0000093751us-gaap:MaterialReconcilingItemsMemberstt:AccountServicingMember2021-04-012021-06-30

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of ~~April 25,~~July 26, 2022 was ~~367,115,210.~~367,619,359.


		Page

PART I	FINANCIAL INFORMATION
	Management's Discussion and Analysis of Financial Condition and Results of Operations	4
	General	4
	Overview of Financial Results	78
	Consolidated Results of Operations	10
	Total Revenue	1011
	Net Interest Income	1820
	Provision for Credit Losses	2023
	Expenses	2123
	Acquisition Costs	2124
	Restructuring and Repositioning Charges	2124
	Income Tax Expense	2124
	Line of Business Information	2224
	Investment Servicing	2326
	Investment Management	2327
	Financial Condition	2427
	Investment Securities	2528
	Loans	2731
	Cross-Border Outstandings	2832
	Risk Management	2832
	Credit Risk Management	2933
	Liquidity Risk Management	2933
	Operational Risk Management	3337
	Information Technology Risk Management	3337
	Market Risk Management	3438
	Model Risk Management	3842
	Strategic Risk Management	3842
	Capital	3943
	Off-Balance Sheet Arrangements	4652

	Recent Accounting Developments	4652
	Quantitative and Qualitative Disclosures About Market Risk	4753
	Controls and Procedures	4753
	Consolidated Financial Statements	4854
	Consolidated Statement of Income (unaudited)	4854
	Consolidated Statement of Comprehensive Income (loss) (unaudited)	4955
	Consolidated Statement of Condition	5056
	Consolidated Statement of Changes in Shareholders' Equity (unaudited)	5157
	Consolidated Statement of Cash Flows (unaudited)	5258
	Note 1. Summary of Significant Accounting Policies	5359
	Note 2. Fair Value	5360
	Note 3. Investment Securities	5866
	Note 4. Loans and Allowance for Credit Losses	6271
	Note 5. Goodwill and Other Intangible Assets	6776

State Street Corporation | 2


	Note 6. Other Assets	6878
	Note 7. Derivative Financial Instruments	6979
	Note 8. Offsetting Arrangements	7384
	Note 9. Commitments and Guarantees	7586
	Note 10. Contingencies	7687
	Note 11. Variable Interest Entities	7889
	Note 12. Shareholders' Equity	7889
	Note 13. Regulatory Capital	8193
	Note 14. Net Interest Income	8294
	Note 15. Expenses	8294
	Note 16. Earnings Per Common Share	8395
	Note 17. Line of Business Information	8395
	Note 18. Revenue From Contracts with Customers	8496
	Note 19. Non-U.S. Activities	8598
	Review Report of Independent Registered Public Accounting Firm	8699

PART II	OTHER INFORMATION
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	89102
Item 5	Other Information	102
Item 6	Exhibits	90103
	Signatures	91104

We use acronyms and other defined terms for certain business terms and abbreviations, as defined in the acronyms list and glossary following the consolidated financial statements in this Form 10-Q.

State Street Corporation | 3

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

PART I. FINANCIAL INFORMATION

State Street Corporation, referred to as the Parent Company, is a financial holding company organized in 1969 under the laws of the Commonwealth of Massachusetts. Our executive offices are located at One Lincoln Street, Boston, Massachusetts 02111 (telephone (617) 786-3000). For purposes of this Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~June 30, 2022 (Form 10-Q), unless the context requires otherwise, references to "State Street," "we," "us," "our" or similar terms mean State Street Corporation and its subsidiaries on a consolidated basis. The Parent Company is a source of financial and managerial strength to our subsidiaries. Through our subsidiaries, including our principal banking subsidiary, State Street Bank and Trust Company, referred to as State Street Bank, we provide a broad range of financial products and services to institutional investors worldwide, with ~~$41.72~~$38.18 trillion of AUC/A and ~~$4.02~~$3.48 trillion of AUM as of ~~March 31,~~June 30, 2022.

As of ~~March 31,~~June 30, 2022, we had consolidated total assets of ~~$322.35~~$300.22 billion, consolidated total deposits of ~~$251.04~~$241.91 billion, consolidated total shareholders' equity of ~~$26.22~~$25.77 billion and ~~39,335~~ 40,354 employees. We operate in more than 100 geographic markets worldwide, including in the U.S., Canada, Europe, the Middle East and Asia.

Our operations are organized into two lines of business, Investment Servicing and Investment Management, which are defined based on products and services provided.

Additional information about our lines of business is provided in Line of Business Information in this Management's Discussion and Analysis and Note 17 to the consolidated financial statements in this Form 10-Q.

This Management's Discussion and Analysis is part of the Form 10-Q and updates the Management's Discussion and Analysis in our 2021 Annual Report on Form 10-K for the year ended December 31, 2021 previously filed with the SEC (2021 Form 10-K). You should read the financial information contained in this Management's Discussion and Analysis and elsewhere in this Form 10-Q in conjunction with the financial and other information contained in our 2021 Form 10-K. Certain previously reported amounts presented in this Form 10-Q have been reclassified to conform to current-period presentation.

We prepare our consolidated financial statements in conformity with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates

and assumptions in its application of certain accounting policies that materially affect the reported amounts of assets, liabilities, equity, revenue and expenses.

The significant accounting policies that require us to make judgments, estimates and assumptions that are difficult, subjective or complex about matters that are uncertain and may change in subsequent periods include:

•accounting for fair value measurements;

•allowance for credit losses;

•impairment of goodwill and other intangible assets;

•~~contingencies;~~ and

•~~allowance for credit losses.~~contingencies.

These significant accounting policies require the most subjective or complex judgments, and underlying estimates and assumptions could be subject to revision as new information becomes available. For additional information about these significant accounting policies refer to pages 124 to 126, “Significant Accounting Estimates” included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our 2021 Form 10-K. We did not change these significant accounting policies in the first ~~three~~six months of 2022.

