Core Viewpoint - State Street Corporation's Q2 2025 earnings report shows strong performance with adjusted earnings surpassing estimates, driven by growth in fee income and asset balances, despite challenges from rising expenses and lower net interest income [2][3][4]. Financial Performance - Adjusted earnings per share for Q2 2025 were $2.53, exceeding the Zacks Consensus Estimate of $2.36, and reflecting a 17.7% increase year-over-year [2]. - Total revenues reached $3.45 billion, an 8.1% increase from the previous year, surpassing the consensus estimate of $3.38 billion [4]. - Total fee revenues increased by 6.8% year-over-year to $2.72 billion, driven by growth across most components [6]. Expenses and Income - Non-interest expenses rose to $2.53 billion, an 11.5% increase from the prior year, primarily due to higher costs across various components [7]. - Net interest income (NII) was $735 million, showing a slight decline year-over-year, attributed to lower average short-end rates and a shift in deposit mix [5]. Asset Management - As of June 30, 2025, total assets under custody and administration (AUC/A) were $49 trillion, up 10.6% year-over-year, driven by higher equity market levels and client flows [9]. - Assets under management (AUM) reached $5.12 trillion, a 17.1% increase year-over-year, primarily due to higher market levels and net inflows [9]. Shareholder Returns - In the reported quarter, State Street repurchased shares worth $300 million [10]. Future Outlook - Management anticipates generating $350-$400 million in new servicing fee revenues, with total fee revenues expected to increase by 5-7% year-over-year, up from a prior guidance of 3-5% [12]. - Adjusted expense growth is projected to be 3-4% for 2025, reflecting an increase from the previous outlook of 2-3% [13]. - The company targets a total payout ratio of 80% in 2025 [13].

Core Insights - The OCIO (Outsourced Chief Investment Officer) model has seen significant growth, with assets under management (AUM) increasing over 2.6 times in the past decade, indicating a strong demand for outsourced investment management solutions [3][8][10] - The market is dominated by a few key players, with the top five institutions controlling 67% of the market share, particularly following the acquisition of Vanguard by Mercer, which has led to a rapid increase in Mercer’s AUM market share to over 30% [3][10] - The client base for OCIO services is diversifying, with a notable increase in the share of non-pension clients such as endowment funds, charitable foundations, and private wealth, which are expected to grow at a compound annual growth rate (CAGR) exceeding 10% over the next five years [3][17] OCIO Business Overview - OCIO services encompass a comprehensive range of functions including asset allocation, manager selection, portfolio decision execution, and risk management, tailored to meet the needs of institutional investors and high-net-worth families [7][10] - The OCIO model addresses the gap between asset owners' internal capabilities and their performance expectations, providing a systematic approach to enhance governance and efficiency [7][10] Market Dynamics - The OCIO market is primarily driven by corporate pension plans, which accounted for 61% of the market in 2023, but there is a growing trend towards non-pension clients, indicating a shift in market dynamics [3][17] - The overall AUM in the OCIO sector is projected to grow at a CAGR of 7.9%-8%, with increasing penetration among non-traditional institutional clients [17] Competitive Landscape - Major players like JP Morgan, Mercer, BlackRock, and Goldman Sachs are adopting distinct strategies to capture market share, with varying focuses on technology, ESG integration, and client customization [3][10][38] - The acquisition of Vanguard by Mercer is a significant event in the industry, enhancing Mercer’s capabilities in alternative asset management and solidifying its position as the largest OCIO service provider globally [48][51] Client Segmentation - Different client types, including pension funds, foundations, family offices, and sovereign wealth funds, have unique investment needs and risk profiles, leading to tailored OCIO service models [12][17] - Non-profit organizations and endowment funds are increasingly recognized as critical growth drivers for OCIO services, with a high percentage of providers considering them essential for future growth [26][17] Future Opportunities - The OCIO sector is expected to see growth opportunities in Southeast Asian sovereign funds and healthcare systems, as well as through the optimization of asset allocation models [3][10] - The demand for alternative assets and complex investment strategies is rising, necessitating OCIO providers to enhance their capabilities in these areas [13][17]

1. Report Industry Investment Rating - No industry investment rating is provided in the report. 2. Core Views of the Report - Last week, State Street issued broad - industry option strategy products, and other option strategy product lines also expanded. The performance of new and traditional energy in the US has diverged significantly this year, with new energy outperforming traditional energy. The Russell 2000 ETF had a significant outflow, while the overall inflow of broad - based ETFs was positive. The outflow of US domestic stock funds returned to over $10 billion in a single week, and the inflow of bond products was stable [1]. 3. Summary According to the Directory 3.1 US ETF Innovation Products: State Street Issues Broad - Industry Option Strategy Products - Last week, there were 23 new US products. State Street issued option strategy products for its GICS broad - industry ETFs, which invest in existing broad - industry ETFs and sell corresponding call options to gain income, covering all 11 industries. The GraniteShares YieldBOOST product line expanded, with a new product linked to CoinBase, and the YieldMax single - stock Covered Call strategy product was linked to ROBLOX. BlackRock issued an infrastructure active ETF, First Trust issued a nuclear energy product, Dakota issued an active ETF, and PGIM issued 4 ETFs, including 3 corporate bond ETFs with different maturities and a S&P 500 downside protection product [1][6]. 3.2 US ETF Dynamics 3.2.1 US ETF Funds: Significant Outflow from Russell 2000 ETF - Last week, equity ETFs had an inflow of nearly $10 billion, the inflow of digital currency ETFs slowed down, and commodity ETFs had a slight outflow. Among broad - based ETFs, the Russell 2000 ETF had an outflow of nearly $5 billion, while multiple YieldMax Covered Call products had the highest inflows, and traditional leveraged products had outflows. In the bond market, short - term bonds had inflows and long - term bonds had outflows [1][10][13]. 3.2.2 US ETF Performance: New Energy Significantly Outperforms Traditional Energy - This year, there has been a significant divergence in the performance of new and traditional energy in the US. Different from the high - inflation period of 2021 - 2022, the new energy sector has significantly outperformed the traditional energy sector. The VanEck nuclear energy ETF has risen by over 40%, and other managers also issued similar products last week [1][17]. 3.3 Recent US Ordinary Public Fund Fund Flows - In June 2025, the total amount of non - money public funds in the US was $22.69 trillion, an increase of $0.78 trillion compared to May 2025. The S&P 500 rose by 6.15% in June, and the scale of US domestic equity products increased by 4.26%, slightly lower than the stock increase. From July 16th to July 23rd, US domestic equity funds had a total outflow of approximately $13.5 billion, returning to over $10 billion, while the inflow of bond products was stable [1][19].

Core Viewpoint - A US judge has largely rejected a request by major asset managers, including BlackRock, to dismiss a lawsuit filed by Texas and 12 other Republican-led states, which alleges that these companies violated antitrust laws through climate activism that negatively impacted coal production and increased energy prices [1][5]. Group 1: Lawsuit Details - The lawsuit is one of the most prominent cases targeting efforts to promote environmental, social, and governance (ESG) goals [2]. - The states' claims against the asset managers include allegations of joining Climate Action 100+, an initiative aimed at combating climate change, and using shareholder advocacy to further its objectives [3][4]. - The judge dismissed only three of the 21 counts in the lawsuit, allowing the majority of the claims to proceed [1]. Group 2: Implications for Asset Managers - The outcome of the lawsuit could significantly affect how these asset managers, which collectively manage approximately $27 trillion, handle their investments and passive funds [6][7]. - One potential remedy sought by the plaintiffs is for the asset managers to divest from coal companies, which BlackRock argues would harm access to capital and likely lead to higher energy prices [6].

