State Street Corp Q3 2024 10-Q Filing

Ticker: STT-PG · Form: 10-Q · Filed: Oct 31, 2024 · CIK: 93751

State Street Corp 10-Q Filing Summary
FieldDetail
CompanyState Street Corp (STT-PG)
Form Type10-Q
Filed DateOct 31, 2024
Risk Levellow
Pages15
Reading Time18 min
Key Dollar Amounts$1, $46.76, $4.73, $338.48 b, $247.43 b
Sentimentneutral

Sentiment: neutral

Topics: 10-Q, reporting, compliance

Related Tickers: STT

TL;DR

**STT filed its Q3 2024 10-Q. All good on reporting requirements.**

AI Summary

State Street Corporation (STT) filed its quarterly report for the period ending September 30, 2024. The filing indicates that the company has met its reporting requirements for the preceding 12 months and the past 90 days. State Street's common stock is traded on the New York Stock Exchange under the symbol STT.

Why It Matters

This filing provides an update on State Street Corporation's financial and operational status for the third quarter of 2024, which is crucial for investors assessing the company's performance and outlook.

Risk Assessment

Risk Level: low — This is a routine quarterly filing that confirms compliance with reporting obligations and lists registered securities.

Key Players & Entities

  • State Street Corporation (company) — Registrant
  • September 30, 2024 (date) — Quarterly period end date
  • STT (company) — Trading symbol for Common Stock
  • New York Stock Exchange (company) — Exchange where STT is registered
  • STT.PRG (company) — Trading symbol for Preferred Stock

FAQ

Has State Street Corporation filed all required reports for the preceding 12 months?

Yes, the filing indicates that the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months.

Has State Street Corporation been subject to the filing requirements for the past 90 days?

Yes, the filing indicates that the registrant has been subject to such filing requirements for the past 90 days.

What is the trading symbol for State Street Corporation's common stock?

The trading symbol for State Street Corporation's common stock is STT.

On which exchange is State Street Corporation's common stock registered?

State Street Corporation's common stock is registered on the New York Stock Exchange.

What type of preferred stock does State Street Corporation have registered on the NYSE?

State Street Corporation has Depositary Shares, each representing a 1/4,000th ownership interest in a share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series G, without par value per share, registered on the NYSE under the symbol STT.PRG.

Filing Stats: 4,439 words · 18 min read · ~15 pages · Grade level 17.2 · Accepted 2024-10-31 08:01:50

Key Financial Figures

  • $1 — ange on which registered Common Stock, $1 par value per share STT New York Stoc
  • $46.76 — institutional investors worldwide, with $46.76 trillion of AUC/A and $4.73 trillion of
  • $4.73 — wide, with $46.76 trillion of AUC/A and $4.73 trillion of AUM as of September 30, 202
  • $338.48 b — 24, we had consolidated total assets of $338.48 billion, consolidated total deposits of $
  • $247.43 b — billion, consolidated total deposits of $247.43 billion, consolidated total shareholders'
  • $25.83 billion — solidated total shareholders' equity of $25.83 billion and approximately 53,000 employees. Ou
  • $2.26 — rformance Earnings per share (EPS) o f $2.26 in the third quarter of 2024 increased
  • $674 million — the prior year. We returned a total of $674 million to our shareholders in the form of comm
  • $81 million — investment securities of approximately $81 million relating to an investment portfolio rep
  • $66 million — Gain on sale of an equity investment of $66 million recorded in other fee revenue; an

Filing Documents

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Management's Discussion and Analysis of Financial Condition and Results of Operations 4

Management's Discussion and Analysis of Financial Condition and Results of Operations 4 General 4 Overview of Financial Results 8 Consolidated Results of Operations 10 Total Revenue 11 Net Interest Income 20 Provision for Credit Losses 23 Expenses 23 Repositioning Charges 24 Income Tax Expense 25 Line of Business Information 25 Investment Servicing 25 Investment Management 26 Financial Condition 27 Investment Securities 27 Loans 29 Risk Management 31 Credit and Counterparty Risk Management 31 Liquidity Risk Management 31 Operational Risk Management 36 Information Technology Risk Management 36 Market Risk Management 36 Model Risk Management 40 Strategic Risk Management 40 Capital 40 Off-Balance Sheet Arrangements 49 Other Matters 50 Recent Accounting Developments 50

