$
|
229,727
|
|
|
|
|
|
|
$
|
250,432
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities and shareholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Time
|
$
|
12,020
|
|
|
$
|
65
|
|
|
.54
|
%
|
|
$
|
19,223
|
|
|
$
|
125
|
|
|
.65
|
%
|
|
$
|
20,758
|
|
|
$
|
44
|
|
|
.21
|
%
|
Savings
|
18,603
|
|
|
31
|
|
|
.17
|
|
|
10,884
|
|
|
7
|
|
|
.06
|
|
|
10,061
|
|
|
7
|
|
|
.07
|
|
||||||
Non-U.S.
|
91,937
|
|
|
67
|
|
|
.07
|
|
|
95,551
|
|
|
(47
|
)
|
|
(.05
|
)
|
|
102,491
|
|
|
46
|
|
|
.05
|
|
||||||
Total interest-bearing deposits
|
122,560
|
|
|
163
|
|
|
.13
|
|
|
125,658
|
|
|
85
|
|
|
.07
|
|
|
133,310
|
|
|
97
|
|
|
.08
|
|
||||||
Securities sold under repurchase agreements
|
3,683
|
|
|
2
|
|
|
.05
|
|
|
4,113
|
|
|
1
|
|
|
.02
|
|
|
8,875
|
|
|
1
|
|
|
.01
|
|
||||||
Federal funds purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
||||||
Other short-term borrowings
|
1,313
|
|
|
10
|
|
|
.80
|
|
|
1,666
|
|
|
7
|
|
|
.4
|
|
|
3,826
|
|
|
6
|
|
|
.15
|
|
||||||
Long-term debt
|
11,595
|
|
|
308
|
|
|
2.66
|
|
|
11,401
|
|
|
260
|
|
|
2.29
|
|
|
10,301
|
|
|
250
|
|
|
2.43
|
|
||||||
Other interest-bearing liabilities
|
4,607
|
|
|
121
|
|
|
2.63
|
|
|
5,394
|
|
|
75
|
|
|
1.39
|
|
|
6,471
|
|
|
46
|
|
|
.71
|
|
||||||
Total interest-bearing liabilities
|
143,758
|
|
|
604
|
|
|
.42
|
|
|
148,263
|
|
|
428
|
|
|
.29
|
|
|
162,804
|
|
|
400
|
|
|
.29
|
|
||||||
Non-interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Special time
|
27,402
|
|
|
|
|
|
|
32,589
|
|
|
|
|
|
|
34,774
|
|
|
|
|
|
||||||||||||
Demand
|
13,556
|
|
|
|
|
|
|
12,107
|
|
|
|
|
|
|
16,746
|
|
|
|
|
|
||||||||||||
Non-U.S.
(2)
|
290
|
|
|
|
|
|
|
131
|
|
|
|
|
|
|
155
|
|
|
|
|
|
||||||||||||
Other liabilities
|
12,379
|
|
|
|
|
|
|
14,742
|
|
|
|
|
|
|
14,626
|
|
|
|
|
|
||||||||||||
Shareholders’ equity
|
22,065
|
|
|
|
|
|
|
21,895
|
|
|
|
|
|
|
21,327
|
|
|
|
|
|
||||||||||||
Total liabilities and shareholders’ equity
|
$
|
219,450
|
|
|
|
|
|
|
$
|
229,727
|
|
|
|
|
|
|
$
|
250,432
|
|
|
|
|
|
|||||||||
Net interest income, fully taxable-equivalent basis
|
|
|
$
|
2,471
|
|
|
|
|
|
|
$
|
2,251
|
|
|
|
|
|
|
$
|
2,261
|
|
|
|
|||||||||
Excess of rate earned over rate paid
|
|
|
|
|
1.19
|
%
|
|
|
|
|
|
1.05
|
%
|
|
|
|
|
|
.96
|
%
|
||||||||||||
Net interest margin
(3)
|
|
|
|
|
1.29
|
|
|
|
|
|
|
1.13
|
|
|
|
|
|
|
1.03
|
|
|
|
|
|
(1)
|
Fully taxable-equivalent revenue is a method of presentation in which the tax savings achieved by investing in tax-exempt investment securities and certain leases are included in interest income with a corresponding charge to income tax expense. This method facilitates the comparison of the performance of these assets. The adjustments are computed using a federal income tax rate of 35%, adjusted for applicable state income taxes, net of the related federal tax benefit. The fully taxable-equivalent adjustments included in interest income presented above were
$167 million
,
$167 million
and
$173 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively, and were substantially related to tax-exempt securities (state and political subdivisions).
