GENERAL
State Street Corporation , referred to as the Parent Company, is a financial holding company organized in 1969 under the laws of theCommonwealth of Massachusetts . Our executive offices are located atOne Lincoln Street ,Boston, Massachusetts 02111 (telephone (617) 786-3000). For purposes of this Quarterly Report on Form 10-Q for the quarter endedMarch 31, 2020 (Form 10-Q), unless the context requires otherwise, references to "State Street," "we," "us," "our" or similar terms meanState Street Corporation and its subsidiaries on a consolidated basis.The Parent Company is a source of financial and managerial strength to our subsidiaries. Through our subsidiaries, including our principal banking subsidiary,State Street Bank and Trust Company , referred to asState Street Bank , we provide a broad range of financial products and services to institutional investors worldwide, with$31.86 trillion of AUC/A and$2.69 trillion of AUM as ofMarch 31, 2020 . As ofMarch 31, 2020 , we had consolidated total assets of$362.53 billion , consolidated total deposits of$257.10 billion , consolidated total shareholders' equity of$23.86 billion and 39,318 employees. We operate in more than 100 geographic markets worldwide, including in theU.S. ,Canada ,Europe , theMiddle East andAsia . Our operations are organized into two lines of business, Investment Servicing and Investment Management, which are defined based on products and services provided. Additional information about our lines of business is provided in Line of Business Information in this Management's Discussion and Analysis and Note 18 to the consolidated financial statements in this Form 10-Q. This Management's Discussion and Analysis is part of the Form 10-Q and updates the Management's Discussion and Analysis in our 2019 Annual Report on Form 10-K for the year endedDecember 31, 2019 previously filed with theSEC (2019 Form 10-K). You should read the financial information contained in this Management's Discussion and Analysis and elsewhere in this Form 10-Q in conjunction with the financial and other information contained in our 2019 Form 10-K. Certain previously reported amounts presented in this Form 10-Q have been reclassified to conform to current-period presentation. We prepare our consolidated financial statements in conformity withU.S. GAAP. The preparation of financial statements in conformity withU.S. GAAP requires management to make estimates and assumptions in its application of certain accounting policies that materially affect the reported amounts of assets, liabilities, equity, revenue and expenses.
The significant accounting policies that require us to make judgments, estimates and assumptions that are difficult, subjective or complex about matters that are uncertain and may change in subsequent periods include: • accounting for fair value measurements;
• impairment of goodwill and other intangible assets;
• contingencies; and
• allowance for credit losses.
These significant accounting policies require the most subjective or complex judgments, and underlying estimates and assumptions could be subject to revision as new information becomes available. For additional information about these significant accounting policies refer to pages 115 to 117, "Significant Accounting Estimates" included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our 2019 Form 10-K and Significant Accounting Estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q. Upon evaluating our accounting policies in light of our adoption of CECL onJanuary 1, 2020 , we included allowance for credit losses as one of our significant accounting policies. Other than including that additional significant policy, we did not change these significant accounting policies in the first three months of 2020. Certain financial information provided in this Form 10-Q, including in this Management's Discussion and Analysis, is prepared on both aU.S. GAAP, or reported basis, and a non-GAAP basis. We measure and compare certain financial information on a non-GAAP basis, including information that management uses in evaluating our business and activities. Non-GAAP financial information should be considered in addition to, and not as a substitute for or superior to, financial information prepared in conformity withU.S. GAAP. Any non-GAAP financial information presented in this Form 10-Q, including this Management's Discussion and Analysis, is reconciled to its most directly comparableU.S. GAAP-basis measure. We further believe that our presentation of FTE NII, a non-GAAP measure, which reports non-taxable revenue, such as interest income associated with tax-exempt investment securities, on a FTE basis, facilitates an investor's understanding and analysis of our underlying financial performance and trends. We provide additional disclosures required by applicable bank regulatory standards, including supplemental qualitative and quantitative information with respect to regulatory capital (including market risk associated with our trading activities) and the LCR, summary results of semi-annual State Street-run stressState Street Corporation | 4
