Slide 1: Third-Quarter 2014 Financial Highlights
LIMITED ACCESS State Street Corporation Third-Quarter 2014 Financial Highlights October 24, 2014 Exhibit 99.3
Slide 2: Forward-Looking Statements
2 This presentation includes certain highlights of, and also material supplemental to, State Street Corporation’s (State Street’s) news release announcing its third-quarter 2014 financial results. That news release contains a more detailed discussion of many of the matters described in this presenta
Slide 3: Third-Quarter 2014 Key Messages
3 EPS: • GAAP-basis earnings per share, or EPS, of $1.26 decreased from $1.38 in 2Q14 and increased from $1.17 in 3Q13: – 3Q14 results included a $70 million pre-tax, or $53 million net after-tax ($0.12 per share), non-operating charge. This charge reflects our intention to seek to resolve some, but
Slide 4: Third-Quarter 2014 Key Messages - Continued
4 Expenses: • We continue to control expenses amidst regulatory compliance cost pressures Capital: • During 3Q14, we purchased $410 million of our common stock • As of September 30, 2014, we had approximately $880 million remaining under our March 2014 common stock purchase program authorizing the p
Slide 5: Summary of GAAP-Basis Financial Results for Nine Months Ended September 30, 2014
5 Summary of GAAP-Basis Financial Results for the Nine Months Ended September 30, 2014 $ in millions, except per share data 2014 2013 % change Revenue 7,665$ 7,420$ 3.3% Expenses 5,770 5,346 7.9 Earnings per share (EPS) 3.45 3.40 1.5 Ret r on average common equity (ROE) 10.0% 10.4% Pre-tax operating
Slide 6: Summary of GAAP-Basis Financial Results for the Third Quarter of 2014
6 Summary of GAAP-Basis Financial Results for the Third Quarter of 2014 $ in millions, except per share data 3Q14 2Q14 3Q13 2Q14 3Q13 Revenue 2,582$ 2,598$ 2,425$ (0.6)% 6.5% Expenses 1,892 1,850 1,722 2.3 9.9 EPS 1.26 1.38 1.17 (8.7) 7.7 ROE 10.6% 11.9% 10.8% Pre-tax operating margin 26.6 28.7 29.0
Slide 7: Third-Quarter 2014 GAAP-Basis Revenue
7 Third-Quarter 2014 GAAP-Basis Revenue $ in millions 3Q14 2Q14 3Q13 Servicing fees 1,302$ 1.1% 7.5% Management fees 316 5.3 14.5 Trading services revenue 278 6.9 4.9 Securities finance revenue 99 (32.7) 33.8 Processing fees and other revenue 17 (61.4) (70.2) Total fee revenue 2,012 (1.3) 6.9 Net in
Slide 8: Third-Quarter 2014 GAAP-Basis Expenses
8 Third-Quarter 2014 GAAP-Basis Expenses $ in millions 3Q14 2Q14 3Q13 Compensation and employee benefits 953$ (2.6)% 5.5% Information systems and communications 242 (0.8) 3.0 Transaction processing services 199 3.1 7.6 Occupancy 119 3.5 5.3 cquisition and restructuring costs 20 (28.6) (33.3) Other 3
Slide 9: Year-to-Date and Third-Quarter 2014 Operating-Basis Financial Highlights
9 Year-to-Date and Third-Quarter 2014 Operating-Basis (Non-GAAP) Financial Highlights1 • Year-to-date (nine months ended September 30, 2014) comparisons from same period in 2013: –EPS of $3.72 increased 10.1% –Total fee revenue growth of 6.3% – Core total asset servicing and asset management fee rev
Slide 10: Summary of Operating-Basis Financial Results, Nine Months Ended September 30, 2014
10 Summary of Operating-Basis (Non-GAAP) Financial Results1 for the Nine Months Ended September 30, 2014 1 Results presented on an operating basis, a non-GAAP presentation. Refer to the addendum linked to this presentation for explanations of our non-GAAP financial measures and for reconciliations o
Slide 11: Summary of Operating-Basis Financial Results, Third Quarter of 2014
11 Summary of Operating-Basis (Non-GAAP) Financial Results1 for the Third Quarter of 2014 1 Results presented on an operating basis, a non-GAAP presentation. Refer to the addendum linked to this presentation for explanations of our non-GAAP financial measures and for reconciliations of our operating
Slide 12: Operating-Basis (Non-GAAP) Revenue
12 Operating-Basis (Non-GAAP) Revenue1 1 Results presented on an operating basis, a non-GAAP presentation, where applicable. Refer to the addendum linked to this presentation for explanations of our non-GAAP financial measures and for reconciliations of our operating-basis financial information. nm
Slide 13: Operating-Basis (Non-GAAP) Expenses
13 Operating-Basis (Non-GAAP) Expenses1 Key Drivers Notable items in 3Q14: • Other expenses included a $20 million contribution to the State Street Foundation • Other expenses included a $15 million credit associated with an insurance recovery • Compensation and employee benefits expenses included a
