10-QPeriod: Q2 FY2020

STATE STREET CORP Quarterly Report for Q2 Ended Jun 30, 2020

Filed July 27, 2020For Securities:STTSTT-PG

Summary

State Street Corporation's (STT) 10-Q filing for the period ending July 27, 2020, highlights the impact of the COVID-19 pandemic on its capital return strategy. The company, along with other U.S. G-SIBs, suspended common stock repurchases in March 2020 through the second quarter of 2020, resulting in no share buybacks during Q2 2020. This suspension was in response to regulatory guidance amidst the pandemic. Furthermore, the Federal Reserve's 2020 CCAR results in June 2020 imposed limitations on capital distributions for CCAR banks in the third quarter of 2020. State Street is awaiting a resubmission of capital plans based on new scenarios, the outcome of which remains uncertain and could affect future share repurchase programs. Additionally, the filing discloses a consulting arrangement with the retiring Chief Legal Officer, Jeffrey N. Carp, for transition services.

Financial Highlights

37 data points
Beta

Revenue

$2.94B

Net Income

$694.00M

23.6% Net Margin

EPS (Diluted)

$1.86

Total Assets

$280.24B

Cash & Equivalents

$3.69B

Free Cash Flow

$1.18B

Financial Statements
Beta
Revenue$2.94B
Interest Expense$115.00M
Net Income$694.00M
EPS (Basic)$1.88
EPS (Diluted)$1.86
Shares Outstanding (Basic)352.16M
Shares Outstanding (Diluted)356.41M

Key Highlights

  • 1Common stock repurchases were suspended in Q2 2020 due to COVID-19 pandemic related guidance from the Federal Reserve, halting the previously authorized $2.0 billion purchase program.
  • 2The company is subject to limitations on capital distributions in Q3 2020, as dictated by the Federal Reserve's CCAR 2020 results.
  • 3Future share repurchase activity beyond Q3 2020 is uncertain, pending a resubmission of capital plans and new stress test results from the Federal Reserve.
  • 4The filing includes standard certifications from the CEO and CFO regarding the accuracy of financial reporting.
  • 5An executive compensation disclosure details a consulting agreement with the outgoing Chief Legal Officer, Jeffrey N. Carp, for transition services at an hourly rate.
  • 6The report indicates the availability of detailed financial statements in Inline XBRL format, including statements of income, comprehensive income, condition, changes in equity, and cash flows.

Frequently Asked Questions

State Street, along with other U.S. G-SIBs (Globally Systemically Important Banks), suspended common share repurchases in March 2020 through the second quarter of 2020 as a measure to conserve capital and align with regulatory guidance amidst the uncertainty of the COVID-19 pandemic.

The CCAR 2020 results imposed limitations on capital distributions for CCAR banks, including State Street, during the third quarter of 2020, permitting dividend payments only at current levels. Additionally, banks must resubmit capital plans based on new stress test scenarios, the outcome of which could impact future capital distribution plans, including share repurchases.

Jeffrey N. Carp, the former Executive Vice President and Chief Legal Officer, has entered into a consulting agreement to provide transition services for a period ending no later than January 31, 2021. He will be compensated at a rate of $1,600 per hour, with services not expected to exceed 8 hours per week. The agreement also includes indemnification provisions for Mr. Carp.

The detailed financial statements, including the consolidated statements of income, comprehensive income, condition, changes in shareholders' equity, and cash flows, as well as notes to the financial statements, are attached as Exhibit 101 to this report and are formatted in Inline XBRL.