Certain financial information provided in this Form 10-Q, including in this Management's Discussion and Analysis, is prepared on both a U.S. GAAP, or reported basis, and a non-GAAP basis. We measure and compare certain financial information on a non-GAAP basis, including information that management uses in evaluating our business and activities. Non-GAAP financial information should be considered in addition to, and not as a substitute for or superior to, financial information prepared in conformity with U.S. GAAP. Any non-GAAP financial information presented in this Form 10-Q, including this Management’s Discussion and Analysis, is reconciled to its most directly comparable U.S. GAAP-basis measure.

We further believe that our presentation of FTE NII, a non-GAAP measure, which reports non-taxable revenue, such as interest income associated with tax-exempt investment securities, on a FTE basis, facilitates an investor's understanding and analysis of our underlying financial performance and trends.

We provide additional disclosures required by applicable bank regulatory standards, including supplemental qualitative and quantitative information with respect to regulatory capital (including market risk associated with our trading activities) and the ~~LCR, summary results of semi-annual State Street-~~

State Street Corporation | 4

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

~~run~~LCR, summary results of semi-annual State Street-run stress tests which we conduct under the Dodd-Frank Act, and resolution plan disclosures required under the Dodd-Frank Act. These additional disclosures are accessible on the “Investor Relations” section of our corporate website at www.statestreet.com.

We have included our website address in this report as an inactive textual reference only. Information on our website is not incorporated by reference into this Form 10-Q.

We use acronyms and other defined terms for certain business terms and abbreviations, as defined in the acronyms list and glossary following the consolidated financial statements in this Form 10-Q.

Forward-Looking Statements

This Form 10-Q, as well as other reports and proxy materials submitted by us under the Securities Exchange Act of 1934, registration statements filed by us under the Securities Act of 1933, our annual report to shareholders and other public statements we may make, may contain statements (including statements in our Management's Discussion and Analysis included in such reports, as applicable) that are considered “forward-looking statements” within the meaning of U.S. securities laws, including statements about our goals and expectations regarding our business, financial and capital condition, results of operations, strategies, cost savings and transformation initiatives, investment portfolio performance, dividend and stock purchase programs, acquisitions (including, without limitation, our proposed acquisition of the BBH Investor Services business), outcomes of legal proceedings, market growth, ~~acquisitions,~~ joint ventures and divestitures, client growth and new technologies, services and opportunities, as well as industry, governmental, regulatory, economic and market trends, initiatives and developments, the business environment and other matters that do not relate strictly to historical facts.

Terminology such as “plan,” “expect,” “intend,” “objective,” “forecast,” “outlook,” “believe,” “priority,” “anticipate,” “estimate,” “seek,” “may,” “will,” “trend,” “target,” “strategy” and “goal,” or similar statements or variations of such terms, are intended to identify forward-looking statements, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to various risks and uncertainties, which change over time, are based on management's expectations and assumptions at the time the statements are made and are not guarantees of future results. Management's expectations and assumptions, and the continued validity of the forward-looking statements, are subject to change due to a broad range of factors affecting

the U.S. and global economies, regulatory environment and the equity, debt, currency and other financial markets, as well as factors specific to State

Street and its subsidiaries, including State Street Bank. Factors that could cause changes in the expectations or assumptions on which forward-looking statements are based cannot be foreseen with certainty and include, but are not limited to:

Strategic Risks

•The consummation of our proposed acquisition of the BBH Investor Services business is subject to the receipt of regulatory approvals and the satisfaction of other closing conditions, the failure or delay of which may prevent or further delay the consummation of the acquisition; while we are evaluating potential modifications to the transaction that are intended to facilitate resolution of the bank regulatory review, there can be no assurance as to the timing or outcome of that review;

•~~Even if we successfully consummate~~We have been engaged in discussions with banking regulators regarding our proposed acquisition of the BBH Investor Services business and have developed with BBH proposed modifications to the proposed acquisition, including changes to the operating model and legal entity structure and changes to regulatory approvals required to consummate the transaction. These proposed modifications may facilitate resolution of the regulatory review process and provide a path to consummating the transaction. As part of the discussions with BBH, State Street is seeking amendments to the transaction terms, including the purchase price. Any modification to the transaction terms would be subject to review and approval by both BBH and our Board of Directors, and there can be no assurance that a mutually acceptable modified transaction will be entered into or as to the timing or outcome of any regulatory approvals and other closing conditions for that modified transaction; and absent further agreement of the parties, after September 6, 2022 either party can terminate the transaction without penalty;

•Assuming the financial and operational aspects of the proposed modifications to our proposed acquisition of the BBH Investor Services business are timely finalized and contracted, subject to regulatory approval and other closing conditions, the parties are aiming to close the transaction at the end of the fourth quarter of 2022; however, there exists significant timing uncertainty and risk that closing will extend beyond that timeline; and even if we successfully consummate a modified transaction, we may fail to realize some or all of the anticipated benefits of the transaction or the benefits may take longer to realize than expected;

State Street Corporation | 5

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

•We are subject to intense competition, which could negatively affect our profitability;

•We are subject to significant pricing pressure and variability in our financial results and our AUC/A and AUM;

•Our development and completion of new products and services, including State Street Digital orand State Street Alpha, and the enhancement of our infrastructure required to meet increased regulatory and client expectations for resiliency and the systems and process re-engineering necessary to achieve improved productivity and reduced operating risk, may take an extended period to implement, involve costs ~~and dependencies~~ and expose us to increased risk;

•Our business may be negatively affected by our failure to update and maintain our technology infrastructure;

•The COVID-19 pandemic continues to exacerbate certain risks and uncertainties for our business;

•Acquisitions, strategic alliances, joint ventures and divestitures, and the integration, retention and development of the benefits of our acquisitions, pose risks for our business; and

•Competition for qualified members of our workforce is intense, and we may not be able to attract and retain the highly skilled people we need to support our business.

