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x
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QUARTERLY 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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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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PART I. FINANCIAL INFORMATION
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Table of Contents for Management's Discussion and Analysis of Financial Condition and Results of Operations
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Quantitative and Qualitative Disclosures About Market Risk
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Controls and Procedures
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Consolidated Statement of Income (Unaudited) for the three and nine months ended September 30, 2018 and 2017
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Consolidated Statement of Comprehensive Income (Unaudited) for the three and nine months ended September 30, 2018 and 2017
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Consolidated Statement of Condition as of September 30, 2018 (Unaudited) and December 31, 2017
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Consolidated Statement of Changes in Shareholders' Equity (Unaudited) for the nine months ended September 30, 2018 and 2017
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Consolidated Statement of Cash Flows (Unaudited) for the nine months ended September 30, 2018 and 2017
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Condensed Notes to Consolidated Financial Statements (Unaudited)
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Review Report of Independent Registered Public Accounting Firm
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PART II. OTHER INFORMATION
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Unregistered Sales of Equity Securities and Use of Proceeds
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Exhibits
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Signatures
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Net Interest Income
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Strategic Risk Management
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•
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accounting for fair value measurements;
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•
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other-than-temporary impairment of investment securities;
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•
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impairment of goodwill and other intangible assets; and
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•
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contingencies.
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•
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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 or to which our clients have such exposures as a result of our acting as agent, including as an asset manager;
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•
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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 ability to measure the fair value of investment securities) and changes in the manner in which we fund those assets;
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•
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the volatility of servicing fee, management fee, trading fee and securities finance revenues on a quarterly basis in certain of our business lines due to, among other factors, market rates and levels, the volume of client transaction activity and the timing of revenue recognition with respect to processing fees and other revenues;
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•
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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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•
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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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•
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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 such securities and the recognition of an impairment loss in our consolidated statement of income;
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•
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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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•
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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
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•
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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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•
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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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•
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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
|
•
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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 trade policy and bi-lateral and multi-lateral trade agreements proposed by the U.S.;
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•
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our ability to create cost efficiencies through changes in our operational processes and to further digitize our processes and interfaces with our clients, any failure of which, in whole or in part, may among other things, reduce our competitive position, diminish the cost-effectiveness of our systems and processes or provide an insufficient return on our associated investment;
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•
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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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•
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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, payments to clients or reporting to U.S. authorities;
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•
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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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•
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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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•
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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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•
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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,
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•
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the potential for losses arising from our investments in sponsored investment funds;
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•
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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; and the possibility that our clients or regulators will assert claims that our fees with respect to such investment products are not appropriate or consistent with our fiduciary responsibilities;
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•
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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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•
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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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•
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adverse publicity
,
whether specific to us or regarding other industry participants or industry-wide factors, or other reputational harm;
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•
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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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•
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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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•
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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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•
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our ability to complete acquisitions, joint ventures and divestitures, including our ability to obtain regulatory approvals, the ability to arrange financing as required and the ability to satisfy closing conditions;
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•
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the risks that our acquired businesses, including our acquisition of Charles River Systems, Inc. (Charles River Development), and joint ventures will not achieve their anticipated financial, operational and product innovation benefits or will not be integrated successfully
,
or that the integration will take longer than anticipated; that expected synergies will not be achieved or unexpected negative synergies or liabilities will be experienced; that client and deposit retention goals will not be met; that other regulatory or operational challenges will be experienced; and that disruptions from the transaction will harm our relationships with our clients, our employees or regulators;
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•
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our ability to integrate Charles River Development's front office software solutions with our middle and back office capabilities to develop a front-to-middle-to-back office platform that is competitive and meets our clients' requirements;
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•
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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; 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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•
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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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•
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changes in accounting standards and practices; and
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•
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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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TABLE 1: OVERVIEW OF FINANCIAL RESULTS
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||||||||||
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Three Months Ended September 30,
|
|
|
|||||||
(Dollars in millions, except per share amounts)
|
2018
|
|
2017
|
|
% Change
|
|||||
Total fee revenue
(1)(2)
|
$
|
2,280
|
|
|
$
|
2,242
|
|
|
2
|
%
|
Net interest income
(2)
|
672
|
|
|
603
|
|
|
11
|
|
||
Gains (losses) related to investment securities, net
|
(1
|
)
|
|
1
|
|
|
nm
|
|
||
Total revenue
(1)
|
2,951
|
|
|
2,846
|
|
|
4
|
|
||
Provision for loan losses
|
5
|
|
|
3
|
|
|
67
|
|
||
Total expenses
(1)
|
2,079
|
|
|
2,021
|
|
|
3
|
|
||
Income before income tax expense
|
867
|
|
|
822
|
|
|
5
|
|
||
Income tax expense
|
102
|
|
|
137
|
|
|
(26
|
)
|
||
Net income
|
$
|
765
|
|
|
$
|
685
|
|
|
12
|
|
Adjustments to net income:
|
|
|
|
|
|
|||||
Dividends on preferred stock
(3)
|
$
|
(55
|
)
|
|
$
|
(55
|
)
|
|
—
|
|
Earnings allocated to participating securities
(4)
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
||
Net income available to common shareholders
|
$
|
709
|
|
|
$
|
629
|
|
|
13
|
|
Earnings per common share:
|
|
|
|
|
|
|||||
Basic
|
$
|
1.89
|
|
|
$
|
1.69
|
|
|
12
|
|
Diluted
|
1.87
|
|
|
1.66
|
|
|
13
|
|
||
Average common shares outstanding (in thousands):
|
||||||||||
Basic
|
374,963
|
|
|
372,765
|
|
|
1
|
|
||
Diluted
|
379,383
|
|
|
378,518
|
|
|
—
|
|
||
Cash dividends declared per common share
|
$
|
.47
|
|
|
$
|
.42
|
|
|
12
|
|
Return on average common equity
|
14.0
|
%
|
|
13.0
|
%
|
|
100 bps
|
|
||
Pre-tax margin
|
29.4
|
|
|
28.9
|
|
|
50
|
|
||
|
|
|
|
|
|
|||||
|
Nine Months Ended September 30,
|
|
|
|||||||
(Dollars in millions, except per share amounts)
|
2018
|
|
2017
|
|
% Change
|
|||||
Total fee revenue
(1)(2)
|
$
|
7,016
|
|
|
$
|
6,675
|
|
|
5
|
%
|
Net interest income
(2)
|
1,974
|
|
|
1,688
|
|
|
17
|
|
||
Gains (losses) related to investment securities, net
|
6
|
|
|
(39
|
)
|
|
nm
|
|
||
Total revenue
(1)
|
8,996
|
|
|
8,324
|
|
|
8
|
|
||
Provision for loan losses
|
7
|
|
|
4
|
|
|
75
|
|
||
Total expenses
(1)
|
6,494
|
|
|
6,138
|
|
|
6
|
|
||
Income before income tax expense
|
2,495
|
|
|
2,182
|
|
|
14
|
|
||
Income tax expense
|
335
|
|
|
375
|
|
|
(11
|
)
|
||
Net income
|
$
|
2,160
|
|
|
$
|
1,807
|
|
|
20
|
|
Adjustments to net income:
|
|
|
|
|
|
|||||
Dividends on preferred stock
(3)
|
$
|
(146
|
)
|
|
$
|
(146
|
)
|
|
—
|
|
Earnings allocated to participating securities
(4)
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
||
Net income available to common shareholders
|
$
|
2,012
|
|
|
$
|
1,659
|
|
|
21
|
|
Earnings per common share:
|
|
|
|
|
|
|||||
Basic
|
$
|
5.45
|
|
|
$
|
4.41
|
|
|
24
|
|
Diluted
|
5.38
|
|
|
4.35
|
|
|
24
|
|
||
Average common shares outstanding (in thousands):
|
||||||||||
Basic
|
369,368
|
|
|
376,430
|
|
|
(2
|
)
|
||
Diluted
|
374,064
|
|
|
381,779
|
|
|
(2
|
)
|
||
Cash dividends declared per common share
|
$
|
1.31
|
|
|
$
|
1.18
|
|
|
11
|
|
Return on average common equity
|
13.8
|
%
|
|
11.9
|
%
|
|
190 bps
|
|
||
Pre-tax Margin
|
27.7
|
|
|
26.2
|
|
|
150
|
|
|
•
|
EPS of
$1.87
in the
third quarter of 2018
increased
13%
compared to
$1.66
in the
third quarter of 2017
.
|
•
|
Third quarter of 2018
ROE of
14.0%
and pre-tax margin of
29.4%
increased from
13.0%
and
28.9%
, respectively, in the
third quarter of 2017
.
|
•
|
Operating leverage was
0.8%
for the
third quarter of 2018
. Operating leverage represents the difference in the percentage change in total revenue less the percentage change in total expenses, in each case relative to the prior year period.
|
•
|
Fee operating leverage was
(1.2)%
for the
third quarter of 2018
. Fee operating leverage represents the difference in the percentage change in total fee revenue less the percentage change in total expenses, in each case relative to the prior year period. The negative fee operating leverage is due to lower servicing fee revenue.
|
•
|
On October 1, 2018, we completed our previously announced acquisition of Charles River Development, a provider of investment management front office tools and solutions, for an all cash purchase price of approximately
$2.6 billion
. We funded the acquisition with a July 2018 issuance of common stock of approximately
$1.15 billion
, a September 2018 issuance of preferred stock of approximately
$500 million
and the suspension of approximately
$950 million
of share repurchases, which includes approximately
$350 million and approximately $300 million in the second and third quarters of 2018, respectively, and a planned suspension of
|
•
|
We intend to resume our common stock purchases in the first quarter of 2019 and may repurchase up to
$600 million
through June 30, 2019.
|
•
|
During the third quarter of 2018, we recorded minimal acquisition costs related to Charles River Development and expect to incur approximately $200 million of such costs through 2021.
|
•
|
Total revenue
and fee revenue
increased
4%
and
2%
, respectively, in the
third quarter of 2018
compared to the
third quarter of 2017
, reflecting higher management fees and trading services revenue, partially offset by lower securities finance and servicing fee revenue.
|
◦
|
The new revenue recognition standard contributed approximately
$70 million
to total revenue in the third quarter of 2018, compared to the third quarter of 2017.
|
•
|
Servicing fee revenue decreased
1%
in the
third quarter of 2018
compared to the
third quarter of 2017
, primarily due to a previously announced client transition and challenging industry conditions, including fee pressure, outflows across the industry, primarily in the U.S. and Europe, and lower emerging markets asset levels.
|
•
|
Management fee revenue increased
13%
in the
third quarter of 2018
compared to the
third quarter of 2017
, reflecting higher global equity markets. The new revenue recognition standard contributed
$50 million
to management fee revenue in the third quarter of 2018 compared to the third quarter of 2017.
|
•
|
Securities finance revenue decreased
13%
in the
third quarter of 2018
compared to the
third quarter of 2017
, primarily due to certain balance sheet repositioning efforts completed in the third quarter of 2018.
|
•
|
NII increased
11%
in the
third quarter of 2018
compared to the
third quarter of 2017
, primarily due to higher U.S. interest rates and disciplined liability pricing, partially offset by a mix shift to HQLA. During the
nine months ended September 30, 2018
, we sold approximately
$16 billion
of non-HQLA, of which a significant portion has been reinvested in HQLA.
|
•
|
Total expenses
increased
3%
in the
third quarter of 2018
compared to the
third quarter of 2017
, reflecting investments to support new business on-boarded, partially offset by net Beacon savings, benefits of the management delayering announced in the second quarter of 2018 and lower discretionary spending.
|
◦
|
In the
three and nine months ended September 30, 2018
, we have achieved approximately
$66 million
and
$183 million
, respectively, of Beacon pre-tax year-over-year savings, net of Beacon investments, and expect total pre-tax year-over-year savings of approximately
$200 million
in 2018.
|
◦
|
The new revenue recognition standard contributed approximately
$70 million
to total expenses in the third quarter of 2018, compared to the third quarter of 2017.
|
•
|
AUCA increased
6%
in the
third quarter of 2018
compared to the
third quarter of 2017
, primarily due to higher equity markets. Newly announced asset servicing mandates totaled approximately
$1.8 trillion
year-to-date, of which approximately
$300 billion
was newly announced in the
third quarter of 2018
. Servicing assets remaining to be installed in future periods totaled approximately
$465 billion
as of
September 30, 2018
.
|
•
|
AUM increased
5%
in the
third quarter of 2018
compared to the
third quarter of 2017
, primarily driven by strength in equity markets and ETF inflows. We experienced net inflows of approximately
$8 billion
during the
three months ended September 30, 2018
, driven by net institutional and ETF flows.
|
•
|
We declared aggregate common stock dividends of
$0.47
per share, totaling
$179 million
in the
third quarter of 2018
, compared to
$0.42
per share, totaling
$156 million
in the
third quarter of 2017
, representing an increase of approximately
12%
on a per share basis.
|
•
|
In connection with our acquisition of Charles River Development, we did not purchase any common stock during the quarter ended September 30, 2018 under the common stock purchase plan approved by our Board in June 2018 (the 2018 Program), nor did we purchase any common stock under our prior program (the 2017 Program) in the quarter ended June 30,
|
•
|
In July 2018, we completed a public offering of approximately 13.24 million shares of our common stock. The offering price was $86.93 per share and net proceeds totaled approximately
$1.15 billion
.
|
•
|
In September 2018, we issued 500,000 depositary shares each representing a 1/100th ownership interest in a share of our Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series H, without par value per share, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share) and an initial dividend rate of 5.625% per annum. The net proceeds were approximately
$500 million
.
|
•
|
Our CET1 capital ratio increased to
13.0%
as of
September 30, 2018
compared to
11.9%
as of
December 31, 2017
, and Tier 1 leverage ratio increased to
8.1%
as of
September 30, 2018
compared to
7.3%
as of
December 31, 2017
. The increases reflect our above-described issuances of common and preferred stock and the suspension of common stock repurchases for the purpose of funding our acquisition of Charles River Development. We completed our acquisition on October 1, 2018, and we expect our December 31, 2018 capital ratios to approximate our recent historical levels.
|
TABLE 2: TOTAL REVENUE
|
|
|||||||||
|
Three Months Ended September 30,
|
|
|
|||||||
(Dollars in millions)
|
2018
|
|
2017
|
|
% Change
|
|||||
Fee revenue:
|
|
|
|
|
|
|||||
Servicing fees
|
$
|
1,333
|
|
|
$
|
1,351
|
|
|
(1
|
)%
|
Management fees
(1)
|
474
|
|
|
419
|
|
|
13
|
|
||
Trading services:
|
|
|
|
|
|
|||||
Foreign exchange trading
|
169
|
|
|
150
|
|
|
13
|
|
||
Brokerage and other trading services
|
119
|
|
|
109
|
|
|
9
|
|
||
Total trading services
(1)
|
288
|
|
|
259
|
|
|
11
|
|
||
Securities finance
|
128
|
|
|
147
|
|
|
(13
|
)
|
||
Processing fees and other
|
57
|
|
|
66
|
|
|
(14
|
)
|
||
Total fee revenue
|
2,280
|
|
|
2,242
|
|
|
2
|
|
||
Net interest income:
|
|
|
|
|
|
|||||
Interest income
|
916
|
|
|
761
|
|
|
20
|
|
||
Interest expense
|
244
|
|
|
158
|
|
|
54
|
|
||
Net interest income
|
672
|
|
|
603
|
|
|
11
|
|
||
Gains (losses) related to investment securities, net
|
(1
|
)
|
|
1
|
|
|
nm
|
|
||
Total revenue
(1)
|
$
|
2,951
|
|
|
$
|
2,846
|
|
|
4
|
|
|
|
|
|
|
|
|||||
|
Nine Months Ended September 30,
|
|
|
|||||||
(Dollars in millions)
|
2018
|
|
2017
|
|
% Change
|
|||||
Fee revenue:
|
|
|
|
|
|
|||||
Servicing fees
|
$
|
4,135
|
|
|
$
|
3,986
|
|
|
4
|
%
|
Management fees
(1)
|
1,411
|
|
|
1,198
|
|
|
18
|
|
||
Trading services:
|
|
|
|
|
|
|||||
Foreign exchange trading
|
544
|
|
|
492
|
|
|
11
|
|
||
Brokerage and other trading services
|
363
|
|
|
331
|
|
|
10
|
|
||
Total trading services
(1)
|
907
|
|
|
823
|
|
|
10
|
|
||
Securities finance
|
423
|
|
|
459
|
|
|
(8
|
)
|
||
Processing fees and other
|
140
|
|
|
209
|
|
|
(33
|
)
|
||
Total fee revenue
|
7,016
|
|
|
6,675
|
|
|
5
|
|
||
Net interest income:
|
|
|
|
|
|
|||||
Interest income
|
2,680
|
|
|
2,111
|
|
|
27
|
|
||
Interest expense
|
706
|
|
|
423
|
|
|
67
|
|
||
Net interest income
|
1,974
|
|
|
1,688
|
|
|
17
|
|
||
Gains (losses) related to investment securities, net
|
6
|
|
|
(39
|
)
|
|
nm
|
|
||
Total revenue
(1)
|
$
|
8,996
|
|
|
$
|
8,324
|
|
|
8
|
|
|
|
•
|
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, on average and over time, of approximately 3%; and
|
•
|
A 10% increase or decrease in worldwide fixed income 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
,
on average and over time, of approximately 1%.
|
TABLE 3: DAILY, MONTH-END AND QUARTER-END EQUITY INDICES
(1)
|
||||||||||||||||||||||||||
|
Daily Averages of Indices
|
|
Averages of Month-End Indices
|
|
Quarter-End Indices
|
|||||||||||||||||||||
|
Quarters Ended September 30,
|
|
Quarters Ended September 30,
|
|
As of September 30,
|
|||||||||||||||||||||
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
|||||||||
S&P 500
®
|
2,850
|
|
|
2,467
|
|
|
16
|
%
|
|
2,877
|
|
|
2,487
|
|
|
16
|
%
|
|
2,914
|
|
|
2,519
|
|
|
16
|
%
|
MSCI EAFE
®
|
1,964
|
|
|
1,934
|
|
|
2
|
|
|
1,981
|
|
|
1,947
|
|
|
2
|
|
|
1,974
|
|
|
1,974
|
|
|
—
|
|
MSCI
®
Emerging Markets
|
1,054
|
|
|
1,068
|
|
|
(1
|
)
|
|
1,064
|
|
|
1,079
|
|
|
(1
|
)
|
|
1,048
|
|
|
1,082
|
|
|
(3
|
)
|
HFRI Asset Weighted Composite
®
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
1,414
|
|
|
1,358
|
|
|
4
|
|
|
1,415
|
|
|
1,361
|
|
|
4
|
|
|
Daily Averages of Indices
|
|
Averages of Month-End Indices
|
||||||||||||||
|
Nine Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||
S&P 500
®
|
2,762
|
|
|
2,397
|
|
|
15
|
%
|
|
2,765
|
|
|
2,410
|
|
|
15
|
%
|
MSCI EAFE
®
|
2,018
|
|
|
1,846
|
|
|
9
|
|
|
2,016
|
|
|
1,859
|
|
|
8
|
|
MSCI
®
Emerging Markets
|
1,132
|
|
|
996
|
|
|
14
|
|
|
1,130
|
|
|
1,004
|
|
|
13
|
|
HFRI Asset Weighted Composite
®
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
1,410
|
|
|
1,340
|
|
|
5
|
|
|
|
|
|
|
|
TABLE 5: AVERAGE BALANCES AND INTEREST RATES - FULLY TAXABLE-EQUIVALENT BASIS
(1)
|
|||||||||||||||||||||
|
Three Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
(Dollars in millions; fully taxable-equivalent basis)
|
Average
Balance
|
|
Interest
Revenue/
Expense
|
|
Rate
|
|
Average
Balance
|
|
Interest
Revenue/
Expense
|
|
Rate
|
||||||||||
Interest-bearing deposits with banks
|
$
|
56,513
|
|
|
$
|
94
|
|
|
.67
|
%
|
|
$
|
45,513
|
|
|
$
|
45
|
|
|
.40
|
%
|
Securities purchased under resale agreements
(2)
|
2,932
|
|
|
87
|
|
|
11.77
|
|
|
2,167
|
|
|
74
|
|
|
13.53
|
|
||||
Trading account assets
|
1,019
|
|
|
—
|
|
|
—
|
|
|
991
|
|
|
—
|
|
|
—
|
|
||||
Investment securities
|
85,623
|
|
|
474
|
|
|
2.21
|
|
|
95,311
|
|
|
474
|
|
|
1.99
|
|
||||
Loans and leases
|
22,511
|
|
|
176
|
|
|
3.11
|
|
|
22,843
|
|
|
143
|
|
|
2.49
|
|
||||
Other interest-earning assets
|
14,702
|
|
|
97
|
|
|
2.59
|
|
|
23,091
|
|
|
67
|
|
|
1.18
|
|
||||
Average total interest-earning assets
|
$
|
183,300
|
|
|
$
|
928
|
|
|
2.01
|
|
|
$
|
189,916
|
|
|
$
|
803
|
|
|
1.68
|
|
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S.
|
$
|
57,558
|
|
|
$
|
74
|
|
|
.51
|
%
|
|
$
|
25,767
|
|
|
$
|
21
|
|
|
.32
|
%
|
Non-U.S.
(3)
|
67,741
|
|
|
10
|
|
|
.06
|
|
|
96,189
|
|
|
18
|
|
|
.07
|
|
||||
Total interest-bearing deposits
(3)
|
125,299
|
|
|
84
|
|
|
.27
|
|
|
121,956
|
|
|
39
|
|
|
.13
|
|
||||
Securities sold under repurchase agreements
|
1,835
|
|
|
4
|
|
|
.79
|
|
|
3,974
|
|
|
1
|
|
|
.07
|
|
||||
Federal funds purchased
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other short-term borrowings
|
1,248
|
|
|
4
|
|
|
1.38
|
|
|
1,277
|
|
|
3
|
|
|
.81
|
|
||||
Long-term debt
|
10,375
|
|
|
100
|
|
|
3.84
|
|
|
11,766
|
|
|
78
|
|
|
2.67
|
|
||||
Other interest-bearing liabilities
|
5,306
|
|
|
52
|
|
|
3.88
|
|
|
4,063
|
|
|
37
|
|
|
3.70
|
|
||||
Average total interest-bearing liabilities
|
$
|
144,064
|
|
|
$
|
244
|
|
|
.67
|
|
|
$
|
143,036
|
|
|
$
|
158
|
|
|
.44
|
|
Interest-rate spread
|
|
|
|
|
1.34
|
%
|
|
|
|
|
|
1.24
|
%
|
||||||||
Net interest income—fully taxable-equivalent basis
|
|
|
$
|
684
|
|
|
|
|
|
|
$
|
645
|
|
|
|
||||||
Net interest margin—fully taxable-equivalent basis
|
|
|
|
|
1.48
|
%
|
|
|
|
|
|
1.35
|
%
|
||||||||
Tax-equivalent adjustment
|
|
|
(12
|
)
|
|
|
|
|
|
(42
|
)
|
|
|
||||||||
Net interest income—GAAP basis
|
|
|
$
|
672
|
|
|
|
|
|
|
$
|
603
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
(Dollars in millions; fully taxable-equivalent basis)
|
Average
Balance
|
|
Interest
Revenue/
Expense
|
|
Rate
|
|
Average
Balance
|
|
Interest
Revenue/
Expense
|
|
Rate
|
||||||||||
Interest-bearing deposits with banks
|
$
|
54,414
|
|
|
$
|
267
|
|
|
.66
|
%
|
|
$
|
49,171
|
|
|
$
|
121
|
|
|
.33
|
%
|
Securities purchased under resale agreements
(2)
|
2,759
|
|
|
246
|
|
|
11.90
|
|
|
2,192
|
|
|
189
|
|
|
11.52
|
|
||||
Trading account assets
|
1,098
|
|
|
—
|
|
|
—
|
|
|
949
|
|
|
(1
|
)
|
|
(.14
|
)
|
||||
Investment securities
|
89,080
|
|
|
1,435
|
|
|
2.15
|
|
|
95,716
|
|
|
1,410
|
|
|
1.96
|
|
||||
Loans and leases
|
23,359
|
|
|
507
|
|
|
2.90
|
|
|
21,360
|
|
|
373
|
|
|
2.33
|
|
||||
Other interest-earning assets
|
16,599
|
|
|
275
|
|
|
2.22
|
|
|
22,952
|
|
|
146
|
|
|
.85
|
|
||||
Average total interest-earning assets
|
$
|
187,309
|
|
|
$
|
2,730
|
|
|
1.95
|
|
|
$
|
192,340
|
|
|
$
|
2,238
|
|
|
1.56
|
|
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S.
|
$
|
52,190
|
|
|
$
|
154
|
|
|
.39
|
%
|
|
$
|
25,821
|
|
|
$
|
77
|
|
|
.40
|
%
|
Non-U.S.
