State Street Corporation · NYSE:STT
State Street — IPO Roadshow (May 2009)
22 slides from State Street's IPO roadshow presentation, May 18, 2009
Slide 1: Common Stock Offering
Filed pursuant to Rule 433 Registration No. 333-157882 Common Stock Offering May 18, 2009 State Street has filed a registration statement (including a prospectus) with the SEC for the offerings to which this communication relates. Before you invest, you should read the prospectus in that registratio
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements as defined by United States securities laws, including statements about State Street’s goals and expectations regarding its business, financial condition, results of operations and strategies, the financial and market o
Slide 3: The Offering
The Offering POSITIONS STATE STREET TO REDEEM TARP PREFERRED INVESTMENT Issuer > State Street Corporation Symbol > NYSE: STT Offering > $1.5 billion of common stock¹ Size Over-allotment > 15% Option Anticipated > May 18, 2009 Pricing > Planned repurchase of $2.0 billion of TARP preferred plus relate
Slide 4: Capital Plan
Capital Plan STRATEGIC RATIONALE AND KEY CONSIDERATIONS > Decisive, strategic capital action positions State Street for continued growth > Today’s common stock offering further enhances State Street’s already strong capital position – SCAP Stress Test confirmed strength of capital position – Capital
Slide 5: Capital Strength
Capital Strength CAPITAL RAISE ACCELERATES TCE IMPROVEMENT 5.0 % 4.1 % 4.0 % 0.8 % 3.0 % 1.2 % 2.2 % 2.0 % (0.1) % 1.0 % 0.0 % 3/31/09 Conduit Change in Capital Estimated 6/30/09 Adjusted Unrealized Loss Raise 2Q 2009 Estimate¹ For Conduit between 3/31/09 Capital Consolidation and 5/15/09 Generation
Slide 6: Financial Impact
Financial Impact KEY RATIOS¹ ARE MATERIALLY ABOVE “WELL CAPITALIZED” STANDARDS 3/31/09 6/30/09 “Well Adjusted for 6/30/09 Estimate including Capitalized” Conduit Consolidation Estimate² TARP Repayment² Total Capital 10% 14.6% 16.8% 14.1% Tier 1 Capital 6% 13.2% 15.5% 12.8% Fed stress test metrics 1
Slide 7: Conduit Consolidation
STATE STREET. > Conduit Consolidation
Slide 8: Conduit Consolidation
Conduit Consolidation STRATEGIC RATIONALE AND KEY CONSIDERATIONS > Effective as of May 15, 2009 > One-time after-tax extraordinary loss of $3.7 billion related to recognition of unrealized mark-to- market (MTM) losses on the conduit assets > Based upon its’ credit assessment of the conduit assets, S
Slide 9: Conduit Consolidation
Conduit Consolidation CREDIT QUALITY OF INVESTMENT PORTFOLIO SUBSTANTIALLY UNCHANGED > Effective May 15, 2009, the four-asset backed commercial paper conduits State Street administers were consolidated onto its balance sheet – As of 3/31/09, book value of $22.5 billion, after-tax unrealized loss of
Slide 10: Conduit Consolidation
Conduit Consolidation MINIMAL IMPACT ON COMPOSITION OF INVESTMENT PORTFOLIO AS OF 5/15/09 Stand-alone Investment Portfolio Consolidated Investment Portfolio¹ Muni. Bonds / Muni. Bonds / Corporate Other Corporate Other 9% Bonds 7% Govt / Agency Bonds Govt / Agency 3% 3% 15% 19% CMBS CMBS 4% 5% MBS³ 2
Slide 11: Capital Strength
STATE STREET. > Capital Strength
Slide 12: SCAP Stress Test Results
SCAP Stress Test Results SUPERVISORY RATIOS MORE THAN TWO TIMES THE MINIMUMS AFTER CONSOLIDATION > Stress testing assumed conduit consolidation SCAP Stressed Scenario Tier 1 Capital 25% 20.2% 20.2% 20% 15.4% 15% Passed 12.4% "Baseline" Stress Test SCAP-required 10% 6% Minimum "More Adverse" with Mor
Slide 13: Accelerates Achievement of TCE Improvement Plan
The Offering ACCELERATES ACHIEVEMENT OF TCE IMPROVEMENT PLAN TCE estimates¹ assume adjustments based on the following: Q1 Q2 Q3 Q4 Expected Quarterly 2 TCE at beginning of period 1.19% 2.22% 4.14% 5.00% Impacts on TCE result in ratio of Dividend Reduction + 8bps +8bps +8bps +8bps 5.96% at 12/31/09 P
Slide 14: Business Update
STATE STREET. > Business Update
Slide 15: Significant Global Trends and Initiatives
Business Update SIGNIFICANT GLOBAL TRENDS AND INITIATIVES > Global economy slowly beginning to repair – Well-positioned to leverage recovery in equity markets > Strong industry-leading global footprint with ongoing expansion opportunities – Target to achieve 50% of total revenue from non-US sources
Slide 16: Continuing Momentum
Continuing Momentum GAINING MARKET POSITION –WINS IN 2008 Investment Servicing Investment Management > $1.7 trillion in new business wins > $198 billion gross new asset including: wins including: – Lazard Asset Management – CalPERS – Illinois State Teachers – AP4 Swedish Pension Fund – UK Pension Pr
Slide 17: Investment Servicing
Investment Servicing STRATEGIC OVERVIEW > Flight to quality and safety (Deposits more than doubled as of 12/31/08 compared to 12/31/07) Key Customer > Cost pressures on asset managers and asset owners Drivers > Heightened regulatory environment > Growing need for transparency, risk management and co
Slide 18: Investment Management
Investment Management STRATEGIC OVERVIEW > De-risking worldwide; flight to passive and broader benchmarks Key Customer > Need for a trusted, strategic partner Drivers > Focus on pension funding levels; asset allocation decisions > Asset growth rate of DC/IRA bigger than DB > Cash Investment Manageme
Slide 19: Operating Outlook
Operating Outlook OUTLOOK FOR 2009 > Operating EPS¹ expected to be between $4.25 and $4.50 due to: – Current operating environment marginally weaker than we originally believed – Discount accretion of $0.75 per share from the conduit assets offset by: – Impact of share and debt issuance – Contemplat
Slide 20: Capital Plan Summary
Capital Plan SUMMARY > The Offering – Operating EPS forecast for 2009 of $4.25 - $4.50 post-offering and post-consolidation – Well-positioned to repay TARP CPP as evidenced by stress test results – Accelerates achievement of TCE improvement plan – Additional capital will help enhance future growth o
Slide 21: Appendix
STATE STREET. > Appendix
Slide 22: Tangible Common Equity Reconciliation
Tangible Common Equity Reconciliation March 31, 2009 Adjusted for Conduit (Dollars in millions) Actual Consolidation Consolidated Total Assets $ 142,144 $ 142,144 Less: Goodwill 4,493 4,493 Other intangible assets 1,809 1,809 AMLF investment securities 740 740 Excess reserves held at central banks 2