Group 1 - A Texas judge has ruled that cases regarding conspiracy can proceed against BlackRock, State Street, and Vanguard [1] - The companies are facing antitrust lawsuits [1]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=4&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes State Street Corporation's financial performance and condition for the three and six months ended June 30, 2025, covering overall results, line of business performance, financial condition, and risk management. [General](index=4&type=section&id=General) State Street Corporation is a global financial services provider to institutional investors, managing **$49.00 trillion in AUC/A** and **$5.12 trillion in AUM** as of June 30, 2025 - State Street Corporation is a financial holding company providing services to institutional investors globally, with operations in over 100 geographic markets[10](index=10&type=chunk)[11](index=11&type=chunk) - The company's operations are organized into two lines of business: Investment Servicing and Investment Management[12](index=12&type=chunk) **Key Financial Metrics (as of June 30, 2025)** | Metric | Value | | :----- | :-------------------------- | | AUC/A | $49.00 trillion | | AUM | $5.12 trillion | | Total Assets | $376.72 billion | | Total Deposits | $283.02 billion | | Total Shareholders' Equity | $27.31 billion | | Employees | ~52,000 | [Overview of Financial Results](index=8&type=section&id=Overview%20of%20Financial%20Results) For Q2 2025, diluted EPS increased 1% to $2.17, total revenue rose 8% due to higher fee revenue, and total expenses increased 11% due to a repositioning charge and higher incentive compensation. - Notable items in Q2 2025 included a **$100 million repositioning charge** for workforce rationalization and a **$42 million Alpha-related client rescoping impact** on revenue and expenses[50](index=50&type=chunk) - AUC/A increased **11% to $49.00 trillion** and AUM increased **17% to $5.12 trillion** as of June 30, 2025, primarily due to higher market levels and client flows/inflows[52](index=52&type=chunk)[53](index=53&type=chunk) **Three Months Ended June 30, 2025 vs. 2024** | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------------- | :-------------- | :-------------- | :------- | | Total fee revenue | $2,719 | $2,456 | 11% | | Net interest income | $729 | $735 | (1)% | | Total revenue | $3,448 | $3,191 | 8% | | Provision for credit losses | $30 | $10 | nm | | Total expenses | $2,529 | $2,269 | 11% | | Income before income tax expense | $889 | $912 | (3)% | | Net income | $693 | $711 | (3)% | | Net income available to common shareholders | $630 | $655 | (4)% | | Diluted EPS | $2.17 | $2.15 | 1% | | Return on average common equity | 10.8% | 11.9% | (110) bps | | Pre-tax margin | 25.8% | 28.6% | (280) bps | **Six Months Ended June 30, 2025 vs. 2024** | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------------- | :-------------- | :-------------- | :------- | | Total fee revenue | $5,289 | $4,878 | 8% | | Net interest income | $1,443 | $1,451 | (1)% | | Total revenue | $6,732 | $6,329 | 6% | | Provision for credit losses | $42 | $37 | 14% | | Total expenses | $4,979 | $4,782 | 4% | | Income before income tax expense | $1,711 | $1,510 | 13% | | Net income | $1,337 | $1,174 | 14% | | Net income available to common shareholders | $1,227 | $1,073 | 14% | | Diluted EPS | $4.21 | $3.52 | 20% | | Return on average common equity | 10.7% | 9.8% | 90 bps | | Pre-tax margin | 25.4% | 23.9% | 150 bps | [Consolidated Results of Operations](index=10&type=section&id=Consolidated%20Results%20of%20Operations) This section details the consolidated financial performance for the three and six months ended June 30, 2025, compared to the same periods in 2024, covering total revenue, net interest income, provision for credit losses, and expenses. [Total Revenue](index=10&type=section&id=Total%20Revenue) Total revenue increased 8% in Q2 2025 and 6% in H1 2025, primarily driven by higher fee revenue, particularly from foreign exchange trading services, servicing fees, and management fees. - Servicing fee revenue increased **5%** in both Q2 and H1 2025, driven by higher average market levels, net new business, and client activity, with currency translation contributing **1%** to the Q2 increase[63](index=63&type=chunk) - Management fee revenue increased **10%** in both Q2 and H1 2025, primarily due to higher average market levels and net inflows from prior periods[84](index=84&type=chunk) - Foreign exchange trading services revenue increased **28%** in Q2 2025 and **19%** in H1 2025, mainly due to higher volumes and increased spreads from FX volatility[92](index=92&type=chunk) - Newly announced asset servicing mandates totaled approximately **$1.09 trillion of AUC/A** in Q2 2025, with **$3.98 trillion of AUC/A** remaining to be installed in future periods[76](index=76&type=chunk) **Total Revenue (Three Months Ended June 30)** | Revenue Type | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Servicing fees | $1,304 | $1,239 | 5% | | Management fees | $562 | $511 | 10% | | Foreign exchange trading services | $431 | $336 | 28% | | Securities finance | $126 | $108 | 17% | | Software and processing fees | $230 | $214 | 7% | | Other fee revenue | $66 | $48 | 38% | | **Total fee revenue** | **$2,719** | **$2,456** | **11%** | | Net interest income | $729 | $735 | (1)% | | **Total revenue** | **$3,448** | **$3,191** | **8%** | **Total Revenue (Six Months Ended June 30)** | Revenue Type | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Servicing fees | $2,579 | $2,467 | 5% | | Management fees | $1,124 | $1,021 | 10% | | Foreign exchange trading services | $793 | $667 | 19% | | Securities finance | $240 | $204 | 18% | | Software and processing fees | $455 | $421 | 8% | | Other fee revenue | $98 | $98 | —% | | **Total fee revenue** | **$5,289** | **$4,878** | **8%** | | Net interest income | $1,443 | $1,451 | (1)% | | **Total revenue** | **$6,732** | **$6,329** | **6%** | [Net Interest Income](index=16&type=section&id=Net%20Interest%20Income) Net interest income (NII) decreased by 1% in both Q2 and H1 2025, primarily due to lower average short-end rates and a deposit mix shift, partially offset by loan growth and securities portfolio repricing. - Average total interest-earning assets increased to **$304.65 billion** (Q2 2025) and **$297.12 billion** (H1 2025), primarily due to higher client deposits and long-term debt[113](index=113&type=chunk) - Average loans increased to **$45.28 billion** (Q2 2025) and **$44.51 billion** (H1 2025), driven by growth in collateralized loan obligations and fund finance loans[119](index=119&type=chunk) **Net Interest Income (Three Months Ended June 30)** | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Interest income | $3,055 | $2,998 | 2% | | Interest expense | $2,326 | $2,263 | 3% | | **Net interest income** | **$729** | **$735** | **(1)%** | | Net interest margin (FTE) | 0.96% | 1.13% | (17) bps | **Net Interest Income (Six Months Ended June 30)** | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Interest income | $5,977 | $5,887 | 2% | | Interest expense | $4,534 | $4,436 | 2% | | **Net interest income** | **$1,443** | **$1,451** | **(1)%** | | Net interest margin (FTE) | 0.98% | 1.13% | (15) bps | [Provision for Credit Losses](index=19&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses increased to $30 million in Q2 2025 and $42 million in H1 2025, reflecting the evolving macroeconomic environment and higher loan loss reserves for certain commercial real estate loans. - The increase in provision for credit losses is primarily due to the evolving macroeconomic environment and increased loan loss reserves for certain commercial real estate loans[129](index=129&type=chunk) **Provision for Credit Losses** | Period | 2025 (Millions) | 2024 (Millions) | % Change | | :----- | :-------------- | :-------------- | :------- | | Q2 | $30 | $10 | nm | | H1 | $42 | $37 | 14% | [Expenses](index=19&type=section&id=Expenses) Total expenses increased 11% in Q2 2025 and 4% in H1 2025, driven by a $100 million repositioning charge, higher incentive compensation, increased technology investments, and currency translation impacts. - Total headcount decreased **1%** as of June 30, 2025, due to operational simplification and technology, partially offset by growth in high-cost locations[134](index=134&type=chunk) **Total Expenses (Three Months Ended June 30)** | Expense Type | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Compensation and employee benefits | $1,280 | $1,099 | 16% | | Information systems and communications | $523 | $454 | 15% | | Transaction processing services | $260 | $250 | 4% | | Occupancy | $105 | $106 | (1)% | | Amortization of other intangible assets | $56 | $60 | (7)% | | Other expenses | $305 | $300 | 2% | | **Total expenses** | **$2,529** | **$2,269** | **11%** | **Total Expenses (Six Months Ended June 30)** | Expense Type | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Compensation and employee benefits | $2,542 | $2,351 | 8% | | Information systems and communications | $1,020 | $886 | 15% | | Transaction processing services | $518 | $498 | 4% | | Occupancy | $208 | $209 | —% | | Amortization of other intangible assets | $110 | $120 | (8)% | | Other expenses | $581 | $718 | (19)% | | **Total expenses** | **$4,979** | **$4,782** | **4%** | [Repositioning Charges](index=20&type=section&id=Repositioning%20Charges) In Q2 2025, State Street recorded a **$100 million repositioning charge** related to compensation and employee benefits, primarily from workforce rationalization efforts aimed at driving operating efficiency. - A repositioning charge of **$100 million** was recorded in Q2 2025, primarily for workforce