NYSE: STT January 17, 2025 1 All comparisons are to corresponding prior year period unless otherwise noted FY2024 Highlights 4Q24 Highlights Investment Servicing Investment Management Markets & Financing • In 2024, strong FX Trading volumes up ~15% YoY; average loans up 14% YoY Strategic initiatives A These are non-GAAP presentations; refer to the Appendix for a reconciliation of ex-notable items and further explanations of non-GAAP measures. Refer to the Appendix included with this presentation for endnote ...

Earnings Performance - State Street's Q4 2024 adjusted earnings of $2.60 per share beat the Zacks Consensus Estimate of $2.42 and increased 27.5% YoY [1] - For 2024, adjusted earnings of $8.67 per share surpassed the consensus estimate of $8.50 and grew 13.2% YoY [4] - Net income available to common shareholders (GAAP) was $2.48 billion in 2024, up 36.4% from 2023 [4] Revenue Growth - Q4 2024 total revenues of $3.41 billion increased 12.1% YoY and beat the consensus estimate of $3.31 billion [5] - 2024 total revenues grew 8.8% to $13 billion, surpassing the consensus estimate of $12.96 billion [5] - NII in Q4 2024 was $749 million, up 10.5% YoY, driven by higher investment securities yields and loan growth [6] - Total fee revenues in Q4 2024 increased 12.6% YoY to $2.66 billion, beating the estimate of $2.46 billion [6] Expense Management - Non-interest expenses (GAAP basis) in Q4 2024 were $2.44 billion, down 13.5% YoY, mainly due to the absence of the FDIC special assessment charge [7] - Adjusted expenses in Q4 2024 rose 8.2% to $2.38 billion, higher than the estimate of $2.31 billion [7] - Provision for credit losses in Q4 2024 was $12 million, down 40% from the projected $21.3 million [7] Asset Balances - Total AUC/A as of Dec 31, 2024, was $46.56 trillion, up 11.4% YoY, driven by higher equity market levels and client flows [9] - AUM as of Dec 31, 2024, was $4.72 trillion, up 14.9% YoY, primarily due to higher market levels and net inflows [9] Capital and Shareholder Returns - Common Equity Tier 1 ratio was 10.9% as of Dec 31, 2024, compared to 11.6% in 2023 [8] - Return on average common equity was 12.7% in Q4 2024, up from 3.1% in the year-ago quarter [8] - State Street repurchased shares worth $550 million in Q4 2024 [10] Peer Performance - Bank of New York Mellon's Q4 2024 adjusted earnings of $1.72 per share beat the consensus estimate of $1.56 and increased 33.3% YoY [12] - JPMorgan's Q4 2024 earnings of $4.81 per share surpassed the consensus estimate of $4.03, driven by strong capital markets and mortgage banking performance [13] Outlook - State Street expects NII to be roughly flat and fee income to grow 3-5% in 2025 [2] - Despite a weak 2025 outlook, higher interest rates and solid business servicing wins are expected to support State Street's financials [11]

Financial Performance - State Street Corporation reported $3.41 billion in revenue for Q4 2024, a 12.1% YoY increase [1] - EPS for the quarter was $2.60, compared to $2.04 a year ago [1] - Revenue surpassed Zacks Consensus Estimate by 3.17% ($3.31 billion) [1] - EPS exceeded consensus estimate by 7.44% ($2.42) [1] Key Metrics Analysis - Basel III Advanced Approaches - Tier 1 Leverage Ratio: 5.2% vs 5.3% estimate [4] - Net interest margin (FTE): 1.1% vs 1.1% estimate [4] - Average balance - Total interest-earning assets: $278.53 billion vs $265.70 billion estimate [4] - Basel III Standardized Approach - Tier 1 capital ratio: 13.2% vs 13.4% estimate [4] - Assets under Management (AUM): $4,715 billion vs $4,785.94 billion estimate [4] - Basel III Standardized Approach - Total capital ratio: 14.8% vs 14.4% estimate [4] - Assets under Custody and/or Administration (AUC/A): $46,557 billion vs $40,312.27 billion estimate [4] - Net Interest Income: $749 million vs $734.49 million estimate [4] - Total fee revenue: $2.66 billion vs $2.58 billion estimate [4] - Net Interest Income - fully taxable-equivalent basis: $749 million vs $735.50 million estimate [4] - Software and processing fees: $259 million vs $234.64 million estimate [4] - Other fee revenue: $66 million vs $50.98 million estimate [4] Stock Performance - State Street shares returned +5.3% over the past month [3] - Zacks S&P 500 composite showed -2.1% change during the same period [3] - The stock currently has a Zacks Rank 3 (Hold) [3] Market Insights - Investors focus on YoY changes in revenue and earnings to determine investment strategies [2] - Key metrics provide better insight into a company's underlying performance [2] - Comparing metrics with year-ago numbers and analyst estimates helps project stock price performance [2]