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS tests which we conduct under the Dodd-Frank Act, and resolution plan disclosures required under the Dodd-Frank Act. These additional disclosures are accessible on the "Investor Relations" section of our corporate website at www.statestreet.com. We have included our website address in this report as an inactive textual reference only. Information on our website is not incorporated by reference into this Form 10-Q. We use acronyms and other defined terms for certain business terms and abbreviations, as defined in the acronyms list and glossary following the consolidated financial statements in this Form 10-Q. Forward-Looking Statements This Form 10-Q, as well as other reports and proxy materials submitted by us under the Securities Exchange Act of 1934, registration statements filed by us under the Securities Act of 1933, our annual report to shareholders and other public statements we may make, may contain statements (including statements in our Management's Discussion and Analysis included in such reports, as applicable) that are considered "forward-looking statements" within the meaning ofU.S. securities laws, including statements about our goals and expectations regarding our business, financial and capital condition, results of operations, strategies, cost savings and transformation initiatives, investment portfolio performance, dividend and stock purchase programs, outcomes of legal proceedings, market growth, acquisitions, joint ventures and divestitures, client growth and new technologies, services and opportunities, as well as industry, governmental, regulatory, economic and market trends, initiatives and developments, the business environment and other matters that do not relate strictly to historical facts. Terminology such as "plan," "expect," "intend," "objective," "forecast," "outlook," "believe," "priority," "anticipate," "estimate," "seek," "may," "will," "trend," "target," "strategy" and "goal," or similar statements or variations of such terms, are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are subject to various risks and uncertainties, which change over time, are based on management's expectations and assumptions at the time the statements are made and are not guarantees of future results. Management's expectations and assumptions, and the continued validity of the forward-looking statements, are subject to change due to a broad range of factors affecting theU.S. and global economies, regulatory environment and the equity, debt, currency and other financial markets, as well as factors specific to State Street and its subsidiaries, includingState Street Bank . Factors that could cause changes in the expectations or
assumptions on which forward-looking statements are based cannot be foreseen with certainty and include, but are not limited to: • 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 or securities lending agent;
• the significant risks and uncertainties for our business, results of
operations and financial condition, as well as our regulatory capital and liquidity ratios and other regulatory requirements inthe United States and internationally, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its influence on the economy and financial markets, the effectiveness of our work from home arrangements and staffing levels in operational facilities, the impact of market participants on which we rely and actions taken by governmental authorities and other third parties in response to the pandemic and the impact of lower equity market valuations on our service and management fee revenue;
• 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;
• the volatility of servicing fee, management fee, trading fee and securities
finance revenues due to, among other factors, the value of equity and fixed-income markets, market interest and FX rates, the volume of client transaction activity, competitive pressures in the investment servicing and asset management industries, and the timing of revenue recognition with respect to software and processing fees revenues;
• the liquidity of the
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;
• the level, volatility and uncertainty of interest rates; the expected
discontinuation of Interbank Offered Rates including London Interbank Offered Rate (LIBOR); the valuation of theU.S. dollar relative to other currencies in which we record revenue or accrue expenses; the performance and volatility of securities, credit, currency and other markets inState Street Corporation | 5
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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the
in our investment securities portfolio, a deterioration or downgrade of which could lead to impairment of such securities and the recognition of a provision for credit losses in our consolidated statement of income;
• our ability to attract and retain 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; our ability to deploy deposits in a profitable manner consistent with our liquidity needs, regulatory requirements and risk profile; and the risks associated with the potential liquidity mismatch between short-term deposit funding and longer term investments;
• the manner and timing with which the