rationalization[139](index=139&type=chunk) **Repositioning Charges Accrual Balance (Millions)** | Metric | Dec 31, 2023 | Mar 31, 2024 | Jun 30, 2024 | Dec 31, 2024 | Mar 31, 2025 | Jun 30, 2025 | | :-------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Employee Related Costs | $207 | $188 | $151 | $96 | $82 | $163 | | Real Estate Actions | $1 | $1 | $1 | $0 | $0 | $0 | | **Total** | **$208** | **$189** | **$152** | **$96** | **$82** | **$163** | [Income Tax Expense](index=21&type=section&id=Income%20Tax%20Expense) Income tax expense was $196 million in Q2 2025 and $374 million in H1 2025, with the effective tax rate decreasing slightly to 22.0% (Q2) and 21.9% (H1) due to higher discrete tax benefits. - The decrease in the effective tax rate for the six-month period was primarily due to higher discrete tax benefits in 2025[140](index=140&type=chunk) **Income Tax Expense and Effective Tax Rate** | Period | Income Tax Expense (Millions) | Effective Tax Rate | | :----- | :---------------------------- | :----------------- | | Q2 2025 | $196 | 22.0% | | Q2 2024 | $201 | 22.1% | | H1 2025 | $374 | 21.9% | | H1 2024 | $336 | 22.3% | [Line of Business Information](index=21&type=section&id=Line%20of%20Business%20Information) State Street operates two primary lines of business: Investment Servicing and Investment Management, offering back- and middle-office solutions, market and financing solutions, and a range of investment products including SPDR ETFs. - The company's operations are organized into two lines of business: Investment Servicing and Investment Management[141](index=141&type=chunk) - Investment Servicing provides custody, accounting, fund administration, transaction management, foreign exchange, brokerage, securities finance, and deposit services, including the State Street Alpha platform[142](index=142&type=chunk)[143](index=143&type=chunk) - Investment Management offers equity, fixed income, cash, multi-asset, and alternative strategies, including SPDR ETFs and index funds[144](index=144&type=chunk) [Investment Servicing](index=21&type=section&id=Investment%20Servicing) The Investment Servicing line of business reported an **8% increase in total revenue** for Q2 2025 and **6% for H1 2025**, with income before income tax expense rising **12% in Q2** and **11% in H1**. - Servicing fees increased **5%** in both periods, driven by higher average market levels, net new business, and client activity, with currency translation contributing **1%** to the Q2 increase[146](index=146&type=chunk) **Investment Servicing Key Financials (Three Months Ended June 30)** | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Servicing fees | $1,304 | $1,239 | 5% | | Foreign exchange trading services | $390 | $304 | 28% | | Securities finance | $119 | $101 | 18% | | Software and processing fees | $254 | $214 | 19% | | Other fee revenue | $51 | $36 | 42% | | **Total fee revenue** | **$2,118** | **$1,894** | **12%** | | Net interest income | $726 | $730 | (1)% | | **Total revenue** | **$2,844** | **$2,624** | **8%** | | Total expenses | $1,995 | $1,880 | 6% | | Income before income tax expense | $819 | $734 | 12% | | Pre-tax margin | 28.8% | 28.0% | 80 bps | **Investment Servicing Key Financials (Six Months Ended June 30)** | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Servicing fees | $2,579 | $2,467 | 5% | | Foreign exchange trading services | $727 | $612 | 19% | | Securities finance | $227 | $191 | 19% | | Software and processing fees | $479 | $421 | 14% | | Other fee revenue | $85 | $79 | 8% | | **Total fee revenue** | **$4,097** | **$3,770** | **9%** | | Net interest income | $1,435 | $1,441 | —% | | **Total revenue** | **$5,532** | **$5,211** | **6%** | | Total expenses | $4,014 | $3,843 | 4% | | Income before income tax expense | $1,476 | $1,331 | 11% | | Pre-tax margin | 26.7% | 25.5% | 120 bps | [Investment Management](index=22&type=section&id=Investment%20Management) The Investment Management line of business saw total revenue increase by **10% in Q2 2025** and **9% in H1 2025**, with income before income tax expense growing **16% in Q2** and **20% in H1**. - Management fees increased **10%** in both periods, driven by higher average market levels and net inflows from prior periods[151](index=151&type=chunk) **Investment Management Key Financials (Three Months Ended June 30)** | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Management fees | $562 | $511 | 10% | | Foreign exchange trading services | $38 | $32 | 19% | | Securities finance | $7 | $7 | —% | | Other fee revenue | $15 | $12 | 25% | | **Total fee revenue** | **$622** | **$562** | **11%** | | Net interest income | $3 | $5 | (40)% | | **Total revenue** | **$625** | **$567** | **10%** | | Total expenses | $417 | $388 | 7% | | Income before income tax expense | $208 | $179 | 16% | | Pre-tax margin | 33.3% | 31.6% | 170 bps | **Investment Management Key Financials (Six Months Ended June 30)** | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Management fees | $1,124 | $1,021 | 10% | | Foreign exchange trading services | $63 | $55 | 15% | | Securities finance | $13 | $13 | —% | | Other fee revenue | $13 | $19 | (32)% | | **Total fee revenue** | **$1,213** | **$1,108** | **9%** | | Net interest income | $8 | $10 | (20)% | | **Total revenue** | **$1,221** | **$1,118** | **9%** | | Total expenses | $848 | $808 | 5% | | Income before income tax expense | $373 | $310 | 20% | | Pre-tax margin | 30.5% | 27.7% | 280 bps | [Financial Condition](index=23&type=section&id=Financial%20Condition) State Street's financial condition is shaped by client deposits and short-term investments, primarily invested in a diversified portfolio of high-quality investment securities and short-duration financial instruments, with total assets of **$376.72 billion** as of June 30, 2025. [Investment Securities](index=23&type=section&id=Investment%20Securities) The carrying value of investment securities increased to **$113.89 billion** as of June 30, 2025, from **$106.62 billion** at December 31, 2024, with approximately **97% rated "AA" or higher** and an average duration of **2.0 years**. - Approximately **97%** of the investment securities portfolio was rated "AA" or higher as of June 30, 2025, and December 31, 2024[163](index=163&type=chunk) - The average duration of the investment securities portfolio, including hedges, was **2.0 years** as of June 30, 2025[163](index=163&type=chunk) **Carrying Values of Investment Securities (Millions)** | Security Type | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | **Available-for-sale:** | | | | U.S. Treasury and federal agencies | $41,678 | $34,091 | | Non-U.S. debt securities | $25,250 | $21,058 | | Asset-backed securities | $3,619 | $3,638 | | State and political subdivisions | $30 | $56 | | Other U.S. debt securities | $26 | $52 | | **Total available-for-sale** | **$70,603** | **$58,895** | | **Held-to-maturity:** | | | | U.S. Treasury and federal agencies | $37,589 | $41,518 | | Non-U.S. debt securities | $3,299 | $3,673 | | Asset-backed securities | $2,398 | $2,536 | | **Total held-to-maturity** | **$43,286** | **$47,727** | [Loans](index=27&type=section&id=Loans) Total loans increased to **$47.28 billion** as of June 30, 2025, from **$43.20 billion** at December 31, 2024, primarily driven by growth in fund finance loans and collateralized loan obligations, with the allowance for loan losses increasing slightly to **$179 million**. - Average core loans (excluding overdrafts) increased to **$41.89 billion** (Q2 2025) and **$41.26 billion** (H1 2025), driven by growth in collateralized loan obligations and fund finance loans[119](index=119&type=chunk) - The allowance for credit losses increased by **$9 million to $192 million** as of June 30, 2025, primarily due to increased loan loss reserves for certain commercial real estate loans, partially offset by charge-offs[185](index=185&type=chunk)[187](index=187&type=chunk) **U.S. and Non-U.S. Loans (Millions)** | Loan Type | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | **Domestic:** | | | | Fund finance | $17,366 | $16,347 | | Leveraged loans | $2,878 | $2,742 | | Overdrafts | $2,101 | $1,208 | | Collateralized loan obligations in loan form | $50 | $50 | | Other commercial and financial | $1,935 | $3,220 | | Commercial real estate | $2,551 | $2,842 | | **Foreign:** | | | | Fund finance | $7,120 | $6,601 | | Leveraged loans | $1,168 | $1,082 | | Overdrafts | $1,909 | $772 | | Collateralized loan obligations in loan form | $10,201 | $8,336 | | **Total loans** | **$47,279** | **$43,200** | | Allowance for loan losses | ($179) | ($174) | | **Loans, net of allowance** | **$47,100** | **$43,026** | [Risk Management](index=28&type=section&id=Risk%20Management) State Street manages various material risks inherent in the financial services industry, including credit, liquidity, operational, information technology, market, model, and strategic risks, through established policies, metrics, and stress testing. - State Street is exposed to various material risks, including credit and counterparty risk, liquidity risk, operational risk, information technology risk, market risk, model risk, and strategic risk[190](index=190&type=chunk) [Credit and Counterparty Risk Management](index=28&type=section&id=Credit%20and%20Counterparty%20Risk%20Management) Credit risk is managed through an allowance for credit losses on both on-balance sheet and off-balance sheet exposures, with the Q2 2025 estimate reflecting the evolving macroeconomic environment and increased loan loss reserves for commercial real estate loans. - Credit risk is defined as the risk of financial loss if a counterparty is unable or unwilling to repay borrowings or settle a transaction[192](index=192&type=chunk) - The allowance for credit losses is recorded