Earnings Performance - State Street Corporation reported quarterly earnings of $2 60 per share, beating the Zacks Consensus Estimate of $2 42 per share, representing a 7 44% earnings surprise [1] - The company's earnings per share (EPS) increased from $2 04 a year ago to $2 60, reflecting strong year-over-year growth [1] - Over the last four quarters, the company has consistently surpassed consensus EPS estimates [2] Revenue Performance - State Street posted revenues of $3 41 billion for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 3 17% [2] - Year-over-year revenue growth was notable, increasing from $3 04 billion to $3 41 billion [2] - The company has topped consensus revenue estimates in each of the last four quarters [2] Stock Performance and Market Comparison - State Street shares have gained approximately 2 4% since the beginning of the year, outperforming the S&P 500's gain of 1% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Earnings Outlook and Estimate Revisions - The current consensus EPS estimate for the coming quarter is $1 94 on $3 27 billion in revenues, while the fiscal year estimate is $9 55 on $13 39 billion in revenues [7] - The estimate revisions trend for State Street is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected market-aligned performance [6] - Empirical research highlights a strong correlation between near-term stock movements and earnings estimate revisions [5] Industry Context - State Street operates in the Zacks Banks - Major Regional industry, which is currently ranked in the top 26% of over 250 Zacks industries [8] - The top 50% of Zacks-ranked industries historically outperform the bottom 50% by more than 2 to 1 [8] Peer Comparison - Fifth Third Bancorp (FITB), another company in the same industry, is expected to report quarterly earnings of $0 87 per share, reflecting a year-over-year decline of 12 1% [9] - Fifth Third Bancorp's revenue is projected at $2 21 billion, up 2 4% from the year-ago quarter [10] - The consensus EPS estimate for Fifth Third Bancorp has been revised 0 3% higher over the last 30 days [9]

