Financial Data and Key Metrics Changes - The second quarter EPS was $2.15, slightly down from $2.17 in the previous year, but would have shown positive growth without an $80 million reserve release last year [10][18] - Total revenue growth was 3% year-over-year, driven by a 6% increase in net interest income (NII) and a 2% increase in fee revenues, supporting modestly positive total operating leverage [18][31] - The pretax margin was nearly 29%, and return on equity was close to 12% for the quarter [8][10] Business Line Data and Key Metrics Changes - In asset services, AUC/A wins totaled $291 billion, with significant contributions from the APAC region [11] - Management fees increased by 11% year-over-year to $511 million, despite aggregate net outflows largely due to client rebalancing [13][22] - Servicing fee revenue wins amounted to $72 million, up from $67 million in the first quarter, totaling over $330 million in the last 12 months [12][21] Market Data and Key Metrics Changes - Global equity markets reached new all-time highs in the second quarter, although gains were concentrated in a few names [9] - Fixed income markets faced challenges due to geopolitical risks and economic data, impacting overall performance [9] Company Strategy and Development Direction - The company is focused on transforming and simplifying its operating model, including consolidating operations in India to improve client experience and productivity [8][27] - The Alpha strategy is seen as a competitive advantage, helping to deepen client relationships and win new long-term clients [12][24] - The company plans to increase its quarterly common stock dividend by 10% to $0.76 per share, reflecting its commitment to returning capital to shareholders [15][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving goals of 6 to 8 new Alpha clients and $350 million to $400 million in servicing fee revenue wins for the year [16][30] - The outlook for total fee revenue growth has been revised to 4% to 5% for the full year, better than previous expectations [30] - Management acknowledged the uncertain economic and political environment but remains optimistic about the company's ability to navigate these challenges [30] Other Important Information - The company reported a strong balance sheet, enabling over $400 million in capital return in the second quarter [15][28] - The company is targeting a full-year expense increase of about 3%, slightly higher than previous guidance [31] Q&A Session Summary Question: Concerns about institutional lead outflows in Global Advisors - Management confirmed that most outflows were due to client rebalancing and do not expect this trend to continue [34] Question: Thoughts on potential acquisitions and consolidation opportunities - Management emphasized a focus on organic growth but remains open to M&A if it aligns with strategic goals [36] Question: Outlook for NII and deposit growth - Management indicated that while NII may see some erosion, they expect stabilization and potential growth in the coming quarters [40][42] Question: Impact of ECB rate cuts on euro deposits - Management noted that the beta on the recent ECB rate cut was similar to previous increases, indicating a balanced approach to deposit pricing [50][52] Question: Confidence in achieving servicing fee sales targets - Management expressed confidence based on a strong pipeline and historical trends showing better performance in the second half of the year [65]

Core Insights - State Street Corporation reported revenue of $3.19 billion for the quarter ended June 2024, reflecting a year-over-year increase of 2.6% [1] - The earnings per share (EPS) for the quarter was $2.15, slightly down from $2.17 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $3.15 billion, resulting in a surprise of +1.36% [1] - The company achieved an EPS surprise of +6.97%, with the consensus EPS estimate being $2.01 [1] Financial Metrics - Net interest margin (FTE) was reported at 1.1%, matching the average estimate from five analysts [2] - Average balance of total interest-earning assets was $261.74 billion, surpassing the four-analyst average estimate of $250.50 billion [2] - Basel III Advanced Approaches - Tier 1 Leverage Ratio stood at 5.3%, in line with the average estimate [2] - Basel III Standardized Approach - Tier 1 capital ratio was 13.3%, slightly above the 13.1% average estimate [2] - Assets under Management (AUM) reached $4,415 billion, exceeding the estimated $4,318.27 billion [2] - Basel III Standardized Approach - Total capital ratio was reported at 15%, above the 14.2% average estimate [2] - Assets under Custody and/or Administration (AUC/A) totaled $44,312 billion, significantly higher than the two-analyst average estimate of $37,496.93 billion [2] - Total fee revenue was $2.46 billion, matching the five-analyst average estimate [2] - Net Interest Income on a fully taxable-equivalent basis was $736 million, exceeding the estimated $697.06 million [2] - Net Interest Income was reported at $735 million, above the average estimate of $696.04 million [2] - Software and processing fees were $214 million, slightly below the estimated $214.97 million [2] - Other fee revenue was $48 million, exceeding the average estimate of $43.02 million [2] Stock Performance - Shares of State Street have returned +10.1% over the past month, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Key TakeawaysState Street posted records for both assets under control/administration and assets under management. Its quarterly profit and sales beat estimates.The financial services firm reported higher interest income and fee revenue.State Street shares rose to their highest level in more than a year. Shares of State Street (STT) rose after the financial services firm reported record-high numbers for two key measures of assets held and its results beat forecasts, aided by rising interest income and manag ...