for on-balance sheet and off-balance sheet credit exposures, with estimates based on multiple economic scenarios (baseline, upside, downside)[193](index=193&type=chunk) - In Q2 2025, the allowance estimate increased due to the macroeconomic environment and higher loan loss reserves for commercial real estate loans, partially offset by charge-offs[194](index=194&type=chunk) [Liquidity Risk Management](index=29&type=section&id=Liquidity%20Risk%20Management) State Street manages liquidity risk globally and on a stand-alone basis, employing limits, metrics, and stress testing, with the Parent Company's average daily LCR at **107%** for Q2 2025 and both the Parent Company and State Street Bank exceeding the **100% minimum NSFR** requirement. - Liquidity risk is managed through limits, metrics, early warning indicators, and routine stress testing, evaluating internal and external scenarios[197](index=197&type=chunk) - As a systemically important financial institution (G-SIB), State Street is subject to heightened regulatory liquidity requirements, including LCR and NSFR[200](index=200&type=chunk) **Liquidity Ratios (Q2 2025)** | Metric | Parent Company | State Street Bank | | :----- | :------------- | :---------------- | | Average Daily LCR | 107% | ~136% | | NSFR (as of June 30, 2025) | Above 100% | Above 100% | [Operational Risk Management](index=32&type=section&id=Operational%20Risk%20Management) Operational risk is defined as the risk of loss from inadequate or failed internal processes, people, systems, or external events, with global market volatility and geopolitical tensions potentially elevating operational and information technology risk exposures. - Operational risk is the risk of loss from inadequate or failed internal processes, people, and systems or from external events[229](index=229&type=chunk) - Volatility in global markets and geopolitical tensions can increase operational risk and information technology risk exposures, including cyber-threats[230](index=230&type=chunk) [Information Technology Risk Management](index=32&type=section&id=Information%20Technology%20Risk%20Management) Information technology risk encompasses risks associated with the use, ownership, operation, and adoption of IT, including non-compliance, security incidents, control gaps, and new technology adoption, where failures or attacks could result in significant costs and reputational damage. - Information technology risk is associated with the use, ownership, operation, and adoption of IT, including non-compliance, security incidents, and internal control gaps[232](index=232&type=chunk) - Failures, damage, attacks, or unauthorized access to IT systems could lead to significant costs, reputational damage, and impact business activities[233](index=233&type=chunk) [Market Risk Management](index=32&type=section&id=Market%20Risk%20Management) Market risk, defined as the risk of loss from broad market movements, is present in both trading and non-trading activities, with State Street using VaR and stressed VaR methodologies to measure trading-related market risk daily, reporting no back-testing exceptions in recent quarters. - Market risk is the risk of loss from broad market movements, such as changes in interest rates, credit spreads, and foreign exchange rates, affecting both trading and non-trading activities[234](index=234&type=chunk) - The company uses Value-at-Risk (VaR) and stressed VaR to measure trading-related market risk daily, with no back-testing exceptions in Q2 2025, Q1 2025, and Q2 2024[239](index=239&type=chunk)[248](index=248&type=chunk) **Ten-Day Value-at-Risk (VaR) Associated with Trading Activities (Q2 2025)** | Category | Average (Thousands) | Maximum (Thousands) | Minimum (Thousands) | | :---------------- | :------------------ | :------------------ | :------------------ | | State Street Markets | $6,256 | $9,700 | $4,100 | | Global Treasury | $2,688 | $5,416 | $571 | | Diversification | ($2,247) | ($5,387) | ($101) | | **Total VaR** | **$6,697** | **$9,729** | **$4,570** | **Ten-Day Stressed Value-at-Risk (Stressed VaR) Associated with Trading Activities (Q2 2025)** | Category | Average (Thousands) | Maximum (Thousands) | Minimum (Thousands) | | :---------------- | :------------------ | :------------------ | :------------------ | | State Street Markets | $45,081 | $94,077 | $22,994 | | Global Treasury | $10,520 | $15,811 | $5,363 | | Diversification | ($9,857) | ($12,500) | ($7,081) | | **Total Stressed VaR** | **$45,744** | **$97,388** | **$21,276** | [Model Risk Management](index=36&type=section&id=Model%20Risk%20Management) Model risk management aims to mitigate risks arising from the widespread use of sophisticated models in financial decision-making, as model failure could significantly impact financial performance. - Model risk management mitigates risks from the widespread use of models in financial decision-making, as model failure could harm financial performance[265](index=265&type=chunk) [Strategic Risk Management](index=36&type=section&id=Strategic%20Risk%20Management) Strategic risk is defined as the impact on earnings or capital from adverse business decisions, improper implementation of initiatives, or lack of responsiveness to industry changes, managed with a long-term focus through business plans, formal review processes, and stress-testing. - Strategic risk is the impact on earnings or capital from adverse business decisions, improper strategic implementation, or unresponsiveness to industry changes[267](index=267&type=chunk) - Strategic risk is managed with a long-term focus, incorporating business plans, formal review processes for new proposals, and assessment techniques like scenario analysis and stress-testing[270](index=270&type=chunk) [Capital](index=37&type=section&id=Capital) State Street manages its capital to ensure it is commensurate with its risk profile, complies with regulatory requirements, and provides financial flexibility for strategic initiatives, being subject to additional capital surcharges and buffers as a G-SIB. - Capital management ensures alignment with risk profile, regulatory compliance, and financial flexibility for strategic initiatives[271](index=271&type=chunk) - As a G-SIB, State Street is subject to additional capital surcharges and buffers, including a **2% SLR buffer** at the holding company and a **3% buffer** at State Street Bank[272](index=272&type=chunk) - CET1 capital increased by **$0.99 billion** as of June 30, 2025, compared to December 31, 2024, due to higher net income and improved AOCI, partially offset by dividends and share repurchases[292](index=292&type=chunk) - Total advanced approaches RWA increased by **$4.05 billion**, and total standardized approach RWA increased by **$11.40 billion** as of June 30, 2025, compared to December 31, 2024, mainly due to higher repo-style transactions and loan balances[299](index=299&type=chunk)[300](index=300&type=chunk) **Regulatory Capital Ratios (State Street Corporation, June 30, 2025)** | Ratio | Basel III Advanced Approaches | Basel III Standardized Approach | 2025 Minimum Requirements (Including Buffers) | | :-------------------- | :---------------------------- | :------------------------------ | :-------------------------------------------- | | Common equity tier 1 capital | 12.5% | 10.7% | 8.0% | | Tier 1 capital | 15.5% | 13.3% | 9.5% | | Total capital | 17.0% | 14.8% | 11.5% | | Tier 1 leverage | 5.3% | 5.3% | 4.0% | | Supplementary leverage ratio | 6.3% | 6.3% | N/A (buffer applies) | [Off-Balance Sheet Arrangements](index=45&type=section&id=Off-Balance%20Sheet%20Arrangements) State Street engages in off-balance sheet arrangements, primarily indemnified securities lending, where it indemnifies clients against borrower failure, with indemnified securities on loan totaling **$366.34 billion** as of June 30, 2025. - State Street indemnifies clients for the fair market value of securities lent in its securities lending program against borrower failure[325](index=325&type=chunk) **Indemnified Securities Financing (Millions)** | Metric | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Fair value of indemnified securities financing | $366,337 | $310,814 | | Fair value of collateral held by us, as agent | $383,573 | $325,611 | [Recent Accounting Developments](index=45&type=section&id=Recent%20Accounting%20Developments) State Street is evaluating recently issued accounting standards, including ASU 2024-03 (Income Statement - Expense Disaggregation Disclosures) and ASU 2023-09 (Income Taxes - Improvements to Income Tax Disclosures), not expecting a material impact from ASU 2023-09. - State Street is evaluating ASU 2024-03 (Income Statement - Expense Disaggregation Disclosures) and ASU 2023-09 (Income Taxes - Improvements to Income Tax Disclosures)[357](index=357&type=chunk) - The adoption of ASU 2023-09 is not expected to have a material impact on the company's financial statements[357](index=357&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the detailed market risk management disclosures provided earlier in the Management's Discussion and Analysis, specifically under the "Market Risk Management" section. - Quantitative and qualitative disclosures about market risk are incorporated by reference from the "Market Risk Management" section of the Management's Discussion and Analysis[329](index=329&type=chunk) [Controls and Procedures](index=46&type=section&id=Controls%20and%20Procedures) As of June 30, 2025, management, including the CEO and CFO, concluded that State Street's disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during Q2 2025. - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[330](index=330&type=chunk) - No material changes occurred in internal control over financial reporting during the