~~State Street Corporation | 5~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

Financial Market Risks

•We could be adversely affected by geopolitical, economic and market conditions; including, for example, as a result of the present war in Ukraine;

•We have significant International operations, and disruptions in European and Asian economies could have an adverse effect on our consolidated results of operations or financial condition;

•Our investment securities portfolio, consolidated financial condition and consolidated results of operations could be adversely affected by changes in the financial markets;

•Our business activities expose us to interest rate risk;

•We assume significant credit risk to counterparties, who may also have substantial financial dependencies with other financial institutions, and these credit exposures and concentrations could expose us to financial loss;

•Our fee revenue represents a significant portion of our consolidated revenue and is subject to decline based on, among other factors, market ~~and~~conditions, competition, currency ~~declines,~~valuation and investment activities of our clients and their business mix;

•If we are unable to effectively manage our capital and liquidity, our consolidated financial condition, capital ratios, results of operations and business prospects could be adversely affected;

•We may need to raise additional capital or debt in the future, which may not be available to us or may only be available on unfavorable terms; and

•If we experience a downgrade in our credit ratings, or an actual or perceived reduction in our financial strength, our borrowing and capital costs, liquidity and reputation could be adversely affected.

Compliance and Regulatory Risks

•Our business and capital-related activities, including common share repurchases, may be adversely affected by capital and liquidity standards required as a result of capital stress testing;

•We face extensive and changing government regulation in the jurisdictions in which we operate, which may increase our costs and compliance risks;

•We are subject to enhanced external oversight as a result of the resolution of prior regulatory or governmental matters;

•Our businesses may be adversely affected by government enforcement and litigation;

•Any misappropriation of the confidential information we possess could have an adverse impact on our business and could subject us to regulatory actions, litigation and other adverse effects;

•Our calculations of risk exposures, total RWA and capital ratios depend on data inputs, formulae, models, correlations and assumptions that are subject to change, which could materially impact our risk exposures, our total RWA and our capital ratios from period to period;

•Changes in accounting standards may adversely affect our consolidated financial statements;

•Changes in tax laws, rules or regulations, challenges to our tax positions and changes in the composition of our pre-tax earnings may increase our effective tax rate; and

State Street Corporation | 6

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

•The transition away from LIBOR may result in additional costs and increased risk exposure.

Operational Risks

•Our control environment may be inadequate, fail or be circumvented, and operational risks could adversely affect our consolidated results of operations;

•Cost shifting to non-U.S. jurisdictions and outsourcing may expose us to increased operational risk, geopolitical risk and reputational harm and may not result in expected cost savings;

•Attacks or unauthorized access to our information technology systems or facilities, or those of the third parties with which we do business, or disruptions to our or their continuous operations, could result in significant costs, reputational damage and impacts on our business activities;

•Long-term contracts expose us to pricing and performance risk;

•Our businesses may be negatively affected by adverse publicity or other reputational harm;

•We may not be able to protect our intellectual property;

•The quantitative models we use to manage our business may contain errors that could result in material harm;

~~State Street Corporation | 6~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

•Our reputation and business prospects may be damaged if our clients incur substantial losses or are restricted in redeeming their interests in investment pools that we sponsor or manage;

•The impacts of climate change, and regulatory responses to such risks, could adversely affect us; and

•We may incur losses as a result of unforeseen events including terrorist attacks, natural disasters, the emergence of a new pandemic or acts of embezzlement.

Actual outcomes and results may differ materially from what is expressed in our ~~forward looking~~forward-looking statements and from our historical financial results due to the factors discussed in this section and elsewhere in this Form 10-Q or disclosed in our other SEC filings. Forward-looking statements in this Form 10-Q should not be relied on as representing our expectations or assumptions as of any time subsequent to the time this Form 10-Q is filed with the SEC. We undertake no obligation to revise our forward-looking statements after the time they are made. The factors discussed herein are not intended

to be a complete statement of all risks and uncertainties that may affect our businesses. We cannot anticipate all developments that may adversely affect our business or operations or our consolidated results of operations, financial condition or cash flows.

Forward-looking statements should not be viewed as predictions and should not be the primary basis on which investors evaluate State Street. Any investor in State Street should consider all risks and uncertainties disclosed in our SEC filings, including our filings under the Securities Exchange Act of 1934, in particular our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K, and our registration statements filed under the Securities Act of 1933, all of which are accessible on the SEC's website at www.sec.gov or on the “Investor Relations” section of our corporate website at investors.statestreet.com.

State Street Corporation | 7

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

OVERVIEW OF FINANCIAL RESULTS


TABLE 1: OVERVIEW OF FINANCIAL RESULTS	TABLE 1: OVERVIEW OF FINANCIAL RESULTS									TABLE 1: OVERVIEW OF FINANCIAL RESULTS
												Three Months Ended June 30,							% Change
(Dollars in millions, except per share amounts)											(Dollars in millions, except per share amounts)	2022				2021
Total fee revenue											Total fee revenue	$	2,370			$	2,514		(6)	%
Net interest income											Net interest income	584				467			25
Total other income											Total other income	(1)				53			nm
Total revenue											Total revenue	2,953				3,034			(3)
Provision for credit losses											Provision for credit losses	10				(15)			nm
Total expenses											Total expenses	2,108				2,111			—
Income before income tax expense											Income before income tax expense	835				938			(11)
Income tax expense											Income tax expense	88				175			(50)

Net income											Net income	$	747			$	763		(2)
Adjustments to net income:											Adjustments to net income:
Dividends on preferred stock(1)											Dividends on preferred stock(1)	$	(35)			$	(34)		3
Earnings allocated to participating securities(2)											Earnings allocated to participating securities(2)	—				(1)			nm
Net income available to common shareholders											Net income available to common shareholders	$	712			$	728		(2)
Earnings per common share:											Earnings per common share:
Basic											Basic	$	1.94			$	2.11		(8)
Diluted											Diluted	1.91				2.07			(8)
Average common shares outstanding (in thousands):											Average common shares outstanding (in thousands):
Basic											Basic	367,375				345,889			6
Diluted											Diluted	372,123				351,582			6
Cash dividends declared per common share											Cash dividends declared per common share	$	.57			$	.52		10
Return on average common equity											Return on average common equity	12.1		%		12.6		%	(50) bps
Pre-tax margin											Pre-tax margin	28.3				30.9			(260)