|
(2)
|
Non-U.S. non-interest-bearing deposits were
$762 million
,
$337 million
and
$95 million
as of
December 31, 2017
,
2016
and
2015
, respectively.
|
(3)
|
NIM is calculated by dividing fully taxable-equivalent NII by average total interest-earning assets.
|
Years Ended December 31,
|
2017 Compared to 2016
|
|
2016 Compared to 2015
|
||||||||||||||||||||
(In millions; fully
taxable-equivalent basis)
|
Change in
Volume |
|
Change in
Rate |
|
Net (Decrease)
Increase |
|
Change in
Volume
|
|
Change in
Rate
|
|
Net (Decrease)
Increase
|
||||||||||||
Interest income related to:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing deposits with U.S. banks
|
$
|
(15
|
)
|
|
$
|
97
|
|
|
$
|
82
|
|
|
$
|
(84
|
)
|
|
$
|
50
|
|
|
$
|
(34
|
)
|
Interest-bearing deposits with non-U.S. banks
|
(2
|
)
|
|
(26
|
)
|
|
(28
|
)
|
|
65
|
|
|
(113
|
)
|
|
(48
|
)
|
||||||
Securities purchased under resale agreements
|
(24
|
)
|
|
142
|
|
|
118
|
|
|
(13
|
)
|
|
97
|
|
|
84
|
|
||||||
Trading account assets
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies
|
(58
|
)
|
|
91
|
|
|
33
|
|
|
120
|
|
|
(34
|
)
|
|
86
|
|
||||||
State and political subdivisions
|
(15
|
)
|
|
8
|
|
|
(7
|
)
|
|
(6
|
)
|
|
(8
|
)
|
|
(14
|
)
|
||||||
Other investments
|
(22
|
)
|
|
(75
|
)
|
|
(97
|
)
|
|
(191
|
)
|
|
12
|
|
|
(179
|
)
|
||||||
Loans
|
59
|
|
|
85
|
|
|
144
|
|
|
18
|
|
|
60
|
|
|
78
|
|
||||||
Lease financing
|
(4
|
)
|
|
(5
|
)
|
|
(9
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||||
Other interest-earning assets
|
—
|
|
|
161
|
|
|
161
|
|
|
—
|
|
|
51
|
|
|
51
|
|
||||||
Total interest-earning assets
|
(81
|
)
|
|
477
|
|
|
396
|
|
|
(93
|
)
|
|
111
|
|
|
18
|
|
||||||
Interest expense related to:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Time
|
(47
|
)
|
|
(13
|
)
|
|
(60
|
)
|
|
(3
|
)
|
|
84
|
|
|
81
|
|
||||||
Savings
|
5
|
|
|
19
|
|
|
24
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
||||||
Non-U.S.