quarter ended June 30, 2025[331](index=331&type=chunk) [Consolidated Financial Statements](index=47&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements of State Street Corporation for the periods ended June 30, 2025, including statements of income, comprehensive income, condition, changes in shareholders' equity, and cash flows, along with detailed notes on accounting policies and various financial components. [Consolidated Statement of Income (unaudited)](index=47&type=section&id=Consolidated%20Statement%20of%20Income%20(unaudited)) The unaudited Consolidated Statement of Income shows net income of **$693 million** for Q2 2025 and **$1,337 million** for H1 2025, with diluted EPS of **$2.17** for Q2 and **$4.21** for H1 2025. **Consolidated Statement of Income (Unaudited) - Key Figures** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | H1 2025 (Millions) | H1 2024 (Millions) | | :-------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Total fee revenue | $2,719 | $2,456 | $5,289 | $4,878 | | Net interest income | $729 | $735 | $1,443 | $1,451 | | Total revenue | $3,448 | $3,191 | $6,732 | $6,329 | | Provision for credit losses | $30 | $10 | $42 | $37 | | Total expenses | $2,529 | $2,269 | $4,979 | $4,782 | | Income before income tax expense | $889 | $912 | $1,711 | $1,510 | | Net income | $693 | $711 | $1,337 | $1,174 | | Net income available to common shareholders | $630 | $655 | $1,227 | $1,073 | | Diluted EPS | $2.17 | $2.15 | $4.21 | $3.52 | [Consolidated Statement of Comprehensive Income (unaudited)](index=48&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20(unaudited)) The unaudited Consolidated Statement of Comprehensive Income shows total comprehensive income of **$1,164 million** for Q2 2025 and **$2,116 million** for H1 2025, including net income and other comprehensive income (loss) components. **Consolidated Statement of Comprehensive Income (Unaudited) - Key Figures** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | H1 2025 (Millions) | H1 2024 (Millions) | | :-------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Net income | $693 | $711 | $1,337 | $1,174 | | Other comprehensive income (loss) | $471 | $55 | $779 | $40 | | **Total comprehensive income** | **$1,164** | **$766** | **$2,116** | **$1,214** | [Consolidated Statement of Condition](index=49&type=section&id=Consolidated%20Statement%20of%20Condition) The unaudited Consolidated Statement of Condition shows total assets of **$376,717 million** as of June 30, 2025, an increase from **$353,240 million** at December 31, 2024, with total liabilities and shareholders' equity also increasing. **Consolidated Statement of Condition (Unaudited) - Key Figures (Millions)** | Metric | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Cash and due from banks | $4,020 | $3,145 | | Interest-bearing deposits with banks | $118,835 | $112,957 | | Investment securities available-for-sale | $70,603 | $58,895 | | Investment securities held-to-maturity | $43,286 | $47,727 | | Loans (net of allowance) | $47,100 | $43,026 | | Goodwill | $7,918 | $7,691 | | Other intangible assets | $1,014 | $1,089 | | Other assets | $67,344 | $64,514 | | **Total assets** | **$376,717** | **$353,240** | | Non-interest-bearing deposits | $34,569 | $33,180 | | Interest-bearing deposits | $248,455 | $228,740 | | **Total deposits** | **$283,024** | **$261,920** | | Long-term debt | $25,911 | $23,272 | | **Total liabilities** | **$349,410** | **$327,914** | | Preferred stock | $3,559 | $2,816 | | Common stock | $504 | $504 | | Retained earnings | $30,373 | $29,582 | | Accumulated other comprehensive income (loss) | ($1,321) | ($2,100) | | Treasury stock, at cost | ($16,506) | ($16,198) | | **Total shareholders' equity** | **$27,307** | **$25,326** | [Consolidated Statement of Changes in Shareholders' Equity (unaudited)](index=50&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Shareholders'%20Equity%20(unaudited)) The unaudited Consolidated Statement of Changes in Shareholders' Equity shows an increase in total shareholders' equity to **$27,307 million** as of June 30, 2025, from **$25,326 million** at December 31, 2024, driven by net income and other comprehensive income, partially offset by common stock repurchases and dividends. **Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - Key Figures (Millions)** | Metric | Dec 31, 2024 | Mar 31, 2025 | Jun 30, 2025 | | :-------------------------------- | :----------- | :----------- | :----------- | | Balance, beginning of period | $25,326 | $26,692 | $26,692 | | Net income | $644 | $693 | $693 | | Other comprehensive income (loss) | $308 | $471 | $471 | | Preferred stock issued | $743 | $0 | $0 | | Common stock acquired | ($100) | ($303) | ($303) | | Cash dividends declared (Common) | ($220) | ($217) | ($217) | | Cash dividends declared (Preferred) | ($46) | ($63) | ($63) | | **Balance, end of period** | **$26,692** | **$27,307** | **$27,307** | [Consolidated Statement of Cash Flows (unaudited)](index=51&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows%20(unaudited)) The unaudited Consolidated Statement of Cash Flows shows net cash used in operating activities of **$6,045 million** for H1 2025, net cash used in investing activities of **$14,991 million**, and net cash provided by financing activities of **$21,911 million**, with cash and due from banks increasing by **$875 million** to **$4,020 million**. **Consolidated Statement of Cash Flows (Unaudited) - Key Figures (Millions)** | Activity | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | | Net cash used in operating activities | ($6,045) | ($8,488) | | Net cash used in investing activities | ($14,991) | ($22,174) | | Net cash provided by financing activities | $21,911 | $29,513 | | Net increase (decrease) in cash and due from banks | $875 | ($1,149) | | Cash and due from banks at end of period | $4,020 | $2,898 | [Note 1. Summary of Significant Accounting Policies](index=52&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines State Street's accounting and financial reporting policies, which conform to U.S. GAAP, emphasizing that the consolidated financial statements are unaudited and involve management estimates and assumptions. - State Street's accounting and financial reporting policies conform to U.S. GAAP[351](index=351&type=chunk) - The consolidated financial statements are unaudited and involve management estimates and assumptions[353](index=353&type=chunk)[354](index=354&type=chunk) - The company held accounts in Russia subject to sanctions, totaling approximately **$2.0 billion** as of June 30, 2025[356](index=356&type=chunk) [Note 2. Fair Value](index=52&type=section&id=Note%202.%20Fair%20Value) State Street carries various financial instruments at fair value on a recurring basis, including trading account assets/liabilities, AFS debt securities, and derivatives, categorized into a three-level valuation hierarchy based on the observability of market inputs. - Financial assets and liabilities carried at fair value on a recurring basis include trading account assets/liabilities, AFS debt securities, and derivative financial instruments[358](index=358&type=chunk) - Fair value measurements are categorized into a three-level valuation hierarchy based on the observability of market inputs[361](index=361&type=chunk) **Total Assets Carried at Fair Value (Millions)** | Category | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Trading account assets | $791 | $768 | | Available-for-sale investment securities | $70,603 | $58,895 | | Derivative instruments | $9,475 | $11,183 | | Other assets | $777 | $767 | | **Total assets carried at fair value** | **$81,646** | **$71,613** | [Note 3. Investment Securities](index=55&type=section&id=Note%203.%20Investment%20Securities) Investment securities are classified as trading, AFS, or HTM, with total amortized cost of AFS and HTM securities at **$70,552 million** and **$43,286 million**, respectively, as of June 30, 2025, and over **99%** of the portfolio is publicly rated investment grade. - Investment securities are classified as trading account assets, available-for-sale (AFS), or held-to-maturity (HTM)[368](index=368&type=chunk) - Over **99%** of the HTM and AFS investment portfolio is publicly rated investment grade as of June 30, 2025[384](index=384&type=chunk) - No allowance for credit losses was recorded on HTM and AFS investment securities as of June 30, 2025, and no provision or charge-offs were recorded in Q2 2025[384](index=384&type=chunk) **Investment Securities Amortized Cost and Fair Value (Millions)** | Security Type | Amortized Cost (June 30, 2025) | Fair Value (June 30, 2025) | Amortized Cost (Dec 31, 2024) | Fair Value (Dec 31, 2024) | | :-------------------------------- | :----------------------------- | :------------------------- | :---------------------------- | :-------------------------- | | **Available-for-sale:** | | | | | | U.S. Treasury and federal agencies | $41,791 | $41,678 | $34,238 | $34,091 | | Non-U.S. debt securities | $25,095 | $25,250 | $21,032 | $21,058 | | Asset-backed securities | $3,609 | $3,619 | $3,627 | $3,638 | | State and political subdivisions | $30 | $30 | $56 | $56 | | Other U.S. debt securities | $27 | $26 | $53 | $52 | | **Total available-for-sale** | **$70,552** | **$70,603** | **$59,006** | **$58,895** | | **Held-to-maturity:** | | | | | | U.S. Treasury and federal agencies | $37,589 | $32,854 | $41,518 | $35,788 | | Non-U.S. debt securities | $3,299 | $3,263 | $3,673 | $3,607 | | Asset-backed securities | $2,398 | $2,368 | $2,536 | $2,511 | | **Total held-to-maturity** | **$43,286** | **$38,485** | **$47,727** | **$41,906** | [Note 4. Loans and Allowance for Credit Losses](index=59&type=section&id=Note%204.