		Three Months Ended March 31,						% Change				Six Months Ended June 30,							% Change
(Dollars in millions, except per share amounts)	(Dollars in millions, except per share amounts)	2022			2021						(Dollars in millions, except per share amounts)	2022				2021
Total fee revenue	Total fee revenue	$	2,573		$	2,483		4	%		Total fee revenue	$	4,943			$	4,997		(1)	%
Net interest income	Net interest income	509			467			9			Net interest income	1,093				934			17
Total other income	Total other income	(1)			—			nm			Total other income	(2)			—	53			nm
Total revenue	Total revenue	3,081			2,950			4			Total revenue	6,034				5,984			1
Provision for credit losses	Provision for credit losses	—			(9)			nm			Provision for credit losses	10				(24)			nm
Total expenses	Total expenses	2,327			2,332			—			Total expenses	4,435				4,443			—
Income before income tax expense	Income before income tax expense	754			627			20			Income before income tax expense	1,589				1,565			2
Income tax expense	Income tax expense	150			108			39			Income tax expense	238				283			(16)

Net income	Net income	$	604		$	519		16			Net income	$	1,351			$	1,282		5
Adjustments to net income:	Adjustments to net income:										Adjustments to net income:
Dividends on preferred stock(1)	Dividends on preferred stock(1)	$	(20)		$	(30)		(33)			Dividends on preferred stock(1)	$	(55)			$	(64)		(14)
Earnings allocated to participating securities(2)	Earnings allocated to participating securities(2)	(1)			—			nm			Earnings allocated to participating securities(2)	(1)				(1)			—
Net income available to common shareholders	Net income available to common shareholders	$	583		$	489		19			Net income available to common shareholders	$	1,295			$	1,217		6
Earnings per common share:	Earnings per common share:										Earnings per common share:
Basic	Basic	$	1.59		$	1.39		14			Basic	$	3.53			$	3.49		1
Diluted	Diluted	1.57			1.37			15			Diluted	3.48				3.44			1
Average common shares outstanding (in thousands):	Average common shares outstanding (in thousands):										Average common shares outstanding (in thousands):
Basic	Basic	366,542			350,743			5			Basic	366,961				348,303			5
Diluted	Diluted	372,037			355,690			5			Diluted	372,080				353,434			5
Cash dividends declared per common share	Cash dividends declared per common share	$	.57		$	.52		10			Cash dividends declared per common share	$	1.14			$	1.04		10
Return on average common equity	Return on average common equity	9.5		%	8.4		%	110 bps			Return on average common equity	10.8		%		10.5		%	30 bps
Pre-tax margin	Pre-tax margin	24.5			21.3			320			Pre-tax margin	26.3				26.2			10

(1) Additional information about our preferred stock dividends is provided in Note 12 to the consolidated financial statements in this Form 10-Q.

(2) Represents the portion of net income available to common equity allocated to participating securities, composed of unvested and fully vested SERP (Supplemental executive retirement plans) shares and fully vested deferred director stock awards, which are equity-based awards that contain non-forfeitable rights to dividends, and are considered to participate with the common stock in undistributed earnings.

nmnm Not meaningful

The following “Financial Results and Highlights” section provides information related to significant events, as well as highlights of our consolidated financial results for the ~~first~~second quarter of 2022 presented in Table 1: Overview of Financial Results. More detailed information about our consolidated financial results, including the comparison of our financial results for the ~~first quarter of~~three and six months ended June 30, 2022, compared to the same ~~period~~periods in 2021, is provided under “Consolidated Results of Operations”, "Line of Business Information" and "Capital" which follows these sections, as well as in our consolidated financial statements in this Form 10-Q. In this Management’s Discussion and Analysis, where we describe the effects of changes in foreign currency translation, those effects are determined by applying applicable weighted average FX rates from the relevant 2021 period to the relevant 2022 period results.

~~State Street Corporation | 7~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

Financial Results and Highlights

•~~First~~Second quarter of 2022 financial performance:

◦Earnings per share of $~~1.57~~1.91 in the ~~first~~second quarter of 2022, de~~increased~~creased ~~15%~~8% compared to ~~$1.37~~$2.07 in the same period in 2021.

◦Total fee revenue and total revenue ~~were both~~decreased ~~up 4%~~6% and 3%, respectively, in the ~~first~~second quarter of 2022, compared to the same period in 2021. Currency translation decreased both fee revenue and total revenue by 2% in the second quarter of 2022, relative to the same period in 2021.

◦~~Servicing and management fee revenues were flat and~~NII increased ~~5%, respectively,~~25% in the ~~first~~second quarter of 2022, compared to the same period in 2021.

◦In the ~~first~~second quarter of 2022, return on equity of ~~9.5% increased~~12.1% decreased from ~~8.4%~~12.6% in the same period in 2021, primarily due to ~~an increase~~a decrease in net income available to common shareholders. Pre-tax margin of ~~24.5%~~28.3% in the ~~first~~second quarter of 2022, ~~increased~~decreased from ~~21.3%~~30.9% in the same period in 2021, primarily due to ~~an increase~~a decrease in total revenue.

◦~~Positive~~Negative operating leverage of ~~4.6%~~2.5% points in the ~~first~~second quarter of 2022. Operating leverage represents the difference between the percentage change in total revenue and the percentage change in total expenses, in each case relative to the prior year period.

