State Street(STT) - 2024 Q1 - Quarterly Report

Financial Performance - Total fee revenue for Q1 2024 was $2,422 million, a 4$2,335 million in Q1 2023[32]. - Net interest income decreased by 7% to $716 million in Q1 2024 from$766 million in Q1 2023[32]. - Total revenue increased by 1% to $3,138 million in Q1 2024 compared to$3,101 million in Q1 2023[32]. - Net income available to common shareholders decreased by 20% to $418 million in Q1 2024 from$525 million in Q1 2023[32]. - Earnings per share (EPS) for Q1 2024 was $1.37, a 10$1.54 in Q1 2023[34]. - Total expenses increased by 6% to $2,513 million in Q1 2024, with approximately 5$27 million in Q1 2024, down from $44 million in Q1 2023[36]. - Return on average common equity was 7.7$308 million to shareholders through common share repurchases and dividends in Q1 2024[34]. Assets and Management - As of March 31, 2024, State Street Corporation reported total assets of $338.00 billion and total deposits of$251.88 billion[11]. - The company has $43.91 trillion in assets under custody/administration (AUC/A) and$4.34 trillion in assets under management (AUM) as of March 31, 2024[10]. - Consolidated total shareholders' equity stood at $24.43 billion, with approximately 46,000 employees[11]. - Total assets under custody and/or administration (AUC/A) reached$43.912 billion as of March 31, 2024, up from $41.810 billion at the end of 2023 and$37.635 billion a year earlier[68]. - As of March 31, 2024, total assets under management (AUM) were $4.336 billion, an increase from$4.128 billion at the end of 2023 and $3.618 billion a year earlier[81]. - Assets under management (AUM) increased by 20$4.3 trillion as of March 31, 2024, driven by higher market levels and net inflows[45]. - The geographic distribution of AUC/A as of March 31, 2024, was $31.610 billion in the Americas,$9.207 billion in Europe/Middle East/Africa, and $3.095 billion in Asia/Pacific[70]. Revenue Sources - Management fee revenue rose by 12$510 million, driven by higher average market levels[45]. - Software and processing fees revenue surged by 25% in Q1 2024 to $207 million, primarily due to higher front office software and data revenue[45]. - Servicing fees rose by 1$1,228 million in Q1 2024, influenced by higher average market levels, despite pricing headwinds and lower client activity[150][151]. - Total revenue for Investment Management grew by 9% to $551 million in Q1 2024, compared to$505 million in Q1 2023[154]. - Total revenue for Investment Servicing was stable at $2,587 million in Q1 2024, slightly down from$2,596 million in Q1 2023[150]. Competition and Risks - State Street faces intense competition and pricing pressure, which could negatively impact profitability and financial results[25]. - The company is subject to various strategic risks, including the integration and retention of benefits from acquisitions and joint ventures[25]. - Management's forward-looking statements indicate expectations regarding business growth and market conditions, which are subject to various risks and uncertainties[23]. Regulatory and Compliance - The company emphasizes the importance of regulatory capital and conducts annual stress tests under the Dodd-Frank Act[19]. - State Street's financial statements are prepared in conformity with U.S. GAAP, with certain non-GAAP measures used for internal evaluation[17]. - The standardized CET1 capital ratio decreased to 11.1% as of March 31, 2024, from 11.6% at the end of 2023[46]. Employee and Operational Metrics - Total headcount increased by 7% to 45,871 employees as of March 31, 2024, reflecting the consolidation of operations in India[135]. - Operating leverage was negative 4.9% in Q1 2024, primarily due to the increase in the FDIC special assessment[34]. Investment Securities and Loans - The total carrying value of available-for-sale securities increased to $48.64 billion from$44.53 billion as of December 31, 2023, representing an increase of approximately 9.5%[163]. - The total fair value of held-to-maturity securities decreased to $52.91 billion as of March 31, 2024, down from$57.12 billion as of December 31, 2023, a decline of about 7.7%[163]. - As of March 31, 2024, total loans increased to $38.635 billion from$36.631 billion as of December 31, 2023, representing a growth of approximately 5.5%[176]. - Domestic loans rose to $23.527 billion, up from$23.065 billion, driven by increases in fund finance loans, leveraged loans, and overdrafts[176]. - Foreign loans increased to $15.108 billion from$13.566 billion, primarily due to growth in fund finance loans, overdrafts, and collateralized loan obligations[176].