|
2
|
|
|
112
|
|
|
114
|
|
|
(3
|
)
|
|
(90
|
)
|
|
(93
|
)
|
||||||
Securities sold under repurchase agreements
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Federal funds purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other short-term borrowings
|
(1
|
)
|
|
4
|
|
|
3
|
|
|
(3
|
)
|
|
4
|
|
|
1
|
|
||||||
Long-term debt
|
4
|
|
|
44
|
|
|
48
|
|
|
27
|
|
|
(17
|
)
|
|
10
|
|
||||||
Other interest-bearing liabilities
|
(11
|
)
|
|
57
|
|
|
46
|
|
|
(8
|
)
|
|
37
|
|
|
29
|
|
||||||
Total interest-bearing liabilities
|
(48
|
)
|
|
224
|
|
|
176
|
|
|
11
|
|
|
17
|
|
|
28
|
|
||||||
Net interest income
|
$
|
(33
|
)
|
|
$
|
253
|
|
|
$
|
220
|
|
|
$
|
(104
|
)
|
|
$
|
94
|
|
|
$
|
(10
|
)
|
|
2017 Quarters
|
|
2016 Quarters
|
||||||||||||||||||||||||||||
(Dollars in millions,
except per share amounts; shares in thousands)
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
||||||||||||||||
Total fee revenue
|
$
|
2,230
|
|
|
$
|
2,242
|
|
|
$
|
2,235
|
|
|
$
|
2,198
|
|
|
$
|
2,014
|
|
|
$
|
2,079
|
|
|
$
|
2,053
|
|
|
$
|
1,970
|
|
Interest income
|
797
|
|
|
761
|
|
|
700
|
|
|
650
|
|
|
616
|
|
|
647
|
|
|
620
|
|
|
629
|
|
||||||||
Interest expense
|
181
|
|
|
158
|
|
|
125
|
|
|
140
|
|
|
102
|
|
|
110
|
|
|
99
|
|
|
117
|
|
||||||||
Net interest income
|
616
|
|
|
603
|
|
|
575
|
|
|
510
|
|
|
514
|
|
|
537
|
|
|
521
|
|
|
512
|
|
||||||||
Gains (losses) related to investment securities, net
|
—
|
|
|
1
|
|
|
—
|
|
|
(40
|
)
|
|
2
|
|
|
4
|
|
|
(1
|
)
|
|
2
|
|
||||||||
Total revenue
|
2,846
|
|
|
2,846
|
|
|
2,810
|
|
|
2,668
|
|
|
2,530
|
|
|
2,620
|
|
|
2,573
|
|
|
2,484
|
|
||||||||
Provision for loan losses
|
(2
|
)
|
|
3
|
|
|
3
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||
Total expenses
|
2,131
|
|
|
2,021
|
|
|
2,031
|
|
|
2,086
|
|
|
2,183
|
|
|
1,984
|
|
|
1,860
|
|
|
2,050
|
|
||||||||
Income before income tax expense
|
717
|
|
|
822
|
|
|
776
|
|
|
584
|
|
|
345
|
|
|
636
|
|
|
709
|
|
|
430
|
|
||||||||
Income tax expense (benefit)
|
347
|
|
|
137
|
|
|
156
|
|
|
82
|
|
|
(248
|
)
|
|
72
|
|
|
92
|
|
|
62
|
|
||||||||
Net income (loss) from minority interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
2
|
|
|
—
|
|
||||||||
Net income
|
$
|
370
|
|
|
$
|
685
|
|
|
$
|
620
|
|
|
$
|
502
|
|
|
$
|
593
|
|
|
$
|
563
|
|
|
$
|
619
|
|
|
$
|
368
|
|
Net income available to common shareholders
|
$
|
334
|
|
|
$
|
629
|
|
|
$
|
584
|
|
|
$
|
446
|
|
|
$
|
557
|
|
|
$
|
507
|
|
|
$
|
585
|
|
|
$
|
319
|
|
Earnings per common share
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
.91
|
|
|
$
|
1.69
|
|
|
$
|
1.56
|
|
|
$
|
1.17
|
|
|
$
|
1.45
|
|
|
$
|
1.31
|
|
|
$
|
1.48
|
|
|
$
|
.80
|
|
Diluted
|
.89
|
|
|
1.66
|
|
|
1.53
|
|
|
1.15
|
|
|
1.43
|
|
|
1.29
|
|
|
1.47
|
|
|
.79
|
|
||||||||
Average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
369,934
|
|
|
372,765
|
|
|
375,395
|
|
|
381,224
|
|
|
384,115
|
|
|
388,358
|
|
|
394,160
|
|
|
399,421
|
|
||||||||
Diluted
|
375,477
|
|
|
378,518
|
|
|
380,915
|
|
|
386,417
|
|
|
389,046
|
|
|
393,212
|
|
|
398,847
|
|
|
403,615
|
|
||||||||
Dividends per common share
|
$
|
.42
|
|
|
$
|
.42
|
|
|
$
|
.38
|
|
|
$
|
.38
|
|
|
$
|
.38
|
|
|
$
|
.38
|
|
|
$
|
.34
|
|
|
$
|
.34
|
|