Revenue and Income - Total revenue for 2024 reached $13,000 million, a 8.8% increase from $11,945 million in 2023[4] - Net income available to common shareholders for 2024 was $2,483 million, up 36.4% from $1,821 million in 2023[4] - Diluted earnings per common share increased to $8.21 in 2024, compared to $5.58 in 2023, representing a 47.5% growth[4] - Total fee revenue for 2024 was $10,156 million, a 7.1% increase from $9,480 million in 2023[4] - Year-to-date (YTD) 2024 total revenue increased by 8.8% to $13,000 million compared to YTD 2023[6] - Total revenue for Q4 2024 reached $3,043 million, representing a 12.1% increase compared to Q4 2023[32] - Year-to-date total revenue for 2024 was $13,000 million, an 8.8% increase compared to $11,945 million in 2023[42] - Total revenue for Q4 2024 reached $3,412 million, representing a 12.2% increase compared to Q4 2023[50] Expenses - Total expenses for Q4 2024 were $2,440 million, a 13.5% decrease compared to Q4 2023[6] - Total expenses for Q4 2024 were $2,822 million, a decrease of 13.5% compared to Q4 2023[32] - Total expenses for 2024 are expected to be $9,530 million, a slight decrease from $9,583 million in 2023[48] - Total expenses, excluding notable items, were $9,331 million for the year 2024, reflecting a 4.1% increase compared to 2023[50] Assets and Liabilities - Total assets reached $327.2 billion in Q4 2024, a 17.4% increase year-over-year[8] - Total assets increased by 18.8% year-over-year to $353,240 million as of December 31, 2024[10] - Total liabilities increased by 19.9% year-over-year to $327,914 million as of December 31, 2024[10] - Total deposits grew to $237.1 billion in Q4 2024, reflecting a 14.8% increase compared to Q4 2023[8] - Total deposits rose by 18.5% year-over-year to $261,920 million as of December 31, 2024[10] Interest and Fees - Net interest income for 2024 was $2,923 million, reflecting a 5.9% increase from $2,759 million in 2023[4] - Net interest income for Q4 2024 was $749 million, reflecting a 10.5% increase from Q4 2023[6] - Management fees in Q4 2024 were $576 million, a significant increase of 20.3% from Q4 2023[6] - Total fee revenue increased to $2,662 million in Q4 2024, up 12.6% year-over-year[50] Shareholder Metrics - Cash dividends declared per common share increased to $2.90 in 2024, up from $2.64 in 2023[4] - Tangible book value per common share reached $49.14 in Q4 2024, an 11.1% increase year-over-year[8] - Common shareholders' equity increased to $22,744 million, a 4.4% rise from the previous year[12] - The total common shares outstanding decreased from 336,461 thousand in 1Q23 to 288,766 thousand in 4Q24, a reduction of about 14.2%[38] Credit Losses and Provisions - The provision for credit losses in Q4 2024 was $12 million, a decrease of 40.0% compared to Q4 2023[6] - The allowance for credit losses increased to $183 million, reflecting a 22.0% increase year-over-year[24] - Provision for loan losses for YTD 2024 was $75 million, a significant increase of 63.0% from the previous year[33] Investment Portfolio - The company continues to focus on optimizing its investment portfolio amidst changing market conditions[21] - Total investment securities amounted to $105.3 billion with an average yield of 3.63% in 4Q24, compared to $107.1 billion and 2.50% in 1Q23[20] - Approximately 86% of the investment portfolio was held in high-quality liquid assets (HQLA) as of December 31, 2024[22] Tax and Regulatory Metrics - The effective tax rate for Q4 2024 was 18.4%, a decrease of 2.7 percentage points from Q3 2024[8] - The effective tax rate excluding notable items for 2024 is projected to be 21.1%, an increase of 2.3 percentage points from 2023[48] - The company must maintain a minimum Supplementary Leverage Ratio (SLR) of 3% to avoid limitations on distributions to shareholders[35] Performance Ratios - The return on average common equity for 2024 was 11.1%, consistent with the previous year[4] - Return on average tangible common equity (Non-GAAP) for 4Q24 is expected to be 20.3%, compared to 13.3% for the full year 2023, indicating a significant improvement[38] - The pre-tax margin for Q4 2024 improved to 28.1%, up from 21.5% in Q4 2023[32]

Earnings Announcement and Expectations - State Street (STT) is scheduled to announce Q4 and full-year 2024 results on Jan 17, with expected year-over-year growth in revenues and earnings [1] - The company has a strong earnings surprise history, beating the Zacks Consensus Estimate in each of the trailing four quarters with an average surprise of 10.63% [3] - The Zacks Consensus Estimate for Q4 earnings is $2.42 per share, revised upward by 3% over the past seven days, implying an 18.6% rise from the year-ago quarter [3] - The consensus estimate for Q4 sales is $3.32 billion, suggesting 9.2% year-over-year growth [3] Net Interest Income (NII) and Lending Activities - The Federal Reserve reduced interest rates by 100 basis points since September 2024, positively impacting STT's NII by alleviating funding cost pressure [4] - The yield curve steepened and then normalized during Q4, aiding NII through asset repricing [4] - The Zacks Consensus Estimate for average interest-earning assets is $265.7 billion, a 1.4% fall from the previous quarter [5] - Lending activities improved in Q4, supporting NII to some extent [5] - The Zacks Consensus Estimate for NII (FTE basis) is $734.5 million, indicating a sequential rise of 1.6% [6] Fee Revenues and Market Impact - Higher volatility and volume in FX markets likely boosted STT's FX trading services income, with the dollar strengthening after the presidential election and interest rate cuts [7] - The consensus estimate for FX trading services income is $359.9 million, suggesting a 3.8% fall from the last quarter [7] - The consensus estimate for management fees is $530.9 million, implying a marginal sequential increase [8] - The Zacks Consensus Estimate for servicing fees is $1.28 billion, indicating marginal growth [8] - The consensus estimate for software and processing fees suggests a 12.8% increase to $234.6 million [8] - The Zacks Consensus Estimate for securities finance revenues is $110.1 million, suggesting a 5.1% decline [9] - The Zacks Consensus Estimate for total fee revenues is $2.6 billion, indicating a 1.5% decline from the prior quarter [9] Expenses and Operational Efficiency - Higher information systems and communication expenses, inflationary pressure, and strategic buyouts are expected to have increased operating expenses in Q4 [10] - Management's efforts to streamline the business model to enhance operating efficiency are expected to have increased expenses [11] - Total adjusted non-interest expenses are anticipated to be $2.31 billion [11] 2024 Outlook - Management expects to achieve $350-$400 million of servicing fee sales in 2024 [12] - Total fee revenues are anticipated to be at or slightly above the higher end of the 4-5% range, driven by a solid start to the year and higher average market levels [12] - Servicing fees and management fees are projected to increase due to steady business momentum and higher market levels [12] - NII is estimated to grow 4-5%, supported by management actions [13] - The average deposit balance is expected to remain at the Q2 2024 level in the second half of the year [13] - Adjusted expenses are anticipated to rise roughly 3.5% due to projected revenue-related costs [13] - Common equity tier 1 and Tier 1 leverage ratios are expected to be 10-11% and 5.25-5.75%, respectively [13] Earnings Model and Other Bank Stocks - The likelihood of State Street beating the Zacks Consensus Estimate is high due to a positive Earnings ESP of +0.67% and a Zacks Rank 3 (Hold) [14][15] - First Horizon Corporation (FHN) has an Earnings ESP of +3.18% and a Zacks Rank 2 (Buy), with Q4 and full-year 2024 results expected on Jan 16 [16] - Regions Financial Corporation (RF) has an Earnings ESP of +0.61% and a Zacks Rank 3, with Q4 and full-year 2024 earnings expected on Jan 17 [17]