%20Loans%20and%20Allowance%20for%20Credit%20Losses) Loans are segregated into commercial and financial, and commercial real estate segments, with total loans increasing to **$47,279 million** as of June 30, 2025, and the allowance for credit losses increasing to **$179 million**, reflecting macroeconomic conditions and commercial real estate loan loss reserves. - Loans are segregated into commercial and financial loans and commercial real estate loans, reflecting their risk characteristics and assessment methods[387](index=387&type=chunk) - The allowance for credit losses increased to **$192 million** as of June 30, 2025, primarily due to the evolving macroeconomic environment and increased loan loss reserves for certain commercial real estate loans[419](index=419&type=chunk) - Approximately **87%** of loans were rated as investment grade as of June 30, 2025[411](index=411&type=chunk) **Recorded Investment in Loans (Millions)** | Loan Segment | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Domestic Commercial and financial | $24,326 | $23,567 | | Domestic Commercial real estate | $2,551 | $2,842 | | Foreign Commercial and financial | $20,385 | $16,777 | | **Total loans** | **$47,262** | **$43,186** | | Allowance for credit losses | ($179) | ($174) | | **Loans, net of allowance** | **$47,100** | **$43,026** | [Note 5. Goodwill and Other Intangible Assets](index=64&type=section&id=Note%205.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill increased to **$7,918 million** as of June 30, 2025, from **$7,691 million** at December 31, 2024, primarily due to foreign currency translation, while other intangible assets decreased to **$1,014 million**, with amortization of **$110 million** in H1 2025. **Goodwill (Millions)** | Segment | Dec 31, 2023 | Dec 31, 2024 | Jun 30, 2025 | | :---------------- | :----------- | :----------- | :----------- | | Investment Servicing | $7,346 | $7,428 | $7,650 | | Investment Management | $265 | $263 | $268 | | **Total Goodwill** | **$7,611** | **$7,691** | **$7,918** | **Other Intangible Assets (Millions)** | Metric | Dec 31, 2023 | Dec 31, 2024 | Jun 30, 2025 | | :-------------------- | :----------- | :----------- | :----------- | | Ending balance | $1,320 | $1,089 | $1,014 | | Amortization (H1 2025) | N/A | N/A | ($110) | [Note 6. Other Assets](index=65&type=section&id=Note%206.%20Other%20Assets) Other assets totaled **$67,344 million** as of June 30, 2025, up from **$64,514 million** at December 31, 2024, with key components including securities borrowed (**$39,952 million**), derivative instruments (**$9,475 million**), and bank-owned life insurance (**$3,911 million**). **Components of Other Assets (Millions)** | Asset Type | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Securities borrowed | $39,952 | $37,451 | | Derivative instruments, net | $9,475 | $11,183 | | Bank-owned life insurance | $3,911 | $3,856 | | Collateral, net | $3,710 | $3,216 | | Investments in joint ventures and other unconsolidated entities | $3,342 | $3,317 | | Right-of-use assets | $875 | $818 | | Prepaid expenses | $866 | $738 | | Deferred tax assets, net | $691 | $701 | | Receivable for securities settlement | $431 | $57 | | Income taxes receivable | $416 | $144 | | Accounts receivable | $294 | $504 | | Other | $3,381 | $2,529 | | **Total** | **$67,344** | **$64,514** | [Note 7. Derivative Financial Instruments](index=66&type=section&id=Note%207.%20Derivative%20Financial%20Instruments) State Street uses derivative financial instruments for client needs and risk management, including FX contracts and interest rate contracts, with notional amounts of derivatives not designated as hedging instruments totaling **$3.16 trillion** as of June 30, 2025, primarily foreign exchange forward, swap, and spot contracts. - Derivative financial instruments are used to support client needs and manage interest rate, currency, and other market risks[426](index=426&type=chunk) - The aggregate fair value of derivatives with credit contingent features in a net liability position was approximately **$5.75 billion** as of June 30, 2025, with a maximum additional collateral requirement of **$3.73 billion** if triggered[444](index=444&type=chunk) **Notional Amounts of Derivative Financial Instruments (Millions)** | Derivative Type | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | **Not designated as hedging instruments:** | | | | Foreign exchange contracts (Forward, swap and spot) | $3,046,843 | $2,612,945 | | Interest rate contracts (Futures) | $64,124 | $47,222 | | Stable value contracts | $18,894 | $25,271 | | **Designated as hedging instruments:** | | | | Interest rate contracts (Swap agreements) | $41,540 | $33,302 | | Foreign exchange contracts (Forward and swap) | $11,056 | $10,260 | [Note 8. Offsetting Arrangements](index=69&type=section&id=Note%208.%20Offsetting%20Arrangements) State Street nets derivatives and cash collateral from the same counterparty in its consolidated statement of condition when legally binding master netting agreements exist, with the value of securities received as collateral that can be re-pledged totaling **$4.90 billion** as of June 30, 2025. - Derivatives receivable/payable and cash collateral are netted in the consolidated statement of condition under legally binding master netting agreements[443](index=443&type=chunk) - As of June 30, 2025, the value of securities received as collateral from third parties that could be transferred or re-pledged totaled **$4.90 billion**[446](index=446&type=chunk) [Note 9. Commitments and Guarantees](index=72&type=section&id=Note%209.%20Commitments%20and%20Guarantees) Off-balance sheet commitments and guarantees include unfunded credit facilities totaling **$35,127 million** as of June 30, 2025, with approximately **71%** expiring within one year, and indemnified securities financing amounting to **$366,337 million**. - Approximately **71%** of unfunded commitments to extend credit expire within one year as of June 30, 2025[456](index=456&type=chunk) - As a sponsoring member in FICC, State Street provides a guarantee for customer obligations, mitigating risk through security interests in collateral[459](index=459&type=chunk) **Off-Balance Sheet Commitments and Guarantees (Millions)** | Type | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Unfunded credit facilities | $35,127 | $34,191 | | Indemnified securities financing | $366,337 | $310,814 | | Standby letters of credit | $780 | $908 | [Note 10. Contingencies](index=72&type=section&id=Note%2010.%20Contingencies) State Street is involved in various legal and regulatory matters, with aggregate accruals for loss contingencies totaling approximately **$6 million** as of June 30, 2025, and an estimated aggregate reasonably possible loss (in excess of accrued amounts) ranging up to **$45 million** for certain matters. - State Street is involved in disputes, litigation, and governmental/regulatory inquiries, with resolutions inherently difficult to predict[462](index=462&type=chunk) - As of June 30, 2025, aggregate accruals for loss contingencies for legal, regulatory, and related matters totaled approximately **$6 million**[466](index=466&type=chunk) - The estimated aggregate reasonably possible loss (in excess of accrued amounts) for certain matters ranges up to approximately **$45 million** as of June 30, 2025[467](index=467&type=chunk) - Significant legal matters include Edmar Financial Company, LLC et al v. Currenex, Inc. et al, Pension Risk Transfer Litigation, German Tax Matter, and State of Texas et al v. Blackrock, Inc. et al[471](index=471&type=chunk)[472](index=472&type=chunk)[475](index=475&type=chunk)[476](index=476&type=chunk) [Note 11. Variable Interest Entities](index=74&type=section&id=Note%2011.%20Variable%20Interest%20Entities) State Street manages certain investment funds and holds investments in low-income housing and production tax credit entities, which are considered VIEs, with potential maximum loss exposure related to unconsolidated funds of **$22 million** and for unconsolidated tax credit entities of **$1.02 billion** as of June 30, 2025. - State Street manages certain investment funds and holds investments in low-income housing and production tax credit entities, which are considered Variable Interest Entities (VIEs)[480](index=480&type=chunk)[481](index=481&type=chunk) **Potential Maximum Loss Exposure from Unconsolidated VIEs (Millions)** | Type of VIE | June 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Investment Funds | $22 | $19 | | Low-income housing and production tax credit entities | $1,020 | $1,100 | [Note 12. Shareholders' Equity](index=75&type=section&id=Note%2012.%20Shareholders'%20Equity) Total shareholders' equity increased to **$27,307 million** as of June 30, 2025, with this note detailing preferred stock issuances, common stock repurchases, and dividends, including **$300 million** of common stock repurchased and common stock dividends of **$0.76 per share** declared in Q2 2025. - In Q2 2025, State Street repurchased **$300 million** of common stock under its 2024 share repurchase program[491](index=491&type=chunk) **Preferred Stock Issued and Outstanding (June 30, 2025)** | Series | Issuance Date | Amount Outstanding (Millions) | Per Annum Dividend Rate | Redemption Date | | :----- | :------------ | :---------------------------- | :---------------------- | :-------------- | | G | April 2016 | $500 | 5.35% | March 15, 2026 | | I | January 2024 | $1,500 | 6.700% (fixed-to-floating) | March 15, 2029 | | J | July 2024 | $850 | 6.700% (fixed-to-floating) | September 15, 2029 | | K | February 2025 | $750 | 6.450% (fixed-to-floating) | September 15, 2030 | **Common Stock Dividends Declared** | Period | Dividends Declared per Share | Total (Millions) | | :----- | :--------------------------- | :--------------- | | Q2 2025 | $0.76 | $217 | | Q2 2024 | $0.69 | $207 | | H1 2025 | $1.52 | $437 | | H1 2024 | $1.38 | $415 | [Note 13. Regulatory Capital](index=78&type=section&id=Note%2013.