non-U.S. regulators implement or reevaluate the regulatory framework applicable to our operations (as well as changes to that framework), including implementation or modification of the Dodd-Frank Act and related stress testing and resolution planning requirements and implementation of international standards applicable to financial institutions, such as those proposed by the Basel Committee and European legislation (such as Undertakings for Collective Investments inTransferable Securities (UCITS) V, the Money Market Fund Regulation and the Markets in Financial Instruments Directive II/Markets in Financial Instruments Regulation); among other consequences, these regulatory changes impact the levels of regulatory capital, long-term debt and liquidity we must maintain, acceptable levels of credit exposure to third parties, margin requirements applicable to derivatives, restrictions on banking and financial activities and the manner in which we structure and implement our global operations and servicing relationships. In addition, our regulatory posture and related expenses have been and will continue to be affected by heightened standards and changes in regulatory expectations for global systemically important financial institutions applicable to, among other things, risk management, liquidity and capital planning, cyber-security, resiliency, resolution planning and compliance programs, as well as changes in governmental enforcement approaches to perceived failures to comply with regulatory or legal obligations;
• 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;
• requirements to obtain the prior approval or non-objection of the Federal
Reserve or otherU.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 repurchases, without which our growth plans, distributions to shareholders, share repurchase programs or other capital or corporate initiatives may be restricted;
• 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, without limitation, additional or increased taxes or assessments thereon, capital adequacy requirements, margin requirements and changes that expose us to risks related to our operating model and the adequacy and resiliency of our controls or compliance programs;
• a cyber-security incident, or a failure to protect our systems and our, our
clients' and others' information against cyber-attacks, could result in the theft, loss, unauthorized access to, disclosure, use or alteration of information, system failures, or loss of access to information; any such incident or failure could adversely impact our ability to conduct our businesses, damage our reputation and cause losses, potentially materially;
• our ability to expand our use of technology to enhance the efficiency,
accuracy and reliability of our operations and our dependencies on information technology; to replace and consolidate systems, particularly those relying upon older technology, and to adequately incorporate cyber-security, resiliency and business continuity into our operations, information technology infrastructure and systems management; to implement robust management processes into our technology development and maintenance programs; and to control risks related to use of technology, including cyber-crime and inadvertent data disclosures;
• our ability to identify and address threats to our
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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information technology infrastructure and systems (including those of our third-party service providers); the effectiveness of our and our third party service providers' efforts to manage the resiliency of the systems on which we rely; controls regarding the access to, and integrity of, our and our clients' data; and complexities and costs of protecting the security of such systems and data; • our ability to control operational and resiliency 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;
• economic or financial market disruptions in the
including those which may result from recessions or political instability; for example, theUnited Kingdom's (U.K. ) exit from theEuropean Union or actual or potential changes in trade policy, such as tariffs or bilateral and multilateral trade agreements;
• 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;
• 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, reputational and other consequences of our failure to meet such expectations;
• 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 theSEC , 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 toU.S. authorities;
• 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, adverse actions or penalties imposed by governmental authorities and costs associated with remediation of identified deficiencies;
• the results of, and costs associated with,
governmental or regulatory inquiries and investigations, litigation and similar claims, disputes, or civil or criminal proceedings; • 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;
• the large institutional clients on which we focus are often able to exert
considerable market influence and have diverse investment activities, and this, combined with strong competitive market forces, subjects us to significant pressure to reduce the fees we charge, to potentially significant changes in our AUC/A or our AUM in the event of the acquisition or loss of a client, in whole or in part, and to potentially significant changes in our revenue in the event a client re-balances or changes its investment approach, re-directs assets to lower- or higher-fee asset classes or changes the mix of products or services that it receives from us;
• the potential for losses arising from our investments in sponsored investment
funds;
• 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;
• our ability to anticipate and manage the level and timing of redemptions and
withdrawals from our collateral pools and other collective investment
products;
• the credit agency ratings of our debt and depositary obligations and investor