/// STATE 2024 Financial Highlights NYSE: STT July 16, 2024 All comparisons are to corresponding prior year period unless otherwise noted • EPS of $2.15, as compared to $2.17 in 2Q23 • Total revenue of $3.2B, up 3% – Fee revenue up 2%, primarily reflecting higher Management fees and FX trading services revenue, partially offset by lower Servicing fees, Other fee revenue, Securities finance revenue and Software and processing feesFinancial performance– NII up 6%, largely due to higher investment securities y ...

Core Viewpoint - State Street's second-quarter 2024 earnings exceeded expectations, driven by growth in fee revenues and net interest revenues, despite a decline in net income compared to the previous year [1][2]. Financial Performance - Earnings per share were $2.15, surpassing the Zacks Consensus Estimate of $2.01, but down 1% year over year [1]. - Total revenues reached $3.19 billion, a 2.6% increase year over year, beating the Zacks Consensus Estimate of $3.15 billion [2]. - Net income available to common shareholders was $655 million, a decrease of 9.8% from the prior-year quarter [1]. Revenue Breakdown - Net interest revenues (NIR) amounted to $735 million, up 6.4% year over year, driven by higher investment securities yields and loan growth [2]. - Total fee revenues increased by 1.5% year over year to $2.46 billion [2]. Expense Analysis - Non-interest expenses rose to $2.27 billion, up 2.6% from the prior-year quarter, attributed to increases in almost all cost components [2]. - The net interest margin contracted by 6 basis points year over year to 1.13% [2]. Asset Management - Total assets under custody and administration were $44.31 trillion, an 11.9% increase year over year, driven by higher equity market levels and client flows [4]. - Assets under management (AUM) reached $4.42 trillion, up 16.3% year over year, primarily due to higher market levels and net inflows [4]. Shareholder Actions - In the reported quarter, State Street repurchased shares worth $200 million [5]. Capital Ratios - The Common Equity Tier 1 ratio was 11.2% as of June 30, 2024, down from 11.8% in the same period of 2023 [3]. - Return on common equity was 11.9%, compared to 13.0% in the year-ago quarter [3].

Financial Performance - Total revenue for 2023 was $11,945 million, a decrease of 1.7% compared to 2022[4] - Net income available to common shareholders for 2023 was $1,821 million, down 31.6% from $2,660 million in 2022[4] - Total revenue for Q2 2024 was $2,607 million, a slight increase of 0.7% compared to Q2 2023[36] - Total revenue on a GAAP basis for Q2 2024 was $3,191 million, up 2.6% from Q2 2023 and 1.7% from Q1 2024[42] - Year-to-date total revenue for 2024 reached $6,329 million, a 1.9% increase compared to the same period in 2023[42] - The company reported a total revenue of $6,333 million for YTD 2024, reflecting a 2% increase compared to YTD 2023[51] Income and Earnings - The diluted earnings per common share for 2023 was $5.58, down from $7.19 in 2022[4] - Net income available to common shareholders for 2Q24 was $655 million, a 56.7% increase compared to $726 million in 2Q23[8] - Basic earnings per share for 2Q24 were $2.18, reflecting a 58.0% increase from $2.20 in 2Q23[8] - Net income on a GAAP basis for Q2 2024 was $711 million, reflecting a decline of 6.8% year-over-year, but a significant increase of 53.6% from Q1 2024[44] - Year-to-date net income for 2024 was $1,174 million, a decrease of 10.5% compared to the same period in 2023[44] - Excluding notable items, net income for Q2 2024 was $711 million, representing a 26.5% increase compared to Q2 2023[44] Assets and Liabilities - Total assets increased by 11.4% year-over-year, reaching $306.298 billion in 2Q24[8] - Total assets increased to $325,603 million in June 2024, reflecting a 10.5% year-over-year growth[11] - Total liabilities increased to $300,841 million in June 2024, an 11.3% increase year-over-year[11] - Total risk-weighted assets increased from $108,296 million in Q1 2023 to $112,161 million in Q1 2024, reflecting a growth of 3.9%[55] Deposits and Loans - Total deposits rose by 7.3% year-over-year, amounting to $220.881 billion in 2Q24[8] - Total deposits reached $239,160 million in June 2024, a decrease of 5.1% compared to March 2024[11] - Loans net rose to $39,240 million in June 2024, marking a 1.9% increase from the previous quarter[11] - Loans grew by 12.8% from $33,878 million in YTD2023 to $38,225 million in YTD2024[16] Expenses - Total expenses for Q2 2024 were $2,269 million, a decrease of 9.7% from Q1 2024[6] - Total expenses for Q2 2024 were $1,850 million, reflecting a 1.6% increase from Q2 2023[36] - Year-to-date total expenses for 2024 were $4,782 million, which is a 4.4% increase from the previous year[42] Capital Ratios - The common equity tier 1 ratio was 11.6% at the end of 2023, down from 13.6% in 2022[4] - Common equity tier 1 ratio was 11.2% in 2Q24, a slight decrease of 0.6 percentage points from 11.8% in 2Q23[8] - The common equity tier 1 risk-based capital ratio decreased from 13.0% in Q1 2023 to 11.7% in Q1 2024, indicating a decline of 10%[55] Investment Securities - Total investment securities amounted to $105.1 billion in 2Q24, with an average yield of 3.62%[20] - The fair value of investment securities held-to-maturity decreased to $46,823 million, down from $51,503 million in March 2024[11] - The company reported an after-tax unrealized loss on securities available-for-sale of $249 million and on securities held-to-maturity of $4.6 billion[22] Management Fees and Revenue Streams - Management fees for YTD 2024 increased by 11.2% to $1,021 million compared to $918 million in YTD 2023[6] - Management fees rose by 10.8% to $461 million in Q2 2024 compared to Q2 2023[36] - Foreign exchange trading services revenue increased by 10.9% year-over-year to $336 million in Q2 2024[51] Tax Rates - The effective tax rate for 2Q24 was 22.1%, an increase of 5.4 percentage points from 16.7% in 2Q23[8] - The effective tax rate on a GAAP basis for Q2 2024 was 22.1%, an increase of 5.4 percentage points compared to Q1 2024[46] - The effective tax rate excluding notable items for Q2 2024 was 22.4%, an increase of 4.2 percentage points compared to the previous year[46] Market Trends and Future Outlook - The company plans to continue focusing on market expansion and new product development to drive future growth[45] - Management emphasized the importance of non-GAAP financial measures to enhance understanding of the company's performance and trends[41]