Common stock price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
High
|
$
|
100.90
|
|
|
$
|
96.39
|
|
|
$
|
91.43
|
|
|
$
|
83.49
|
|
|
$
|
81.91
|
|
|
$
|
71.62
|
|
|
$
|
64.69
|
|
|
$
|
65.65
|
|
Low
|
89.68
|
|
|
89.25
|
|
|
76.95
|
|
|
74.45
|
|
|
68.16
|
|
|
51.22
|
|
|
50.60
|
|
|
50.73
|
|
||||||||
Closing
|
97.61
|
|
|
95.54
|
|
|
89.73
|
|
|
79.61
|
|
|
77.72
|
|
|
69.63
|
|
|
53.92
|
|
|
58.52
|
|
|
|
|
|
(1)
|
Basic and diluted earnings per common share for full-year
2017
and basic earnings per common share for full-year
2016
do not equal the sum of the four quarters for the year.
|
ACRONYMS
|
|||
|
|
|
|
ABS
|
Asset-backed securities
|
GEAM
|
General Electric Asset Management
|
AFS
|
Available-for-sale
|
G-SIB
|
Global systemically important bank
|
AIFMD
|
Alternative Investment Fund Managers Directive
|
HQLA
(1)
|
High-quality liquid assets
|
AIRB
(1)
|
Advanced Internal Ratings-Based Approach
|
HTM
|
Held-to-maturity
|
ALLL
|
Allowance for loan and lease losses
|
IDI
|
Insured depository institution
|
AML
|
Anti-money laundering
|
IFDS U.K.
|
International Financial Data Services Limited U.K.
|
AOCI
|
Accumulated other comprehensive income (loss)
|
ISDA
|
International Swaps and Derivatives Association
|
ASU
|
Accounting Standards Update
|
LCR
(1)
|
Liquidity coverage ratio
|
AUCA
|
Assets under custody and administration
|
LDA model
|
Loss distribution approach model
|
AUM
|
Assets under management
|
LTD
|
Long term debt
|
BCBS
|
Basel Committee on Banking Supervision
|
MBS
|
Mortgage-backed securities
|
BCRC
|
Business Conduct Risk Committee
|
MiFID
|
Markets in Financial Instruments Directive
|
BFDS
|
Boston Financial Data Services, Inc.
|
MiFID II
|
Markets in Financial Instruments Directive II
|
Board
|
Board of Directors
|
MiFIR
|
Markets in Financial Instruments Regulation
|
bps
|
Basis points
|
MRAC
|
Management Risk and Capital Committee
|
BRRD
|
Bank Recovery and Resolution Directive
|
MRC
|
Model Risk Committee
|
CAP
|
Capital adequacy process
|
MVG
|
Model Validation Group
|
CCAR
|
Comprehensive Capital Analysis and Review
|
NII
|
Net interest income
|
CD
|
Certificates of deposit
|
NIM
|
Net interest margin
|
CET1
(1)
|
Common equity tier 1
|
NSFR
(1)
|
Net stable funding ratio
|
CFTC
|
Commodity Futures Trading Commission
|
NYSE
|
New York Stock Exchange
|
CIS
|
Corporate Information Security
|
OCC
|
Office of the Comptroller of the Currency
|
CLO
|
Collateralized loan obligations
|
OCI
|
Other comprehensive income (loss)
|
CMO
|
Collateralized mortgage obligations
|
OCIO
|
Outsourced Chief Investment Officer
|
COSO
|
Committee of Sponsoring Organizations of the Treadway Commission
|
OFAC
|
Office of Foreign Assets Control
|
CRE
|
Commercial real estate
|
ORM
|
Operational risk management
|
CRPC
|
Credit Risk & Policy Committee
|
OTC
|
Over-the-counter
|
CVA
|
Credit valuation adjustment
|
OTTI
|
Other-than-temporary-impairment
|
DIF
|
Deposit Insurance Fund
|
Parent Company
|
State Street Corporation
|
Dodd-Frank Act
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
PCA
|
Prompt corrective action
|
DOJ
|
Department of Justice
|
PD
(1)
|
Probability-of-default
|
DOL
|
Department of Labor
|
PUA
|
Purchase undertaking agreement
|
E&A Committee
|