State Street Corporation | 8

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

◦~~Positive~~Negative fee operating leverage of ~~3.8%~~5.6% points in the ~~first~~second quarter of 2022. Fee operating leverage represents the difference between the percentage change in total fee revenue and the percentage change in total expenses, in each case relative to the prior year period.

•While the ongoing war in Ukraine ~~caused~~continued to cause considerable challenges for global markets in the ~~first~~second quarter of 2022, our direct financial exposure to Russia isremains very ~~low, with less than $25 million of deposits denominated in Russian roubles, and with less than 0.1% of our AUC/A and less than 0.01% of our AUM consisting of Russian securities, as of March 31, 2022.~~low. As of ~~March 31,~~June 30, 2022, we had no direct credit exposures to Russian-domiciled entities, including the Russian central bank, other than our subcustodian in Russia, which is an affiliate of a large multinational bank.

•Approximately 73% of our employees globally continued to work remotely as of March 31, 2022, compared to approximately 79% as of December 31, 2021, primarily due to the transition to hybrid working in many locations worldwide.

Revenue

•Total ~~fee~~ revenue ~~and total revenue both~~ decreased 3%~~increased 4%~~ in the ~~first~~second quarter of 2022, compared to the same period in 2021, ~~primarily driven by increases across management fees, foreign exchange trading services, software and processing fees and other fee revenue.~~

•~~Servicing~~as the decrease in total fee revenue was ~~flat~~partially offset by higher NII. Total fee revenue decreased 6% in the ~~first~~second quarter of 2022, compared to the same period in 2021, asprimarily driven by lower servicing fees, management fees, software and processing fees and other fee revenue, partially offset by higher foreign exchange trading services revenue. Currency translation decreased both total revenue and total fee revenue by 2% in the second quarter of 2022, relative to the same period in 2021

•Servicing fee revenue decreased 7% in the second quarter of 2022, compared to the same period in 2021, primarily due to lower average equity and fixed income market levels, normal pricing headwinds, lower client activity and ~~flows, average equity market levels, and net new business were offset by normal pricing headwinds~~adjustments and the impact of currency ~~translation.~~translation, partially offset by net new business. Currency translation ~~negatively impacted~~decreased servicing ~~fees~~fee revenue by 2%3% in the ~~first~~second quarter of 2022, ~~compared~~relative to the same period in 2021.

•Management fee revenue ~~increased 5%~~decreased 3% in the ~~first~~second quarter of 2022, compared to the same period in 2021, primarily due to lower average equity and fixed income market levels, a client-specific pricing adjustment, and the impact of currency translation, partially offset by the absence of the impact of money market fee waivers and net inflows from ETFs. Currency translation decreased management fees by 2% in the second quarter of 2022, relative to the same period in 2021.

•Foreign exchange trading services revenue increased 16% in the second quarter of 2022, compared to the same period in 2021, primarily reflecting higher FX spreads, partially offset by lower client FX volumes.

•Securities finance revenue decreased 2% in the second quarter of 2022, compared to the same period in 2021, reflecting lower agency and enhanced custody balances, partially offset by higher spreads.

•Software and processing fees revenue decreased 11% in the second quarter of 2022, compared to the same period in 2021, primarily due to lower front office software and data revenue associated with CRD.

•Other fee revenue decreased $53 million in the second quarter of 2022, compared to the same period in 2021, primarily due to negative market-related adjustments.

•NII increased 25% in the second quarter of 2022, compared to the same period in 2021, primarily due to higher ~~average equity~~ market ~~levels~~interest rates and ~~net inflows from ETFs.~~

•Foreign exchange trading services revenue increased 4% in the first quarter of 2022, compared to the same period in 2021, primarily due to higher FX volatility, partially offset by lower client FX volumes.

•Securities finance revenue decreased 3% in the first quarter of 2022, compared to the same period in 2021, reflecting lower average agency assets on loan, partially offset by new business wins in enhanced custody.

•~~Software and processing fees revenue increased 26% in the first quarter of 2022, compared to the same period in 2021, primarily due to higher front-office servicing revenues.~~

•~~Other fee revenue increased 81% in the first quarter of 2022, compared to the same period in 2021, primarily due to fair value adjustments on equity investments.~~

•~~NII increased 9% in the first quarter of 2022, compared to the same period in 2021, primarily due to~~ growth in ~~the investment portfolio and higher~~ loan ~~balances, as well as higher market interest rates.~~balances.

~~State Street Corporation | 8~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

Provision for Credit Losses

•We recorded no a $10 million provision for credit losses in the ~~first~~second quarter of 2022, compared to a $9$15 million reserve release in the same period in 2021, ~~as positive changes in the mix of loans in our portfolio were offset by~~reflecting a downward shift in management's economic ~~outlook.~~outlook, partially offset by a decrease in expected losses related to leveraged loans within our portfolio.

Expenses

•Total expenses were flat in the ~~first~~second quarter of 2022, compared to the same period in 2021, as higher targeted business investments and ~~seasonal expenses~~wage growth were offset by productivity savings and ongoing disciplined expense management, and ~~lower notable items.~~the positive impact of currency translation. Currency translation decreased expenses by 3% in the second quarter of 2022, relative to the same period in 2021.

Notable items

•The impact of notable items in the ~~first~~second quarter of 2022 includes acquisition and restructuring costs of approximately $9$12 million related to our proposed acquisition of the BBH Investor Services business, which is subject to regulatory review and other closing conditions.

•The impact of notable items in the ~~first~~second quarter of 2021 includes:

State Street Corporation | 9

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

◦$53 million gain on the sale of a majority share of our Wealth Management Services (WMS) business, recorded in other income;

◦legal ~~and other expenses~~accrual release of approximately ~~$29 million, including $20 million in information systems~~$11 million; and ~~communications, $8 million in transaction processing services and $1 million in other expenses;~~

◦acquisition and restructuring costs of approximately ~~$10~~$11 million, primarily related to our 2018 acquisition of ~~CRD;~~

◦costs of $5 million due to the partial redemption of outstanding Series F non-cumulative perpetual preferred stock representing the difference between the redemption value and the net carrying value of the preferred stock.CRD.