Core Viewpoint - Analysts project that State Street Corporation (STT) will report quarterly earnings of $2.42 per share, an 18.6% increase year over year, with revenues expected to reach $3.31 billion, an 8.7% increase from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate for the quarter has been adjusted upward by 2.4% over the past 30 days, indicating a reassessment by covering analysts [2]. - Revisions to earnings projections are critical for predicting investor behavior and are strongly linked to short-term stock price performance [3]. Key Financial Metrics - Analysts expect the 'Basel III Advanced Approaches - Tier 1 Leverage Ratio' to be 5.3%, down from 5.5% in the same quarter last year [5]. - The 'Average balance - Total interest-earning assets' is projected to be $265.70 billion, up from $232.23 billion year over year [5]. - The 'Basel III Standardized Approach - Tier 1 capital ratio' is estimated at 13.4%, unchanged from the previous year [6]. - 'Assets under Management (AUM)' are expected to reach $4,785.94 billion, compared to $4,128 billion a year ago [6]. - The 'Basel III Standardized Approach - Total capital ratio' is forecasted at 14.4%, down from 15.2% in the same quarter last year [7]. - 'Assets under Custody and/or Administration (AUC/A)' are projected to be $40,312.27 billion, compared to $41,810 billion last year [7]. Revenue Estimates - 'Net Interest Income' is expected to be $734.49 million, up from $678 million year over year [8]. - 'Total fee revenue' is projected at $2.58 billion, compared to $2.37 billion in the same quarter last year [8]. - 'Net Interest Income - fully taxable-equivalent basis' is estimated at $735.50 million, compared to $679 million last year [9]. - 'Software and processing fees' are expected to reach $234.64 million, slightly down from $237 million year over year [9]. - 'Other fee revenue' is projected at $50.98 million, up from $33 million last year [10]. - 'Management fees' are expected to be $530.90 million, compared to $479 million in the same quarter last year [10]. Market Performance - Shares of State Street have decreased by 6.3% over the past month, compared to a 3.5% decline in the Zacks S&P 500 composite [11].