(3)
|
74,170
|
|
|
82
|
|
|
.15
|
|
|
96,860
|
|
|
19
|
|
|
.03
|
|
||||
Total interest-bearing deposits
(3)
|
126,360
|
|
|
236
|
|
|
.25
|
|
|
122,681
|
|
|
96
|
|
|
.11
|
|
||||
Securities sold under repurchase agreements
|
2,361
|
|
|
11
|
|
|
.61
|
|
|
3,965
|
|
|
2
|
|
|
.05
|
|
||||
Federal funds purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Other short-term borrowings
|
1,274
|
|
|
12
|
|
|
1.24
|
|
|
1,313
|
|
|
7
|
|
|
.75
|
|
||||
Long-term debt
|
10,808
|
|
|
293
|
|
|
3.62
|
|
|
11,569
|
|
|
227
|
|
|
2.61
|
|
||||
Other interest-bearing liabilities
|
5,187
|
|
|
154
|
|
|
3.97
|
|
|
4,881
|
|
|
91
|
|
|
2.50
|
|
||||
Average total interest-bearing liabilities
|
$
|
145,990
|
|
|
$
|
706
|
|
|
.65
|
|
|
$
|
144,410
|
|
|
$
|
423
|
|
|
.39
|
|
Interest-rate spread
|
|
|
|
|
1.30
|
%
|
|
|
|
|
|
1.17
|
%
|
||||||||
Net interest income—fully taxable-equivalent basis
|
|
|
$
|
2,024
|
|
|
|
|
|
|
$
|
1,815
|
|
|
|
||||||
Net interest margin—fully taxable-equivalent basis
|
|
|
|
|
1.45
|
%
|
|
|
|
|
|
1.26
|
%
|
||||||||
Tax-equivalent adjustment
|
|
|
(50
|
)
|
|
|
|
|
|
(127
|
)
|
|
|
||||||||
Net interest income—GAAP basis
|
|
|
$
|
1,974
|
|
|
|
|
|
|
$
|
1,688
|
|
|
|
|
|
TABLE 6: EXPENSES
|
||||||||||
|
Three Months Ended September 30,
|
|
% Change
|
|||||||
(Dollars in millions)
|
2018
|
|
2017
|
|
||||||
Compensation and employee benefits
|
$
|
1,103
|
|
|
$
|
1,090
|
|
|
1
|
%
|
Information systems and communications
|
332
|
|
|
296
|
|
|
12
|
|
||
Transaction processing services
(1)
|
236
|
|
|
215
|
|
|
10
|
|
||
Occupancy
|
110
|
|
|
118
|
|
|
(7
|
)
|
||
Acquisition costs
|
1
|
|
|
—
|
|
|
nm
|
|
||
Restructuring charges, net
|
(1
|
)
|
|
33
|
|
|
nm
|
|
||
Other:
|
|
|
|
|
|
|||||
Professional services
|
79
|
|
|
71
|
|
|
11
|
|
||
Amortization of other intangible assets
|
47
|
|
|
54
|
|
|
(13
|
)
|
||
Regulatory fees and assessments
|
15
|
|
|
24
|
|
|
(38
|
)
|
||
Other
(1)
|
157
|
|
|
120
|
|
|
31
|
|
||
Total other
(1)
|
298
|
|
|
269
|
|
|
11
|
|
||
Total expenses
(1)
|
$
|
2,079
|
|
|
$
|
2,021
|
|
|
3
|
|
Number of employees at quarter-end
|
39,020
|
|
|
36,303
|
|
|
7
|
|
||
|
|
|
|
|
|
|||||
|
Nine Months Ended September 30,
|
|
% Change
|
|||||||
(Dollars in millions)
|
2018
|
|
2017
|
|
||||||
Compensation and employee benefits
|
$
|
3,477
|
|
|
$
|
3,327
|
|
|
5
|
%
|
Information systems and communications
|
968
|
|
|
866
|
|
|
12
|
|
||
Transaction processing services
(1)
|
724
|
|
|
619
|
|
|
17
|
|
||
Occupancy
|
354
|
|
|
344
|
|
|
3
|
|
||
Acquisition costs
|
1
|
|
|
21
|
|
|
nm
|
|
||
Restructuring charges, net
|
(1
|
)
|
|
112
|
|
|
nm
|
|
||
Other:
|
|
|
|
|
|
|||||
Professional services
|
247
|
|
|
262
|
|
|
(6
|
)
|
||
Amortization of other intangible assets
|
145
|
|
|
160
|
|
|
(9
|
)
|
||
Regulatory fees and assessments
|
71
|
|
|
77
|
|
|
(8
|
)
|
||
Other
(1)
|
508
|
|
|
350
|
|
|
45
|
|
||
Total other
(1)
|
971
|
|
|
849
|
|
|
14
|
|
||
Total expenses
(1)
|
$
|
6,494
|
|
|
$
|
6,138
|
|
|
6
|
|
|
|
TABLE 7: RESTRUCTURING CHARGES
|
|||||||||||||||
(In millions)
|
Employee
Related Costs |
|
Real Estate
Actions |
|
Asset and Other Write-offs
|
|
Total
|
||||||||
Accrual Balance at December 31, 2016
|
$
|
37
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
56
|
|
Accruals for Beacon
|
14
|
|
|
—
|
|
|
2
|
|
|
16
|
|
||||
Payments and Other Adjustments
|
(13
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(18
|
)
|
||||
Accrual Balance at March 31, 2017
|
38
|
|
|
14
|
|
|
2
|
|
|
54
|
|
||||
Accruals for Beacon
|
60
|
|
|
—
|
|
|
2
|
|
|
62
|
|
||||
Payments and Other Adjustments
|
(11
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(16
|
)
|
||||
Accrual Balance at June 30, 2017
|
87
|
|
|
11
|
|
|
2
|
|
|
100
|
|
||||
Accruals for Beacon
|
23
|
|
|
9
|
|
|
1
|
|
|
33
|
|
||||
Payments and Other Adjustments
|
(10
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(16
|
)
|
||||
Accrual Balance at September 30, 2017
|
$
|
100
|
|
|
$
|
15
|
|
|
$
|
2
|
|
|
$
|
117
|
|
|
|
|
|
|
|
|
|
||||||||
Accrual Balance at December 31, 2017
|
$
|
166
|
|
|
$
|
32
|
|
|
$
|
3
|
|
|
$
|
201
|
|
Accruals for Beacon
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Payments and Other Adjustments
|
(22
|
)
|
|
(4
|
)
|
|
—
|
|
|
(26
|
)
|
||||
Accrual Balance at March 31, 2018
|
144
|
|
|
28
|
|
|
3
|
|
|
175
|
|
||||
Accruals for Beacon
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Payments and Other Adjustments
|
(31
|
)
|
|
(3
|
)
|
|
—
|
|
|
(34
|
)
|
||||
Accrual Balance at June 30, 2018
|
113
|
|
|
25
|
|
|
3
|
|
|
141
|
|
||||
Accruals for Beacon
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Payments and Other Adjustments
|
(18
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(23
|
)
|
||||
Accrual Balance at September 30, 2018
|
$
|
94
|
|
|
$
|
21
|
|
|
$
|
2
|
|
|
$
|
117
|
|
TABLE 8: INVESTMENT SERVICING LINE OF BUSINESS RESULTS
|
|||||||||||||||||||||
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||
(Dollars in millions, except where otherwise noted)
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Servicing fees
|
$
|
1,333
|
|
|
$
|
1,351
|
|
|
(1
|
)%
|
|
$
|
4,135
|
|
|
$
|
3,986
|
|
|
4
|
%
|
Trading services
|
255
|
|
|
239
|
|
|
7
|
|
|
810
|
|
|
768
|
|
|
5
|
|
||||
Securities finance
|
128
|
|
|
147
|
|
|
(13
|
)
|
|
423
|
|
|
459
|
|
|
(8
|
)
|
||||
Processing fees and other
|
49
|
|
|
65
|
|
|
(25
|
)
|
|
131
|
|
|
203
|
|
|
(35
|
)
|
||||
Total fee revenue
|
1,765
|
|
|
1,802
|
|
|
(2
|
)
|
|
5,499
|
|
|
5,416
|
|
|
2
|
|
||||
Net interest income
|
680
|
|
|
606
|
|
|
12
|
|
|
1,991
|
|
|
1,691
|
|
|
18
|
|
||||
Gains (losses) related to investment securities, net
|
(1
|
)
|
|
1
|
|
|
nm
|
|
|
6
|
|
|
(39
|
)
|
|
nm
|
|
||||
Total revenue
|
2,444
|
|
|
2,409
|
|
|
1
|
|
|
7,496
|
|
|
7,068
|
|
|
6
|
|
||||
Provision for loan losses
|
5
|
|
|
3
|
|
|
67
|
|
|
7
|
|
|
4
|
|
|
75
|
|
||||
Total expenses
|
1,693
|
|
|
1,673
|
|
|
1
|
|
|
5,244
|
|
|
5,050
|
|
|
4
|
|
||||
Income before income tax expense
|
$
|
746
|
|
|
$
|
733
|
|
|
2
|
|
|
$
|
2,245
|
|
|
$
|
2,014
|
|
|
11
|
|
Pre-tax margin
|
31
|
%
|
|
30
|
%
|
|
|
|
30
|
%
|
|
28
|
%
|
|
|
|
|
|
TABLE 9: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT
|
|||||||||||
(In billions)
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||
Mutual funds
|
$
|
8,717
|
|
|
$
|
7,603
|
|
|
$
|
7,394
|
|
Collective funds
|
9,646
|
|
|
9,707
|
|
|
9,190
|
|
|||
Pension products
|
6,807
|
|
|
6,704
|
|
|
6,571
|
|
|||
Insurance and other products
|
8,826
|
|
|
9,105
|
|
|
8,955
|
|
|||
Total
|
$
|
33,996
|
|
|
$
|
33,119
|
|
|
$
|
32,110
|
|
TABLE 10: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS
|
|||||||||||
(In billions)
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||
Equities
|
$
|
20,070
|
|
|
$
|
19,214
|
|
|
$
|
18,423
|
|
Fixed-income
|
10,018
|
|
|
10,070
|
|
|
9,883
|
|
|||
Short-term and other investments
|
3,908
|
|
|
3,835
|
|
|
3,804
|
|
|||
Total
|
$
|
33,996
|
|
|
$
|
33,119
|
|
|
$
|
32,110
|
|
TABLE 11: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY
(1)
|
|||||||||||
(In billions)
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||
North America
|
$
|
25,157
|
|
|
$
|
24,418
|
|
|
$
|
23,675
|
|
Europe/Middle East/Africa
|
7,094
|
|
|
7,028
|
|
|
6,806
|
|
|||
Asia/Pacific
|
1,745
|
|
|
1,673
|
|
|
1,629
|
|
|||
Total
|
$
|
33,996
|
|
|
$
|
33,119
|
|
|
$
|
32,110
|
|
|
|
•
|
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
|
•
|
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 us 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
|
|
|
|
|
|
|
|||||||||||||||
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
% Change
|
||||||||||||||
(Dollars in millions, except where otherwise noted)
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
|||||||||||
Management fees
|
$
|
474
|
|
|
$
|
419
|
|
|
13
|
%
|
|
$
|
1,411
|
|
|
$
|
1,198
|
|
|
18
|
%
|
Trading services
(1)
|
33
|
|
|
20
|
|
|
65
|
|
|
97
|
|
|
55
|
|
|
76
|
|
||||
Processing fees and other
|
8
|
|
|
1
|
|
|
nm
|
|
|
9
|
|
|
6
|
|
|
50
|
|
||||
Total fee revenue
|
515
|
|
|
440
|
|
|
17
|
|
|
1,517
|
|
|
1,259
|
|
|
20
|
|
||||
Net interest income
|
(8
|
)
|
|
(3
|
)
|
|
nm
|
|
|
(17
|
)
|
|
(3
|
)
|
|
nm
|
|
||||
Total revenue
|
507
|
|
|
437
|
|
|
16
|
|
|
1,500
|
|
|
1,256
|
|
|
19
|
|
||||
Total expenses
|
386
|
|
|
314
|
|
|
23
|
|
|
1,173
|
|
|
954
|
|
|
23
|
|
||||
Income before income tax expense
|
$
|
121
|
|
|
$
|
123
|
|
|
(2
|
)
|
|
$
|
327
|
|
|
$
|
302
|
|
|
8
|
|
Pre-tax margin
|
24
|
%
|
|
28
|
%
|
|
|
|
22
|
%
|
|
24
|
%
|
|
|
|
|
TABLE 13: ASSETS UNDER MANAGEMENT BY ASSET CLASS AND INVESTMENT APPROACH
|
|||||||||||
(In billions)
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||
Equity:
|
|
|
|
|
|
||||||
Active
|
$
|
96
|
|
|
$
|
95
|
|
|
$
|
95
|
|
Passive
|
1,693
|
|
|
1,650
|
|
|
1,545
|
|
|||
Total Equity
|
1,789
|
|
|
1,745
|
|
|
1,640
|
|
|||
Fixed-Income:
|
|
|
|
|
|
||||||
Active
|
80
|
|
|
77
|
|
|
73
|
|
|||
Passive
|
343
|
|
|
337
|
|
|
326
|
|
|||
Total Fixed-Income
|
423
|
|
|
414
|
|
|
399
|
|
|||
Cash
(1)
|
317
|
|
|
330
|
|
|
347
|
|
|||
Multi-Asset-Class Solutions:
|
|
|
|
|
|
||||||
Active
|
20
|
|
|
18
|
|
|
18
|
|
|||
Passive
|
125
|
|
|
129
|
|
|
116
|
|
|||
Total Multi-Asset-Class Solutions
|
145
|
|
|
147
|
|
|
134
|
|
|||
Alternative Investments
(2)
:
|
|
|
|
|
|
||||||
Active
|
22
|
|
|
23
|
|
|
24
|
|
|||
Passive
|
114
|
|
|
123
|
|
|
129
|
|
|||
Total Alternative Investments
|
136
|
|
|
146
|
|
|
153
|
|
|||
Total
|
$
|
2,810
|
|
|
$
|
2,782
|
|
|
$
|
2,673
|
|
|
|
|
|
|
|
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, 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
|
|
|
2
|
|
|
12
|
|
|
3
|
|
|
325
|
|
||||||
Foreign exchange impact
|
26
|
|
|
9
|
|
|
3
|
|
|
5
|
|
|
6
|
|
|
49
|
|
||||||
Total market/foreign exchange impact
|
319
|
|
|
24
|
|
|
5
|
|
|
17
|
|
|
9
|
|
|
374
|
|
||||||
Balance as of December 31, 2017
|
$
|
1,745
|
|
|
$
|
414
|
|
|
$
|
330
|
|
|
$
|
147
|
|
|
$
|
146
|
|
|
$
|
2,782
|
|
Long-term institutional inflows
(3)
|
260
|
|
|
111
|
|
|
—
|
|
|
50
|
|
|
11
|
|
|
432
|
|
||||||
Long-term institutional outflows
(3)
|
(299
|
)
|
|
(95
|
)
|
|
—
|
|
|
(51
|
)
|
|
(12
|
)
|
|
(457
|
)
|
||||||
Long-term institutional flows, net
|
(39
|
)
|
|
16
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(25
|
)
|
||||||
ETF flows, net
|
2
|
|
|
8
|
|
|
1
|
|
|
—
|
|
|
(4
|
)
|
|
7
|
|
||||||
Cash fund flows, net
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||||
Total flows, net
|
(37
|
)
|
|
24
|
|
|
(14
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|
(33
|
)
|
||||||
Market appreciation
|
92
|
|
|
(11
|
)
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
82
|
|
||||||
Foreign exchange impact
|
(11
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(21
|
)
|
||||||
Total market/foreign exchange impact
|
81
|
|
|
(15
|
)
|
|
1
|
|
|
(1
|
)
|
|
(5
|
)
|
|
61
|
|
||||||
Balance as of September 30, 2018
|
$
|
1,789
|
|
|
$
|
423
|
|
|
$
|
317
|
|
|
$
|
145
|
|
|
$
|
136
|
|
|
$
|
2,810
|
|
|
|
TABLE 17: AVERAGE STATEMENT OF CONDITION
(1)
|
|||||||
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
(In millions)
|
Average Balance
|
|
Average Balance
|
||||
Assets:
|
|
|
|
||||
Interest-bearing deposits with banks
|
$
|
54,414
|
|
|
$
|
49,171
|
|
Securities purchased under resale agreements
|
2,759
|
|
|
2,192
|
|
||
Trading account assets
|
1,098
|
|
|
949
|
|
||
Investment securities
|
89,080
|
|
|
95,716
|
|
||
Loans and leases
|
23,359
|
|
|
21,360
|
|
||
Other interest-earning assets
|
16,599
|
|
|
22,952
|
|
||
Average total interest-earning assets
|
187,309
|
|
|
192,340
|
|
||
Cash and due from banks
|
3,375
|
|
|
3,181
|
|
||
Other non-interest-earning assets
|
33,386
|
|
|
24,973
|
|
||
Average total assets
|
$
|
224,070
|
|
|
$
|
220,494
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity:
|
|
|
|||||
Interest-bearing deposits:
|
|
|
|
||||
U.S.
|
$
|
52,190
|
|
|
$
|
25,821
|
|
Non-U.S.
|
74,170
|
|
|
96,860
|
|
||
Total interest-bearing deposits
|
126,360
|
|
|
122,681
|
|
||
Securities sold under repurchase agreements
|
2,361
|
|
|
3,965
|
|
||
Federal funds purchased
|
—
|
|
|
1
|
|
||
Other short-term borrowings
|
1,274
|
|
|
1,313
|
|
||
Long-term debt
|
10,808
|
|
|
11,569
|
|
||
Other interest-bearing liabilities
|
5,187
|
|
|
4,881
|
|
||
Average total interest-bearing liabilities
|
145,990
|
|
|
144,410
|
|
||
Non-interest-bearing deposits
|
36,081
|
|
|
42,043
|
|
||
Other non-interest-bearing liabilities
|
19,330
|
|
|
12,130
|
|
||
Preferred shareholders’ equity
|
3,204
|
|
|
3,197
|
|
||
Common shareholders’ equity
|
19,465
|
|
|
18,714
|
|
||
Average total liabilities and shareholders’ equity
|
$
|
224,070
|
|
|
$
|
220,494
|
|
|
|
TABLE 18: CARRYING VALUES OF INVESTMENT SECURITIES
|
|||||||
(In millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Available-for-sale:
|
|||||||
U.S. Treasury and federal agencies:
|
|||||||
Direct obligations
|
$
|
11
|
|
|
$
|
223
|
|
Mortgage-backed securities
|
15,473
|
|
|
10,872
|
|
||
Total U.S. Treasury and federal agencies
|
15,484
|
|
|
11,095
|
|
||
Asset-backed securities:
|
|
|
|
||||
Student loans
(1)
|
1,441
|
|
|
3,358
|
|
||
Credit cards
|
616
|
|
|
1,542
|
|
||
Other
|
611
|
|
|
1,447
|
|
||
Total asset-backed securities
|
2,668
|
|
|
6,347
|
|
||
Non-U.S. debt securities:
|
|
|
|
||||
Mortgage-backed securities
|
2,348
|
|
|
6,695
|
|
||
Asset-backed securities
|
1,521
|
|
|
2,947
|
|
||
Government securities
|
12,973
|
|
|
10,721
|
|
||
Other
|
4,744
|
|
|
6,108
|
|
||
Total non-U.S. debt securities
|
21,586
|
|
|
26,471
|
|
||
State and political subdivisions
|
4,035
|
|
|
9,151
|
|
||
Collateralized mortgage obligations
|
303
|
|
|
1,054
|
|
||
Other U.S. debt securities
|
2,026
|
|
|
2,560
|
|
||
U.S. equity securities
(2)
|
—
|
|
|
46
|
|
||
U.S. money-market mutual funds
(2)
|
—
|
|
|
397
|
|
||
Total
|
$
|
46,102
|
|
|
$
|
57,121
|
|
|
|
|
|
||||
Held-to-maturity
(3)
:
|
|
|
|
||||
U.S. Treasury and federal agencies:
|
|||||||
Direct obligations
|
$
|
15,168
|
|
|
$
|
17,028
|
|
Mortgage-backed securities
|
19,697
|
|
|
16,651
|
|
||
Total U.S. Treasury and federal agencies
|
34,865
|
|
|
33,679
|
|
||
Asset-backed securities:
|
|
|
|
||||
Student loans
(1)
|
3,031
|
|
|
3,047
|
|
||
Credit cards
|
325
|
|
|
798
|
|
||
Other
|
1
|
|
|
1
|
|
||
Total asset-backed securities
|
3,357
|
|
|
3,846
|
|
||
Non-U.S. debt securities:
|
|
|
|
||||
Mortgage-backed securities
|
672
|
|
|
939
|
|
||
Asset-backed securities
|
228
|
|
|
263
|
|
||
Government securities
|
357
|
|
|
474
|
|
||
Other
|
46
|
|
|
48
|
|
||
Total non-U.S. debt securities
|
1,303
|
|
|
1,724
|
|
||
Collateralized mortgage obligations
|
1,042
|
|
|
1,209
|
|
||
Total
|
$
|
40,567
|
|
|
$
|
40,458
|
|
|
|
TABLE 19: INVESTMENT PORTFOLIO BY EXTERNAL CREDIT RATING
|
|||||
|
September 30, 2018
|
|
December 31, 2017
|
||
AAA
(1)
|
76
|
%
|
|
74
|
%
|
AA
|
14
|
|
|
16
|
|
A
|
6
|
|
|
6
|
|
BBB
|
4
|
|
|
4
|
|
Below BBB
|
—
|
|
|
—
|
|
|
100
|
%
|
|
100
|
%
|
|
|
TABLE 20: INVESTMENT PORTFOLIO BY ASSET CLASS
|
|||||
|
September 30, 2018
|
|
December 31, 2017
|
||
US Treasuries
|
17
|
%
|
|
17
|
%
|
US Agency MBS
|
38
|
|
|
26
|
|
Foreign Sovereign
|
16
|
|
|
12
|
|
ABS
|
13
|
|
|
22
|
|
Other Credit
|
16
|
|
|
23
|
|
|
100
|
%
|
|
100
|
%
|
TABLE 21: NON-U.S. DEBT SECURITIES
|
|||||||
(In millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Available-for-sale:
|
|
|
|
||||
United Kingdom
|
$
|
3,510
|
|
|
$
|
5,721
|
|
Australia
|
2,924
|
|
|
4,717
|
|
||
Canada
|
2,473
|
|
|
3,066
|
|
||
France
|
2,243
|
|
|
2,500
|
|
||
Belgium
|
1,416
|
|
|
1,193
|
|
||
Japan
|
1,305
|
|
|
1,319
|
|
||
Italy
|
1,194
|
|
|
1,645
|
|
||
Spain
|
1,179
|
|
|
1,413
|
|
||
Austria
|
1,124
|
|
|
234
|
|
||
Ireland
|
989
|
|
|
787
|
|
||
Netherlands
|
957
|
|
|
1,175
|
|
||
Finland
|
621
|
|
|
299
|
|
||
Germany
|
487
|
|
|
529
|
|
||
Sweden
|
354
|
|
|
538
|
|
||
Hong Kong
|
307
|
|
|
666
|
|
||
Norway
|
172
|
|
|
514
|
|
||
Other
(1)
|
331
|
|
|
155
|
|
||
Total
|
$
|
21,586
|
|
|
$
|
26,471
|
|
Held-to-maturity:
|
|
|
|
||||
United Kingdom
|
$
|
371
|
|
|
$
|
410
|
|
Singapore
|
240
|
|
|
353
|
|
||
Netherlands
|
199
|
|
|
372
|
|
||
Australia
|
170
|
|
|
235
|
|
||
Germany
|
117
|
|
|
127
|
|
||
Spain
|
95
|
|
|
104
|
|
||
Other
(2)
|
111
|
|
|
123
|
|
||
Total
|
$
|
1,303
|
|
|
$
|
1,724
|
|
|
|
•
|
a pre-tax net unrealized loss of
$112 million
, composed of gross unrealized gains of
$27 million
and gross unrealized losses of
$139 million
, associated with non-U.S. debt securities available-for-sale and;
|
•
|
a pre-tax net unrealized gain of
$76 million
, composed of gross unrealized gains of
$82 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
|
|||||||
September 30, 2018
|
|
|
|
|
|
|
||||||||
State of Issuer:
|
|
|
|
|
|
|
||||||||
Texas
|
$
|
458
|
|
|
$
|
1,587
|
|
|
$
|
2,045
|
|
|
16
|
%
|
New York
|
490
|
|
|
1,536
|
|
|
2,026
|
|
|
16
|
|
|||
California
|
224
|
|
|
1,746
|
|
|
1,970
|
|
|
15
|
|
|||
Massachusetts
|
685
|
|
|
980
|
|
|
1,665
|
|
|
13
|
|
|||
Total
|
$
|
1,857
|
|
|
$
|
5,849
|
|
|
$
|
7,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
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
|
|
|
|
|
|
|
|
TABLE 24: ALLOWANCE FOR LOAN AND LEASE LOSSES
|
||||||||
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Allowance for loan and lease losses:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
54
|
|
|
$
|
53
|
|
Provision for loan and lease losses
(1)
|
|
7
|
|
|
4
|
|
||
Charge-offs
(2)
|
|
(1
|
)
|
|
—
|
|
||
Ending balance
|
|
$
|
60
|
|
|
$
|
57
|
|
|
|
|
|
TABLE 25: CROSS-BORDER OUTSTANDINGS
(1)
|
|||||||||||
(In millions)
|
Investment Securities and Other Assets
|
|
Derivatives and Securities on Loan
|
|
Total Cross-Border Outstandings
|
||||||
September 30, 2018
|
|
|
|
|
|
|
|||||
Germany
|
$
|
18,330
|
|
|
$
|
766
|
|
|
$
|
19,096
|
|
Japan
|
16,031
|
|
|
1,817
|
|
|
17,848
|
|
|||
United Kingdom
|
13,833
|
|
|
1,327
|
|
|
15,160
|
|
|||
Australia
|
4,146
|
|
|
974
|
|
|
5,120
|
|
|||
Canada
|
2,958
|
|
|
555
|
|
|
3,513
|
|
|||
France
|
3,035
|
|
|
273
|
|
|
3,308
|
|
|||
Ireland
|
1,940
|
|
|
788
|
|
|
2,728
|
|
|||
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
|
|
|
|
•
|
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;
|
•
|
model risk;
|
•
|
strategic risk;
and
|
•
|
reputational, fiduciary and business conduct risk.