Examining and Audit Committee
|
P&L
|
Profit-and-loss
|
EAD
(1)
|
Exposure-at-default
|
RC
|
Risk Committee
|
ECB
|
European Central Bank
|
RCSA
|
Risk and control self-assessment
|
ECC
|
Executive Compensation Committee
|
ROE
|
Return on average common equity
|
EMIR
|
European Market Infrastructure Resolution
|
RWA
(1)
|
Risk-weighted assets
|
EPS
|
Earnings per share
|
SEC
|
Securities and Exchange Commission
|
ERISA
|
Employee Retirement Income Security Act
|
SERP
|
Supplemental executive retirement plans
|
ERM
|
Enterprise Risk Management
|
SIFI
|
Systemically Important Financial Institution
|
ETF
|
Exchange-Traded Fund
|
SLR
(1)
|
Supplementary leverage ratio
|
EVE
|
Economic value of equity
|
SOX
|
Sarbanes-Oxley Act of 2002
|
FASB
|
Financial Accounting Standards Board
|
SPOE Strategy
|
Single Point of Entry Strategy
|
FCA
|
Financial Conduct Authority
|
SSGA
|
State Street Global Advisors
|
FDIC
|
Federal Deposit Insurance Corporation
|
SSGA FM
|
State Street Global Advisors Funds Management, Inc.
|
Federal Reserve
|
Board of Governors of the Federal Reserve System
|
SSGA Ltd.
|
State Street Global Advisors Limited
|
FFELP
|
Federal Family Education Loan Program
|
SSIF
|
State Street Intermediate Funding, LLC
|
FHLB
|
Federal Home Loan Bank of Boston
|
State Street Bank
|
State Street Bank and Trust Company
|
FRBB
|
Federal Reserve Bank of Boston
|
TLAC
(1)
|
Total loss-absorbing capacity
|
FSB
|
Financial Stability Board
|
TMRC
|
Trading and Markets Risk Committee
|
FSOC
|
Financial Stability Oversight Council
|
TORC
|
Technology and Operational Risk Committee
|
FX
|
Foreign exchange
|
UCITS
|
Undertakings for Collective Investments in Transferable Securities
|
GDPR
|
General Data Protection Regulation
|
UOM
|
Unit of measure
|
GAAP
|
Generally accepted accounting principles
|
VaR
|
Value-at-Risk
|
GCR
|
Global credit review
|
VIE
|
Variable interest entity
|
|
|
|
|
|
|
|
|
(Shares in thousands)
|
(a)
Number of securities
to be issued
upon exercise of
outstanding
options,
warrants and rights
|
|
(b)
Weighted-average
exercise price of
outstanding
options,
warrants and rights
(1)
|
|
(c)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected
in column (a))
|
||||
Plan category:
|
|
|
|
|
|
||||
Equity compensation plans approved by shareholders
|
8,396
|
|
(2)
|
$
|
—
|
|
|
25,884
|
|
Equity compensation plans not approved by shareholders
|
24
|
|
(3)
|
—
|
|
|
—
|
|
|
Total
|
8,420
|
|
|
|
|
|
25,884
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
4.1 (P)
|
|
The description of State Street’s Common Stock is included in State Street’s Registration Statement on Form 8-A (File No. 001-07511), as filed on January 18, 1995 and March 7, 1995 (filed with the SEC on January 18, 1995 and March 7, 1995 and incorporated herein by reference)
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
(Note: None of the instruments defining the rights of holders of State Street’s outstanding long-term debt are in respect of indebtedness in excess of 10% of the total assets of State Street and its subsidiaries on a consolidated basis. State Street hereby agrees to furnish to the SEC upon request a copy of any other instrument with respect to long-term debt of State Street and its subsidiaries.)