and client perceptions of our financial strength;
• adverse publicity, whether specific to us or regarding other industry
participants or industry-wide factors, or other reputational harm;
• changes or potential changes to the competitive environment, due to, among
other things, regulatory and technological changes, the effects of industry consolidation and perceptions of us, as a suitable service provider or counterparty;
• our ability to complete acquisitions, joint ventures and divestitures,
including, without limitation, our ability to obtain regulatory approvals, the ability to arrange financing as required and the ability to satisfy closing conditions;
• the risks that our acquired businesses, including, without limitation, our
acquisition of CRD, and joint ventures will not achieve their anticipated financial, operational and product innovation benefits or willState Street Corporation | 7
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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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; • our ability to integrate CRD's front office software solutions with our
middle and back office capabilities to develop our front-to-middle-to-back office State Street Alpha that is competitive, generates revenues in line with our expectations and meets our clients' requirements; the dependency of State Street Alpha on enhancements to our data management and the risks to our servicing model associated with increased exposure to client data;
• 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;
• 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;
• changes in accounting standards and practices; and
• the impact of the
legislation and in the interpretation of existing tax laws by
non-
Actual outcomes and results may differ materially from what is expressed in our
forward-looking statements and from our historical financial results due to the
factors discussed in this section and elsewhere in this Form 10-Q or disclosed
in our other
which investors evaluate State Street. Any investor in
Three Months Ended March 31, (Dollars in millions, except per share amounts) 2020 2019 % Change Total fee revenue $ 2,399 $ 2,260 6% Net interest income 664 673 (1) Total other income 2 - (1 ) - nm Total revenue 3,065 2,932 5 Provision for credit losses(1) 36 4 nm Total expenses 2,255 2,293 (2) Income before income tax expense 774 635 22 Income tax expense 140 127 10 Net income $ 634 $ 508 25 Adjustments to net income: Dividends on preferred stock(2) $ (53 ) $ (55 ) (4) Earnings allocated to participating securities(3) (1 ) (1 ) - Net income available to common shareholders $ 580 $ 452 28 Earnings per common share: Basic $ 1.64 $ 1.20 37 Diluted 1.62 1.18 37 Average common shares outstanding (in thousands): Basic 353,746 377,915 (6) Diluted 357,993 381,703 (6) Cash dividends declared per common share $ .52 $ .47 11 Return on average common equity 10.9 % 8.7 % 220 bps Pre-tax margin 25.3 21.7 360 (1) We adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments, onJanuary 1, 2020 . Please refer to Note 1 to the consolidated financial statements in this Form 10-Q for additional information. (2) Additional information about our preferred stock dividends is provided in Note 13 to the consolidated financial statements in this Form 10-Q. (3) Represents the portion of net income available to common equity allocated to participating securities, composed of unvested and fully vested SERP (Supplemental executive retirement plans) shares and fully vested deferred director stock awards, which are equity-based awards that contain non-forfeitable rights to dividends, and are considered to participate with the common stock in undistributed earnings. nm Not meaningful The following "Financial Results and Highlights" section provides information related to significant events, as well as highlights of our consolidated financial results for the first quarter of 2020 presented in Table 1: Overview of Financial Results. More detailed information about our consolidated financial results, including the comparison of our financial results for the first quarter of 2020 compared to the same period in State Street Corporation | 8
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 2019, is provided under "Consolidated Results of Operations", "Line of Business Information" and "Capital" which follows these sections, as well as in our consolidated financial statements in this Form 10-Q. In this Management's Discussion and Analysis, where we describe the effects of changes in FX rates, those effects are determined by applying applicable weighted average FX rates from the relevant 2019 period to the relevant 2020 period results. Financial Results and Highlights • EPS of$1.62 in the first quarter of 2020 increased 37% compared to$1.18 in the same period in 2019. • The COVID-19 pandemic, and the actions we took to support our clients, the financial markets and the broader economy, is reflected in our results for the first quarter of 2020. This includes accommodating higher than usualU.S. client deposits inMarch 2020 and a 64% increase in FX trading services revenue in the first quarter of 2020 as compared to the same period in 2019 reflecting higher FX volume amidst significant market volatility towards quarter-end. Operationally, we maintained business continuity, resiliency and operational effectiveness with approximately 90% of our global employees working from home by the end of the quarter.