|
TABLE 26: COMPONENTS OF AVERAGE HQLA BY TYPE OF ASSET
|
||||||||
|
|
Quarters Ended
|
||||||
(In millions)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Excess central bank balances
|
|
$
|
46,192
|
|
|
$
|
33,584
|
|
Foreign government
|
|
12,019
|
|
|
8,064
|
|
||
U.S. Treasuries
|
|
10,756
|
|
|
10,278
|
|
||
Other investment securities
|
|
25,398
|
|
|
13,422
|
|
||
Total
|
|
$
|
94,365
|
|
|
$
|
65,348
|
|
•
|
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 27: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Quarters Ended
|
|
As of September 30,
|
|
As of June 30,
|
|
As of September 30,
|
||||||||||||||||||||||||||||||||||||||||
|
September 30, 2018
|
|
June 30, 2018
|
|
September 30, 2017
|
|
2018
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||||||||||
(In thousands)
|
Avg.
|
|
Max.
|
|
Min.
|
|
Avg.
|
|
Max.
|
|
Min.
|
|
Avg.
|
|
Max.
|
|
Min.
|
|
VaR
|
|
VaR
|
|
VaR
|
||||||||||||||||||||||||
Global Markets
|
$
|
6,008
|
|
|
$
|
11,947
|
|
|
$
|
3,308
|
|
|
$
|
6,396
|
|
|
$
|
12,946
|
|
|
$
|
3,607
|
|
|
$
|
7,592
|
|
|
$
|
13,703
|
|
|
$
|
3,295
|
|
|
$
|
5,428
|
|
|
$
|
3,851
|
|
|
$
|
9,524
|
|
Global Treasury
|
317
|
|
|
896
|
|
|
91
|
|
|
656
|
|
|
1,813
|
|
|
179
|
|
|
342
|
|
|
790
|
|
|
145
|
|
|
896
|
|
|
257
|
|
|
723
|
|
||||||||||||
Diversification
|
(314
|
)
|
|
(881
|
)
|
|
(136
|
)
|
|
(504
|
)
|
|
(1,710
|
)
|
|
(203
|
)
|
|
(388
|
)
|
|
(841
|
)
|
|
(103
|
)
|
|
(886
|
)
|
|
(414
|
)
|
|
(784
|
)
|
||||||||||||
Total VaR
|
$
|
6,011
|
|
|
$
|
11,962
|
|
|
$
|
3,263
|
|
|
$
|
6,548
|
|
|
$
|
13,049
|
|
|
$
|
3,583
|
|
|
$
|
7,546
|
|
|
$
|
13,652
|
|
|
$
|
3,337
|
|
|
$
|
5,438
|
|
|
$
|
3,694
|
|
|
$
|
9,463
|
|
TABLE 28: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Quarters Ended
|
|
As of September 30,
|
|
As of June 30,
|
|
As of September 30,
|
||||||||||||||||||||||||||||||||||||||||
|
September 30, 2018
|
|
June 30, 2018
|
|
September 30, 2017
|
|
2018
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||||||||||
(In thousands)
|
Avg.
|
|
Max.
|
|
Min.
|
|
Avg.
|
|
Max.
|
|
Min.
|
|
Avg.
|
|
Max.
|
|
Min.
|
|
Stressed VaR
|
|
Stressed VaR
|
|
Stressed VaR
|
||||||||||||||||||||||||
Global Markets
|
$
|
27,641
|
|
|
$
|
47,571
|
|
|
$
|
14,811
|
|
|
$
|
38,594
|
|
|
$
|
54,517
|
|
|
$
|
21,608
|
|
|
$
|
23,981
|
|
|
$
|
45,399
|
|
|
$
|
13,363
|
|
|
$
|
25,185
|
|
|
$
|
26,774
|
|
|
$
|
24,755
|
|
Global Treasury
|
2,130
|
|
|
4,467
|
|
|
840
|
|
|
3,927
|
|
|
10,137
|
|
|
1,534
|
|
|
5,309
|
|
|
10,549
|
|
|
2,584
|
|
|
1,958
|
|
|
3,268
|
|
|
5,150
|
|
||||||||||||
Diversification
|
(2,619
|
)
|
|
(6,345
|
)
|
|
(823
|
)
|
|
(4,820
|
)
|
|
(10,682
|
)
|
|
(2,239
|
)
|
|
(4,908
|
)
|
|
(11,584
|
)
|
|
(2,060
|
)
|
|
(2,988
|
)
|
|
(4,046
|
)
|
|
(5,543
|
)
|
||||||||||||
Total VaR
|
$
|
27,152
|
|
|
$
|
45,693
|
|
|
$
|
14,828
|
|
|
$
|
37,701
|
|
|
$
|
53,972
|
|
|
$
|
20,903
|
|
|
$
|
24,382
|
|
|
$
|
44,364
|
|
|
$
|
13,887
|
|
|
$
|
24,155
|
|
|
$
|
25,996
|
|
|
$
|
24,362
|
|
TABLE 29: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR FOR COVERED POSITIONS
(1)
|
|||||||||||||||||||||||||||||||||||
|
As of September 30, 2018
|
|
As of June 30, 2018
|
|
As of September 30, 2017
|
||||||||||||||||||||||||||||||
(In thousands)
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Volatility Risk
|
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Volatility Risk
|
|
Foreign Exchange Risk
|
|
Interest Rate
|
|
Volatility Risk
|
||||||||||||||||||
By component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Global Markets
|
$
|
3,103
|
|
|
$
|
4,939
|
|
|
$
|
233
|
|
|
$
|
2,386
|
|
|
$
|
3,114
|
|
|
$
|
467
|
|
|
$
|
7,876
|
|
|
$
|
2,930
|
|
|
$
|
201
|
|
Global Treasury
|
36
|
|
|
896
|
|
|
—
|
|
|
36
|
|
|
228
|
|
|
—
|
|
|
62
|
|
|
736
|
|
|
—
|
|
|||||||||
Diversification
|
(33
|
)
|
|
(943
|
)
|
|
—
|
|
|
(17
|
)
|
|
(156
|
)
|
|
—
|
|
|
(55
|
)
|
|
(1,102
|
)
|
|
—
|
|
|||||||||
Total VaR
|
$
|
3,106
|
|
|
$
|
4,892
|
|
|
$
|
233
|
|
|
$
|
2,405
|
|
|
$
|
3,186
|
|
|
$
|
467
|
|
|
$
|
7,883
|
|
|
$
|
2,564
|
|
|
$
|
201
|
|
TABLE 30: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR FOR COVERED POSITIONS
(1)
|
|||||||||||||||||||||||||||||||||||
|
As of September 30, 2018
|
|
As of June 30, 2018
|
|
As of September 30, 2017
|
||||||||||||||||||||||||||||||
(In thousands)
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Volatility Risk
|
|
Foreign Exchange Risk
|
|
Interest Rate Risk
|
|
Volatility Risk
|
|
Foreign Exchange Risk
|
|
Interest Rate
|
|
Volatility Risk
|
||||||||||||||||||
By component:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Global Markets
|
$
|
14,544
|
|
|
$
|
29,451
|
|
|
$
|
257
|
|
|
$
|
9,457
|
|
|
$
|
36,770
|
|
|
$
|
520
|
|
|
$
|
16,864
|
|
|
$
|
20,608
|
|
|
$
|
214
|
|
Global Treasury
|
109
|
|
|
2,071
|
|
|
—
|
|
|
130
|
|
|
3,391
|
|
|
—
|
|
|
98
|
|
|
5,273
|
|
|
—
|
|
|||||||||
Diversification
|
(117
|
)
|
|
(3,446
|
)
|
|
—
|
|
|
2
|
|
|
(4,203
|
)
|
|
—
|
|
|
(100
|
)
|
|
(3,941
|
)
|
|
—
|
|
|||||||||
Total VaR
|
$
|
14,536
|
|
|
$
|
28,076
|
|
|
$
|
257
|
|
|
$
|
9,589
|
|
|
$
|
35,958
|
|
|
$
|
520
|
|
|
$
|
16,862
|
|
|
$
|
21,940
|
|
|
$
|
214
|
|
|
|
|
TABLE 31: NII SENSITIVITY
|
||||||||
(In millions)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Rate change:
|
|
Benefit (Exposure)
|
||||||
+100 bps shock
|
|
$
|
346
|
|
|
$
|
435
|
|
–100 bps shock
|
|
(171
|
)
|
|
(294
|
)
|
||
+100 bps ramp
|
|
141
|
|
|
177
|
|
||
–100 bps ramp
|
|
(74
|
)
|
|
(122
|
)
|
TABLE 32: EVE SENSITIVITY
|
||||||||
(In millions)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Rate change:
|
|
Benefit (Exposure)
|
||||||
+200 bps shock
|
|
$
|
(1,827
|
)
|
|
$
|
(1,507
|
)
|
–200 bps shock
|
|
1,338
|
|
|
11
|
|
•
|
Method 1: Assesses systemic importance based upon five equally-weighted components: size, interconnectedness, complexity, cross-jurisdictional activity and substitutability
|
•
|
Method 2: Alters the calculation from Method 1 by factoring in a wholesale funding score in place of substitutability and applying a 2x multiplier to the sum of the five components
|
TABLE 33: 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 34: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS
|
|||||||||||||||||||||||||||||||||||
|
State Street
|
|
State Street Bank
|
||||||||||||||||||||||||||||||||
(In millions)
|
Basel III Advanced Approaches September 30, 2018
(1)
|
|
Basel III Standardized Approach September 30, 2018
(2)
|
|
Basel III Advanced Approaches December 31, 2017
(1)
|
|
Basel III Standardized Approach December 31, 2017
(2)
|
|
Basel III Advanced Approaches September 30, 2018
(1)
|
|
Basel III Standardized Approach September 30, 2018
(2)
|
|
Basel III Advanced Approaches December 31, 2017
(1)
|
|
Basel III Standardized Approach December 31, 2017
(2)
|
||||||||||||||||||||
Common shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Common stock and related surplus
|
$
|
10,922
|
|
|
$
|
10,922
|
|
|
$
|
10,302
|
|
|
$
|
10,302
|
|
|
$
|
13,262
|
|
|
$
|
13,262
|
|
|
$
|
11,612
|
|
|
$
|
11,612
|
|
||||
Retained earnings
|
20,387
|
|
|
20,387
|
|
|
18,856
|
|
|
18,856
|
|
|
13,969
|
|
|
13,969
|
|
|
12,312
|
|
|
12,312
|
|
||||||||||||
Accumulated other comprehensive income (loss)
|
(1,661
|
)
|
|
(1,661
|
)
|
|
(972
|
)
|
|
(972
|
)
|
|
(1,450
|
)
|
|
(1,450
|
)
|
|
(809
|
)
|
|
(809
|
)
|
||||||||||||
Treasury stock, at cost
|
(8,735
|
)
|
|
(8,735
|
)
|
|
(9,029
|
)
|
|
(9,029
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total
|
20,913
|
|
|
20,913
|
|
|
19,157
|
|
|
19,157
|
|
|
25,781
|
|
|
25,781
|
|
|
23,115
|
|
|
23,115
|
|
||||||||||||
Regulatory capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
(3)
|
(7,016
|
)
|
|
(7,016
|
)
|
|
(6,877
|
)
|
|
(6,877
|
)
|
|
(6,721
|
)
|
|
(6,721
|
)
|
|
(6,579
|
)
|
|
(6,579
|
)
|
||||||||||||
Other adjustments
(4)
|
(194
|
)
|
|
(194
|
)
|
|
(76
|
)
|
|
(76
|
)
|
|
(48
|
)
|
|
(48
|
)
|
|
(5
|
)
|
|
(5
|
)
|
||||||||||||
CET1 capital
|
13,703
|
|
|
13,703
|
|
|
12,204
|
|
|
12,204
|
|
|
19,012
|
|
|
19,012
|
|
|
16,531
|
|
|
16,531
|
|
||||||||||||
Preferred stock
|
3,690
|
|
|
3,690
|
|
|
3,196
|
|
|
3,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Trust preferred capital securities subject to phase-out from tier 1 capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Other adjustments
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Tier 1 capital
|
17,393
|
|
|
17,393
|
|
|
15,382
|
|
|
15,382
|
|
|
19,012
|
|
|
19,012
|
|
|
16,531
|
|
|
16,531
|
|
||||||||||||
Qualifying subordinated long-term debt
|
761
|
|
|
761
|
|
|
980
|
|
|
980
|
|
|
759
|
|
|
759
|
|
|
983
|
|
|
983
|
|
||||||||||||
Trust preferred capital securities phased out of tier 1 capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
ALLL and other
|
5
|
|
|
74
|
|
|
4
|
|
|
72
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
72
|
|
||||||||||||
Other adjustments
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Total capital
|
$
|
18,159
|
|
|
$
|
18,228
|
|
|
$
|
16,367
|
|
|
$
|
16,435
|
|
|
$
|
19,771
|
|
|
$
|
19,846
|
|
|
$
|
17,514
|
|
|
$
|
17,586
|
|
||||
RWAs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Credit risk
(5)
|
$
|
50,272
|
|
|
$
|
104,515
|
|
|
$
|
52,000
|
|
|
$
|
101,349
|
|
|
$
|
47,732
|
|
|
$
|
101,444
|
|
|
$
|
49,489
|
|
|
$
|
98,433
|
|
||||
Operational risk
(6)
|
45,840
|
|
|
NA
|
|
|
45,822
|
|
|
NA
|
|
|
45,315
|
|
|
NA
|
|
|
45,295
|
|
|
NA
|
|
||||||||||||
Market risk
|
1,255
|
|
|
1,255
|
|
|
1,334
|
|
|
1,334
|
|
|
1,255
|
|
|
1,255
|
|
|
1,334
|
|
|
1,334
|
|
||||||||||||
Total RWAs
|
$
|
97,367
|
|
|
$
|
105,770
|
|
|
$
|
99,156
|
|
|
$
|
102,683
|
|
|
$
|
94,302
|
|
|
$
|
102,699
|
|
|
$
|
96,118
|
|
|
$
|
99,767
|
|
||||
Adjusted quarterly average assets
|
$
|
214,103
|
|
|
$
|
214,103
|
|
|
$
|
209,328
|
|
|
$
|
209,328
|
|
|
$
|
211,477
|
|
|
$
|
211,477
|
|
|
$
|
206,070
|
|
|
$
|
206,070
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Capital Ratios:
|
2018 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge
(7)
|
2017 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
CET1 capital
|
7.5
|
%
|
6.5
|
%
|
14.1
|
%
|
|
13.0
|
%
|
|
12.3
|
%
|
|
11.9
|
%
|
|
20.2
|
%
|
|
18.5
|
%
|
|
17.2
|
%
|
|
16.6
|
%
|
||||||||
Tier 1 capital
|
9.0
|
|
8.0
|
|
17.9
|
|
|
16.4
|
|
|
15.5
|
|
|
15.0
|
|
|
20.2
|
|
|
18.5
|
|
|
17.2
|
|
|
16.6
|
|
||||||||
Total capital
|
11.0
|
|
10.0
|
|
18.7
|
|
|
17.2
|
|
|
16.5
|
|
|
16.0
|
|
|
21.0
|
|
|
19.3
|
|
|
18.2
|
|
|
17.6
|
|
||||||||
Tier 1 leverage
|
4.0
|
|
4.0
|
|
8.1
|
|
|
8.1
|
|
|
7.3
|
|
|
7.3
|
|
|
9.0
|
|
|
9.0
|
|
|
8.0
|
|
|
8.0
|
|
|
|
|
|
TABLE 35: CAPITAL ROLL-FORWARD
|
||||||||||||||||
(In millions)
|
|
Basel III Advanced Approaches September 30, 2018
|
|
Basel III Standardized Approach September 30, 2018
|
|
Basel III Advanced Approaches December 31, 2017
|
|
Basel III Standardized Approach December 31, 2017
|
||||||||
CET1 capital:
|
|
|
|
|
|
|
|
|
||||||||
CET1 capital balance, beginning of period
|
|
$
|
12,204
|
|
|
$
|
12,204
|
|
|
$
|
11,624
|
|
|
$
|
11,624
|
|
Net income
|
|
2,160
|
|
|
2,160
|
|
|
2,177
|
|
|
2,177
|
|
||||
Changes in treasury stock, at cost
|
|
294
|
|
|
294
|
|
|
(1,347
|
)
|
|
(1,347
|
)
|
||||
Dividends declared
|
|
(632
|
)
|
|
(632
|
)
|
|
(778
|
)
|
|
(778
|
)
|
||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
|
|
(139
|
)
|
|
(139
|
)
|
|
(529
|
)
|
|
(529
|
)
|
||||
Effect of certain items in accumulated other comprehensive income (loss)
|
|
(689
|
)
|
|
(689
|
)
|
|
964
|
|
|
964
|
|
||||
Other adjustments
|
|
505
|
|
|
505
|
|
|
93
|
|
|
93
|
|
||||
Changes in CET1 capital
|
|
1,499
|
|
|
1,499
|
|
|
580
|
|
|
580
|
|
||||
CET1 capital balance, end of period
|
|
13,703
|
|
|
13,703
|
|
|
12,204
|
|
|
12,204
|
|
||||
Additional tier 1 capital:
|
|
|
|
|
|
|
|
|
||||||||
Tier 1 capital balance, beginning of period
|
|
15,382
|
|
|
15,382
|
|
|
14,717
|
|
|
14,717
|
|
||||
Change in CET1 capital
|
|
1,499
|
|
|
1,499
|
|
|
580
|
|
|
580
|
|
||||
Net issuance of preferred stock
|
|
494
|
|
|
494
|
|
|
—
|
|
|
—
|
|
||||
Trust preferred capital securities phased out of tier 1 capital
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other adjustments
|
|
18
|
|
|
18
|
|
|
85
|
|
|
85
|
|
||||
Changes in tier 1 capital
|
|
2,011
|
|
|
2,011
|
|
|
665
|
|
|
665
|
|
||||
Tier 1 capital balance, end of period
|
|
17,393
|
|
|
17,393
|
|
|
15,382
|
|
|
15,382
|
|
||||
Tier 2 capital:
|
|
|
|
|
|
|
|
|
||||||||
Tier 2 capital balance, beginning of period
|
|
985
|
|
|
1,053
|
|
|
1,192
|
|
|
1,250
|
|
||||
Net issuance and changes in long-term debt qualifying as tier 2
|
|
(219
|
)
|
|
(219
|
)
|
|
(192
|
)
|
|
(192
|
)
|
||||
Changes in ALLL and other
|
|
1
|
|
|
2
|
|
|
(15
|
)
|
|
(5
|
)
|
||||
Change in other adjustments
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Changes in tier 2 capital
|
|
(219
|
)
|
|
(218
|
)
|
|
(207
|
)
|
|
(197
|
)
|
||||
Tier 2 capital balance, end of period
|
|
766
|
|
|
835
|
|
|
985
|
|
|
1,053
|
|
||||
Total capital:
|
|
|
|
|
|
|
|
|
||||||||
Total capital balance, beginning of period
|
|
16,367
|
|
|
16,435
|
|
|
15,909
|
|
|
15,967
|
|
||||
Changes in tier 1 capital
|
|
2,011
|
|
|
2,011
|
|
|
665
|
|
|
665
|
|
||||
Changes in tier 2 capital
|
|
(219
|
)
|
|
(218
|
)
|
|
(207
|
)
|
|
(197
|
)
|
||||
Total capital balance, end of period
|
|
$
|
18,159
|
|
|
$
|
18,228
|
|
|
$
|
16,367
|
|
|
$
|
16,435
|
|
TABLE 36: ADVANCED APPROACHES RWA ROLL-FORWARD
|
||||||||
(In millions)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Total RWAs, beginning of period
|
|
$
|
99,156
|
|
|
$
|
99,301
|
|
Changes in RWAs:
|
|
|
|
|
||||
Net increase (decrease) in investment securities-wholesale
|
|
(516
|
)
|
|
2,914
|
|
||
Net increase (decrease) in loans and leases
|
|
(676
|
)
|
|
30
|
|
||
Net increase (decrease) in securitization exposures
|
|
(3,165
|
)
|
|
(683
|
)
|
||
Net increase (decrease) in repo-style transaction exposures
|
|
191
|
|
|
440
|
|
||
Net increase (decrease) in OTC derivatives exposures
|
|
837
|
|
|
(1,129
|
)
|
||
Net increase (decrease) in all other
(1)
|
|
1,601
|
|
|
(2,543
|
)
|
||
Net increase (decrease) in credit RWAs
|
|
(1,728
|
)
|
|
(971
|
)
|
||
Net increase (decrease) in market RWAs
|
|
(79
|
)
|
|
(417
|
)
|
||
Net increase (decrease) in operational RWAs
|
|
18
|
|
|
1,243
|
|
||
Total RWAs, end of period
|
|
$
|
97,367
|
|
|
$
|
99,156
|
|
|
|
|
TABLE 37: STANDARDIZED APPROACH RWA ROLL-FORWARD
|
||||||||
(In millions)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Total estimated RWAs, beginning of period
(1)
|
|
$
|
102,683
|
|
|
$
|
99,876
|
|
Changes in credit RWAs:
|
|
|
|
|
||||
Net increase (decrease) in investment securities-wholesale
|
|
(1,806
|
)
|
|
1,729
|
|
||
Net increase (decrease) in loans and leases
|
|
1,479
|
|
|
2,589
|
|
||
Net increase (decrease) in securitization exposures
|
|
(3,164
|
)
|
|
(690
|
)
|
||
Net increase (decrease) in repo-style transaction exposures
|
|
918
|
|
|
2,058
|
|
||
Net increase (decrease) in OTC derivatives exposures
|
|
2,891
|
|
|
(1,709
|
)
|
||
Net increase (decrease) in all other
(2)
|
|
2,848
|
|
|
(753
|
)
|
||
Net increase (decrease) in credit RWAs
|
|
3,166
|
|
|
3,224
|
|
||
Net increase (decrease) in market RWAs
|
|
(79
|
)
|
|
(417
|
)
|
||
Total RWAs, end of period
|
|
$
|
105,770
|
|
|
$
|
102,683
|
|
|
|
|
TABLE 38: SUPPLEMENTARY LEVERAGE RATIO
|
||||
(In millions)
|
|
September 30, 2018
|
||
State Street:
|
|
|
||
Tier 1 capital
|
|
$
|
17,393
|
|
|
|
|
||
On-and off-balance sheet leverage exposure
|
|
253,821
|
|
|
Less: regulatory deductions
|
|
(7,210
|
)
|
|
Total assets for SLR
|
|
$
|
246,611
|
|
Supplementary leverage ratio
|
|
7.1
|
%
|
|
|
|
|
||
State Street Bank:
|
|
|
||
Tier 1 capital
|
|
$
|
19,012
|
|
|
|
|
||
On-and off-balance sheet leverage exposure
|
|
250,764
|
|
|