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
*
|
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
|
|
STATE STREET CORPORATION
|
|
|
|
|
|
By
|
/s/ E
RIC
W. A
BOAF
|
|
|
ERIC W. ABOAF,
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
By
|
/s/ E
LIZABETH
M. S
CHAEFER
|
|
|
ELIZABETH M. SCHAEFER,
|
|
|
Senior Vice President, Deputy Controller and Chief Accounting Officer (Interim)
|
/s/ J
OSEPH
L. H
OOLEY
|
|
|
/s/ E
RIC
W. A
BOAF
|
JOSEPH L. HOOLEY,
|
|
|
ERIC W. ABOAF,
|
Chairman and Chief Executive Officer
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
|
|
/s/ E
LIZABETH
M. S
CHAEFER
|
|
|
|
ELIZABETH M. SCHAEFER,
|
|
|
|
Senior Vice President, Deputy Controller and Chief Accounting Officer (Interim)
|
/s/ J
OSEPH
L. H
OOLEY
|
|
|
/s/ K
ENNETT
F. B
URNES
|
JOSEPH L. HOOLEY
|
|
|
KENNETT F. BURNES
|
|
|
|
|
/s/ P
ATRICK
de
S
AINT
-A
IGNAN
|
|
|
/s/ L
INDA
A. H
ILL
|
PATRICK de SAINT-AIGNAN
|
|
|
LINDA A. HILL
|
|
|
|
|
/s/ L
YNN
A. D
UGLE
|
|
|
/s/ S
EAN
O'S
ULLIVAN
|
LYNN A. DUGLE
|
|
|
SEAN O'SULLIVAN
|
|
|
|
|
/s/ A
MELIA
C. F
AWCETT
|
|
|
/s/ R
ICHARD
P. S
ERGEL
|
AMELIA C. FAWCETT
|
|
|
RICHARD P. SERGEL
|
|
|
|
|
/s/ W
ILLIAM
C. F
REDA
|
|
|
/s/ G
REGORY
L. S
UMME
|
WILLIAM C. FREDA
|
|
|
GREGORY L. SUMME
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
(Dollars in millions)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
EXCLUDING INTEREST ON DEPOSITS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income from continuing operations, as reported
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
|
$
|
2,437
|
|
|
$
|
2,666
|
|
Share of pre-tax income (loss) of unconsolidated entities
|
|
254
|
|
|
349
|
|
|
(700
|
)
|
|
(10
|
)
|
|
1
|
|
|||||
Fixed charges
|
|
385
|
|
|
334
|
|
|
321
|
|
|
318
|
|
|
365
|
|
|||||
Adjusted earnings
|
(A)
|
$
|
3,538
|
|
|
$
|
2,803
|
|
|
$
|
1,919
|
|
|
$
|
2,745
|
|
|
$
|
3,032
|
|
Interest on short-term borrowings
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
60
|
|
Interest on long-term debt, including amortization of debt issuance costs
|
|
289
|
|
|
240
|
|
|
219
|
|
|
206
|
|
|
184
|
|
|||||
Portion of long-term leases representative of the interest factor
(1)
|
|
84
|
|
|
86
|
|
|
95
|
|
|
106
|
|
|
121
|
|
|||||
Preferred stock dividends and related adjustments
(2)
|
|
242
|
|
|
171
|
|
|
112
|
|
|
61
|
|
|
33
|
|
|||||
Fixed charges and preferred stock dividends
|
(B)
|
$
|
627
|
|
|
$
|
505
|
|
|
$
|
433
|
|
|
$
|
379
|
|
|
$
|
398
|
|
Consolidated ratios of adjusted earnings to combined fixed charges and preferred stock dividends, excluding interest on deposits
|
(A)/(B)
|
5.64x
|
|
|
5.55x
|
|
|
4.43x
|
|
|
7.24x
|
|
|
7.62x
|
|
|||||
INCLUDING INTEREST ON DEPOSITS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pre-tax income from continuing operations, as reported
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
|
$
|
2,437