AUC/A and AUM

•AUC/A of ~~$41.72~~$38.18 trillion ~~increased 4%~~decreased 10% as of ~~March 31,~~June 30, 2022, compared to ~~March 31,~~June 30, 2021, primarily due to ~~higher equity~~lower market levels, ~~client flows and~~partially offset by net new business ~~growth.~~and client flows. In the ~~first~~second quarter of 2022, newly announced asset servicing mandates totaled approximately ~~$302~~$972 billion. Servicing assets remaining to be installed in future ~~period~~periods totaled approximately ~~$2.91~~$3.63 trillion as of ~~March 31,~~June 30, 2022.

•AUM of ~~$4.02~~$3.48 trillion ~~increased 12%~~decreased 11% as of ~~March 31,~~June 30, 2022, compared to ~~March 31,~~June 30, 2021, primarily due to ~~higher~~lower market levels and net outflows from our Institutional business, partially offset by net inflows ~~across~~from our ETF ~~Institutional~~ and Cash businesses.

Capital

•We declared ~~aggregate~~ common stock dividends of $0.57 per share, totaling ~~$209~~$210 million in the ~~first~~second quarter of 2022, compared to $0.52 per share, totaling ~~$182~~$179 million in the same period in 2021.

•In July 2022, we declared third quarter common stock dividends of $0.63 per share, representing a 10% increase on a per share basis from both the third quarter of 2021 and second quarter of 2022.

•In July 2021, our Board authorized a common share repurchase plan of up to $3.0 billion of our common stock through the end of 2022; however, in connection with our proposed acquisition of the BBH Investor Services business, we did not repurchase any common stock during the ~~third and fourth quarters~~last half of 2021, as well as during the first ~~quarter~~half of 2022. ~~We no longer expect~~In June 2022, we announced our intention to resume our common share ~~repurchase program in~~repurchases during the ~~second and third~~fourth quarter of 2022 ~~due primarily to net unrealized losses on AFS securities reported~~ in ~~Other Comprehensive Income for the first quarter of 2022 related to higher~~an amount reflecting interest ~~rates (described below).~~rate levels and market conditions at that time.

•Our standardized CET1 capital ratio decreased to ~~11.9%~~12.9% as of ~~March 31,~~June 30, 2022, compared to 14.3% as of December 31, 2021, primarily reflecting lower AOCI related

to AFS securities driven by the significant increase in rates across the yield curve and the implementation of the standardized approach for counterparty credit risk (SA-CCR), ~~as well as the temporary deployment of~~partially offset by planned RWA ~~capital for revenue generating activities in our markets businesses.~~reductions and optimization. Our Tier 1 leverage ratio decreased to ~~5.9%~~6.0% as of ~~March 31,~~June 30, 2022 compared to 6.1% as of December 31, 2021, primarily driven by lower ~~AOCI. Actions are underway that are intended~~AOCI, partially offset by lower consolidated average assets. During the second quarter of 2022, we completed a number of our previously announced actions to mitigate additional AOCI risk in the current environment including ~~but not limited to, transfers~~a $21.23 billion transfer of securities from AFS to ~~HTM, and shortening~~HTM. Given the ~~portfolio duration through hedging activities and portfolio runoff. There can be no assurance that such measures will be sufficient if~~reduction in AOCI risk, we have the ~~pace of rate increases continues at a historical level. We expect both our~~ability to operate with CET1 and Tier 1 leverage capital ratios ~~to be~~ at or ~~near~~somewhat below the lower end of our target ranges of 10-11% and 5.25-5.75%, respectively, ~~during~~after the ~~quarter within which~~close of the proposed acquisition of the BBH Investor Services ~~business closes.~~business.

Debt Issuances and Redemptions

•On ~~February 7,~~May 13, 2022, we issued ~~$300~~$500 million aggregate principal amount of ~~fixed-to-~~

~~State Street Corporation | 9~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

~~floating rate senior notes due 2026, $650 million aggregate principal amount of~~4.421% fixed-to-floating rate senior notes due ~~2028 and $550 million aggregate principal amount of fixed-to-floating rate senior notes due~~ 2033.

•On ~~March 30,~~May 15, 2022, we redeemed $750 million aggregate principal amount of ~~2.825% Fixed-to-Floating Rate Senior Notes~~2.653% fixed-to-floating rate senior notes due 2023.

•~~On April 14, 2022, we notified the holders of our $750 million aggregate principal amount of 2.653% Fixed-to-Floating Rate Senior Notes due 2023 that we will redeem all of the Notes on May 15, 2022.~~

CONSOLIDATED RESULTS OF OPERATIONS

This section discusses our consolidated results of operations for the ~~first quarter of~~three and six months ended June 30, 2022, compared to the same ~~period~~periods in 2021, and should be read in conjunction with the consolidated financial statements and accompanying notes to the consolidated financial statements in this Form 10-Q.

State Street Corporation | 10

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Total Revenue

TABLE 2: TOTAL REVENUE
Three Months Ended March 31, % Change
(Dollars in millions) 2022 2021
Fee revenue:
      Back office services $ 1,268 $ 1,266 — %
      Middle office services 100 103 (3)
Servicing fees(1)
1,368 1,369 —
Management fees 520 493 5
Foreign exchange trading services 359 346 4
Securities finance 96 99 (3)
      Front office software and data 138 96 44
      Lending related and other fees 63 64 (2)
Software and processing fees(1)
201 160 26
Other fee revenue(1)
29 16 81
Total fee revenue 2,573 2,483 4
Net interest income:
   Interest income 521 471 11
   Interest expense 12 4 nm
Net interest income 509 467 9
Other income:
Gains (losses) related to investment securities, net (1) — nm
Total other income (1) — nm
Total revenue $ 3,081 $ 2,950 4