Quantitative and Qualitative Disclosures About Market Risk 51

Quantitative and Qualitative Disclosures About Market Risk 51

Controls and Procedures 51

Controls and Procedures 51 Consolidated Financial Statements 52 Consolidated Statement of Income (unaudited) 52 Consolidated Statement of Comprehensive Income (unaudited) 53 Consolidated Statement of Condition 54 Consolidated Statement of Changes in Shareholders' Equity (unaudited) 55 Consolidated Statement of Cash Flows (unaudited) 56 Note 1. Summary of Significant Accounting Policies 57 Note 2. Fair Value 58 Note 3. Investment Securities 60 Note 4. Loans and Allowance for Credit Losses 64 Note 5. Goodwill and Other Intangible Assets 69 Note 6. Other Assets 70 Note 7. Derivative Financial Instruments 71 Note 8. Offsetting Arrangements 74 Note 9. Commitments and Guarantees 77 Note 10. Contingencies 77 Note 11. Variable Interest Entities 79 Note 12. Shareholders' Equity 80 Note 13. Regulatory Capital 83 Note 14. Net Interest Income 84 Note 15. Expenses 84 Note 16. Earnings Per Common Share 85 Note 17. Line of Business Information 86 Note 18. Revenue from Contracts with Customers 86 Note 19. Non-U.S. Activities 88 Note 20. Subsequent Events 89 Review Report of Independent Registered Public Accounting Firm 90

OTHER INFORMATION

PART II OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds 93

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 93

Other Information 93

Item 5 Other Information 93

Exhibits 94

Item 6 Exhibits 94 Signatures 95 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.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION GENERAL As of September 30, 2024, we had consolidated total assets of $338.48 billion, consolidated total deposits of $247.43 billion, consolidated total shareholders' equity of $25.83 billion and approximately 53,000 employees. 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 17 to the consolidated financial statements in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (Form 10-Q). Our executive offices are located at One Congress Street, Boston, Massachusetts 02114 (telephone (617) 786-3000). For purposes of this Form 10-Q, unless the context requires otherwise, references to "State Street," "we," "us," "our" or similar terms

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS taxable-equivalent NII that reports non-taxable revenue, such as interest income associated with tax-exempt investment securities, on a fully taxable-equivalent basis, which we believe 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), the LCR and NSFR, summary results of annual State Street-run stress tests which we conduct under the Dodd-Frank Act, and recovery and resolution plan disclosures. These additional disclosures are accessible on the "Filings & reports" tab of our website at investors.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

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 of U.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, climate, dividend and stock purchase programs, acquisitions, outcomes of legal proceedings, market growth, joint ventures and divestitures, client growth, new technologies, services and opportunities, sustainability and impact, human capital, 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 "expect," "outlook," "will," "goal," "target," "strategy," "may," "estimate," "plan," "intend," "objective," "forecast," "believe," "priority," "anticipate," "seek," and "trend," 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 the U.S. and global economies, regulatory enviro

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and liquidity or other disruptions in the markets for equity, fixed income and other assets classes globally or within specific markets; We have significant global operations and clients that can be adversely impacted by disruptions in key global economies, including local, regional and geopolitical developments affecting those economies; Our investment securities portfolio, consolidated financial condition and consolidated results of operations could be adversely affected by changes in the financial markets, governmental action or monetary policy. For example, among other risks, increases in prevailing interest rates or market conditions have led, and were they to occur in the future could further lead, to reduced levels of client deposits and resulting decreases in our NII or to portfolio management decisions resulting in reductions in our capital or liquidity ratios; Our business activities expose us to interest rate risk; We assume significant credit risk of counterparties, who may also have substantial financial dependencies on other financial institutions, and these credit exposures and concentrations could expose us to financial loss; Our fee revenue represents a significant portion of our revenue and is subject to decline based on, among other factors, market and currency declines, investment activities and preferences of our clients and their business mix; If we are unable to effectively manage our capital and liquidity, our financial condition, capital ratios, results of operations and business prospects could be adversely affected; Our calculations of risk exposures, total RWA and capital ratios depend on data inputs, formulae, models, correlations and assumptions that are subject to change, which could materially impact our risk exposures, our total RWA and our capital ratios from period to period; We may need to raise additional capital or debt in the future