|
|
|
$
|
2,666
|
|
Share of pre-tax income (loss) of unconsolidated entities
|
|
254
|
|
|
349
|
|
|
(700
|
)
|
|
(10
|
)
|
|
1
|
|
|||||
Fixed charges
|
|
548
|
|
|
419
|
|
|
418
|
|
|
416
|
|
|
458
|
|
|||||
Adjusted earnings
|
(C)
|
$
|
3,701
|
|
|
$
|
2,888
|
|
|
$
|
2,016
|
|
|
$
|
2,843
|
|
|
$
|
3,125
|
|
Interest on short-term borrowings and deposits
|
|
$
|
175
|
|
|
$
|
93
|
|
|
$
|
104
|
|
|
$
|
104
|
|
|
$
|
153
|
|
Interest on long-term debt, including amortization of debt issuance costs
|
|
289
|
|
|
240
|
|
|
219
|
|
|
206
|
|
|
184
|
|
|||||
Portion of long-term leases representative of the interest factor
(1)
|
|
84
|
|
|
86
|
|
|
95
|
|
|
106
|
|
|
121
|
|
|||||
Preferred stock dividends and related adjustments
(2)
|
|
242
|
|
|
171
|
|
|
112
|
|
|
61
|
|
|
33
|
|
|||||
Fixed charges and preferred stock dividends
|
(D)
|
$
|
790
|
|
|
$
|
590
|
|
|
$
|
530
|
|
|
$
|
477
|
|
|
$
|
491
|
|
Consolidated ratios of adjusted earnings to combined fixed charges and preferred stock dividends, including interest on deposits
|
(C)/(D)
|
4.68x
|
|
|
4.89x
|
|
|
3.80x
|
|
|
5.96x
|
|
|
6.36x
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
(Dollars in millions)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
EXCLUDING INTEREST ON DEPOSITS:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income from continuing operations, as reported
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
|
$
|
2,437
|
|
|
$
|
2,666
|
|
Share of pre-tax income (loss) of unconsolidated entities
|
|
254
|
|
|
349
|
|
|
(700
|
)
|
|
(10
|
)
|
|
1
|
|
|||||
Fixed charges
|
|
385
|
|
|
334
|
|
|
321
|
|
|
318
|
|
|
365
|
|
|||||
Adjusted earnings
|
(A)
|
$
|
3,538
|
|
|
$
|
2,803
|
|
|
$
|
1,919
|
|
|
$
|
2,745
|
|
|
$
|
3,032
|
|
Interest on short-term borrowings
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
60
|
|
Interest on long-term debt, including amortization of debt issuance costs
|
|
289
|
|
|
240
|
|
|
219
|
|
|
206
|
|
|
184
|
|
|||||
Portion of long-term leases representative of the interest factor
(1)
|
|
84
|
|
|
86
|
|
|
95
|
|
|
106
|
|
|
121
|
|
|||||
Fixed charges
|
(B)
|
$
|
385
|
|
|
$
|
334
|
|
|
$
|
321
|
|
|
$
|
318
|
|
|
$
|
365
|
|
Consolidated ratios of adjusted earnings to fixed charges, excluding interest on deposits
|
(A)/(B)
|
9.19x
|
|
|
8.39x
|
|
|
5.98x
|
|
|
8.63x
|
|
|
8.31x
|
|
|||||
INCLUDING INTEREST ON DEPOSITS:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pre-tax income from continuing operations, as reported
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
|
$
|
2,437
|
|
|
$
|
2,666
|
|
Share of pre-tax income (loss) of unconsolidated entities
|
|
254
|
|
|
349
|
|
|
(700
|
)
|
|
(10
|
)
|
|
1
|
|
|||||
Fixed charges
|
|
548
|
|
|
419
|
|
|
418
|
|
|
416
|
|
|
458
|
|
|||||
Adjusted earnings
|
(C)
|
$
|
3,701
|
|
|
$
|
2,888
|
|
|
$
|
2,016
|
|
|
$
|
2,843
|
|
|
$
|
3,125
|
|