Less: regulatory deductions
|
|
(6,769
|
)
|
|
Total assets for SLR
|
|
$
|
243,995
|
|
Supplementary leverage ratio
|
|
7.8
|
%
|
TABLE 39: 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
|
|||
Series H
|
September 2018
|
|
500,000
|
|
|
1/100th
|
|
100,000
|
|
|
1,000
|
|
|
494
|
|
|
December 15, 2023
|
|
|
|
|
TABLE 40: PREFERRED STOCK DIVIDENDS
|
|||||||||||||||||||||||
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
(In millions) (1) |
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
(In millions) |
||||||||||||
Preferred Stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series C
|
$
|
1,313
|
|
|
$
|
0.33
|
|
|
$
|
6
|
|
|
$
|
1,313
|
|
|
$
|
0.33
|
|
|
$
|
6
|
|
Series D
|
1,475
|
|
|
0.37
|
|
|
11
|
|
|
1,475
|
|
|
0.37
|
|
|
11
|
|
||||||
Series E
|
1,500
|
|
|
0.38
|
|
|
11
|
|
|
1,500
|
|
|
0.38
|
|
|
11
|
|
||||||
Series F
|
2,625
|
|
|
26.25
|
|
|
20
|
|
|
2,625
|
|
|
26.25
|
|
|
20
|
|
||||||
Series G
|
1,338
|
|
|
0.33
|
|
|
7
|
|
|
1,338
|
|
|
0.33
|
|
|
7
|
|
||||||
Total
|
|
|
|
|
$
|
55
|
|
|
|
|
|
|
$
|
55
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
(In millions) |
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
(In millions) |
||||||||||||
Preferred Stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series C
|
$
|
3,939
|
|
|
$
|
0.99
|
|
|
$
|
19
|
|
|
$
|
3,939
|
|
|
$
|
0.99
|
|
|
$
|
19
|
|
Series D
|
4,425
|
|
|
1.11
|
|
|
33
|
|
|
4,425
|
|
|
1.11
|
|
|
33
|
|
||||||
Series E
|
4,500
|
|
|
1.14
|
|
|
33
|
|
|
4,500
|
|
|
1.14
|
|
|
33
|
|
||||||
Series F
|
5,250
|
|
|
52.50
|
|
|
40
|
|
|
5,250
|
|
|
52.50
|
|
|
40
|
|
||||||
Series G
|
4,014
|
|
|
0.99
|
|
|
21
|
|
|
4,014
|
|
|
0.99
|
|
|
21
|
|
||||||
Total
|
|
|
|
|
$
|
146
|
|
|
|
|
|
|
$
|
146
|
|
|
|
|
|
TABLE 41: SHARES REPURCHASED
|
||||||||||
|
Nine Months Ended September 30, 2018
(1)
|
|||||||||
|
Shares Acquired
(In millions) |
|
Average Cost per Share
|
|
Total Acquired
(In millions) |
|||||
2017 Program
|
3.3
|
|
|
$
|
105.31
|
|
|
$
|
350
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(Dollars in millions, except per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Fee revenue:
|
|
|
|
|
|
|
|
||||||||
Servicing fees
|
$
|
1,333
|
|
|
$
|
1,351
|
|
|
$
|
4,135
|
|
|
$
|
3,986
|
|
Management fees
|
474
|
|
|
419
|
|
|
1,411
|
|
|
1,198
|
|
||||
Trading services
|
288
|
|
|
259
|
|
|
907
|
|
|
823
|
|
||||
Securities finance
|
128
|
|
|
147
|
|
|
423
|
|
|
459
|
|
||||
Processing fees and other
|
57
|
|
|
66
|
|
|
140
|
|
|
209
|
|
||||
Total fee revenue
|
2,280
|
|
|
2,242
|
|
|
7,016
|
|
|
6,675
|
|
||||
Net interest income:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
916
|
|
|
761
|
|
|
2,680
|
|
|
2,111
|
|
||||
Interest expense
|
244
|
|
|
158
|
|
|
706
|
|
|
423
|
|
||||
Net interest income
|
672
|
|
|
603
|
|
|
1,974
|
|
|
1,688
|
|
||||
Gains (losses) related to investment securities, net:
|
|
|
|
|
|
|
|
||||||||
Gains (losses) from sales of available-for-sale securities, net
|
—
|
|
|
1
|
|
|
8
|
|
|
(39
|
)
|
||||
Losses from other-than-temporary impairment
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Gains (losses) related to investment securities, net
|
(1
|
)
|
|
1
|
|
|
6
|
|
|
(39
|
)
|
||||
Total revenue
|
2,951
|
|
|
2,846
|
|
|
8,996
|
|
|
8,324
|
|
||||
Provision for loan losses
|
5
|
|
|
3
|
|
|
7
|
|
|
4
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Compensation and employee benefits
|
1,103
|
|
|
1,090
|
|
|
3,477
|
|
|
3,327
|
|
||||
Information systems and communications
|
332
|
|
|
296
|
|
|
968
|
|
|
866
|
|
||||
Transaction processing services
|
236
|
|
|
215
|
|
|
724
|
|
|
619
|
|
||||
Occupancy
|
110
|
|
|
118
|
|
|
354
|
|
|
344
|
|
||||
Acquisition and restructuring costs
|
—
|
|
|
33
|
|
|
—
|
|
|
133
|
|
||||
Professional services
|
79
|
|
|
71
|
|
|
247
|
|
|
262
|
|
||||
Amortization of other intangible assets
|
47
|
|
|
54
|
|
|
145
|
|
|
160
|
|
||||
Other
|
172
|
|
|
144
|
|
|
579
|
|
|
427
|
|
||||
Total expenses
|
2,079
|
|
|
2,021
|
|
|
6,494
|
|
|
6,138
|
|
||||
Income before income tax expense
|
867
|
|
|
822
|
|
|
2,495
|
|
|
2,182
|
|
||||
Income tax expense
|
102
|
|
|
137
|
|
|
335
|
|
|
375
|
|
||||
Net income
|
$
|
765
|
|
|
$
|
685
|
|
|
$
|
2,160
|
|
|
$
|
1,807
|
|
Net income available to common shareholders
|
$
|
709
|
|
|
$
|
629
|
|
|
$
|
2,012
|
|
|
$
|
1,659
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.89
|
|
|
$
|
1.69
|
|
|
$
|
5.45
|
|
|
$
|
4.41
|
|
Diluted
|
1.87
|
|
|
1.66
|
|
|
5.38
|
|
|
4.35
|
|
||||
Average common shares outstanding (in thousands):
|
|
|
|
|
|
|
|
||||||||
Basic
|
374,963
|
|
|
372,765
|
|
|
369,368
|
|
|
376,430
|
|
||||
Diluted
|
379,383
|
|
|
378,518
|
|
|
374,064
|
|
|
381,779
|
|
||||
Cash dividends declared per common share
|
$
|
.47
|
|
|
$
|
.42
|
|
|
$
|
1.31
|
|
|
$
|
1.18
|
|
|
Three Months Ended September 30,
|
||||||
(In millions)
|
2018
|
|
2017
|
||||
Net income
|
$
|
765
|
|
|
$
|
685
|
|
Other comprehensive income (loss), net of related taxes:
|
|
|
|
||||
Foreign currency translation, net of related taxes of $3 and ($7), respectively
|
(57
|
)
|
|
259
|
|
||
Net unrealized gains (losses) on available-for-sale securities, net of reclassification adjustment and net of related taxes of ($66) and $28, respectively
|
(218
|
)
|
|
47
|
|
||
Net unrealized gains (losses) on available-for-sale securities designated in fair value hedges, net of related taxes of ($12) and $4, respectively
|
20
|
|
|
4
|
|
||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of $1 and $1, respectively
|
2
|
|
|
1
|
|
||
Net unrealized gains (losses) on cash flow hedges, net of related taxes of ($5) and ($15), respectively
|
30
|
|
|
(27
|
)
|
||
Net unrealized gains (losses) on retirement plans, net of related taxes of $2 and zero, respectively
|
—
|
|
|
2
|
|
||
Other comprehensive income (loss)
|
(223
|
)
|
|
286
|
|
||
Total comprehensive income
|
$
|
542
|
|
|
$
|
971
|
|
|
|
|
|
||||
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2018
|
|
2017
|
||||
Net income
|
$
|
2,160
|
|
|
$
|
1,807
|
|
Other comprehensive income (loss), net of related taxes:
|
|
|
|
||||
Foreign currency translation, net of related taxes of ($59) and $6, respectively
|
(244
|
)
|
|
785
|
|
||
Net unrealized gains (losses) on available-for-sale securities, net of reclassification adjustment and net of related taxes of ($202) and $336, respectively
|
(475
|
)
|
|
519
|
|
||
Net unrealized gains (losses) on available-for-sale securities designated in fair value hedges, net of related taxes of $10 and $9, respectively
|
29
|
|
|
13
|
|
||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of $4 and $2, respectively
|
1
|
|
|
3
|
|
||
Net unrealized gains (losses) on cash flow hedges, net of related taxes of ($15) and ($179), respectively
|
(27
|
)
|
|
(274
|
)
|
||
Net unrealized gains (losses) on retirement plans, net of related taxes of $5 and $2, respectively
|
14
|
|
|
10
|
|
||
Other comprehensive income (loss)
|
(702
|
)
|
|
1,056
|
|
||
Total comprehensive income
|
$
|
1,458
|
|
|
$
|
2,863
|
|
(Dollars in millions, except per share amounts)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Assets:
|
(Unaudited)
|
|
|
||||
Cash and due from banks
|
$
|
4,145
|
|
|
$
|
2,107
|
|
Interest-bearing deposits with banks
|
63,618
|
|
|
67,227
|
|
||
Securities purchased under resale agreements
|
4,195
|
|
|
3,241
|
|
||
Trading account assets
|
1,001
|
|
|
1,093
|
|
||
Investment securities available-for-sale
|
46,102
|
|
|
57,121
|
|
||
Investment securities held-to-maturity (fair value of $39,591 and $40,255)
|
40,567
|
|
|
40,458
|
|
||
Loans and leases (less allowance for losses of $60 and $54)
|
23,312
|
|
|
23,240
|
|
||
Premises and equipment (net of accumulated depreciation of $4,110 and $3,881)
|
2,193
|
|
|
2,186
|
|
||
Accrued interest and fees receivable
|
3,196
|
|
|
3,099
|
|
||
Goodwill
|
6,016
|
|
|
6,022
|
|
||
Other intangible assets
|
1,461
|
|
|
1,613
|
|
||
Other assets
|
38,201
|
|
|
31,018
|
|
||
Total assets
|
$
|
234,007
|
|
|
$
|
238,425
|
|
Liabilities:
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Non-interest-bearing
|
$
|
41,893
|
|
|
$
|
47,175
|
|
Interest-bearing - U.S.
|
63,661
|
|
|
50,139
|
|
||
Interest-bearing - non-U.S.
|
62,644
|
|
|
87,582
|
|
||
Total deposits
|
168,198
|
|
|
184,896
|
|
||
Securities sold under repurchase agreements
|
1,690
|
|
|
2,842
|
|
||
Other short-term borrowings
|
1,009
|
|
|
1,144
|
|
||
Accrued expenses and other liabilities
|
28,222
|
|
|
15,606
|
|
||
Long-term debt
|
10,335
|
|
|
11,620
|
|
||
Total liabilities
|
209,454
|
|
|
216,108
|
|
||
Commitments, guarantees and contingencies (Notes 9 and 10)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, no par, 3,500,000 shares authorized:
|
|
|
|
||||
Series C, 5,000 shares issued and outstanding
|
491
|
|
|
491
|
|
||
Series D, 7,500 shares issued and outstanding
|
742
|
|
|
742
|
|
||
Series E, 7,500 shares issued and outstanding
|
728
|
|
|
728
|
|
||
Series F, 7,500 shares issued and outstanding
|
742
|
|
|
742
|
|
||
Series G, 5,000 shares issued and outstanding
|
493
|
|
|
493
|
|
||
Series H, 5,000 shares issued and outstanding
|
494
|
|
|
—
|
|
||
Common stock, $1 par, 750,000,000 shares authorized:
|
|
|
|
||||
503,879,642 and 503,879,642 shares issued
|
504
|
|
|
504
|
|
||
Surplus
|
10,418
|
|
|
9,799
|
|
||
Retained earnings
|
20,387
|
|
|
18,856
|
|
||
Accumulated other comprehensive income (loss)
|
(1,711
|
)
|
|
(1,009
|
)
|
||
Treasury stock, at cost (124,390,135 and 136,229,784 shares)
|
(8,735
|
)
|
|
(9,029
|
)
|
||
Total shareholders’ equity
|
24,553
|
|
|
22,317
|
|
||
Total liabilities and shareholders' equity
|
$
|
234,007
|
|
|
$
|
238,425
|
|
(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, 2016
|
$
|
3,196
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
9,782
|
|
|
$
|
17,459
|
|
|
$
|
(2,040
|
)
|
|
121,941
|
|
|
$
|
(7,682
|
)
|
|
$
|
21,219
|
|
Net income
|
|
|
|
|
|
|
|
|
1,807
|
|
|
|
|
|
|
|
|
1,807
|
|
||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
1,056
|
|
|
|
|
|
|
1,056
|
|
||||||||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock - $1.18 per share
|
|
|
|
|
|
|
|
|
(442
|
)
|
|
|
|
|
|
|
|
(442
|
)
|
||||||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
(146
|
)
|
|
|
|
|
|
|
|
(146
|
)
|
||||||||||||||
Common stock acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
13,131
|
|
|
(1,100
|
)
|
|
(1,100
|
)
|
|||||||||||||
Common stock awards vested
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
(2,033
|
)
|
|
85
|
|
|
106
|
|
||||||||||||
Other
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
(3
|
)
|
|||||||||||||
Balance as of September 30, 2017
|
$
|
3,196
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
9,803
|
|
|
$
|
18,675
|
|
|
$
|
(984
|
)
|
|
133,039
|
|
|
$
|
(8,697
|
)
|
|
$
|
22,497
|
|
Balance as of December 31, 2017
|
$
|
3,196
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
9,799
|
|
|
$
|
18,856
|
|
|
$
|
(1,009
|
)
|
|
136,230
|
|
|
$
|
(9,029
|
)
|
|
$
|
22,317
|
|
Net income
|
|
|
|
|
|
|
|
|
2,160
|
|
|
|
|
|
|
|
|
|
2,160
|
|
|||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
(702
|
)
|
|
|
|
|
|
(702
|
)
|
||||||||||||||
Preferred stock issued
|
494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
494
|
|
||||||||||||||
Common stock issued
|
|
|
|
|
|
|
586
|
|
|
|
|
|
|
(13,244
|
)
|
|
564
|
|
|
1,150
|
|
||||||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock - $1.31 per share
|
|
|
|
|
|
|
|
|
(486
|
)
|
|
|
|
|
|
|
|
(486
|
)
|
||||||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
(146
|
)
|
|
|
|
|
|
|
|
(146
|
)
|
||||||||||||||
Common stock acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
3,324
|
|
|
(350
|
)
|
|
(350
|
)
|
|||||||||||||
Common stock awards vested
|
|
|
|
|
|
|
33
|
|
|
|
|
|
|
(1,931
|
)
|
|
81
|
|
|
114
|
|
||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
11
|
|
|
(1
|
)
|
|
2
|
|
|||||||||||
Balance as of September 30, 2018
|
$
|
3,690
|
|
|
503,880
|
|
|
$
|
504
|
|
|
$
|
10,418
|
|
|
$
|
20,387
|
|
|
$
|
(1,711
|
)
|
|
124,390
|
|
|
$
|
(8,735
|
)
|
|
$
|
24,553
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2018
|
|
2017
|
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
2,160
|
|
|
$
|
1,807
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Deferred income tax (benefit)
|
(98
|
)
|
|
(217
|
)
|
||
Amortization of other intangible assets
|
145
|
|
|
160
|
|
||
Other non-cash adjustments for depreciation, amortization and accretion, net
|
729
|
|
|
636
|
|
||
(Gains) losses related to investment securities, net
|
(6
|
)
|
|
39
|
|
||
Change in trading account assets, net
|
92
|
|
|
(111
|
)
|
||
Change in accrued interest and fees receivable, net
|
(97
|
)
|
|
(399
|
)
|
||
Change in collateral deposits, net
|
7,236
|
|
|
(1,232
|
)
|
||
Change in unrealized losses on foreign exchange derivatives, net
|
(2,118
|
)
|
|
1,136
|
|
||
Change in other assets, net
|
(64
|
)
|
|
(2,063
|
)
|
||
Change in accrued expenses and other liabilities, net
|
750
|
|
|
1,733
|
|
||
Other, net
|
95
|
|
|
368
|
|
||
Net cash provided by operating activities
|
8,824
|
|
|
1,857
|
|
||
Investing Activities:
|
|
|
|
||||
Net decrease in interest-bearing deposits with banks
|
3,609
|
|
|
9,979
|
|
||
Net (increase) in securities purchased under resale agreements
|
(954
|
)
|
|
(1,509
|
)
|
||
Proceeds from sales of available-for-sale securities
|
15,712
|
|
|
7,122
|
|
||
Proceeds from maturities of available-for-sale securities
|
11,156
|
|
|
21,619
|
|
||
Purchases of available-for-sale securities
|
(17,949
|
)
|
|
(20,891
|
)
|
||
Proceeds from maturities of held-to-maturity securities
|
5,003
|
|
|
2,647
|
|
||
Purchases of held-to-maturity securities
|
(4,390
|
)
|
|
(3,961
|
)
|
||
Net (increase) in loans and leases
|
(53
|
)
|
|
(3,859
|
)
|
||
Business acquisitions, net of cash acquired
|
(63
|
)
|
|
—
|
|
||
Purchases of equity investments and other long-term assets
|
(243
|
)
|
|
(32
|
)
|
||
Purchases of premises and equipment, net
|
(436
|
)
|
|
(485
|
)
|
||
Proceeds from sale of joint venture investment
|
—
|
|
|
172
|
|
||
Other, net
|
39
|
|
|
77
|
|
||
Net cash provided by investing activities
|
11,431
|
|
|
10,879
|
|
||
Financing Activities:
|
|
|
|
||||
Net increase (decrease) in time deposits
|
1,606
|
|
|
(16,790
|
)
|
||
Net (decrease) increase in all other deposits
|
(18,304
|
)
|
|
8,890
|
|
||
Net increase (decrease) in other short-term borrowings
|
(1,287
|
)
|
|
(865
|
)
|
||
Proceeds from issuance of long-term debt, net of issuance costs
|
—
|
|
|
747
|
|
||
Payments for long-term debt and obligations under capital leases
|
(1,032
|
)
|
|
(482
|
)
|
||
Proceeds from issuance of preferred stock
|
495
|
|
|
—
|
|
||
Proceeds from issuance of common stock
|
1,150
|
|
|
—
|
|
||
Purchases of common stock
|
(350
|
)
|
|
(942
|
)
|
||
Repurchases of common stock for employee tax withholding
|
113
|
|
|
(101
|
)
|
||
Payments for cash dividends
|
(608
|
)
|
|
(577
|
)
|
||
Other, net
|
—
|
|
|
9
|
|
||
Net cash (used in) financing activities
|
(18,217
|
)
|
|
(10,111
|
)
|
||
Net increase
|
2,038
|
|
|
2,625
|
|
||
Cash and due from banks at beginning of period
|
2,107
|
|
|
1,314
|
|
||
Cash and due from banks at end of period
|
$
|
4,145
|
|
|
$
|
3,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 7. De
rivative Financial Instruments
|
|
|
|
Note 8.
Offsetting Arrangements
|
|
|
|
Note 9.
Commitments and Guarantees
|
|
|
|
Note 10.
Contingencies
|
|
|
|
Note 11.
Variable Interest Entities
|
|
|
|
Note 12.
Shareholders' Equity
|
|
|
|
Note 13.
Regulatory Capital
|
|
|
|
Note 14. Net Interest Income
|
|
|
|
Note 15. Expenses
|
|
|
|
Note 16. Earnings Per Common Share
|
|
|
|
Note 17. Line of Business Information
|
|
|
|
Note 18.
Revenues from Contracts with Customers
|
|
|
|
Note 19.
Non-U.S. Activities
|
|
|
|
Note 20.