TABLE 2: TOTAL REVENUE
	Three Months Ended June 30,				% Change
(Dollars in millions)	2022		2021
Fee revenue:
Back office services	$	1,205	$	1,290		(7)	%
Middle office services	92		104			(12)
Servicing fees(1)	1,297		1,394			(7)
Management fees	490		504			(3)
Foreign exchange trading services	331		286			16
Securities finance	107		109			(2)
Front office software and data	126		148			(15)
Lending related and other fees	62		63			(2)
Software and processing fees(1)	188		211			(11)
Other fee revenue(1)	(43)		10			nm
Total fee revenue	2,370		2,514			(6)
Net interest income:
Interest income	704		467			51
Interest expense	120		—			nm
Net interest income	584		467			25
Other income:
Gains (losses) related to investment securities, net	(1)		—			nm
Other income	—		53			nm
Total other income	(1)		53			nm
Total revenue	$	2,953	$	3,034		(3)

	Six Months Ended June 30,					% Change
(Dollars in millions)	2022		2021
Fee revenue:
Back office services	$	2,473	$	2,556		(3)	%
Middle office services	192		207			(7)
Servicing fees(1)	2,665		2,763			(4)
Management fees	1,010		997			1
Foreign exchange trading services	690		632			9
Securities finance	203		208			(2)
Front office software and data	264		244			8
Lending related and other fees	125		127			(2)
Software and processing fees(1)	389		371			5
Other fee revenue(1)	(14)		26			nm
Total fee revenue	4,943		4,997			(1)
Net interest income:
Interest income	1,225		938			31
Interest expense	132		4			nm
Net interest income	1,093		934			17
Other income:
Gains (losses) related to investment securities, net	(2)		—			nm
Other income	—		53			nm
Total other income	(2)		53			nm
Total revenue	$	6,034	$	5,984		1

(1) In the first quarter of 2022, we reclassified certain fee revenue in our Consolidated Statement of Operations, primarily moving revenues that are not directly associated with software and processing fees to a new Other fee revenue line item. In addition, we provided a disaggregation of servicing fees into Back office services and Middle office services and of software and processing fees into Front office software and data and Lending related and other fees. Prior periods were revised to reflect these changes.

Fee Revenue

Table 2: Total Revenue, provides the breakout of fee revenue for the ~~first quarter of~~three and six months ended June 30, 2022 and 2021. Servicing and management fees collectively made up approximately ~~73%~~75% and ~~75%~~74% of the total fee revenue in the ~~first quarter of~~three and six months ended June 30, 2022, ~~and 2021, respectively.~~respectively, compared to 75% in both the same periods in 2021.

State Street Corporation | 11

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Servicing Fee Revenue

Servicing fee revenue comprises revenue from both back office and middle office services. Generally, our servicing fee revenues are affected by several factors including changes in market valuations, client activity and asset flows, net new business and the manner in which we price our services. We provide a range of services to our clients, including core custody services, accounting, reporting and administration, which we refer to collectively as back office services, and middle office services. The nature and mix of services provided affects our servicing fees. The basis for fees will differ across regions and clients.

Changes in Market Valuations

Our servicing fee revenue is impacted by both our levels and the geographic and product mix of our AUC/A. Increases or decreases in market valuations have a corresponding impact on the level of our AUC/A and servicing fee revenues, though the degree of impact will vary depending on asset types and classes and geography of assets held within our clients’ portfolios. For certain asset classes where the valuation process is more complex, including alternative investments, or where our valuation is dependent on third party information, AUC/A is reported on a lag, typically one-month. For those asset classes, the impact of market levels on our reported AUC/A does not reflect current period-end market levels.

Over the five years ended December 31, 2021, we estimate that worldwide market valuations impacted our servicing fee revenues by approximately 3% on average with a range of 0% to 7% annually and approximately 7% and 2% in 2021 and 2020, respectively. See Table 3: Daily Averages, Month-End Averages and Quarter-End Equity Indices for selected indices. While the specific indices presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and the performance of associated relevant indices and of client portfolios can therefore differ from the performance of the indices presented. In addition, our asset classifications may differ from those industry classifications presented.

~~State Street Corporation | 10~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

Assuming that all other factors remain constant, including client activity, asset flows and pricing, we estimate, using relevant information as of ~~March 31,~~June 30, 2022 that a 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our servicing fees are calculated, would result in a corresponding change in our total servicing fee revenues, on average and over multiple quarters, of approximately 3%. We estimate, similarly assuming all other factors remain constant and using relevant information as of ~~March 31,~~June 30, 2022, that changes in worldwide fixed income markets, which on a weighted average basis and over time are typically less volatile than worldwide equity markets, have a significantly smaller impact on our servicing fee revenues on average and over time.

TABLE 3: DAILY AVERAGES, MONTH-END AVERAGES AND QUARTER-END EQUITY INDICES(1)

MSCI® Emerging Markets


	Daily Averages of Indices				Month-End Averages of Indices
	Six Months Ended June 30,				Six Months Ended June 30,
	2022	2021	% Change		2022	2021	% Change
S&P 500®	4,285	4,027	6	%	4,245	4,030	5	%
MSCI EAFE®	2,105	2,254	(7)		2,084	2,235	(7)
MSCI® Emerging Markets	1,120	1,357	(17)		1,113	1,347	(17)

(1) The index names listed in the table are service marks of their respective owners.

TABLE 4: QUARTER-END DEBT INDICES(1)

Barclays Capital U.S. Aggregate Bond Index®

Barclays Capital Global Aggregate Bond Index®

(1) The index names listed in the table are service marks of their respective owners.

State Street Corporation | 12

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Client Activity and Asset Flows

Client activity and asset flows are impacted by the number of transactions we execute on behalf of our clients, including FX settlements, equity and derivative trades, and wire transfer activity, as well as actions by our clients to change the asset class in which their assets are invested. Our servicing fee revenues are impacted by a number of factors, including transaction volumes, asset levels and asset classes in which funds are invested, as well as industry trends associated with these client-related activities.