Earnings Performance - State Street Corporation (STT) has consistently beaten earnings estimates, with an average surprise of 7.81% over the past two quarters [1] - For the last reported quarter, the company posted earnings of $2.26 per share, surpassing the Zacks Consensus Estimate of $2.08 per share by 8.65% [2] - In the previous quarter, State Street reported earnings of $2.15 per share, exceeding the estimate of $2.01 per share by 6.97% [2] Earnings ESP and Zacks Rank - State Street currently has a positive Earnings ESP of +1.14%, indicating analysts' bullish outlook on the company's earnings prospects [6] - The combination of a positive Earnings ESP and a Zacks Rank 3 (Hold) suggests a high likelihood of another earnings beat in the upcoming report [6] - Stocks with a positive Earnings ESP and a Zacks Rank 3 or better have a nearly 70% chance of producing a positive earnings surprise [4] Earnings Estimate Trends - State Street's earnings estimates have been trending higher, partly due to its history of earnings surprises [3] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the former reflecting the latest analyst revisions before an earnings release [5] Upcoming Earnings Report - State Street's next earnings report is expected to be released on January 17, 2025 [6]

Performance Overview - State Street's stock (STT) has risen by about 29% year-to-date, outperforming peers like BNY which is up 57% [1] - The company surpassed street estimates in Q3 2024 with earnings of $2 26 per share and revenue growth of 22% YoY to $3 26 billion [1] - Fee revenues increased by 16% YoY to $2 62 billion, while average assets under management grew by 29% YoY to $4 73 trillion [1] - Assets under custody surged by 17% to $46 7 trillion, and net interest income rose by 16% driven by higher investment securities yields and loan growth [1] Margins and Cost Efficiency - Pre-tax margins improved to 28 4%, up almost 940 basis points compared to last year [2] - The company benefits from operating leverage due to its high fixed-cost structure, with revenues growing faster than total costs [2] - State Street has been streamlining operations to cut costs while focusing on higher-margin businesses [2] Historical Stock Performance - STT stock returns were 31% in 2021, 14% in 2022, and 4% in 2023, showing volatility similar to the S&P 500 [3] Market and Macroeconomic Factors - The Trefis High Quality Portfolio, consisting of 30 stocks, has outperformed the S&P 500 with less volatility [4] - Post-U S election, markets have been bullish with expectations of deregulation under the Trump administration, potentially lowering compliance costs for banks like STT [4] - Higher potential economic growth and tax cuts under Trump could benefit asset prices and custody banks [4] - The end of quantitative tightening by the U S Fed may improve liquidity, benefiting institutions and custody banks like State Street [4] Valuation - STT stock is valued at about $90 per share, slightly below the current market price [4]

Core Viewpoint - State Street Corporation reported strong Q3 2024 earnings, surpassing estimates and showing significant year-over-year growth in both earnings and revenues, driven by increased fee revenues and net interest income (NII) [2][4][10]. Financial Performance - Adjusted earnings per share for Q3 2024 were $2.26, exceeding the Zacks Consensus Estimate of $2.08, and reflecting a 17.1% increase from the prior year [2]. - Net income available to common shareholders reached $682 million, a 71.4% increase from the previous year, surpassing projections [3]. - Total revenues amounted to $3.34 billion, an 11.9% year-over-year increase, and exceeded the Zacks Consensus Estimate of $3.18 billion [4]. - NII was reported at $723 million, up 15.9% year over year, driven by higher investment securities yields and loan growth [4]. - Total fee revenues increased by 10.8% to $2.62 billion, also beating estimates [5]. Expense Management - Non-interest expenses rose to $2.31 billion, a 5.9% increase, attributed to higher costs across nearly all components [5]. - The provision for credit losses was $26 million, compared to no provision in the prior year [5]. - The company is implementing measures to improve operating efficiency, targeting additional productivity savings of nearly $500 million [12]. Asset Management - As of September 30, 2024, total assets under custody/administration (AUC/A) reached $46.76 trillion, a 16.8% increase year over year [7]. - Assets under management (AUM) were $4.73 trillion, up 28.9%, primarily due to higher market levels and net inflows [7]. Shareholder Returns - In the reported quarter, State Street repurchased shares worth $450 million [8]. Future Outlook - The company anticipates servicing fee sales of $350-$400 million in 2024, with total fee revenues expected to be at or slightly above the higher end of the 4-5% growth range [10]. - The average deposit balance is projected to remain stable in the second half of 2024 [11]. - CET1 and Tier 1 leverage ratios are expected to be between 10-11% and 5.25-5.75%, respectively [13]. Industry Context - State Street operates within the Zacks Banks - Major Regional industry, where peers like The Bank of New York Mellon Corporation have also reported positive earnings growth [17][18].