Subsequent Events
|
|
|
|
Relevant standards that were issued but not yet adopted:
|
|||
|
|
|
|
Standard
|
Description
|
Date of Adoption
|
Effects on the financial statements or other significant matters
|
ASU 2016-02, Leases (Topic 842) and relevant amendments
|
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 continue to assess the impact of the standard on our consolidated financial statements, but expect an increase in assets and liabilities due to the recognition of the required right-of-use assets and lease liabilities. This increase will depend on the lease portfolio at the time of adoption, but will largely relate to approximately $1 billion of future minimum lease payments due under existing operating leases of office space. No material changes are expected to the recognition of operating lease expense in the Consolidated Statement of Income. We will adopt the standard by applying the alternative transition method whereby comparative periods will not be restated, and any cumulative effect adjustment to the opening balance of retained earnings would be recognized as of January 1, 2019. The impact on retained earnings is expected to be immaterial. We expect to elect the standard’s package of three practical expedients, which includes (1) to not reassess whether any expired or existing contracts are or contain leases, (2) to not reassess the lease classification for any expired or existing leases, and (3) to not reassess initial direct costs for any existing leases. Also, we will make an accounting policy election not to apply the recognition requirements to short-term leases.
|
ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
The standard replaces the existing incurred loss impairment guidance and 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. The standard also amends existing impairment guidance for available-for-sale securities, and credit losses 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. The guidance requires a cumulative effect of initial application to be recognized in retained earnings at the date of initial application.
|
January 1, 2020, early adoption permitted
|
We are continuing to assess the impact of the standard on our consolidated financial statements. 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 to ensure that the expected credit losses are calculated in accordance with the standard. We continue to develop and test new and modified credit loss models and based on our analysis to date, we expect the recognition of credit losses to accelerate under the new standard. We are continuing to assess the extent of the impact on the allowance for credit losses which will be impacted by the Company's portfolio and the macroeconomic factors on the date of adoption. We plan to adopt the new guidance on January 1, 2020.
|
ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
The standard simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The ASU requires an entity to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying value exceeds the fair value of the reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss.
|
January 1, 2020, early adoption permitted
|
We are evaluating the impacts of early adoption, and will apply this standard prospectively upon adoption.
|
ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium amortization on Purchased Callable Debt Securities
|
The standard shortens the amortization period for certain purchased callable debt securities to the earliest call date. The standard does not impact debt securities which are held at a discount. The guidance requires a cumulative effect of initial application to be recognized in retained earnings at the beginning of the period of adoption.
|
January 1, 2019, early adoption permitted
|
We are currently evaluating the impact of the new standard and do not expect the impact to be significant.
|
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities
|
The standard amends the hedge accounting model to better portray the economics of risk management activities in the financial statements and enhances the presentation of hedge results. The amendments also make targeted changes to simplify the application of hedge accounting in certain situations.
|
January 1, 2019, early adoption permitted
|
We anticipate adopting the standard in the fourth quarter of 2018. As part of that adoption we anticipate reclassifying certain debt securities from held-to-maturity to available-for-sale. We continue to assess the full impact of the standard, but we do not expect a significant impact on our consolidated financial statements.
|
ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
This standard provides an election to reclassify the stranded tax effects resulting from the enactment of the Tax Cuts and Jobs Act of 2017, from accumulated other comprehensive income to retained earnings.
|
January 1, 2019, early adoption permitted
|
We are currently evaluating the impact of the new standard and determining if the adjustments in the new standard will be adopted.
|
|
Fair Value Measurements on a Recurring Basis
|
||||||||||||||||||
|
As of September 30, 2018
|
||||||||||||||||||
(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
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
33
|
|
||
Non-U.S. government securities
|
151
|
|
|
180
|
|
|
—
|
|
|
|
|
331
|
|
||||||
Other
|
109
|
|
|
528
|
|
|
—
|
|
|
|
|
637
|
|
||||||
Total trading account assets
|
293
|
|
|
708
|
|
|
—
|
|
|
|
|
1,001
|
|
||||||
AFS investment securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct obligations
|
11
|
|
|
—
|
|
|
—
|
|
|
|
|
11
|
|
||||||
Mortgage-backed securities
|
—
|
|
|
15,473
|
|
|
—
|
|
|
|
|
15,473
|
|
||||||
Total U.S. Treasury and federal agencies
|
11
|
|
|
15,473
|
|
|
—
|
|
|
|
|
15,484
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
—
|
|
|
1,441
|
|
|
—
|
|
|
|
|
1,441
|
|
||||||
Credit cards
|
—
|
|
|
616
|
|
|
—
|
|
|
|
|
616
|
|
||||||
CLOs
|
—
|
|
|
—
|
|
|
611
|
|
|
|
|
611
|
|
||||||
Total asset-backed securities
|
—
|
|
|
2,057
|
|
|
611
|
|
|
|
|
2,668
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
—
|
|
|
2,348
|
|
|
—
|
|
|
|
|
2,348
|
|
||||||
Asset-backed securities
|
—
|
|
|
930
|
|
|
591
|
|
|
|
|
1,521
|
|
||||||
Government securities
|
—
|
|
|
12,973
|
|
|
—
|
|
|
|
|
12,973
|
|
||||||
Other
(2)
|
—
|
|
|
4,640
|
|
|
104
|
|
|
|
|
4,744
|
|
||||||
Total non-U.S. debt securities
|
—
|
|
|
20,891
|
|
|
695
|
|
|
|
|
21,586
|
|
||||||
State and political subdivisions
|
—
|
|
|
4,035
|
|
|
—
|
|
|
|
|
4,035
|
|
||||||
Collateralized mortgage obligations
|
—
|
|
|
295
|
|
|
8
|
|
|
|
|
303
|
|
||||||
Other U.S. debt securities
|
—
|
|
|
2,026
|
|
|
—
|
|
|
|
|
2,026
|
|
||||||
Total AFS investment securities
|
11
|
|
|
44,777
|
|
|
1,314
|
|
|
|
|
46,102
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
—
|
|
|
15,059
|
|
|
2
|
|
|
$
|
(10,351
|
)
|
|
4,710
|
|
||||
Interest-rate contracts
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Other derivative contracts
|
2
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Total derivative instruments
|
6
|
|
|
15,070
|
|
|
2
|
|
|
(10,351
|
)
|
|
4,727
|
|
|||||
Other
|
—
|
|
|
390
|
|
|
—
|
|
|
—
|
|
|
390
|
|
|||||
Total assets carried at fair value
|
$
|
310
|
|
|
$
|
60,945
|
|
|
$
|
1,316
|
|
|
$
|
(10,351
|
)
|
|
$
|
52,220
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued expenses and other liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading account liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107
|
|
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
—
|
|
|
14,933
|
|
|
2
|
|
|
(10,557
|
)
|
|
4,378
|
|
|||||
Interest-rate contracts
|
1
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|||||
Other derivative contracts
|
2
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|||||
Total derivative instruments
|
3
|
|
|
15,274
|
|
|
2
|
|
|
(10,557
|
)
|
|
4,722
|
|
|||||
Total liabilities carried at fair value
|
$
|
110
|
|
|
$
|
15,274
|
|
|
$
|
2
|
|
|
$
|
(10,557
|
)
|
|
$
|
4,829
|
|
|
|
|
|
|
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
|
|
||||||
CLOs
|
—
|
|
|
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
(2)
|
—
|
|
|
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:
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives 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 Using Significant Unobservable Inputs
|
||||||||||||||||||||||||||||||||||
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||||||||||||||||
|
Fair Value
as of June 30, 2018 |
|
Total Realized and
Unrealized Gains (Losses) |
|
Purchases
|
|
Settlements
|
|
Transfers into
Level 3 |
|
Transfers
out of Level 3 |
|
Fair Value
as of September 30, 2018 (1) |
|
Change in Unrealized Gains (Losses) Related to Financial Instruments
Held as of September 30, 2018 |
||||||||||||||||||||
(In millions)
|
Recorded in Revenue
(1)
|
|
Recorded in Other Comprehensive Income
(1)
|
|
|||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
AFS Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
CLOs
|
$
|
851
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(239
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
611
|
|
|
|
||
Total asset-backed securities
|
851
|
|
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
(239
|
)
|
|
—
|
|
|
—
|
|
|
611
|
|
|
|
||||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Asset-backed securities
|
474
|
|
|
—
|
|
|
(2
|
)
|
|
76
|
|
|
(3
|
)
|
|
46
|
|
|
—
|
|
|
591
|
|
|
|
||||||||||
Other
|
169
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(64
|
)
|
|
104
|
|
|
|
||||||||||
Total non-U.S. debt securities
|
643
|
|
|
—
|
|
|
(2
|
)
|
|
76
|
|
|
(4
|
)
|
|
46
|
|
|
(64
|
)
|
|
695
|
|
|
|
||||||||||
CMOs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
|
||||||||||
Total AFS investment securities
|
1,494
|
|
|
1
|
|
|
(4
|
)
|
|
76
|
|
|
(243
|
)
|
|
54
|
|
|
(64
|
)
|
|
1,314
|
|
|
|
||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign exchange contracts
|
7
|
|
|
(2
|
)
|
|
—
|
|
|
3
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
$
|
(2
|
)
|
||||||||
Total derivative instruments
|
7
|
|
|
(2
|
)
|
|
—
|
|
|
3
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|||||||||
Total assets carried at fair value
|
$
|
1,501
|
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
$
|
79
|
|
|
$
|
(249
|
)
|
|
$
|
54
|
|
|
$
|
(64
|
)
|
|
$
|
1,316
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs
|
||||||||||||||||||||||||||||||||||
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||||||||||||||
|
Fair Value
as of
June 30,
2017
|
|
Total Realized and
Unrealized Gains (Losses) |
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Fair Value
as of September 30, 2017 |
|
Change in Unrealized Gains (Losses) Related to Financial Instruments
Held as of September 30, 2017 |
||||||||||||||||||||
(In millions)
|
Recorded
in Revenue (1) |
|
Recorded
in Other Comprehensive Income (1) |
|
|||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
AFS Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage-backed securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
25
|
|
|
|
||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Student loans
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
|
||||||||||
Other
|
951
|
|
|
1
|
|
|
1
|
|
|
60
|
|
|
—
|
|
|
(2
|
)
|
|
175
|
|
|
1,186
|
|
|
|
||||||||||
Total asset-backed securities
|
951
|
|
|
1
|
|
|
1
|
|
|
260
|
|
|
—
|
|
|
(2
|
)
|
|
175
|
|
|
1,386
|
|
|
|
||||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
|
||||||||||
Asset-backed securities
|
63
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
(10
|
)
|
|
—
|
|
|
15
|
|
|
97
|
|
|
|
||||||||||
Other
|
274
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
7
|
|
|
—
|
|
|
201
|
|
|
|
||||||||||
Total non-U.S. debt securities
|
337
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|
(90
|
)
|
|
7
|
|
|
15
|
|
|
416
|
|
|
|
||||||||||
State and political subdivisions
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
|
||||||||||
Other U.S. debt securities
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
|
||||||||||
Total AFS investment securities
|
1,345
|
|
|
1
|
|
|
1
|
|
|
407
|
|
|
(90
|
)
|
|
5
|
|
|
215
|
|
|
1,884
|
|
|
|
||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign exchange contracts
|
5
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
2
|
|
|
$
|
(2
|
)
|
||||||||
Total derivative instruments
|
5
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|||||||||
Total assets carried at fair value
|
$
|
1,350
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
409
|
|
|
$
|
(90
|
)
|
|
$
|
—
|
|
|
$
|
215
|
|
|
$
|
1,886
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs
|
||||||||||||||||||||||||||||||||||||||
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||||||||||||||||
|
Fair Value
as of
December 31,
2016
|
|
Total Realized and
Unrealized Gains (Losses) |
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
Fair Value
as of
September 30,
2017
|
|
Change in Unrealized Gains (Losses) Related to Financial Instruments
Held as of
September 30, 2017
|
||||||||||||||||||||||
(In millions)
|
|
Recorded
in Revenue (1) |
|
Recorded
in Other Comprehensive Income (1) |
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
AFS Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mortgage-backed securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
|
||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Student loans
|
97
|
|
|
—
|
|
|
1
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
200
|
|
|
|
|||||||||||
Other
|
905
|
|
|
2
|
|
|
—
|
|
|
415
|
|
|
—
|
|
|
(412
|
)
|
|
276
|
|
|
—
|
|
|
1,186
|
|
|
|
|||||||||||
Total asset-backed securities
|
1,002
|
|
|
2
|
|
|
1
|
|
|
615
|
|
|
—
|
|
|
(412
|
)
|
|
276
|
|
|
(98
|
)
|
|
1,386
|
|
|
|
|||||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mortgage-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
|
|||||||||||
Asset-backed securities
|
32
|
|
|
1
|
|
|
(1
|
)
|
|
60
|
|
|
(10
|
)
|
|
(21
|
)
|
|
67
|
|
|
(31
|
)
|
|
97
|
|
|
|
|||||||||||
Other
|
248
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(80
|
)
|
|
28
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|
|
|||||||||||
Total non-U.S. debt securities
|
280
|
|
|
1
|
|
|
(1
|
)
|
|
183
|
|
|
(90
|
)
|
|
7
|
|
|
67
|
|
|
(31
|
)
|
|
416
|
|
|
|
|||||||||||
State and political subdivisions
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
38
|
|
|
|
|||||||||||
CMOs
|
16
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
|
|||||||||||
Other U.S. debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
|
|||||||||||
Total AFS investment securities
|
1,337
|
|
|
3
|
|
|
—
|
|
|
840
|
|
|
(90
|
)
|
|
(406
|
)
|
|
368
|
|
|
(168
|
)
|
|
1,884
|
|
|
|
|||||||||||
Derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Foreign exchange contracts
|
8
|
|
|
(6
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
$
|
(1
|
)
|
|||||||||
Total derivative instruments
|
8
|
|
|
(6
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
||||||||||
Total assets carried at fair value
|
$
|
1,345
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
844
|
|
|
$
|
(90
|
)
|
|
$
|
(410
|
)
|
|
$
|
368
|
|
|
$
|
(168
|
)
|
|
$
|
1,886
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||||||||
|
Fair Value
|
|
|
|
|
|
Weighted-Average
|
||||||||||
(Dollars in millions)
|
As of September 30, 2018
|
|
As of December 31, 2017
|
|
Valuation Technique
|
|
Significant
Unobservable Input (1) |
|
As of September 30, 2018
|
|
As of December 31, 2017
|
||||||
Significant unobservable inputs readily available to State Street:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative instruments, foreign exchange contracts
|
$
|
2
|
|
|
$
|
1
|
|
|
Option model
|
|
Volatility
|
|
10.9
|
%
|
|
7.2
|
%
|
Total
|
$
|
2
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative instruments, foreign exchange contracts
|
$
|
2
|
|
|
$
|
1
|
|
|
Option model
|
|
Volatility
|
|
11.8
|
%
|
|
7.2
|
%
|
Total
|
$
|
2
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
||||||||||
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
|
$
|
4,145
|
|
|
$
|
4,145
|
|
|
$
|
4,145
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits with banks
|
|
63,618
|
|
|
63,618
|
|
|
—
|
|
|
63,618
|
|
|
—
|
|
|||||
Securities purchased under resale agreements
|
|
4,195
|
|
|
4,195
|
|
|
—
|
|
|
4,195
|
|
|
—
|
|
|||||
Investment securities held-to-maturity
|
|
40,567
|
|
|
39,591
|
|
|
14,785
|
|
|
24,623
|
|
|
183
|
|
|||||
Net loans (excluding leases)
(1)
|
|
23,062
|
|
|
23,058
|
|
|
—
|
|
|
23,018
|
|
|
40
|
|
|||||
Other
(2)
|
|
8,505
|
|
|
8,505
|
|
|
—
|
|
|
8,505
|
|
|
—
|
|
|||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-interest-bearing
|
|
$
|
41,893
|
|
|
$
|
41,893
|
|
|
$
|
—
|
|
|
$
|
41,893
|
|
|
$
|
—
|
|
Interest-bearing - U.S.
|
|
63,661
|
|
|
63,661
|
|
|
—
|
|
|
63,661
|
|
|
—
|
|
|||||
Interest-bearing - non-U.S.
|
|
62,644
|
|
|
62,644
|
|
|
—
|
|
|
62,644
|
|
|
—
|
|
|||||
Securities sold under repurchase agreements
|
|
1,690
|
|
|
1,690
|
|
|
—
|
|
|
1,690
|
|
|
—
|
|
|||||
Other short-term borrowings
|
|
1,009
|
|
|
1,009
|
|
|
—
|
|
|
1,009
|
|
|
—
|
|
|||||
Long-term debt
|
|
10,335
|
|
|
10,549
|
|
|
—
|
|
|
10,309
|
|
|
240
|
|
|||||
Other
(2)
|
|
8,505
|
|
|
8,505
|
|
|
—
|
|
|
8,505
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
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
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
222
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
223
|
|
Mortgage-backed securities
|
15,841
|
|
|
8
|
|
|
376
|
|
|
15,473
|
|
|
10,975
|
|
|
26
|
|
|
129
|
|
|
10,872
|
|
||||||||
Total U.S. Treasury and federal agencies
|
15,852
|
|
|
8
|
|
|
376
|
|
|
15,484
|
|
|
11,197
|
|
|
28
|
|
|
130
|
|
|
11,095
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Student loans
(1)
|
1,422
|
|
|
20
|
|
|
1
|
|
|
1,441
|
|
|
3,325
|
|
|
37
|
|
|
4
|
|
|
3,358
|
|
||||||||
Credit cards
|
639
|
|
|
1
|
|
|
24
|
|
|
616
|
|
|
1,565
|
|
|
2
|
|
|
25
|
|
|
1,542
|
|
||||||||
CLOs
|
609
|
|
|
3
|
|
|
1
|
|
|
611
|
|
|
1,440
|
|
|
7
|
|
|
—
|
|
|
1,447
|
|
||||||||
Total asset-backed securities
|
2,670
|
|
|
24
|
|
|
26
|
|
|
2,668
|
|
|
6,330
|
|
|
46
|
|
|
29
|
|
|
6,347
|
|
||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
2,348
|
|
|
4
|
|
|
4
|
|
|
2,348
|
|
|
6,664
|
|
|
36
|
|
|
5
|
|
|
6,695
|
|
||||||||
Asset-backed securities
|
1,523
|
|
|
1
|
|
|
3
|
|
|
1,521
|
|
|
2,942
|
|
|
5
|
|
|
—
|
|
|
2,947
|
|
||||||||
Government securities
|
13,080
|
|
|
8
|
|
|
115
|
|
|
12,973
|
|
|
10,754
|
|
|
16
|
|
|
49
|
|
|
10,721
|
|
||||||||
Other
(2)
|
4,747
|
|
|
14
|
|
|
17
|
|
|
4,744
|
|
|
6,076
|
|
|
38
|
|
|
6
|
|
|
6,108
|
|
||||||||
Total non-U.S. debt securities
|
21,698
|
|
|
27
|
|
|
139
|
|
|
21,586
|
|
|
26,436
|
|
|
95
|
|
|
60
|
|
|
26,471
|
|
||||||||
State and political subdivisions
(3)
|
3,959
|
|
|
93
|
|
|
17
|
|
|
4,035
|
|
|
8,929
|
|
|
245
|
|
|
23
|
|
|
9,151
|
|
||||||||
Collateralized mortgage obligations
|
310
|
|
|
—
|
|
|
7
|
|
|
303
|
|
|
1,060
|
|
|
3
|
|
|
9
|
|
|
1,054
|
|
||||||||
Other U.S. debt securities
|
2,065
|
|
|
4
|
|
|
43
|
|
|
2,026
|
|
|
2,563
|
|
|
12
|
|
|
15
|
|
|
2,560
|
|
||||||||
U.S. equity securities
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
8
|
|
|
2