• The impact of notable items in the first quarter of 2020 includes:
• acquisition costs of approximately
• costs of$9 million due to the redemption of all outstanding Series C non-cumulative perpetual preferred stock representing the difference between the redemption value and the net carrying value of the preferred stock.
• The impact of notable items in the first quarter of 2019 includes:
• acquisition and restructuring costs of$9 million , consisting of acquisition costs related to CRD of$13 million , partially offset by a$4 million accrual release for restructuring; and
• legal and related expenses of approximately
• CRD contributed approximately$95 million and$58 million in total revenue and total expenses, respectively, in the first quarter of 2020, compared to$96 million and$41 million , respectively, in the same period in 2019. In addition, CRD-related expenses include$17 million and$15 million in amortization of other intangible assets in the first quarters of 2020 and 2019, respectively. CRD revenue with affiliated entities, which is eliminated in our consolidated financial statements, was$5 million and$3 million for the first quarters of 2020 and 2019, respectively. • In the first quarter of 2020, return on equity of 10.9% increased from 8.7% in the same period in 2019, primarily due to an increase in net income available to common shareholders. Pre-tax margin of 25.3% in the first quarter of 2020 increased from 21.7% in the same period in 2019, primarily due to higher total revenue and lower expenses. • Operating leverage was 6.2% in the first quarter of 2020. Operating leverage represents the difference between the percentage change in total revenue and the percentage change in total expenses, in each case relative to the prior year period. • We repurchased$500 million of our common stock in the first quarter of 2020 under our common stock purchase program announced inJune 2019 . OnMarch 16, 2020 , we announced that we temporarily suspended our common stock repurchase program, together with the otherU.S. based GSIFIs, in light of the COVID-19 pandemic. • As our clients participated in theFederal Reserve's Money Market Mutual Fund Liquidity Facility (MMLF) program in the first quarter of 2020, we purchased$27 billion of investment securities under that program providing liquidity to our clients by facilitating more than 50% of the MMLF program usage. InApril 2020 , we were selected to serve as custodian and accounting administrator for theFederal Reserve's Commercial Paper Funding Facility and to its Primary and Secondary Market Corporate Credit Fund Facilities.
Revenue
• Total revenue and fee revenue increased 5% and 6%, respectively, in the first quarter of 2020 compared to the same period in 2019, primarily driven by increases in servicing fees, management fees and foreign exchange trading services, partially offset by lower securities finance revenues and software and processing fees and, in the case of total revenue, by NII. • Servicing fee revenue increased 3% in the first quarter of 2020 compared to the same period in 2019, primarily due to higher client activity and flows, average market levels, and net new business, partially offset by pricing headwinds.State Street Corporation | 9
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS • Management fee revenue increased 7% in the first quarter of 2020 compared to the same period in 2019, primarily due to higher average equity market levels and the run rate revenue impact of inflows from ETFs and cash throughout 2019, partially offset by mix changes away from higher fee institutional products. • Foreign exchange trading services increased 64% in the first quarter of 2020 compared to the same period in 2019, primarily due to a significant increase in FX volatility and trading volumes amidst significant market disruptions towards quarter-end. • Securities finance revenue decreased 22% in the first quarter of 2020 compared to the same period in 2019, primarily due to decreases in enhanced custody balances due to client deleveraging and a decline in equity markets and lower agency lending revenues due to lower spreads and balances with the market volatility in the first quarter of 2020. • Software and processing fees revenue decreased 41% in the first quarter of 2020 compared to the same period in 2019, primarily due to market-related adjustments and lower income on tax advantaged investments. • NII decreased 1% in the first quarter of 2020 compared to the same period in 2019, primarily due to the impact of lower market rates, partially offset by stronger deposit balances reflecting period-end inflows, and episodic market-related benefits. Provision for Credit Losses • In the first quarter of 2020, we recorded a provision for credit losses related to loans and financial assets held at amortized cost, including investment securities held-to-maturity and off-balance sheet commitments of$36 million based on the CECL methodology, reflecting the impact of COVID-19 driven changes in our economic outlook as of quarter-end on estimated lifetime losses under the CECL methodology. While we took steps in late March to incorporate the impact of the COVID-19 pandemic on the economic forecast utilized to determine our allowance for credit losses, which drives our provision, if the economic forecast worsens relative to the assumptions we utilized in March our allowance for credit losses will increase accordingly in future periods. This compares to a$4 million provision for credit losses in the same period in 2019 (which was under the previous incurred loss model).