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our risk management framework, models and processes may not be effective in identifying or mitigating risk and reducing the potential for related losses, and a failure or circumvention of our controls and procedures, or errors or delays in our operational and transaction processing, or those of third parties, could have an adverse effect on our business, financial condition, operating results and reputation; Shifting and maintaining operational activities to non-U.S. jurisdictions, changing our operating model, including by consolidating our operations joint ventures in India, and outsourcing to, or insourcing from, third parties expose us to increased operational risk, geopolitical risk and reputational harm and may not result in expected cost savings or operational improvements; Attacks or unauthorized access to our or our business partners' or clients' information technology systems or facilities, such as cyber-attacks or other disruptions to our or their operations, could result in significant costs, reputational damage and impacts on our business activities; Long-term contracts and customizing service delivery for clients expose us to increased operational risk, pricing and performance risk; We may not be able to protect our intellectual property or may infringe upon the rights of third parties; The quantitative models we use to manage our business may contain errors that could adversely impact our business, financial condition, operating results and regulatory compliance; Our reputation and business prospects may be damaged if investors in the collective investment pools we sponsor or manage incur substantial losses in these investment pools or are restricted in redeeming their interests in these investment pools; The impacts of climate change, and regulatory responses, and disclosure requirements related to such risks, could adversely affect us; and We may incur l

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW OF FINANCIAL RESULTS TABLE 1: OVERVIEW OF FINANCIAL RESULTS Three Months Ended September 30, % Change (Dollars in millions, except per share amounts) 2024 2023 Total fee revenue $ 2,616 $ 2,361 11 % Net interest income 723 624 16 Total other income (80) (294) 73 Total revenue 3,259 2,691 21 Provision for credit losses 26 — nm Total expenses 2,308 2,180 6 Income before income tax expense 925 511 81 Income tax expense 195 89 nm Net income $ 730 $ 422 73 Adjustments to net income: Dividends on preferred stock (1) $ (48) $ (24) (100) Net income available to common shareholders $ 682 $ 398 71 Earnings per common share: Basic $ 2.29 $ 1.27 80 Diluted 2.26 1.25 81 Average common shares outstanding (in thousands): Basic 297,365 313,147 (5) Diluted 301,847 317,329 (5) Cash dividends declared per common share $ 0.76 $ 0.69 10 Return on average common equity 12.0 % 7.3 % 470 bps Pre-tax margin 28.4 19.0 940 Nine Months Ended September 30, % Change (Dollars in millions, except per share amounts) 2024 2023 Total fee revenue $ 7,494 $ 7,115 5 % Net interest income 2,174 2,081 4 Total other income (80) (294) 73 Total revenue 9,588 8,902 8 Provision for credit losses 63 26 nm Total expenses 7,090 6,761 5 Income before income tax expense 2,435 2,115 15 Income tax expense 531 381 39 Net income $ 1,904 $ 1,734 10 Adjustments to net income: Dividends on preferred stock (1) $ (148) $ (84) (76) Earnings allocated to participating securities (2) (1) (1) — Net income available to common shareholders $ 1,755 $ 1,649 6 Earnings per common share: Basic $ 5.85 $ 5.03 16 Diluted 5.77 4.97 16 Average common shares outstanding (in thousands): Basic 299,964 327,776 (8) Diluted 304,176 332,011 (8) Cash dividends declared per common share $ 2.14 $ 1.95 10 Return on average common equity 10.6 % 9.9 % 70 bps Pre-tax margin 25.4 23.8 160 (1) Additi

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS difference between the percentage change in total revenue and the percentage change in total expenses, in each case relative to the same period of the prior year. Fee operating leverage was 4.9% points in the third quarter of 2024, reflecting the impact of notable items which represented 3.4% points of fee operating leverage. Fee operating leverage represents the difference between the percentage change in total fee revenue and the percentage change in total expenses, in each case relative to the same period of the prior year. We returned a total of $674 million to our shareholders in the form of common share repurchases and common stock dividends. Notable Items Notable items in the third quarter of 2024 include: Loss on the sale of investment securities of approximately $81 million relating to an investment portfolio repositioning reflected in other income; Gain on sale of an equity investment of $66 million recorded in other fee revenue; an

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