|
|
|
46
|
|
||||||||
U.S. money-market mutual funds
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
—
|
|
|
—
|
|
|
397
|
|
||||||||
Total
|
$
|
46,554
|
|
|
$
|
156
|
|
|
$
|
608
|
|
|
$
|
46,102
|
|
|
$
|
56,952
|
|
|
$
|
437
|
|
|
$
|
268
|
|
|
$
|
57,121
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Direct obligations
|
$
|
15,168
|
|
|
$
|
—
|
|
|
$
|
325
|
|
|
$
|
14,843
|
|
|
$
|
17,028
|
|
|
$
|
—
|
|
|
$
|
143
|
|
|
$
|
16,885
|
|
Mortgage-backed securities
|
19,697
|
|
|
2
|
|
|
802
|
|
|
18,897
|
|
|
16,651
|
|
|
22
|
|
|
225
|
|
|
16,448
|
|
||||||||
Total U.S. Treasury and federal agencies
|
34,865
|
|
|
2
|
|
|
1,127
|
|
|
33,740
|
|
|
33,679
|
|
|
22
|
|
|
368
|
|
|
33,333
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
(1)
|
3,031
|
|
|
43
|
|
|
7
|
|
|
3,067
|
|
|
3,047
|
|
|
32
|
|
|
9
|
|
|
3,070
|
|
||||||||
Credit cards
|
325
|
|
|
—
|
|
|
—
|
|
|
325
|
|
|
798
|
|
|
2
|
|
|
—
|
|
|
800
|
|
||||||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Total asset-backed securities
|
3,357
|
|
|
43
|
|
|
7
|
|
|
3,393
|
|
|
3,846
|
|
|
34
|
|
|
9
|
|
|
3,871
|
|
||||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
672
|
|
|
81
|
|
|
6
|
|
|
747
|
|
|
939
|
|
|
82
|
|
|
6
|
|
|
1,015
|
|
||||||||
Asset-backed securities
|
228
|
|
|
—
|
|
|
—
|
|
|
228
|
|
|
263
|
|
|
1
|
|
|
—
|
|
|
264
|
|
||||||||
Government securities
|
357
|
|
|
1
|
|
|
—
|
|
|
358
|
|
|
474
|
|
|
2
|
|
|
—
|
|
|
476
|
|
||||||||
Other
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
||||||||
Total non-U.S. debt securities
|
1,303
|
|
|
82
|
|
|
6
|
|
|
1,379
|
|
|
1,724
|
|
|
85
|
|
|
6
|
|
|
1,803
|
|
||||||||
Collateralized mortgage obligations
|
1,042
|
|
|
44
|
|
|
7
|
|
|
1,079
|
|
|
1,209
|
|
|
45
|
|
|
6
|
|
|
1,248
|
|
||||||||
Total
|
$
|
40,567
|
|
|
$
|
171
|
|
|
$
|
1,147
|
|
|
$
|
39,591
|
|
|
$
|
40,458
|
|
|
$
|
186
|
|
|
$
|
389
|
|
|
$
|
40,255
|
|
|
|
|
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
September 30, 2018
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
$
|
10,651
|
|
|
$
|
175
|
|
|
$
|
3,708
|
|
|
$
|
201
|
|
|
$
|
14,359
|
|
|
$
|
376
|
|
Total U.S. Treasury and federal agencies
|
10,651
|
|
|
175
|
|
|
3,708
|
|
|
201
|
|
|
14,359
|
|
|
376
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student loans
|
262
|
|
|
1
|
|
|
142
|
|
|
—
|
|
|
404
|
|
|
1
|
|
||||||
Credit cards
|
—
|
|
|
—
|
|
|
491
|
|
|
24
|
|
|
491
|
|
|
24
|
|
||||||
CLOs
|
357
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
357
|
|
|
1
|
|
||||||
Total asset-backed securities
|
619
|
|
|
2
|
|
|
633
|
|
|
24
|
|
|
1,252
|
|
|
26
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
1,063
|
|
|
4
|
|
|
57
|
|
|
—
|
|
|
1,120
|
|
|
4
|
|
||||||
Asset-backed securities
|
769
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
769
|
|
|
3
|
|
||||||
Government securities
|
10,408
|
|
|
115
|
|
|
—
|
|
|
—
|
|
|
10,408
|
|
|
115
|
|
||||||
Other
|
1,468
|
|
|
14
|
|
|
164
|
|
|
3
|
|
|
1,632
|
|
|
17
|
|
||||||
Total non-U.S. debt securities
|
13,708
|
|
|
136
|
|
|
221
|
|
|
3
|
|
|
13,929
|
|
|
139
|
|
||||||
State and political subdivisions
|
662
|
|
|
10
|
|
|
266
|
|
|
7
|
|
|
928
|
|
|
17
|
|
||||||
Collateralized mortgage obligations
|
217
|
|
|
5
|
|
|
77
|
|
|
2
|
|
|
294
|
|
|
7
|
|
||||||
Other U.S. debt securities
|
1,229
|
|
|
29
|
|
|
316
|
|
|
14
|
|
|
1,545
|
|
|
43
|
|
||||||
Total
|
$
|
27,086
|
|
|
$
|
357
|
|
|
$
|
5,221
|
|
|
$
|
251
|
|
|
$
|
32,307
|
|
|
$
|
608
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct obligations
|
$
|
8,963
|
|
|
$
|
222
|
|
|
$
|
5,879
|
|
|
$
|
103
|
|
|
$
|
14,842
|
|
|
$
|
325
|
|
Mortgage-backed securities
|
11,692
|
|
|
386
|
|
|
6,303
|
|
|
416
|
|
|
17,995
|
|
|
802
|
|
||||||
Total U.S. Treasury and federal agencies
|
20,655
|
|
|
608
|
|
|
12,182
|
|
|
519
|
|
|
32,837
|
|
|
1,127
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
160
|
|
|
1
|
|
|
533
|
|
|
6
|
|
|
693
|
|
|
7
|
|
||||||
Total asset-backed securities
|
160
|
|
|
1
|
|
|
533
|
|
|
6
|
|
|
693
|
|
|
7
|
|
||||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
97
|
|
|
1
|
|
|
125
|
|
|
5
|
|
|
222
|
|
|
6
|
|
||||||
Total non-U.S. debt securities
|
97
|
|
|
1
|
|
|
125
|
|
|
5
|
|
|
222
|
|
|
6
|
|
||||||
Collateralized mortgage obligations
|
5
|
|
|
—
|
|
|
224
|
|
|
7
|
|
|
229
|
|
|
7
|
|
||||||
Total
|
$
|
20,917
|
|
|
$
|
610
|
|
|
$
|
13,064
|
|
|
$
|
537
|
|
|
$
|
33,981
|
|
|
$
|
1,147
|
|
|
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
|
|
September 30, 2018
|
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
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Mortgage-backed securities
|
129
|
|
|
830
|
|
|
2,547
|
|
|
11,967
|
|
|
15,473
|
|
|||||
Total U.S. Treasury and federal agencies
|
140
|
|
|
830
|
|
|
2,547
|
|
|
11,967
|
|
|
15,484
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loans
|
71
|
|
|
311
|
|
|
391
|
|
|
668
|
|
|
1,441
|
|
|||||
Credit cards
|
198
|
|
|
292
|
|
|
126
|
|
|
—
|
|
|
616
|
|
|||||
CLOs
|
—
|
|
|
449
|
|
|
141
|
|
|
21
|
|
|
611
|
|
|||||
Total asset-backed securities
|
269
|
|
|
1,052
|
|
|
658
|
|
|
689
|
|
|
2,668
|
|
|||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
175
|
|
|
1,638
|
|
|
158
|
|
|
377
|
|
|
2,348
|
|
|||||
Asset-backed securities
|
103
|
|
|
637
|
|
|
607
|
|
|
174
|
|
|
1,521
|
|
|||||
Government securities
|
2,100
|
|
|
5,184
|
|
|
5,430
|
|
|
259
|
|
|
12,973
|
|
|||||
Other
|
1,346
|
|
|
2,647
|
|
|
731
|
|
|
20
|
|
|
4,744
|
|
|||||
Total non-U.S. debt securities
|
3,724
|
|
|
10,106
|
|
|
6,926
|
|
|
830
|
|
|
21,586
|
|
|||||
State and political subdivisions
|
379
|
|
|
1,329
|
|
|
1,625
|
|
|
702
|
|
|
4,035
|
|
|||||
Collateralized mortgage obligations
|
8
|
|
|
—
|
|
|
—
|
|
|
295
|
|
|
303
|
|
|||||
Other U.S. debt securities
|
160
|
|
|
1,241
|
|
|
625
|
|
|
—
|
|
|
2,026
|
|
|||||
Total
|
$
|
4,680
|
|
|
$
|
14,558
|
|
|
$
|
12,381
|
|
|
$
|
14,483
|
|
|
$
|
46,102
|
|
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and federal agencies:
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct obligations
|
$
|
2,897
|
|
|
$
|
12,213
|
|
|
$
|
12
|
|
|
$
|
46
|
|
|
$
|
15,168
|
|
Mortgage-backed securities
|
8
|
|
|
173
|
|
|
1,403
|
|
|
18,113
|
|
|
19,697
|
|
|||||
Total U.S. Treasury and federal agencies
|
2,905
|
|
|
12,386
|
|
|
1,415
|
|
|
18,159
|
|
|
34,865
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Student loans
|
32
|
|
|
300
|
|
|
185
|
|
|
2,514
|
|
|
3,031
|
|
|||||
Credit cards
|
58
|
|
|
267
|
|
|
—
|
|
|
—
|
|
|
325
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Total asset-backed securities
|
90
|
|
|
567
|
|
|
185
|
|
|
2,515
|
|
|
3,357
|
|
|||||
Non-U.S. debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
|
71
|
|
|
143
|
|
|
8
|
|
|
450
|
|
|
672
|
|
|||||
Asset-backed securities
|
98
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
228
|
|
|||||
Government securities
|
240
|
|
|
117
|
|
|
—
|
|
|
—
|
|
|
357
|
|
|||||
Other
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Total non-U.S. debt securities
|
455
|
|
|
390
|
|
|
8
|
|
|
450
|
|
|
1,303
|
|
|||||
Collateralized mortgage obligations
|
2
|
|
|
438
|
|
|
11
|
|
|
591
|
|
|
1,042
|
|
|||||
Total
|
$
|
3,452
|
|
|
$
|
13,781
|
|
|
$
|
1,619
|
|
|
$
|
21,715
|
|
|
$
|
40,567
|
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Balance, beginning of period
|
|
$
|
64
|
|
|
$
|
66
|
|
Additions:
|
|
|
|
|
||||
Losses for which OTTI was previously recognized
|
|
2
|
|
|
—
|
|
||
Deductions:
|
|
|
|
|
||||
Previously recognized losses related to securities sold or matured
|
|
—
|
|
|
(2
|
)
|
||
Balance, end of period
|
|
$
|
66
|
|
|
$
|
64
|
|
(In millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Domestic:
|
|
|
|
||||
Commercial and financial:
|
|
|
|
||||
Loans to investment funds
|
$
|
12,863
|
|
|
$
|
13,618
|
|
Senior secured bank loans
|
3,150
|
|
|
2,923
|
|
||
Loans to municipalities
|
908
|
|
|
2,105
|
|
||
Other
|
40
|
|
|
50
|
|
||
Commercial real estate
|
602
|
|
|
98
|
|
||
Lease financing
|
39
|
|
|
267
|
|
||
Total domestic
|
17,602
|
|
|
19,061
|
|
||
Non-U.S.:
|
|
|
|
||||
Commercial and financial:
|
|
|
|
||||
Loans to investment funds
|
4,819
|
|
|
3,213
|
|
||
Senior secured bank loans
|
740
|
|
|
624
|
|
||
Lease financing
|
211
|
|
|
396
|
|
||
Total non-U.S.
|
5,770
|
|
|
4,233
|
|
||
Total loans and leases
|
23,372
|
|
|
23,294
|
|
||
Allowance for loan and lease losses
|
(60
|
)
|
|
(54
|
)
|
||
Loans and leases, net of allowance
|
$
|
23,312
|
|
|
$
|
23,240
|
|
September 30, 2018
|
Commercial and Financial
|
|
Commercial Real Estate
|
|
Lease
Financing
|
|
Total Loans and Leases
|
||||||||
(In millions)
|
|||||||||||||||
Investment grade
(1)
|
$
|
17,753
|
|
|
$
|
602
|
|
|
$
|
250
|
|
|
$
|
18,605
|
|
Speculative
(2)
|
4,728
|
|
|
—
|
|
|
—
|
|
|
4,728
|
|
||||
Special mention
(3)
|
39
|
|
|
—
|
|
|
—
|
|
|
39
|
|
||||
Total
|
$
|
22,520
|
|
|
$
|
602
|
|
|
$
|
250
|
|
|
$
|
23,372
|
|
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
|
|
|
|
|
|
|
Three Months Ended September 30,
|
||||||
(In millions)
|
2018
|
|
2017
|
||||
Allowance for loan and lease losses:
|
|
|
|||||
Beginning balance
|
$
|
55
|
|
|
$
|
54
|
|
Provision for loan and lease losses
|
5
|
|
|
3
|
|
||
Ending balance
|
$
|
60
|
|
|
$
|
57
|
|
|
|
|
|
||||
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2018
|
|
2017
|
||||
Allowance for loan and lease losses:
|
|
|
|||||
Beginning balance
|
$
|
54
|
|
|
$
|
53
|
|
Provision for loan and lease losses
|
7
|
|
|
4
|
|
||
Charge-offs
|
(1
|
)
|
|
—
|
|
||
Ending balance
|
$
|
60
|
|
|
$
|
57
|
|
(In millions)
|
Investment
Servicing
|
|
Investment
Management
|
|
Total
|
||||||
Goodwill:
|
|
|
|
|
|
||||||
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
|
|
|||
Acquisitions
|
53
|
|
|
—
|
|
|
53
|
|
|||
Foreign currency translation
|
(56
|
)
|
|
(3
|
)
|
|
(59
|
)
|
|||
Ending balance September 30, 2018
|
$
|
5,749
|
|
|
$
|
267
|
|
|
$
|
6,016
|
|
(In millions)
|
Investment
Servicing
|
|
Investment
Management
|
|
Total
|
||||||
Other intangible assets:
|
|
|
|
|
|
||||||
Ending balance December 31, 2016
|
$
|
1,539
|
|
|
$
|
211
|
|
|
$
|
1,750
|
|
Acquisitions
|
16
|
|
|
—
|
|
|
16
|
|
|||
Divestitures
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||
Amortization
|
(183
|
)
|
|
(31
|
)
|
|
(214
|
)
|
|||
Foreign currency translation
|
71
|
|
|
1
|
|
|
72
|
|
|||
Ending balance December 31, 2017
|
1,432
|
|
|
181
|
|
|
1,613
|
|
|||
Acquisitions
|
10
|
|
|
—
|
|
|
10
|
|
|||
Amortization
|
(123
|
)
|
|
(22
|
)
|
|
(145
|
)
|
|||
Foreign currency translation
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||
Ending balance September 30, 2018
|
$
|
1,302
|
|
|
$
|
159
|
|
|
$
|
1,461
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(In millions)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Client relationships
|
$
|
2,630
|
|
|
$
|
(1,553
|
)
|
|
$
|
1,077
|
|
|
$
|
2,669
|
|
|
$
|
(1,470
|
)
|
|
$
|
1,199
|
|
Core deposits
|
680
|
|
|
(343
|
)
|
|
337
|
|
|
686
|
|
|
(320
|
)
|
|
366
|
|
||||||
Other
|
143
|
|
|
(96
|
)
|
|
47
|
|
|
142
|
|
|
(94
|
)
|
|
48
|
|
||||||
Total
|
$
|
3,453
|
|
|
$
|
(1,992
|
)
|
|
$
|
1,461
|
|
|
$
|
3,497
|
|
|
$
|
(1,884
|
)
|
|
$
|
1,613
|
|
(In millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Securities borrowed
(1)
|
$
|
23,727
|
|
|
$
|
19,404
|
|
Derivative instruments, net
|
4,727
|
|
|
4,013
|
|
||
Bank-owned life insurance
|
3,300
|
|
|
3,242
|
|
||
Investments in joint ventures and other unconsolidated entities
(2)
|
2,797
|
|
|
2,259
|
|
||
Collateral, net
|
1,268
|
|
|
473
|
|
||
Receivable for securities settlement
|
749
|
|
|
188
|
|
||
Prepaid expenses
|
510
|
|
|
364
|
|
||
Accounts receivable
|
361
|
|
|
348
|
|
||
Deposits with clearing organizations
|
126
|
|
|
120
|
|
||
Deferred tax assets, net of valuation allowance
(3)
|
120
|
|
|
113
|
|
||
Income taxes receivable
|
61
|
|
|
97
|
|
||
Other
|
455
|
|
|
397
|
|
||
Total
|
$
|
38,201
|
|
|
$
|
31,018
|
|
|
|
September 30, 2018
|
||
Maturity
|
|
Fixed Interest Rate Paid
|
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)
|
September 30,
2018 |
|
December 31, 2017
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|||||
Interest-rate contracts:
|
|
|
|
||||
Futures
|
$
|
14,656
|
|
|
$
|
2,392
|
|
Swap agreements
|
300
|
|
|
—
|
|
||
Foreign exchange contracts:
|
|
|
|
||||
Forward, swap and spot
|
2,389,839
|
|
|
1,679,976
|
|
||
Options purchased
|
452
|
|
|
350
|
|
||
Options written
|
267
|
|
|
302
|
|
||
Futures
|
—
|
|
|
50
|
|
||
Commodity and equity contracts:
|
|
|
|||||
Commodity
(1)
|
73
|
|
|
16
|
|
||
Equity
(1)
|
365
|
|
|
50
|
|
||
Other:
|
|
|
|
||||
Stable value contracts
|
26,313
|
|
|
26,653
|
|
||
Deferred value awards
(2)
|
497
|
|
|
473
|
|
||
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|||||
Interest-rate contracts:
|
|
|
|
||||
Swap agreements
|
10,994
|
|
|
11,047
|
|
||
Foreign exchange contracts:
|
|
|
|
||||
Forward and swap
|
3,884
|
|
|
28,913
|
|
|
|
|
September 30, 2018
|
||||||||||
(In millions)
|
Fair Value Hedges
|
|
Cash
Flow Hedges |
|
Total
|
||||||
Investment securities available-for-sale
|
$
|
1,201
|
|
|
$
|
—
|
|
|
$
|
1,201
|
|
Long-term debt
(1)
|
8,493
|
|
|
—
|
|
|
8,493
|
|
|||
Floating-rate loans
|
—
|
|
|
1,300
|
|
|
1,300
|
|
|||
Total
|
$
|
9,694
|
|
|
$
|
1,300
|
|
|
$
|
10,994
|
|
|
December 31, 2017
|
||||||||||
(In millions)
|
Fair Value Hedges
|
|
Cash
Flow Hedges |
|
Total
|
||||||
Investment securities available-for-sale
|
$
|
1,254
|
|
|
$
|
—
|
|
|
$
|
1,254
|
|
Long-term debt
(1)
|
8,493
|
|
|
—
|
|
|
8,493
|
|
|||
Floating rate loans
|
—
|
|
|
1,300
|
|
|
1,300
|
|
|||
Total
|
$
|
9,747
|
|
|
$
|
1,300
|
|
|
$
|
11,047
|
|
|
|
|
|
|
Derivative Liabilities
(1)
|
||||||
|
Fair Value
|
||||||
(In millions)
|
September 30,
2018 |
|
December 31, 2017
|
||||
Derivatives not designated as hedging instruments:
|
|||||||
Foreign exchange contracts
|
$
|
14,878
|
|
|
$
|
11,361
|
|
Interest-rate contracts
|
1
|
|
|
—
|
|
||
Other derivative contracts
|
252
|
|
|
284
|
|
||
Total
|
$
|
15,131
|
|
|
$
|
11,645
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|||||||
Foreign exchange contracts
|
$
|
57
|
|
|
$
|
107
|
|
Interest-rate contracts
|
91
|
|
|
100
|
|
||
Total
|
$
|
148
|
|
|
$
|
207
|
|
|
|
|
|
|
|
|
|
|
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 in Consolidated Statement of Income
|
|
Amount of Gain (Loss) on Derivatives Recognized in Consolidated Statement of Income
|
||||||||||||||||||
|
|
Three Months Ended September 30,
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
||||||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Interest-rate contracts
|
|
$
|
(6
|
)
|
|
$
|
(1
|
)
|
|
Net interest income
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Net interest income
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Foreign exchange contracts
|
|
32
|
|
|
(1
|
)
|
|
Net interest income
|
|
—
|
|
|
—
|
|
|
Net interest income
|
|
6
|
|
|
5
|
|
||||||
|
|
$
|
26
|
|
|
$
|
(2
|
)
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign exchange contracts
|
|
$
|
19
|
|
|
$
|
(47
|
)
|
|
Gains (Losses) related to investment securities, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Gains (Losses) related to investment securities, net
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
19
|
|
|
$
|
(47
|
)
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
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 in Consolidated Statement of Income
|
|
Amount of Gain (Loss) on Derivatives Recognized in Consolidated Statement of Income
|
||||||||||||||||||
|
|
Nine Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
||||||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Interest-rate contracts
|
|
$
|
(35
|
)
|
|
$
|
(2
|
)
|
|
Net interest income
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Net interest income
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
|
(6
|
)
|
|
(93
|
)
|
|
Net interest income
|
|
—
|
|
|
—
|
|
|
Net interest income
|
|
20
|
|
|
18
|
|
||||||
|
|
$
|
(41
|
)
|
|
$
|
(95
|
)
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
20
|
|
|
$
|
18
|
|
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign exchange contracts
|
|
$
|
54
|
|
|
$
|
(148
|
)
|
|
Gains (Losses) related to investment securities, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Gains (Losses) related to investment securities, net
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
54
|
|
|
$
|
(148
|
)
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Location of Gain (Loss) on Derivative in Consolidated Statement of Income
|
|
Amount of Gain
(Loss) on Derivative
Recognized in
Consolidated
Statement of Income
|
|
Hedged Item in Fair Value Hedging Relationship
|
|
Location of Gain (Loss) on Hedged Item in Consolidated Statement of Income
|
|
Amount of Gain
(Loss) on Hedged
Item Recognized in
Consolidated
Statement of Income
|
||||||||||||
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Three Months Ended September 30,
|
||||||||||||
(In millions)
|
|
|
2018
|
|
2017
|
|
|
|
|
|
2018
|
|
2017
|
||||||||
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign exchange contracts
|
Processing fees and
other revenue |
|
$
|
(14
|
)
|
|
$
|
19
|
|
|
Investment securities
|
|
Processing fees and
other revenue |
|
$
|
14
|
|
|
$
|
(19
|
)
|
Foreign exchange contracts
|
Processing fees and other revenue
|
|
33
|
|
|
200
|
|
|
FX deposit
|
|
Processing fees and other revenue
|
|
(33
|
)
|
|
(200
|
)
|
||||
Interest-rate contracts
(1)
|
Net interest income
(2)
|
|
9
|
|
|
—
|
|
|
Available-for-sale securities
|
|
Net interest income
(2)
|
|
(8
|
)
|
|
—
|
|
||||
Interest-rate contracts
(1)
|
Net interest income
|
|
(40
|
)
|
|
—
|
|
|
Long-term debt
|
|
Net interest income
|
|
39
|
|
|
—
|
|
||||
Interest-rate contracts
(1)
|
Processing fees and
other revenue |
|
—
|
|
|
9
|
|
|
Available-for-sale securities
|
|
Processing fees and
other revenue (2) |
|
—
|
|
|
(9
|
)
|
||||
Interest-rate contracts
(1)
|
Processing fees and other revenue
|
|
—
|
|
|
(8
|
)
|
|
Long-term debt
|
|
Processing fees and other revenue
|
|
—
|
|
|
5
|
|
||||
Total
|
|
|
$
|
(12
|
)
|
|
$
|
220
|
|
|
|
|
|
|
$
|
12
|
|
|
$
|
(223
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Location of Gain (Loss) on Derivative in Consolidated Statement of Income
|
|
Amount of Gain
(Loss) on Derivative Recognized in Consolidated Statement of Income |
|
Hedged Item in Fair Value Hedging Relationship
|
|
Location of Gain (Loss) on Hedged Item in Consolidated Statement of Income
|
|
Amount of Gain
(Loss) on Hedged Item Recognized in Consolidated Statement of Income |
||||||||||||
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
|
|
2018
|
|
2017
|
|
|
|
|
|
2018
|
|
2017
|
||||||||
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign exchange contracts
|
Processing fees and
other revenue |
|
$
|
(57
|
)
|
|
$
|
21
|
|
|
Investment securities
|
|
Processing fees and
other revenue |
|
$
|
57
|
|
|
$
|
(21
|
)
|
Foreign exchange contracts
|
Processing fees and other revenue
|
|
(320
|
)
|
|
1,282
|
|
|
FX deposit
|
|
Processing fees and other revenue
|
|
320
|
|
|
(1,282
|
)
|
||||
Interest-rate contracts
(1)
|
Net interest income
|
|
(254
|
)
|
|
—
|
|
|
Long-term debt
|
|
Net interest income
|
|
239
|
|
|
—
|
|
||||
Interest-rate contracts
(1)
|
Net interest income