Expenses
• Total expenses decreased 2% in the first quarter of 2020 compared to the same period in 2019, primarily reflecting savings from resource discipline, process re-engineering and automation initiatives. AUC/A and AUM • AUC/A decreased 2% as ofMarch 31, 2020 compared toMarch 31, 2019 , primarily due to lower end of period equity market levels and a previously announced client transition, partially offset by higher fixed income market levels. In the first quarter of 2020, newly announced asset servicing mandates totaled approximately$171 billion . Servicing assets remaining to be installed in future periods totaled approximately$1.06 trillion as ofMarch 31, 2020 . • AUM decreased 4% as ofMarch 31, 2020 compared toMarch 31, 2019 , primarily due to lower end of period equity market levels, partially offset by net inflows from cash andETFs. Capital and Capital Redemptions • In the first quarter of 2020, we returned a total of approximately$683 million to our shareholders in the form of common stock dividends and share purchases. • We declared aggregate common stock dividends of$0.52 per share, totaling$183 million in the first quarter of 2020, compared to$0.47 per share, totaling$177 million in the same period in 2019, representing an increase of approximately 11% on a per share basis. • In the first quarter of 2020, we acquired 6.5 million shares of common stock at an average per share cost of$77.35 and an aggregate cost of approximately$500 million . In the first quarter of 2019, we acquired 4.2 million shares of common stock at an average per share cost of$70.93 and an aggregate cost of approximately$300 million. These purchases were all conducted under share purchase programs approved by our Board of Directors. • Our CET1 capital ratio was 10.7% as ofMarch 31, 2020 compared to 11.7% as ofDecember 31, 2019 , and Tier 1 leverage ratio decreased to 6.1% as ofMarch 31, 2020 , compared to 6.9% as ofDecember 31, 2019 , due primarily to increased leverage assets and the redemption of our$500 million Series CState Street Corporation | 10
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS preferred stock in the first quarter of 2020. As ofMarch 31, 2020 , standardized approaches capital ratios were binding for the period. Capital Redemptions • We redeemed all outstanding Series C non-cumulative perpetual preferred stock as ofMarch 15, 2020 at a redemption price of$500 million ($100,000 per share equivalent to$25.00 per depositary share) plus accrued and unpaid dividends. The difference of$9 million between the redemption value and the net carrying value resulted in an EPS impact of approximately ($0.03 ) per share in the first quarter of 2020. Debt Issuances • OnJanuary 24, 2020 , we issued$750 million aggregate principal amount of 2.400% Senior Notes due 2030. • OnMarch 26, 2020 , we issued$750 million aggregate principal amount of 2.825% Fixed-to-Floating Rate Senior Notes due 2023,$500 million aggregate principal amount of 2.901% Fixed-to-Floating Rate Senior Notes due 2026 and$500 million aggregate principal amount of 3.152% of Fixed-to-Floating Rate Senior Notes due 2031.
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