PM Images The SPDR S&P 500 ETF Trust (SPY) and individual sector ETFs such as The Energy Select Sector SPDR Fund ETF (XLE) have become staples throughout the investment community. While ETFs such as SPY and XLE are talked about regularly, their parent company, State Street Corporation (NYSE:STT) seems to fly well under the radar. Similar to BlackRock (BLK) and Vanguard, STT is a premier investment management and servicing company with $4.3 trillion in assets under management (AUM). Through SST and its s ...

Core Viewpoint - Analysts expect State Street Corporation (STT) to report quarterly earnings of $2.01 per share, reflecting a year-over-year decline of 7.4%, with revenues projected at $3.15 billion, an increase of 1.2% from the previous year [1] Earnings and Revenue Estimates - The consensus EPS estimate has been revised upward by 1% in the past 30 days, indicating a reassessment by covering analysts [1] - Total fee revenue is expected to reach $2.46 billion, compared to $2.42 billion reported in the same quarter last year [4] - Net Interest Income is projected at $694 million, slightly up from $691 million in the previous year [3][4] Key Financial Metrics - Analysts project 'Average balance - Total interest-earning assets' to be $250.50 billion, up from $231.99 billion a year ago [2] - The 'Basel III Advanced Approaches - Tier 1 Leverage Ratio' is expected to be 5.5%, down from 5.8% year-over-year [2] - The 'Basel III Standardized Approach - Tier 1 capital ratio' is estimated at 13.2%, compared to 13.6% last year [3] - 'Assets under Management (AUM)' are forecasted to reach $4,260.46 billion, up from $3,797 billion a year ago [3] - 'Assets under Custody and/or Administration (AUC/A)' are expected to be $37,329.47 billion, down from $39,589 billion in the same quarter last year [3] Fee Revenue Breakdown - 'Software and processing fees' are projected at $216.18 million, down from $221 million year-over-year [4] - 'Other fee revenue' is expected to be $44.27 million, compared to $58 million last year [4] - 'Management fees' are forecasted to reach $506.07 million, up from $461 million in the previous year [4] Stock Performance - State Street shares have returned +4.6% over the past month, compared to the Zacks S&P 500 composite's +5.1% change, with a Zacks Rank 3 (Hold) indicating expected performance in line with the overall market [6]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for State Street Corporation (STT) despite higher revenues, with the actual results being crucial for stock price movement [1] Earnings Expectations - State Street is expected to report quarterly earnings of $2.01 per share, reflecting a year-over-year decrease of 7.4% [2] - Revenues are projected to be $3.15 billion, which is an increase of 1.2% from the same quarter last year [2] Estimate Revisions - The consensus EPS estimate has been revised 0.88% higher in the last 30 days, indicating a positive reassessment by analysts [2] - The Most Accurate Estimate for State Street is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.15% [5] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading indicates a likely earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [4] - State Street's current Zacks Rank is 3, suggesting a moderate outlook for beating the consensus EPS estimate [5][6] Historical Performance - In the last reported quarter, State Street exceeded the expected earnings of $1.48 per share by delivering $1.69, resulting in a surprise of +14.19% [7] - The company has consistently beaten consensus EPS estimates in the last four quarters [7] Conclusion - State Street is positioned as a compelling candidate for an earnings beat, although other factors should also be considered before making investment decisions [8]

State Street Corp.’s (STT) asset management business, State Street Global Advisors, has announced a collaboration with Galaxy Asset Management, an affiliate of Galaxy Digital Holdings Inc., to introduce investors to the next generation of digital asset-based strategies. This will enhance investors’ exposure to digital asset space companies, extending beyond just cryptocurrencies and bitcoin.This partnership between prominent global asset managers aims to offer investors the latest innovation in digital asse ...