%20Regulatory%20Capital) State Street and State Street Bank exceeded all regulatory capital adequacy requirements as of June 30, 2025, with State Street Bank categorized as "well capitalized," and the company is subject to the U.S. Basel III framework and a G-SIB surcharge. - State Street and State Street Bank exceeded all regulatory capital adequacy requirements as of June 30, 2025, with State Street Bank categorized as "well capitalized"[497](index=497&type=chunk) **Regulatory Capital Ratios (State Street Corporation, June 30, 2025)** | Ratio | Basel III Advanced Approaches | Basel III Standardized Approach | 2025 Minimum Requirements (Including Buffers) | | :-------------------- | :---------------------------- | :------------------------------ | :-------------------------------------------- | | Common equity tier 1 capital | 12.5% | 10.7% | 8.0% | | Tier 1 capital | 15.5% | 13.3% | 9.5% | | Total capital | 17.0% | 14.8% | 11.5% | | Tier 1 leverage | 5.3% | 5.3% | 4.0% | [Note 14. Net Interest Income](index=79&type=section&id=Note%2014.%20Net%20Interest%20Income) This note provides a detailed breakdown of interest income and interest expense, showing total interest income of **$3,055 million** and total interest expense of **$2,326 million** for Q2 2025, resulting in net interest income of **$729 million**. **Net Interest Income Components (Millions)** | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Interest-bearing deposits with banks | $792 | $929 | $1,561 | $1,927 | | Total investment securities | $987 | $949 | $1,952 | $1,815 | | Securities purchased under resale agreements | $179 | $166 | $344 | $333 | | Loans | $574 | $563 | $1,130 | $1,109 | | Other interest-earning assets | $523 | $391 | $990 | $703 | | **Total interest income** | **$3,055** | **$2,998** | **$5,977** | **$5,887** | | Interest-bearing deposits | $1,693 | $1,637 | $3,259 | $3,277 | | Securities sold under repurchase agreements | $35 | $43 | $86 | $82 | | Other short-term borrowings | $114 | $167 | $250 | $268 | | Long-term debt | $322 | $267 | $619 | $525 | | Other interest-bearing liabilities | $162 | $149 | $320 | $284 | | **Total interest expense** | **$2,326** | **$2,263** | **$4,534** | **$4,436** | | **Net interest income** | **$729** | **$735** | **$1,443** | **$1,451** | [Note 15. Expenses](index=79&type=section&id=Note%2015.%20Expenses) This note provides a detailed breakdown of other expenses and repositioning charges, with total other expenses of **$305 million** and a **$100 million repositioning charge** recorded for workforce rationalization in Q2 2025. - A **$100 million repositioning charge** related to compensation and employee benefits from workforce rationalization was recorded in Q2 2025[504](index=504&type=chunk) **Components of Other Expenses (Millions)** | Expense Type | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Professional services | $107 | $111 | $217 | $221 | | Sales advertising and public relations | $39 | $34 | $64 | $59 | | Regulatory fees and assessments | $13 | $9 | $26 | $150 | | Donations | $8 | $1 | $12 | $26 | | Other | $109 | $112 | $216 | $213 | | **Total other expenses** | **$305** | **$300** | **$581** | **$718** | [Note 16. Earnings Per Common Share](index=80&type=section&id=Note%2016.%20Earnings%20Per%20Common%20Share) This note details the computation of basic and diluted EPS, with basic EPS at **$2.20** and diluted EPS at **$2.17** for Q2 2025, and basic EPS at **$4.27** and diluted EPS at **$4.21** for H1 2025. **Earnings Per Common Share (Unaudited)** | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net income available to common shareholders (Millions) | $630 | $655 | $1,227 | $1,073 | | Basic EPS | $2.20 | $2.18 | $4.27 | $3.56 | | Diluted EPS | $2.17 | $2.15 | $4.21 | $3.52 | | Average common shares outstanding (Basic, thousands) | 286,281 | 300,564 | 287,415 | 301,278 | | Average common shares outstanding (Diluted, thousands) | 290,490 | 304,765 | 291,596 | 305,354 | [Note 17. Line of Business Information](index=80&type=section&id=Note%2017.%20Line%20of%20Business%20Information) This note provides a summary of financial results for State Street's two reportable segments: Investment Servicing and Investment Management, along with unallocated "Other" amounts, which the Chief Executive Officer uses to evaluate performance and allocate resources. - State Street's operations are organized into two reportable segments: Investment Servicing and Investment Management[507](index=507&type=chunk) - The Chief Executive Officer (CODM) uses line of business results to evaluate performance and allocate resources[508](index=508&type=chunk) **Line of Business Income Before Tax Expense (Millions)** | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | Investment Servicing | $819 | $734 | $1,476 | $1,331 | | Investment Management | $208 | $179 | $373 | $310 | | Other | ($138) | ($1) | ($138) | ($131) | | **Total** | **$889** | **$912** | **$1,711** | **$1,510** | [Note 18. Revenue from Contracts with Customers](index=82&type=section&id=Note%2018.%20Revenue%20from%20Contracts%20with%20Customers) This note disaggregates revenue by line of business and revenue stream, distinguishing between Topic 606 revenue and other revenue, with total remaining non-cancellable performance obligations of approximately **$2.19 billion** as of June 30, 2025. - Revenue is disaggregated by two lines of business and by revenue stream, distinguishing between Topic 606 revenue and other revenue[517](index=517&type=chunk) - As of June 30, 2025, total remaining non-cancellable performance obligations for services and products not yet delivered were approximately **$2.19 billion**[524](index=524&type=chunk) - Approximately half of the remaining non-cancellable performance obligations are expected to be recognized in revenue over the next three years[524](index=524&type=chunk) [Note 19. Non-U.S. Activities](index=84&type=section&id=Note%2019.%20Non-U.S.%20Activities) This note presents financial results for non-U.S. activities, defined as revenue-producing business activities from clients serviced or managed outside the U.S., with non-U.S. total revenue of **$2,856 million** and income before income tax expense of **$665 million** for H1 2025. - Non-U.S. activities are defined as revenue-producing business activities from clients serviced or managed outside the U.S[526](index=526&type=chunk) - Non-U.S. assets were **$100.52 billion** as of June 30, 2025, up from **$80.95 billion** in 2024[530](index=530&type=chunk) **Non-U.S. Financial Results (Millions)** | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Total revenue | $1,474 | $1,388 | $2,856 | $2,732 | | Income before income tax expense | $356 | $351 | $665 | $642 | [Review Report of Independent Registered Public Accounting Firm](index=85&type=section&id=Review%20Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP reviewed the unaudited condensed consolidated interim financial statements for State Street Corporation and found no material modifications needed for conformity with U.S. GAAP, also confirming their unqualified audit opinion on the consolidated financial statements as of December 31, 2024. - Ernst & Young LLP reviewed the unaudited condensed consolidated interim financial statements and found no material modifications needed for conformity with U.S. GAAP[533](index=533&type=chunk) - An unqualified audit opinion was expressed on the consolidated financial statements as of December 31, 2024[534](index=534&type=chunk) [PART II. OTHER INFORMATION](index=88&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=88&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) State Street repurchased **$300 million** of its common stock in Q2 2025 under the **$5.0 billion** common share repurchase program approved in January 2024, which has no set expiration date and is not expected to be fully executed in 2025. - State Street repurchased **$300 million** of common stock in Q2 2025 under its **$5.0 billion** 2024 share repurchase program[559](index=559&type=chunk) **Common Share Repurchase Activity (Q2 2025)** | Period | Shares Acquired (Millions) | Average Cost per Share | Total Acquired (Millions) | | :-------------------- | :------------------------- | :--------------------- | :------------------------ | | April 1 - April 30, 2025 | 3.497 | $85.78 | $300 | | May 1 - May 31, 2025 | — | — | — | | June 1 - June 30, 2025 | — | — | — | | **Total** | **3.497** | **$85.78** | **$300** | [Item 5. Other Information](index=88&type=section&id=Item%205.%20Other%20Information) This section discusses securities trading plans of directors and executive officers, noting that a significant portion of executive compensation is in deferred equity awards, and that no executive officers or directors adopted or terminated a Rule 10b5-1 trading plan in Q2 2025. - Executive compensation includes deferred equity awards, aligning with shareholder performance[562](index=562&type=chunk) - Executive officers may use Rule 10b5-1 trading plans for securities transactions[563](index=563&type=chunk) - No executive officers or directors adopted or terminated a Rule 10b5-1 trading plan or non-Rule 10b5-1 trading arrangement in Q2 2025[564](index=564&type=chunk) [Item 6. Exhibits](index=89&type=section&id=Item%206.%20Exhibits) This item lists the exhibits filed with the Form 10-Q, including employment agreements, compensation arrangements, certifications, and Inline XBRL documents for the financial statements. - Exhibits include employment agreements, compensation arrangements, certifications (Rule 13a-14(a)/15d-14(a) and Section 1350), and Inline XBRL documents for financial statements[568](index=568&type=chunk)