Slide 14: Balance Sheet Highlights
14 Balance Sheet Highlights Third-Quarter 20141, 2 Investment portfolio • Size: $115 billion, a slight decrease from the end of 2Q14 • Credit profile: approximately 91% rated AAA/AA • Fixed-rate/floating-rate mix: 51% / 49% • Duration: 2.1 years • Unrealized after-tax mark-to-market (MTM) gain decre
Slide 15: Capital
15 Capital Footnotes 1 through 7 provided on page 16. Third-Quarter 2014 Highlights • Maintained a strong capital position • In 3Q14, we purchased approximately 5.8 million shares of our common stock, at an average price of $70.61 and a total cost of approximately $410 million, under the March 2014
Slide 16: Capital ratio footnotes
16 1 Unless otherwise specified, all capital ratios referenced on page 15 and elsewhere in this presentation refer to State Street Corporation, or State Street, and not State Street Bank and Trust Company, or State Street Bank. Refer to the addendum linked to this presentation for a further descript
Slide 17: Third-Quarter 2014 Summary and Full-Year 2014 Outlook
17 Third-Quarter 2014 Summary and Full-Year 2014 Outlook1 • Solid results driven by strength in core revenue, momentum in trading services and a continued focus on expense management – Core servicing and management fees increased in both the third quarter and first nine-months in comparison to 2013
Slide 18: Appendix
18 APPENDIX A. Effective Tax Rate Calculations B. Investment Portfolio C. Non-GAAP Measures and Capital Ratios Pages 19 20-26 27
Slide 19: Effective Tax Rate Calculations
19 Effective Tax Rate Calculations • Beginning with the first quarter of 2014, we are presenting our operating-basis effective tax rate to reflect the tax-equivalent adjustments associated with our investments in tax-exempt securities low-income housing and alternative energy. • There is no effect o
Slide 20: B. Investment Portfolio
B STATE STREET. B. Investment Portfolio
Slide 21: Investment Portfolio as of September 30, 2014
21 Portfolio amounts are expressed at book value; book value includes the amortized cost of transferred securities at the time they were transferred. OECD=Organization for Economic Cooperation and Development FFELP=Federal Family Education Loan Program Government / Agency Structured Securities Unsec
Slide 22: Investment portfolio characteristics
22 • Assets selected using rigorous credit process • Diversified by asset class and geography • 91% rated AAA/AA • Constructed to perform well through periods of economic weakness • Unrealized after-tax mark-to-market (MTM) gain of $411 million1 Portfolio amounts are expressed at book value; book va
Slide 23: Investment portfolio ratings and book value
23 Ratings 1 Book Value ($B) Book Value (% Total) Unrealized After-tax MTM Gain / (Loss) ($M) 2 Investment UST / AGY AAA AA A BBB <BBB Not Rated Fixed Rate / Floating Rate Government/Agency securities 81% 11% 8% — — — — $19.6 17.1% $(121) 96% / 4% Asset-backed securities — 71% 21% 4% 1% 3% — 45.6 39
Slide 24: Asset-backed securities holdings
24 Ratings 1 Book Value ($B) Book Value (% Total) Unrealized After-tax MTM Gain / (Loss) ($M) Investment UST / AGY AAA AA A BBB <BBB Not Rated Student Loans — 37% 57% 5% — 1% — $14.7 32.2% $2 Credit Cards — 100% — — — — — 5.5 12.1 (5) Auto/Equipment — 99% — — 1% — — 5.1 11.2 6 Non-US RMBS — 84% 5% 6
Slide 25: Mortgage-backed Securities Holdings
25 Ratings1 Book Value ($B) Book Value (% Total) Unrealized After-tax MTM Gain / (Loss) ($M) Investment UST / AGY AAA AA A BBB <BBB Not Rated Agency MBS 100% — — — — — — $21.2 74.4% $1 Non-Agency MBS — 48% 9% 6% 12% 25% — 1.9 6.7 18 CMBS 1% 86% 7% 5% — 1% — 5.4 18.9 23 TOTAL MBS 75% 19% 2% 1% 1% 2%
Slide 26: Non-U.S. Investment Summary
26 Non-U.S. Investments: Ratings Non-U.S. Investments: Asset Class 1. Sovereign debt is reflected in the government agency column. 2. Country of collateral used except for corporates, where country of issuer is used. Excludes equity securities of approximately $11.5 million. (1) Investment Portfolio
Slide 27: C. Non-GAAP Measures and Capital Ratios
27 C. Non-GAAP Measures and Capital Ratios Refer to the addendum linked to this presentation for explanations of our non-GAAP financial measures and for reconciliations of our operating-basis financial information. To access the addendum go to www.statestreet.com/stockholder and click on “Filings &