Interest on short-term borrowings and deposits
|
|
$
|
175
|
|
|
$
|
93
|
|
|
$
|
104
|
|
|
$
|
104
|
|
|
$
|
153
|
|
Interest on long-term debt, including amortization of debt issuance costs
|
|
289
|
|
|
240
|
|
|
219
|
|
|
206
|
|
|
184
|
|
|||||
Portion of long-term leases representative of the interest factor
(1)
|
|
84
|
|
|
86
|
|
|
95
|
|
|
106
|
|
|
121
|
|
|||||
Fixed charges
|
(D)
|
$
|
548
|
|
|
$
|
419
|
|
|
$
|
418
|
|
|
$
|
416
|
|
|
$
|
458
|
|
Consolidated ratios of adjusted earnings to fixed charges, including interest on deposits
|
(C)/(D)
|
6.75x
|
|
|
6.89x
|
|
|
4.82x
|
|
|
6.83x
|
|
|
6.82x
|
|
|
|
|
|
|
|
Antrim Corporation
|
Massachusetts
|
Currenex INC
|
New York
|
International Fund Services (N.A.) L.L.C.
|
New York
|
Investors Copley Securities Corporation
|
Massachusetts
|
LASER Trust
|
Grand Cayman
|
Lincoln Securities Corporation
|
Massachusetts
|
Offshore Financial Solutions LTD
|
Grand Cayman
|
Quincy Securities Corporation
|
Massachusetts
|
Sail Trust
|
Grand Cayman
|
SS Borrowdale Pty Limited
|
Australia
|
SS Scarborough Pty Limited
|
Australia
|
SSB Realty, LLC
|
Massachusetts
|
SSGM International UK
|
United Kingdom
|
State Street Australia Limited
|
Australia
|
State Street Bank GMBH
|
Germany
|
State Street Bank Luxembourg S.A.
|
Luxembourg
|
State Street Europe Holdings Germany Sarl & Co KG
|
Germany
|
State Street Europe Holdings Luxembourg Sarl
|
Luxembourg
|
State Street Europe Limited
|
United Kingdom
|
State Street Fund Services Ireland LTD
|
Ireland
|
State Street Global Advisors, Inc
|
Massachusetts
|
State Street Global Advisors International Holdings Inc
|
Delaware
|
State Street Global Advisors Limited
|
United Kingdom
|
State Street Global Markets LLC
|
Massachusetts
|
State Street Holdings Germany GMBH
|
Germany
|
State Street International Holdings
|
Massachusetts
|
State Street International Holdings UK Ltd
|
United Kingdom
|
State Street Intl Holdings Switzerland GMBH
|
Switzerland
|
State Street Public Lending Corporation
|
Massachusetts
|
State Street Social Investments Corporation
|
Massachusetts
|
State Street Trust and Banking Company Limited
|
Japan
|
1.
|
I have reviewed this
Annual Report on
Form 10-K
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:
|
February 26, 2018
|
|
By:
|
/s/ J
OSEPH
L. H
OOLEY
|
|
|
|
|
Joseph L. Hooley,
|
|
|
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this
Annual Report on
Form 10-K
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:
|
February 26, 2018
|
|
By:
|
/s/ E
RIC
W. A
BOAF
|
|
|
|
|
Eric W. Aboaf,
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
Date:
|
February 26, 2018
|
|
By:
|
/s/ J
OSEPH
L. H
OOLEY
|
|
|
|
|
Joseph L. Hooley,
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
Date:
|
February 26, 2018
|
|
By:
|
/s/ E
RIC
W. A
BOAF
|
|
|
|
|
Eric W. Aboaf,
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|