(3)
|
|
40
|
|
|
—
|
|
|
Available-for-sale securities
|
|
Net interest income
(3)
|
|
(38
|
)
|
|
—
|
|
||||
Interest-rate contracts
(1)
|
Processing fees and
other revenue |
|
—
|
|
|
23
|
|
|
Available-for-sale securities
|
|
Processing fees and
other revenue (3) |
|
—
|
|
|
(21
|
)
|
||||
Interest-rate contracts
(1)
|
Processing fees and other revenue
|
|
—
|
|
|
37
|
|
|
Long-term debt
|
|
Processing fees and other revenue
|
|
—
|
|
|
(39
|
)
|
||||
Total
|
|
|
$
|
(591
|
)
|
|
$
|
1,363
|
|
|
|
|
|
|
$
|
578
|
|
|
$
|
(1,363
|
)
|
|
|
|
|
|
Assets:
|
|
September 30, 2018
|
||||||||||||||||||
|
|
Gross Amounts of Recognized
Assets
(1)(2)
|
|
Gross Amounts Offset in Statement of Condition
(3)
|
|
Net Amounts of Assets Presented in Statement of Condition
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(In millions)
|
|
|
|
|
Cash and Securities Received
(4)
|
|
Net Amount
(5)
|
|||||||||||||
Derivatives:
|
|
|
|
|
|
|
||||||||||||||
Foreign exchange contracts
|
|
$
|
15,061
|
|
|
$
|
(9,160
|
)
|
|
$
|
5,901
|
|
|
$
|
—
|
|
|
$
|
5,901
|
|
Interest-rate contracts
(6)
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Other derivative contracts
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Cash collateral and securities netting
|
|
NA
|
|
|
(1,191
|
)
|
|
(1,191
|
)
|
|
(73
|
)
|
|
(1,264
|
)
|
|||||
Total derivatives
|
|
15,078
|
|
|
(10,351
|
)
|
|
4,727
|
|
|
(73
|
)
|
|
4,654
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
||||||||||||||
Resale agreements and securities borrowing
(7)
|
|
80,072
|
|
|
(52,150
|
)
|
|
27,922
|
|
|
(27,343
|
)
|
|
579
|
|
|||||
Total derivatives and other financial instruments
|
|
$
|
95,150
|
|
|
$
|
(62,501
|
)
|
|
$
|
32,649
|
|
|
$
|
(27,416
|
)
|
|
$
|
5,233
|
|
Assets:
|
|
December 31, 2017
|
||||||||||||||||||
|
|
Gross Amounts of Recognized
Assets
(1)(2)
|
|
Gross Amounts Offset in Statement of Condition
(3)
|
|
Net Amounts of Assets Presented in Statement of Condition
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(In millions)
|
|
|
|
|
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
|
|
|
|
|
|
|
Liabilities:
|
|
September 30, 2018
|
||||||||||||||||||
|
|
Gross Amounts of Recognized Liabilities
(1)(2)
|
|
Gross Amounts Offset in Statement of Condition
(3)
|
|
Net Amounts of Liabilities Presented in Statement of Condition
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(In millions)
|
|
|
|
|
Cash and Securities Provided
(4)
|
|
Net Amount
(5)
|
|||||||||||||
Derivatives:
|
|
|
|
|
|
|
||||||||||||||
Foreign exchange contracts
|
|
$
|
14,935
|
|
|
$
|
(9,160
|
)
|
|
$
|
5,775
|
|
|
$
|
—
|
|
|
$
|
5,775
|
|
Interest-rate contracts
(6)
|
|
92
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
92
|
|
|||||
Other derivative contracts
|
|
252
|
|
|
—
|
|
|
252
|
|
|
—
|
|
|
252
|
|
|||||
Cash collateral and securities netting
|
|
NA
|
|
|
(1,397
|
)
|
|
(1,397
|
)
|
|
(263
|
)
|
|
(1,660
|
)
|
|||||
Total derivatives
|
|
15,279
|
|
|
(10,557
|
)
|
|
4,722
|
|
|
(263
|
)
|
|
4,459
|
|
|||||
Other financial instruments:
|
|
|
|
|
|
|
||||||||||||||
Repurchase agreements and securities lending
(7)
|
|
69,457
|
|
|
(52,150
|
)
|
|
17,307
|
|
|
(15,640
|
)
|
|
1,667
|
|
|||||
Total derivatives and other financial instruments
|
|
$
|
84,736
|
|
|
$
|
(62,707
|
)
|
|
$
|
22,029
|
|
|
$
|
(15,903
|
)
|
|
$
|
6,126
|
|
Liabilities:
|
|
December 31, 2017
|
||||||||||||||||||
|
|
Gross Amounts of Recognized Liabilities
(1)(2)
|
|
Gross Amounts Offset in Statement of Condition
(3)
|
|
Net Amounts of Liabilities Presented in Statement of Condition
|
|
Gross Amounts Not Offset in Statement of Condition
|
||||||||||||
(In millions)
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||
|
|
As of September 30, 2018
|
|
As of December 31, 2017
(1)
|
||||||||||||
(In millions)
|
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
Total
|
|
Overnight and Continuous
|
||||||||
Repurchase agreements:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and agency securities
|
|
$
|
49,858
|
|
|
$
|
—
|
|
|
$
|
49,858
|
|
|
$
|
43,072
|
|
Total
|
|
49,858
|
|
|
—
|
|
|
49,858
|
|
|
43,072
|
|
||||
Securities lending transactions:
|
|
|
|
|
|
|
|
|
||||||||
US Treasury and agency securities
|
|
209
|
|
|
—
|
|
|
209
|
|
|
—
|
|
||||
Corporate debt securities
|
|
80
|
|
|
—
|
|
|
80
|
|
|
35
|
|
||||
Equity securities
|
|
10,637
|
|
|
168
|
|
|
10,805
|
|
|
11,020
|
|
||||
Other
(2)
|
|
8,505
|
|
|
—
|
|
|
8,505
|
|
|
—
|
|
||||
Total
|
|
19,431
|
|
|
168
|
|
|
19,599
|
|
|
11,055
|
|
||||
Gross amount of recognized liabilities for repurchase agreements and securities lending
|
|
$
|
69,289
|
|
|
$
|
168
|
|
|
$
|
69,457
|
|
|
$
|
54,127
|
|
|
|
|
|
|
(In millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Commitments:
|
|
|
|
||||
Unfunded credit facilities
|
$
|
27,782
|
|
|
$
|
26,488
|
|
|
|
|
|
||||
Guarantees
(1)
:
|
|
|
|
||||
Indemnified securities financing
|
$
|
380,389
|
|
|
$
|
381,817
|
|
Stable value protection
|
26,313
|
|
|
26,653
|
|
||
Standby letters of credit
|
3,006
|
|
|
3,158
|
|
|
|
(In millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Fair value of indemnified securities financing
|
$
|
380,389
|
|
|
$
|
381,817
|
|
Fair value of cash and securities held by us, as agent, as collateral for indemnified securities financing
|
399,249
|
|
|
400,828
|
|
||
Fair value of collateral for indemnified securities financing invested in indemnified repurchase agreements
|
55,534
|
|
|
61,270
|
|
||
Fair value of cash and securities held by us or our agents as collateral for investments in indemnified repurchase agreements
|
58,976
|
|
|
65,272
|
|
|
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
|
|||
Series H
|
September 2018
|
|
500,000
|
|
|
1/100th
|
|
100,000
|
|
|
1,000
|
|
|
494
|
|
|
December 15, 2023
|
|
|
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
(In millions) (1) |
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
(In millions)
|
||||||||||||
Preferred Stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series C
|
$
|
1,313
|
|
|
$
|
0.33
|
|
|
$
|
6
|
|
|
$
|
1,313
|
|
|
$
|
0.33
|
|
|
$
|
6
|
|
Series D
|
1,475
|
|
|
0.37
|
|
|
11
|
|
|
1,475
|
|
|
0.37
|
|
|
11
|
|
||||||
Series E
|
1,500
|
|
|
0.38
|
|
|
11
|
|
|
1,500
|
|
|
0.38
|
|
|
11
|
|
||||||
Series F
|
2,625
|
|
|
26.25
|
|
|
20
|
|
|
2,625
|
|
|
26.25
|
|
|
20
|
|
||||||
Series G
|
1,338
|
|
|
0.33
|
|
|
7
|
|
|
1,338
|
|
|
0.33
|
|
|
7
|
|
||||||
Total
|
|
|
|
|
$
|
55
|
|
|
|
|
|
|
$
|
55
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
(In millions) |
|
Dividends Declared per Share
|
|
Dividends Declared per Depositary Share
|
|
Total
(In millions)
|
||||||||||||
Preferred Stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Series C
|
$
|
3,939
|
|
|
$
|
0.99
|
|
|
$
|
19
|
|
|
$
|
3,939
|
|
|
$
|
0.99
|
|
|
$
|
19
|
|
Series D
|
4,425
|
|
|
1.11
|
|
|
33
|
|
|
4,425
|
|
|
1.11
|
|
|
33
|
|
||||||
Series E
|
4,500
|
|
|
1.14
|
|
|
33
|
|
|
4,500
|
|
|
1.14
|
|
|
33
|
|
||||||
Series F
|
5,250
|
|
|
52.50
|
|
|
40
|
|
|
5,250
|
|
|
52.50
|
|
|
40
|
|
||||||
Series G
|
4,014
|
|
|
0.99
|
|
|
21
|
|
|
4,014
|
|
|
0.99
|
|
|
21
|
|
||||||
Total
|
|
|
|
|
$
|
146
|
|
|
|
|
|
|
$
|
146
|
|
|
|
|
|
|
Nine Months Ended September 30, 2018
(1)
|
|||||||||
|
Shares Acquired
(In millions) |
|
Average Cost per Share
|
|
Total Acquired
(In millions) |
|||||
2017 Program
|
3.3
|
|
|
$
|
105.31
|
|
|
$
|
350
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
|
Dividends Declared per Share
|
|
Total
(In millions)
|
|
Dividends Declared per Share
|
|
Total
(In millions)
|
|
Dividends Declared per Share
|
|
Total
(In millions)
|
|
Dividends Declared per Share
|
|
Total
(In millions)
|
||||||||||||||||
Common Stock
|
$
|
0.47
|
|
|
$
|
179
|
|
|
$
|
0.42
|
|
|
$
|
156
|
|
|
$
|
1.31
|
|
|
$
|
486
|
|
|
$
|
1.18
|
|
|
$
|
442
|
|
(In millions)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Net unrealized (losses) on cash flow hedges
|
$
|
(83
|
)
|
|
$
|
(56
|
)
|
Net unrealized (losses) gains on available-for-sale securities portfolio
|
(330
|
)
|
|
148
|
|
||
Net unrealized gains related to reclassified available-for-sale securities
|
22
|
|
|
19
|
|
||
Net unrealized (losses) gains on available-for-sale securities
|
(308
|
)
|
|
167
|
|
||
Net unrealized (losses) on available-for-sale securities designated in fair value hedges
|
(35
|
)
|
|
(64
|
)
|
||
Net unrealized (losses) on hedges of net investments in non-U.S. subsidiaries
|
(11
|
)
|
|
(65
|
)
|
||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit
|
(5
|
)
|
|
(6
|
)
|
||
Net unrealized (losses) on retirement plans
|
(156
|
)
|
|
(170
|
)
|
||
Foreign currency translation
|
(1,113
|
)
|
|
(815
|
)
|
||
Total
|
$
|
(1,711
|
)
|
|
$
|
(1,009
|
)
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||||||
(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, 2017
|
$
|
(56
|
)
|
|
$
|
103
|
|
|
$
|
(65
|
)
|
|
$
|
(6
|
)
|
|
$
|
(170
|
)
|
|
$
|
(815
|
)
|
|
$
|
(1,009
|
)
|
Other comprehensive income (loss) before reclassifications
|
(27
|
)
|
|
(452
|
)
|
|
54
|
|
|
4
|
|
|
—
|
|
|
(298
|
)
|
|
(719
|
)
|
|||||||
Amounts reclassified into (out of) earnings
|
—
|
|
|
6
|
|
|
—
|
|
|
(3
|
)
|
|
14
|
|
|
—
|
|
|
17
|
|
|||||||
Other comprehensive income (loss)
|
(27
|
)
|
|
(446
|
)
|
|
54
|
|
|
1
|
|
|
14
|
|
|
(298
|
)
|
|
(702
|
)
|
|||||||
Balance as of September 30, 2018
|
$
|
(83
|
)
|
|
$
|
(343
|
)
|
|
$
|
(11
|
)
|
|
$
|
(5
|
)
|
|
$
|
(156
|
)
|
|
$
|
(1,113
|
)
|
|
$
|
(1,711
|
)
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||||
(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, 2016
|
$
|
229
|
|
|
$
|
(286
|
)
|
|
$
|
95
|
|
|
$
|
(9
|
)
|
|
$
|
(194
|
)
|
|
$
|
(1,875
|
)
|
|
$
|
(2,040
|
)
|
Other comprehensive income (loss) before reclassifications
|
(274
|
)
|
|
555
|
|
|
(147
|
)
|
|
3
|
|
|
—
|
|
|
932
|
|
|
1,069
|
|
|||||||
Amounts reclassified into (out of) earnings
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
(13
|
)
|
|||||||
Other comprehensive income (loss)
|
(274
|
)
|
|
532
|
|
|
(147
|
)
|
|
3
|
|
|
10
|
|
|
932
|
|
|
1,056
|
|
|||||||
Balance as of September 30, 2017
|
$
|
(45
|
)
|
|
$
|
246
|
|
|
$
|
(52
|
)
|
|
$
|
(6
|
)
|
|
$
|
(184
|
)
|
|
$
|
(943
|
)
|
|
$
|
(984
|
)
|
|
Three Months Ended September 30,
|
|
|
||||||
|
2018
|
|
2017
|
|
|
||||
(In millions)
|
Amounts Reclassified into
(out of) Earnings |
|
Affected Line Item in Consolidated Statement of Income
|
||||||
Available-for-sale securities:
|
|
|
|
|
|
||||
Net realized gains from sales of available-for-sale securities, net of related taxes of zero and ($1), respectively
|
$
|
—
|
|
|
$
|
4
|
|
|
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
|
(1
|
)
|
|
—
|
|
|
Losses reclassified (from) to other comprehensive income
|
||
Retirement plans:
|
|
|
|
|
|
||||
Amortization of actuarial losses, net of related taxes of ($1) and zero, respectively
|
1
|
|
|
2
|
|
|
Compensation and employee benefits expenses
|
||
Total reclassifications into AOCI
|
$
|
—
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
||||
|
Nine Months Ended September 30,
|
|
|
||||||
|
2018
|
|
2017
|
|
|
||||
(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 ($2) and $15, respectively
|
$
|
6
|
|
|
$
|
(23
|
)
|
|
Net gains (losses) from sales of available-for-sale securities
|
Held-to-maturity securities:
|
|
|
|
|
|
||||
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related taxes of $1 and zero, respectively
|
(3
|
)
|
|
—
|
|
|
Losses reclassified (from) to other comprehensive income
|
||
Retirement plans:
|
|
|
|
|
|
||||
Amortization of actuarial losses, net of related taxes of ($5) and ($2), respectively
|
14
|
|
|
10
|
|
|
Compensation and employee benefits expenses
|
||
Total reclassifications into (out of) AOCI
|
$
|
17
|
|
|
$
|
(13
|
)
|
|
|
|
|
|
State Street
|
|
State Street Bank
|
||||||||||||||||||||||||||||||
(In millions)
|
|
Basel III Advanced Approaches September 30, 2018
(1)
|
|
Basel III Standardized Approach September 30, 2018
(2)
|
|
Basel III Advanced Approaches December 31, 2017
(1)
|
|
Basel III Standardized Approach December 31, 2017
(2)
|
|
Basel III Advanced Approaches September 30, 2018
(1)
|
|
Basel III Standardized Approach September 30, 2018
(2)
|
|
Basel III Advanced Approaches December 31, 2017
(1)
|
|
Basel III Standardized Approach December 31, 2017
(2)
|
|||||||||||||||||||
Common shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Common stock and related surplus
|
$
|
10,922
|
|
|
$
|
10,922
|
|
|
$
|
10,302
|
|
|
$
|
10,302
|
|
|
$
|
13,262
|
|
|
$
|
13,262
|
|
|
$
|
11,612
|
|
|
$
|
11,612
|
|
||||
Retained earnings
|
|
20,387
|
|
|
20,387
|
|
|
18,856
|
|
|
18,856
|
|
|
13,969
|
|
|
13,969
|
|
|
12,312
|
|
|
12,312
|
|
|||||||||||
Accumulated other comprehensive income (loss)
|
(1,661
|
)
|
|
(1,661
|
)
|
|
(972
|
)
|
|
(972
|
)
|
|
(1,450
|
)
|
|
(1,450
|
)
|
|
(809
|
)
|
|
(809
|
)
|
||||||||||||
Treasury stock, at cost
|
|
(8,735
|
)
|
|
(8,735
|
)
|
|
(9,029
|
)
|
|
(9,029
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Total
|
|
|
20,913
|
|
|
20,913
|
|
|
19,157
|
|
|
19,157
|
|
|
25,781
|
|
|
25,781
|
|
|
23,115
|
|
|
23,115
|
|
||||||||||
Regulatory capital adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Goodwill and other intangible assets, net of associated deferred tax liabilities
(3)
|
(7,016
|
)
|
|
(7,016
|
)
|
|
(6,877
|
)
|
|
(6,877
|
)
|
|
(6,721
|
)
|
|
(6,721
|
)
|
|
(6,579
|
)
|
|
(6,579
|
)
|
||||||||||||
Other adjustments
(4)
|
|
(194
|
)
|
|
(194
|
)
|
|
(76
|
)
|
|
(76
|
)
|
|
(48
|
)
|
|
(48
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|||||||||||
Common equity tier 1 capital
|
13,703
|
|
|
13,703
|
|
|
12,204
|
|
|
12,204
|
|
|
19,012
|
|
|
19,012
|
|
|
16,531
|
|
|
16,531
|
|
||||||||||||
Preferred stock
|
3,690
|
|
|
3,690
|
|
|
3,196
|
|
|
3,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Trust preferred capital securities subject to phase-out from tier 1 capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Other adjustments
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Tier 1 capital
|
17,393
|
|
|
17,393
|
|
|
15,382
|
|
|
15,382
|
|
|
19,012
|
|
|
19,012
|
|
|
16,531
|
|
|
16,531
|
|
||||||||||||
Qualifying subordinated long-term debt
|
761
|
|
|
761
|
|
|
980
|
|
|
980
|
|
|
759
|
|
|
759
|
|
|
983
|
|
|
983
|
|
||||||||||||
Trust preferred capital securities phased out of tier 1 capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
ALLL and other
|
5
|
|
|
74
|
|
|
4
|
|
|
72
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
72
|
|
||||||||||||
Other adjustments
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Total capital
|
$
|
18,159
|
|
|
$
|
18,228
|
|
|
$
|
16,367
|
|
|
$
|
16,435
|
|
|
$
|
19,771
|
|
|
$
|
19,846
|
|
|
$
|
17,514
|
|
|
$
|
17,586
|
|
||||
RWAs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Credit risk
(5)
|
$
|
50,272
|
|
|
$
|
104,515
|
|
|
$
|
52,000
|
|
|
$
|
101,349
|
|
|
$
|
47,732
|
|
|
$
|
101,444
|
|
|
$
|
49,489
|
|
|
$
|
98,433
|
|
||||
Operational risk
(6)
|
45,840
|
|
|
NA
|
|
|
45,822
|
|
|
NA
|
|
|
45,315
|
|
|
NA
|
|
|
45,295
|
|
|
NA
|
|
||||||||||||
Market risk
|
1,255
|
|
|
1,255
|
|
|
1,334
|
|
|
1,334
|
|
|
1,255
|
|
|
1,255
|
|
|
1,334
|
|
|
1,334
|
|
||||||||||||
Total RWAs
|
|
$
|
97,367
|
|
|
$
|
105,770
|
|
|
$
|
99,156
|
|
|
$
|
102,683
|
|
|
$
|
94,302
|
|
|
$
|
102,699
|
|
|
$
|
96,118
|
|
|
$
|
99,767
|
|
|||
Adjusted quarterly average assets
|
$
|
214,103
|
|
|
$
|
214,103
|
|
|
$
|
209,328
|
|
|
$
|
209,328
|
|
|
$
|
211,477
|
|
|
$
|
211,477
|
|
|
$
|
206,070
|
|
|
$
|
206,070
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Capital Ratios:
|
2018 Minimum Requirements Including Capital Conservation Buffer and
G-SIB Surcharge
(7)
|
2017 Minimum Requirements Including Capital Conservation Buffer and
G-SIB Surcharge
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Common equity tier 1 capital
|
7.5
|
%
|
6.5
|
%
|
14.1
|
%
|
|
13.0
|
%
|
|
12.3
|
%
|
|
11.9
|
%
|
|
20.2
|
%
|
|
18.5
|
%
|
|
17.2
|
%
|
|
16.6
|
%
|
||||||||
Tier 1 capital
|
9.0
|
|
8.0
|
|
17.9
|
|
|
16.4
|
|
|
15.5
|
|
|
15.0
|
|
|
20.2
|
|
|
18.5
|
|
|
17.2
|
|
|
16.6
|
|
||||||||
Total capital
|
11.0
|
|
10.0
|
|
18.7
|
|
|
17.2
|
|
|
16.5
|
|
|
16.0
|
|
|
21.0
|
|
|
19.3
|
|
|
18.2
|
|
|
17.6
|
|
||||||||
Tier 1 leverage
|
4.0
|
|
4.0
|
|
8.1
|
|
|
8.1
|
|
|
7.3
|
|
|
7.3
|
|
|
9.0
|
|
|
9.0
|
|
|
8.0
|
|
|
8.0
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
||||||||
Deposits with banks
|
$
|
94
|
|
|
$
|
45
|
|
|
$
|
267
|
|
|
$
|
121
|
|
Investment securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury and federal agencies
|
300
|
|
|
207
|
|
|
835
|
|
|
627
|
|
||||
State and political subdivisions
|
29
|
|
|
56
|
|
|
125
|
|
|
171
|
|
||||
Other investments
|
136
|
|
|
173
|
|
|
434
|
|
|
495
|
|
||||
Securities purchased under resale agreements
|
87
|
|
|
74
|
|
|
246
|
|
|
189
|
|
||||
Loans and leases
|
173
|
|
|
139
|
|
|
498
|
|
|
362
|
|
||||
Other interest-earning assets
|
97
|
|
|
67
|
|
|
275
|
|
|
146
|
|
||||
Total interest income
|
916
|
|
|
761
|
|
|
2,680
|
|
|
2,111
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
||||||||
Deposits
|
84
|
|
|
39
|
|
|
236
|
|
|
96
|
|
||||
Securities sold under repurchase agreements
|
4
|
|
|
1
|
|
|
11
|
|
|
2
|
|
||||
Other short-term borrowings
|
4
|
|
|
3
|
|
|
12
|
|
|
7
|
|
||||
Long-term debt
|
100
|
|
|
78
|
|
|
293
|
|
|
227
|
|
||||
Other interest-bearing liabilities
|
52
|
|
|
37
|
|
|
154
|
|
|
91
|
|
||||
Total interest expense
|
244
|
|
|
158
|
|
|
706
|
|
|
423
|
|
||||
Net interest income
|
$
|
672
|
|
|
$
|
603
|
|
|
$
|
1,974
|
|
|
$
|
1,688
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Insurance
|
$
|
15
|
|
|
$
|
27
|
|
|
$
|
79
|
|
|
$
|
84
|
|
Regulatory fees and assessments
|
15
|
|
|
24
|
|
|
71
|
|
|
77
|
|
||||
Sales advertising public relations
|
29
|
|
|
14
|
|
|
84
|
|
|
42
|
|
||||
Bank operations
|
14
|
|
|
19
|
|
|
53
|
|
|
53
|
|
||||
Litigation
|
—
|
|
|
3
|
|
|
7
|
|
|
(15
|
)
|
||||
Other
|
99
|
|
|
57
|
|
|
285
|
|
|
186
|
|
||||
Total other expenses
|
$
|
172
|
|
|
$
|
144
|
|
|
$
|
579
|
|
|
$
|
427
|
|
(In millions)
|
Employee
Related Costs |
|
Real Estate
Actions |
|
Asset and Other Write-offs
|
|
Total
|
||||||||
Accrual Balance at December 31, 2016
|
$
|
37
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
$
|
56
|
|
Accruals for Beacon
|
14
|
|
|
—
|
|
|
2
|
|
|
16
|
|
||||
Payments and Other Adjustments
|
(13
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(18
|
)
|
||||
Accrual Balance at March 31, 2017
|
38
|
|
|
14
|
|
|
2
|
|
|
54
|
|
||||
Accruals for Beacon
|
60
|
|
|
—
|
|
|
2
|
|
|
62
|
|
||||
Payments and Other Adjustments
|
(11
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(16
|
)
|
||||
Accrual Balance at June 30, 2017
|
87
|
|
|
11
|
|
|
2
|
|
|
100
|
|
||||
Accruals for Beacon
|
23
|
|
|
9
|
|
|
1
|
|
|
33
|
|
||||
Payments and Other Adjustments
|
(10
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(16
|
)
|
||||
Accrual Balance at September 30, 2017
|
$
|
100
|
|
|
$
|
15
|
|
|
$
|
2
|
|
|
$
|
117
|
|
Accrual Balance at December 31, 2017
|
$
|
166
|
|
|
$
|
32
|
|
|
$
|
3
|
|
|
$
|
201
|
|
Accruals for Beacon
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Payments and Other Adjustments
|
(22
|
)
|
|
(4
|
)
|
|
—
|
|
|
(26
|
)
|
||||
Accrual Balance at March 31, 2018
