8-KOther Events

STATE STREET CORP 8-K Report, Corporate Update (Jun 27, 2019)

Filed June 27, 2019For Securities:STTSTT-PG

Summary

State Street Corporation (STT) announced on June 27, 2019, that it received no objection from the Federal Reserve regarding its capital plan, as evaluated through the 2019 Comprehensive Capital Analysis and Review (CCAR) process. This positive regulatory outcome allows the company to proceed with its proposed capital distribution initiatives. The approved capital plan includes a proposed increase in the quarterly common stock dividend and a new share repurchase program, signaling confidence in the company's financial stability and commitment to returning capital to shareholders. Specifically, the capital plan proposes raising the quarterly dividend from $0.47 to $0.52 per share, effective in the third quarter of 2019, subject to board approval in September. Additionally, State Street has authorized a new common stock purchase program, allowing for up to $2.0 billion in buybacks between July 1, 2019, and June 30, 2020. These actions are generally viewed favorably by investors as they suggest robust capital levels and management's strategy to enhance shareholder value.

Key Highlights

  • 1Federal Reserve did not object to State Street's 2019 CCAR capital plan.
  • 2Proposed increase in quarterly common stock dividend to $0.52 per share from $0.47 per share.
  • 3Dividend increase subject to Board of Directors' consideration and approval in September 2019.
  • 4Approved a new common stock purchase program authorizing up to $2.0 billion in buybacks.
  • 5Share repurchase program effective from July 1, 2019, through June 30, 2020.
  • 6Share repurchases may be executed through various methods including open-market purchases and accelerated share repurchases.
  • 7The announcement signals a positive regulatory assessment and commitment to shareholder capital return.

Frequently Asked Questions

The Federal Reserve's non-objection to State Street's capital plan, assessed via the CCAR process, indicates that the company maintains sufficient capital levels and financial strength to withstand stressed economic conditions and execute its planned capital distributions. This is a critical approval for financial institutions, allowing them to proceed with dividends and share buybacks.

State Street proposes to increase its quarterly common stock dividend from $0.47 to $0.52 per share. This increase is planned to commence in the third quarter of 2019, but it remains subject to the consideration and final approval by State Street's Board of Directors at their regularly scheduled meeting in September 2019.

The Board of Directors has approved a new common stock purchase program authorizing up to $2.0 billion in share repurchases. This program is set to run from July 1, 2019, through June 30, 2020. The company may utilize various methods for these repurchases, including open-market transactions and accelerated share repurchases.

Yes, both the dividend increase and the commencement of share repurchases are subject to the final approval of State Street's Board of Directors. Furthermore, the actual timing, method, and volume of share repurchases will depend on various factors such as market conditions, the company's capital position, financial performance, and other operational considerations. The company also retains the right to suspend or modify the repurchase program at any time.