Report Industry Investment Rating No information provided in the report. Core Viewpoints of the Report - Last week in the US, 37 new ETF products were issued, with an acceleration in issuance, including products that both increase and decrease concentration. The factor rotation ETF had inflows of over $1 billion, and Bitcoin products outperformed Ethereum products. In May 2025, the total non - money public funds in the US increased, and from July 2nd to 9th, domestic stock funds had outflows while bond products had inflows [2]. Summary According to the Table of Contents 1. US ETF Innovation Products: Products with Increased and Decreased Concentration Issued Simultaneously - 37 new products were issued last week, involving series products from multiple companies. Direxion, Leverage Shares, etc. expanded single - stock leveraged and inverse products. WEBs issued the Defined Volatility series products. Invesco and Janus Henderson issued bond products. Crossmark issued large - cap growth and value ETFs, and Defiance issued an AI and power infrastructure ETF. Roundhill expanded its weekly leveraged + dividend ETFs [5][6][7]. - Xtrackers issued an industry - diversified product, SPXD, which tracks the S&P 500 Diversified Sector Weight Index and distributes weights based on sub - industry revenues. Its first - largest weighted stock is Berkshire Hathaway, with a weight of about 3.7%, and the weights of other stocks are below 2%. Global X issued the PureCap series products to address US regulatory restrictions on ETF shareholding ratios [8][11][12]. 2. US ETF Dynamics 2.1 US ETF Funds: Factor Rotation ETF Inflows Exceeded $1 Billion - Last week, stock ETFs had inflows of over $16 billion, with similar inflows for domestic and international stocks. Bond ETFs had more domestic inflows than international ones, and Bitcoin and commodity ETFs continued to have inflows. The factor rotation products had single - week inflows of over $1 billion and their current scale has exceeded $20 billion. The top out - flowing products were mainly S&P 500 ETFs from State Street and BlackRock [13][14]. 2.2 US ETF Performance: Bitcoin Products Outperformed Ethereum - Since the beginning of this year, the cryptocurrency market has attracted attention. The total scale of relevant US ETFs has exceeded $150 billion. The BlackRock Bitcoin ETF is close to $90 billion, and the BlackRock Ethereum ETF exceeds $10 billion. Bitcoin has a year - to - date increase of about 25%, while Ethereum products have an increase of less than 10%, and BlackRock's products have relatively good performance [17]. 3. Recent Capital Flows of US Ordinary Public Funds - In May 2025, the total non - money public funds in the US were $21.91 trillion, an increase of $0.85 trillion from April 2025. The S&P 500 rose 6.15% in May, and the scale of domestic US equity products increased by 5.49%, slightly lower than the stock increase. From July 2nd to 9th, domestic US stock funds had total outflows of about $7.5 billion, and bond product inflows expanded to $7.58 billion [21].

Core Viewpoint - The signing of the GENIUS Act by President Trump is paving the way for the issuance and regulation of stablecoins in the U.S., which may disrupt traditional banking systems in the next 2 to 3 years [1][2]. Legislative Developments - The GENIUS Act establishes a preliminary framework for stablecoin issuance and regulation, while the CLARITY Act aims to clarify the jurisdiction of the SEC and CFTC over the crypto market [1]. - These legislative advancements signify a shift in focus from policy debates to the actual construction of infrastructure in the digital asset market [2]. Market Growth Projections - The stablecoin market is expected to see moderate growth of approximately $25 billion to $75 billion in the short term, which will likely increase demand for U.S. Treasury securities, particularly short-term bills [2]. Banking Sector Response - U.S. banks are preparing for the stablecoin era, with management expressing readiness to offer stablecoin solutions, although there are concerns regarding specific use cases, especially in domestic payment scenarios [3]. - Major banks like JPMorgan and Citigroup are exploring stablecoin capabilities, with JPMorgan launching its deposit token (JPMD) and Citigroup investing in digital asset services [6][7]. Cross-Border Payment Opportunities - Despite skepticism about domestic applications, bank executives see viable use cases for stablecoins in cross-border payments, with some banks viewing this as a "greenfield" market [4]. Short-Term Impact on Domestic Payments - Most banks anticipate minimal short-term impact on their core domestic payment businesses from stablecoins, although competition in cash management services may intensify [5]. Bank Comments on Stablecoins - JPMorgan is actively entering the stablecoin and digital asset space, while Bank of America acknowledges small cross-border payments as a realistic application [6]. - Citigroup is focusing on tokenized services, despite high transaction costs for converting between fiat and stablecoins [6][7]. Digital Asset Applications - Banks are exploring four main application scenarios for digital assets: reserve management and custody services for stablecoins, transaction services, issuing their own stablecoins, and tokenized deposits [7][8]. Future Outlook - Various banks, including PNC and M&T, are developing digital asset services and assessing the feasibility of stablecoins as payment mechanisms, indicating a growing interest in the sector [9].

Core Insights - The signing of the GENIUS Act by President Trump is paving the way for the issuance and regulation of stablecoins in the U.S., which may disrupt traditional banking systems in the next 2 to 3 years [1] - The CLARITY Act, which delineates the jurisdiction of the SEC and CFTC over the crypto market, has also passed the House and is now under Senate review, indicating a significant regulatory shift [1] - A report from Bank of America predicts a moderate growth of $25 billion to $75 billion in the stablecoin market, which is expected to increase demand for U.S. Treasury securities, particularly short-term bills [1] Group 1: Regulatory Developments - The GENIUS Act establishes an initial framework for stablecoin issuance and regulation, marking a significant regulatory breakthrough [1] - The CLARITY Act aims to clarify the roles of the SEC and CFTC in overseeing the crypto market, further solidifying the regulatory landscape [1] Group 2: Banking Sector Response - U.S. banks are preparing for the stablecoin era, with management expressing readiness to offer stablecoin solutions, although there are doubts about specific use cases, particularly in domestic payment scenarios [2] - Major banks like JPMorgan and Citigroup are exploring stablecoin capabilities, with JPMorgan launching its deposit token (JPMD) and Citigroup investing in digital asset services [5] Group 3: Cross-Border Payment Opportunities - Despite skepticism regarding domestic applications, bank executives see viable use cases for stablecoins in cross-border payments, with Bank of America highlighting small cross-border transactions as a realistic application [3] - Banks are closely monitoring developments in stablecoins and are prepared to act quickly if customer demand increases, indicating a proactive approach to potential market changes [3]

Core Viewpoint - State Street and BlackRock, two of the largest global financial institutions, reported strong Q2 earnings, raising questions about which asset manager presents a better investment opportunity at the moment [1][2][3]. Group 1: State Street's Q2 Performance - State Street reported Q2 earnings of $2.53 per share, exceeding the Zacks EPS Consensus of $2.36 by 7% and marking a 17% increase from $2.15 in the same quarter last year [4]. - The company achieved record Q2 sales of $3.44 billion, an 8% increase from $3.19 billion a year ago, surpassing estimates of $3.37 billion [4]. - Fee revenue for State Street spiked 12%, driven by servicing, management, and software fees, alongside a 27% surge in FX trading volumes [5]. Group 2: BlackRock's Q2 Performance - BlackRock's Q2 EPS was $12.05, beating expectations of $10.71 by 12% and increasing 16% from $10.36 in the same quarter last year [6]. - The company's sales reached $5.42 billion, which, while a 13% increase from $4.8 billion in Q2 2024, fell short of estimates of $5.44 billion [6]. - BlackRock generated 7% organic base fee growth and over $650 billion in net inflows, attributed to record inflows for its iShares ETFs and expansions in private markets [7]. Group 3: Assets Under Management (AUM) - Both State Street and BlackRock achieved record AUM, with State Street's AUM increasing 17% year over year to $5.1 trillion, while BlackRock's AUM rose 18% to $12.53 trillion, making it the first asset manager to surpass $12 trillion [10]. Group 4: Dividend and Valuation Comparison - State Street announced an 11% increase in its quarterly dividend to $0.84 per share, resulting in a current dividend yield of 2.98%, which is higher than BlackRock's 1.99% [11]. - State Street trades at a forward earnings multiple of 10.5X, significantly lower than BlackRock's 22.5X and the S&P 500's 24.1X [13]. Group 5: Investment Outlook - Both State Street and BlackRock stocks have seen gains of over 4% year to date and more than 20% over the last year, indicating their viability as investments [14]. - State Street holds a Zacks Rank 1 (Strong Buy), making it an appealing option due to its dividend and P/E valuation, while BlackRock has a Zacks Rank 2 (Buy) and excels in technology and data-driven strategies [15].