|
144
|
|
|
28
|
|
|
3
|
|
|
175
|
|
||||
Accruals for Beacon
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Payments and Other Adjustments
|
(31
|
)
|
|
(3
|
)
|
|
—
|
|
|
(34
|
)
|
||||
Accrual Balance at June 30, 2018
|
113
|
|
|
25
|
|
|
3
|
|
|
141
|
|
||||
Accruals for Beacon
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Payments and Other Adjustments
|
(18
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
(23
|
)
|
||||
Accrual Balance at September 30, 2018
|
$
|
94
|
|
|
$
|
21
|
|
|
$
|
2
|
|
|
$
|
117
|
|
|
Three Months Ended September 30,
|
||||||
(Dollars in millions, except per share amounts)
|
2018
|
|
2017
|
||||
Net income
|
$
|
765
|
|
|
$
|
685
|
|
Less:
|
|
|
|
||||
Preferred stock dividends
|
(55
|
)
|
|
(55
|
)
|
||
Dividends and undistributed earnings allocated to participating securities
(1)
|
(1
|
)
|
|
(1
|
)
|
||
Net income available to common shareholders
|
$
|
709
|
|
|
$
|
629
|
|
Average common shares outstanding (In thousands):
|
|
|
|
||||
Basic average common shares
|
374,963
|
|
|
372,765
|
|
||
Effect of dilutive securities: equity-based awards
|
4,420
|
|
|
5,753
|
|
||
Diluted average common shares
|
379,383
|
|
|
378,518
|
|
||
Anti-dilutive securities
(2)
|
1,360
|
|
|
—
|
|
||
Earnings per common share:
|
|
|
|
||||
Basic
|
$
|
1.89
|
|
|
$
|
1.69
|
|
Diluted
(3)
|
1.87
|
|
|
1.66
|
|
||
|
|
|
|
||||
|
Nine Months Ended September 30,
|
||||||
(Dollars in millions, except per share amounts)
|
2018
|
|
2017
|
||||
Net income
|
$
|
2,160
|
|
|
$
|
1,807
|
|
Less:
|
|
|
|
||||
Preferred stock dividends
|
(146
|
)
|
|
(146
|
)
|
||
Dividends and undistributed earnings allocated to participating securities
(1)
|
(2
|
)
|
|
(2
|
)
|
||
Net income available to common shareholders
|
$
|
2,012
|
|
|
$
|
1,659
|
|
Average common shares outstanding (In thousands):
|
|
|
|
||||
Basic average common shares
|
369,368
|
|
|
376,430
|
|
||
Effect of dilutive securities: equity-based awards
|
4,696
|
|
|
5,349
|
|
||
Diluted average common shares
|
374,064
|
|
|
381,779
|
|
||
Anti-dilutive securities
(2)
|
871
|
|
|
250
|
|
||
Earnings per common share:
|
|
|
|
||||
Basic
|
$
|
5.45
|
|
|
$
|
4.41
|
|
Diluted
(3)
|
5.38
|
|
|
4.35
|
|
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
Investment
Servicing |
|
Investment
Management |
|
Other
|
|
Total
|
||||||||||||||||||||||||
(Dollars in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Servicing fees
|
$
|
1,333
|
|
|
$
|
1,351
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,333
|
|
|
$
|
1,351
|
|
Management fees
|
—
|
|
|
—
|
|
|
474
|
|
|
419
|
|
|
—
|
|
|
—
|
|
|
474
|
|
|
419
|
|
||||||||
Trading services
|
255
|
|
|
239
|
|
|
33
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
288
|
|
|
259
|
|
||||||||
Securities finance
|
128
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|
147
|
|
||||||||
Processing fees and other
|
49
|
|
|
65
|
|
|
8
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
66
|
|
||||||||
Total fee revenue
|
1,765
|
|
|
1,802
|
|
|
515
|
|
|
440
|
|
|
—
|
|
|
—
|
|
|
2,280
|
|
|
2,242
|
|
||||||||
Net interest income
|
680
|
|
|
606
|
|
|
(8
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
672
|
|
|
603
|
|
||||||||
Gains (losses) related to investment securities, net
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
||||||||
Total revenue
|
2,444
|
|
|
2,409
|
|
|
507
|
|
|
437
|
|
|
—
|
|
|
—
|
|
|
2,951
|
|
|
2,846
|
|
||||||||
Provision for loan losses
|
5
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
3
|
|
||||||||
Total expenses
|
1,693
|
|
|
1,673
|
|
|
386
|
|
|
314
|
|
|
—
|
|
|
34
|
|
|
2,079
|
|
|
2,021
|
|
||||||||
Income before income tax expense
|
$
|
746
|
|
|
$
|
733
|
|
|
$
|
121
|
|
|
$
|
123
|
|
|
$
|
—
|
|
|
$
|
(34
|
)
|
|
$
|
867
|
|
|
$
|
822
|
|
Pre-tax margin
|
31
|
%
|
|
30
|
%
|
|
24
|
%
|
|
28
|
%
|
|
|
|
|
|
29
|
%
|
|
29
|
%
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
Investment
Servicing |
|
Investment
Management |
|
Other
|
|
Total
|
||||||||||||||||||||||||
(Dollars in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Servicing fees
|
$
|
4,135
|
|
|
$
|
3,986
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,135
|
|
|
$
|
3,986
|
|
Management fees
|
—
|
|
|
—
|
|
|
1,411
|
|
|
1,198
|
|
|
—
|
|
|
—
|
|
|
1,411
|
|
|
1,198
|
|
||||||||
Trading services
|
810
|
|
|
768
|
|
|
97
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
907
|
|
|
823
|
|
||||||||
Securities finance
|
423
|
|
|
459
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
423
|
|
|
459
|
|
||||||||
Processing fees and other
|
131
|
|
|
203
|
|
|
9
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
209
|
|
||||||||
Total fee revenue
|
5,499
|
|
|
5,416
|
|
|
1,517
|
|
|
1,259
|
|
|
—
|
|
|
—
|
|
|
7,016
|
|
|
6,675
|
|
||||||||
Net interest income
|
1,991
|
|
|
1,691
|
|
|
(17
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
1,974
|
|
|
1,688
|
|
||||||||
Gains (losses) related to investment securities, net
|
6
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(39
|
)
|
||||||||
Total revenue
|
7,496
|
|
|
7,068
|
|
|
1,500
|
|
|
1,256
|
|
|
—
|
|
|
—
|
|
|
8,996
|
|
|
8,324
|
|
||||||||
Provision for loan losses
|
7
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
4
|
|
||||||||
Total expenses
|
5,244
|
|
|
5,050
|
|
|
1,173
|
|
|
954
|
|
|
77
|
|
|
134
|
|
|
6,494
|
|
|
6,138
|
|
||||||||
Income before income tax expense
|
$
|
2,245
|
|
|
$
|
2,014
|
|
|
$
|
327
|
|
|
$
|
302
|
|
|
$
|
(77
|
)
|
|
$
|
(134
|
)
|
|
$
|
2,495
|
|
|
$
|
2,182
|
|
Pre-tax margin
|
30
|
%
|
|
28
|
%
|
|
22
|
%
|
|
24
|
%
|
|
|
|
|
|
28
|
%
|
|
26
|
%
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||||||||
|
|
Investment Servicing
|
|
Investment Management
|
|
Total
|
||||||||||||||||||||||
(Dollars in millions)
|
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
2018
|
||||||||||||||
Servicing fees
|
|
$
|
1,333
|
|
|
$
|
—
|
|
|
$
|
1,333
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,333
|
|
Management fees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
474
|
|
|
—
|
|
|
474
|
|
|
474
|
|
|||||||
Trading services
|
|
89
|
|
|
166
|
|
|
255
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|
288
|
|
|||||||
Securities finance
|
|
73
|
|
|
55
|
|
|
128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|||||||
Processing fees and other
|
|
27
|
|
|
22
|
|
|
49
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
57
|
|
|||||||
Total fee revenue
|
|
1,522
|
|
|
243
|
|
|
1,765
|
|
|
507
|
|
|
8
|
|
|
515
|
|
|
2,280
|
|
|||||||
Net interest income
|
|
—
|
|
|
680
|
|
|
680
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|
672
|
|
|||||||
Gains (losses) related to investment securities, net
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Total revenue
|
|
$
|
1,522
|
|
|
$
|
922
|
|
|
$
|
2,444
|
|
|
$
|
507
|
|
|
$
|
—
|
|
|
$
|
507
|
|
|
$
|
2,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||||||
|
|
Investment Servicing
|
|
Investment Management
|
|
Total
|
||||||||||||||||||||||
(Dollars in millions)
|
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
Topic 606 revenue
|
|
All other revenue
|
|
Total
|
|
2018
|
||||||||||||||
Servicing fees
|
|
$
|
4,135
|
|
|
$
|
—
|
|
|
$
|
4,135
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,135
|
|
Management fees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,411
|
|
|
—
|
|
|
1,411
|
|
|
1,411
|
|
|||||||
Trading services
|
|
275
|
|
|
535
|
|
|
810
|
|
|
97
|
|
|
—
|
|
|
97
|
|
|
907
|
|
|||||||
Securities finance
|
|
240
|
|
|
183
|
|
|
423
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
423
|
|
|||||||
Processing fees and other
|
|
69
|
|
|
62
|
|
|
131
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
140
|
|
|||||||
Total fee revenue
|
|
4,719
|
|
|
780
|
|
|
5,499
|
|
|
1,508
|
|
|
9
|
|
|
1,517
|
|
|
7,016
|
|
|||||||
Net interest income
|
|
—
|
|
|
1,991
|
|
|
1,991
|
|
|
—
|
|
|
(17
|
)
|
|
(17
|
)
|
|
1,974
|
|
|||||||
Gains (losses) related to investment securities, net
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Total revenue
|
|
$
|
4,719
|
|
|
$
|
2,777
|
|
|
$
|
7,496
|
|
|
$
|
1,508
|
|
|
$
|
(8
|
)
|
|
$
|
1,500
|
|
|
$
|
8,996
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
(In millions)
|
Non-U.S.
|
|
U.S.
|
|
Total
|
|
Non-U.S.
|
|
U.S.
|
|
Total
|
||||||||||||
Total revenue
|
$
|
1,286
|
|
|
$
|
1,665
|
|
|
$
|
2,951
|
|
|
$
|
1,219
|
|
|
$
|
1,627
|
|
|
$
|
2,846
|
|
Income before income taxes
|
497
|
|
|
370
|
|
|
867
|
|
|
342
|
|
|
480
|
|
|
822
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
(In millions)
|
Non-U.S.
|
|
U.S.
|
|
Total
|
|
Non-U.S.
|
|
U.S.
|
|
Total
|
||||||||||||
Total revenue
|
$
|
3,929
|
|
|
$
|
5,067
|
|
|
$
|
8,996
|
|
|
$
|
3,494
|
|
|
$
|
4,830
|
|
|
$
|
8,324
|
|
Income before income taxes
|
1,343
|
|
|
1,152
|
|
|
2,495
|
|
|
919
|
|
|
1,263
|
|
|
2,182
|
|
ACRONYMS
|
|||
|
|
|
|
2017 Form 10-K
|
State Street Corporation Annual Report on Form 10-K for the year ended December 31, 2017
|
MRAC
|
Management Risk and Capital Committee
|
ABS
|
Asset-backed securities
|
NII
|
Net interest income
|
AFS
|
Available-for-sale
|
NIM
|
Net interest margin
|
AIFMD
|
Alternative Investment Fund Managers Directive
|
NSFR
(1)
|
Net stable funding ratio
|
AIRB
(1)
|
Advanced Internal Ratings-Based Approach
|
OCI
|
Other comprehensive income (loss)
|
ALLL
|
Allowance for loan and lease losses
|
OCIO
|
Outsourced Chief Investment Officer
|
AMA
|
Advanced Measurement Approach
|
OFAC
|
Office of Foreign Assets Control
|
AML
|
Anti-money laundering
|
OTC
|
Over-the-counter
|
AOCI
|
Accumulated other comprehensive income (loss)
|
OTTI
|
Other-than-temporary-impairment
|
ASU
|
Accounting Standards Update
|
Parent Company
|
State Street Corporation
|
AUCA
|
Assets under custody and/or administration
|
PCA
|
Prompt corrective action
|
AUM
|
Assets under management
|
PCAOB
|
Public Company Accounting Oversight Board
|
BCBS
|
Basel Committee on Banking Supervision
|
P&L
|
Profit-and-loss
|
Board
|
Board of Directors
|
RC
|
Risk Committee
|
bps
|
Basis points
|
ROE
|
Return on average common equity
|
CCAR
|
Comprehensive Capital Analysis and Review
|
RWA
(1)
|
Risk-weighted asset
|
CD
|
Certificates of deposit
|
SCB
|
Stress Capital Buffer
|
CET1
(1)
|
Common equity tier 1
|
SEC
|
Securities and Exchange Commission
|
CLO
|
Collateralized loan obligations
|
SERP
|
Supplemental executive retirement plans
|
CMO
|
Collateralized mortgage obligations
|
SLB
|
Stress Leverage Buffer
|
CRE
|
Commercial real estate
|
SLR
(1)
|
Supplementary leverage ratio
|
CVA
|
Credit valuation adjustment
|
SPDR
|
Spider; Standard and Poor's depository receipt
|
Dodd-Frank Act
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
SPOE Strategy
|
Single Point of Entry Strategy
|
DOJ
|
Department of Justice
|
SSGA
|
State Street Global Advisors
|
DOL
|
Department of Labor
|
SSIF
|
State Street Intermediate Funding, LLC
|
ECB
|
European Central Bank
|
State Street Bank
|
State Street Bank and Trust Company
|
EPS
|
Earnings per share
|
TMRC
|
Trading and Markets Risk Committee
|
ERISA
|
Employee Retirement Income Security Act
|
UCITS
|
Undertakings for Collective Investments in Transferable Securities
|
ERM
|
Enterprise Risk Management
|
UOM
|
Unit of measure
|
eSLR
|
Enhanced supplementary leverage ratio
|
VaR
|
Value-at-Risk
|
ETF
|
Exchange-Traded Fund
|
VIE
|
Variable interest entity
|
EVE
|
Economic value of equity
|
|
|
FASB
|
Financial Accounting Standards Board
|
|
|
FCA
|
Financial Conduct Authority
|
|
|
FDIC
|
Federal Deposit Insurance Corporation
|
|
|
Federal Reserve
|
Board of Governors of the Federal Reserve System
|
|
|
FHLB
|
Federal Home Loan Bank of Boston
|
|
|
Form 10-Q
|
State Street Corporation Quarterly Report on Form 10-Q
|
|
|
FRBB
|
Federal Reserve Bank of Boston
|
|
|
FSB
|
Financial Stability Board
|
|
|
FX
|
Foreign exchange
|
|
|
GAAP
|
Generally accepted accounting principles
|
|
|
GEAM
|
General Electric Asset Management
|
|
|
G-SIB
|
Global systemically important bank
|
|
|
HQLA
(1)
|
High-quality liquid assets
|
|
|
HTM
|
Held-to-maturity
|
|
|
IDI
|
Insured depository institution
|
|
|
LCR
(1)
|
Liquidity coverage ratio
|
|
|
LIBOR
|
London Interbank Offered Rate
|
|
|
LTD
|
Long term debt
|
|
|
MBS
|
Mortgage-backed securities
|
|
|
MiFID II
|
Markets in Financial Instruments Directive II
|
|
|
MiFIR
|
Markets in Financial Instruments Regulation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Submitted electronically herewith
|
|
|
|
|
|
STATE STREET CORPORATION
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
October 31, 2018
|
|
By:
|
|
/s/ E
RIC
W. A
BOAF
|
|
|
|
|
|
Eric W. Aboaf,
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
October 31, 2018
|
|
By:
|
|
/s/ I
AN
W
.
A
PPLEYARD
|
|
|
|
|
|
Ian W. Appleyard,
|
|
|
|
|
|
Executive Vice President, Global Controller and Chief Accounting Officer
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
Years Ended December 31,
|
||||||||||||||||||||
(Dollars in millions)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
EXCLUDING INTEREST ON DEPOSITS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pre-tax income from continuing operations, as reported
|
|
$
|
2,495
|
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
|
$
|
2,437
|
|
|
$
|
2,666
|
|
Share of pre-tax income (loss) of unconsolidated entities
|
|
145
|
|
|
254
|
|
|
349
|
|
|
(700
|
)
|
|
(10
|
)
|
|
1
|
|
||||||
Fixed charges
|
|
366
|
|
|
385
|
|
|
334
|
|
|
321
|
|
|
318
|
|
|
365
|
|
||||||
Adjusted earnings
|
(A)
|
$
|
3,006
|
|
|
$
|
3,538
|
|
|
$
|
2,803
|
|
|
$
|
1,919
|
|
|
$
|
2,745
|
|
|
$
|
3,032
|
|
Interest on short-term borrowings
|
|
$
|
23
|
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
60
|
|
Interest on long-term debt, including amortization of debt issuance costs
|
|
281
|
|
|
289
|
|
|
240
|
|
|
219
|
|
|
206
|
|
|
184
|
|
||||||
Portion of long-term leases representative of the interest factor
(1)
|
|
62
|
|
|
84
|
|
|
86
|
|
|
95
|
|
|
106
|
|
|
121
|
|
||||||
Preferred stock dividends and related adjustments
(2)
|
|
166
|
|
|
242
|
|
|
171
|
|
|
112
|
|
|
61
|
|
|
33
|
|
||||||
Fixed charges and preferred stock dividends
|
(B)
|
$
|
532
|
|
|
$
|
627
|
|
|
$
|
505
|
|
|
$
|
433
|
|
|
$
|
379
|
|
|
$
|
398
|
|
Consolidated ratios of adjusted earnings to combined fixed charges and preferred stock dividends, excluding interest on deposits
|
(A)/(B)
|
5.65x
|
|
|
5.64x
|
|
|
5.55x
|
|
|
4.43x
|
|
|
7.24x
|
|
|
7.62x
|
|
||||||
INCLUDING INTEREST ON DEPOSITS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax income from continuing operations, as reported
|
|
$
|
2,495
|
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
|
$
|
2,437
|
|
|
$
|
2,666
|
|
Share of pre-tax income (loss) of unconsolidated entities
|
|
145
|
|
|
254
|
|
|
349
|
|
|
(700
|
)
|
|
(10
|
)
|
|
1
|
|
||||||
Fixed charges
|
|
602
|
|
|
548
|
|
|
419
|
|
|
418
|
|
|
416
|
|
|
458
|
|
||||||
Adjusted earnings
|
(C)
|
$
|
3,242
|
|
|
$
|
3,701
|
|
|
$
|
2,888
|
|
|
$
|
2,016
|
|
|
$
|
2,843
|
|
|
$
|
3,125
|
|
Interest on short-term borrowings and deposits
|
|
$
|
259
|
|
|
$
|
175
|
|
|
$
|
93
|
|
|
$
|
104
|
|
|
$
|
104
|
|
|
$
|
153
|
|
Interest on long-term debt, including amortization of debt issuance costs
|
|
281
|
|
|
289
|
|
|
240
|
|
|
219
|
|
|
206
|
|
|
184
|
|
||||||
Portion of long-term leases representative of the interest factor
(1)
|
|
62
|
|
|
84
|
|
|
86
|
|
|
95
|
|
|
106
|
|
|
121
|
|
||||||
Preferred stock dividends and related adjustments
(2)
|
|
166
|
|
|
242
|
|
|
171
|
|
|
112
|
|
|
61
|
|
|
33
|
|
||||||
Fixed charges and preferred stock dividends
|
(D)
|
$
|
768
|
|
|
$
|
790
|
|
|
$
|
590
|
|
|
$
|
530
|
|
|
$
|
477
|
|
|
$
|
491
|
|
Consolidated ratios of adjusted earnings to combined fixed charges and preferred stock dividends, including interest on deposits
|
(C)/(D)
|
4.22x
|
|
|
4.68x
|
|
|
4.89x
|
|
|
3.80x
|
|
|
5.96x
|
|
|
6.36x
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
Years Ended December 31,
|
||||||||||||||||||||
(Dollars in millions)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
EXCLUDING INTEREST ON DEPOSITS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pre-tax income from continuing operations, as reported
|
|
$
|
2,495
|
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
|
$
|
2,437
|
|
|
$
|
2,666
|
|
Share of pre-tax income (loss) of unconsolidated entities
|
|
145
|
|
|
254
|
|
|
349
|
|
|
(700
|
)
|
|
(10
|
)
|
|
1
|
|
||||||
Fixed charges
|
|
366
|
|
|
385
|
|
|
334
|
|
|
321
|
|
|
318
|
|
|
365
|
|
||||||
Adjusted earnings
|
(A)
|
$
|
3,006
|
|
|
$
|
3,538
|
|
|
$
|
2,803
|
|
|
$
|
1,919
|
|
|
$
|
2,745
|
|
|
$
|
3,032
|
|
Interest on short-term borrowings
|
|
$
|
23
|
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
60
|
|
Interest on long-term debt, including amortization of debt issuance costs
|
|
281
|
|
|
289
|
|
|
240
|
|
|
219
|
|
|
206
|
|
|
184
|
|
||||||
Portion of long-term leases representative of the interest factor
(1)
|
|
62
|
|
|
84
|
|
|
86
|
|
|
95
|
|
|
106
|
|
|
121
|
|
||||||
Fixed charges
|
(B)
|
$
|
366
|
|
|
$
|
385
|
|
|
$
|
334
|
|
|
$
|
321
|
|
|
$
|
318
|
|
|
$
|
365
|
|
Consolidated ratios of adjusted earnings to fixed charges, excluding interest on deposits
|
(A)/(B)
|
8.21x
|
|
|
9.19x
|
|
|
8.39x
|
|
|
5.98x
|
|
|
8.63x
|
|
|
8.31x
|
|
||||||
INCLUDING INTEREST ON DEPOSITS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-tax income from continuing operations, as reported
|
|
$
|
2,495
|
|
|
$
|
2,899
|
|
|
$
|
2,120
|
|
|
$
|
2,298
|
|
|
$
|
2,437
|
|
|
$
|
2,666
|
|
Share of pre-tax income (loss) of unconsolidated entities
|
|
145
|
|
|
254
|
|
|
349
|
|
|
(700
|
)
|
|
(10
|
)
|
|
1
|
|
||||||
Fixed charges
|
|
602
|
|
|
548
|
|
|
419
|
|
|
418
|
|
|
416
|
|
|
458
|
|
||||||
Adjusted earnings
|
(C)
|
$
|
3,242
|
|
|
$
|
3,701
|
|
|
$
|
2,888
|
|
|
$
|
2,016
|
|
|
$
|
2,843
|
|
|
$
|
3,125
|
|
Interest on short-term borrowings and deposits
|
|
$
|
259
|
|
|
$
|
175
|
|
|
$
|
93
|
|
|
$
|
104
|
|
|
$
|
104
|
|
|
$
|
153
|
|
Interest on long-term debt, including amortization of debt issuance costs
|
|
281
|
|
|
289
|
|
|
240
|
|
|
219
|
|
|
206
|
|
|
184
|
|
||||||
Portion of long-term leases representative of the interest factor
(1)
|
|
62
|
|
|
84
|
|
|
86
|
|
|
95
|
|
|
106
|
|
|
121
|
|
||||||
Fixed charges
|
(D)
|
$
|
602
|
|
|
$
|
548
|
|
|
$
|
419
|
|
|
$
|
418
|
|
|
$
|
416
|
|
|
$
|
458
|
|
Consolidated ratios of adjusted earnings to fixed charges, including interest on deposits
|
(C)/(D)
|
5.39x
|
|
|
6.75x
|
|
|
6.89x
|
|
|
4.82x
|
|
|
6.83x
|
|
|
6.82x
|
|
|
|
|
|
1.
|
I have reviewed this
Quarterly Report on
Form 10-Q
of State Street Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
Date:
|
October 31, 2018
|
|
By:
|
/s/ J
OSEPH
L. H
OOLEY
|
|
|
|
|
Joseph L. Hooley,
|
|
|
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this
Quarterly Report on
Form 10-Q
of State Street Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
Date:
|
October 31, 2018
|
|
By:
|
/s/ E
RIC
W. A
BOAF
|
|
|
|
|
Eric W. Aboaf,
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
Date:
|
October 31, 2018
|
|
By:
|
/s/ J
OSEPH
L. H
OOLEY
|
|
|
|
|
Joseph L. Hooley,
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
Date:
|
October 31, 2018
|
|
By:
|
/s/ E
RIC
W. A
BOAF
|
|
|
|
|
Eric W. Aboaf,
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|