Our clients may change the asset classes in which their assets are invested, based on their market outlook, risk acceptance tolerance or other considerations. Over the five years ended December 31, 2021, we estimate that client activity and asset flows, together, impacted our servicing fee revenues by approximately 0% on average with a range of (1)% to 2% annually and approximately 0% and 2% in 2021 and 2020, respectively. See Table 5: Industry Asset Flows for selected asset flow information. While the asset flows presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and our flows may differ from those market trends. In addition, our asset classifications may differ from those industry classifications presented.

~~State Street Corporation | 11~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

North America - (US Domiciled) - Morningstar Direct Market Data(1)(2)(3)

Europe - Morningstar Direct Market Data(1)(2)(5)

(1) Industry data is provided for illustrative purposes only. It is not intended to reflect our activity or our clients' activity and is indicative of only segments of the entire industry.

(2) Source: Morningstar. The data includes long-term mutual funds, ETFs and money market funds. Mutual fund data represents estimates of net new cash flow, which is new sales minus redemptions combined with net exchanges, while ETF data represents net issuance, which is gross issuance less gross redemptions. Data for Fund of Funds, Feeder funds and Obsolete funds were excluded from the series to prevent double counting. Data is from the Morningstar Direct Asset Flows database.

(3) The ~~first~~second quarter of 2022 data for North America (U.S. domiciled) includes Morningstar direct actuals for ~~January~~April and ~~February~~May 2022 and Morningstar direct estimates for ~~March~~June 2022.

(4) The long-term fund flows reported by Morningstar direct in North America are composed of U.S. domiciled market flows mainly in Equities, Allocation and Fixed-Income asset classes. The long-term fund flows reported by Morningstar direct in Europe, Middle East, and Africa are composed of the European market flows mainly in Equities, Allocation and Fixed-Income asset classes.

(5) The ~~first~~second quarter of 2022 data for Europe is on a rolling three month basis for ~~December 2021~~March 2022 through ~~February~~May 2022, sourced by Morningstar.

Over the five years ended December 31, 2021, net new business, which includes business both won and lost, has affected our servicing fee revenues by approximately 1% on average with a range of 0% to 3% annually and approximately 1% and 0% in 2021 and 2020, respectively. Gross new investment servicing mandates were ~~$302~~$972 billion in the ~~first~~second quarter of 2022 and $1.8 trillion per year on average over the past five years. Over the five years ended December 31, 2021, gross new annual investment servicing mandates ranged from $750 billion to $3.5 trillion.

Servicing fee revenue associated with new servicing mandates may vary based on the breadth of services provided, the time required to install the assets, and the types of assets installed.

Revenues associated with new mandates are not reflected in our servicing fee revenue until the assets have been installed. Our installation timeline, in general, can range from 6 to 36 months, with the average installation timeline being approximately 9 to 12 months over the past 2 years. Our more complex installations, including new State Street Alpha mandates, will generally be on the longer end of that range. With respect to the current asset mandates of approximately ~~$2.91~~$3.63 trillion that are yet to be installed as of ~~March 31,~~June 30, 2022, we expect the conversion will occur over the coming 2436 months.

State Street Corporation | 13

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Pricing

The industry in which we operate has historically faced pricing pressure, and our servicing fee revenues are also affected by such pressures today. Consequently, no assumption should be drawn as to future revenue run rate from announced servicing wins, as the amount of revenue associated with AUC/A can vary materially. On average, over the five years ended December 31, 2021, we estimate that pricing pressure with respect to existing clients has impacted our servicing fees by approximately (2)% annually, with the impact ranging from (1)% to (4)% in any given year, and approximately (2)% in both 2021 and 2020. Pricing concessions can be a part of a contract renegotiation with a client including terms that may benefit us, such as extending the term of our relationship with the client, expanding the scope of services that we provide or reducing our dependency on manual processes through the standardization of the services we provide. The timing of the impact of additional revenue generated by anticipated additional services, and the amount of revenue generated, may differ from expectations due to the impact of pricing concessions on existing services due to the necessary time required to onboard those new services, the nature of those services and client investment practices and other factors. These same market pressures also impact the fees we negotiate when we win business from new clients.

~~State Street Corporation | 12~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

In order to offset the typical client attrition and normal pricing headwinds, we estimate that we need at least $1.5 trillion of new AUC/A per year; although, notwithstanding increases in AUC/A, servicing fees remain subject to several factors, including changes in market valuations, client activity and asset flows, the manner in which we price our services, the nature of the assets being serviced and the type of services and the other factors described in this Form 10-Q.

Historically, and based on an indicative sample of revenue, we estimate that approximately 55%, on average, of our servicing fee revenues have been variable due to changes in asset valuations including changes in daily average valuations of AUC/A; another 15%, on average, of our servicing fees are impacted by the volume of activity in the funds we serve; and the remaining approximately 30% of our servicing fees tend not to be variable in nature nor impacted by market fluctuations or values.

Based on the impact of the above, client activity and asset flows, net new business and pricing, noted drivers of our servicing fee revenue will vary depending on the mix of products and services we provide to our clients. The full impact of changes in market valuations and the volume of activity in the funds may not be fully reflected in our servicing fee revenues in the periods in which the changes occur, particularly in periods of higher volatility.

Servicing ~~fees,~~fees, as ~~presented~~presented in Table 2: Total Revenue, ~~were flat~~decreased 7% in the ~~first quarter of~~three months ended June 30, 2022 compared to the same period in 2021, ~~as higher~~primarily due to lower average equity and fixed income market levels, normal pricing headwinds, lower client activity and ~~flows, average equity market levels, and net new business were offset by normal pricing headwinds~~adjustments and the impact of currency ~~translation.~~translation, partially offset by net new business. Currency translation ~~negatively impacted~~decreased servicing ~~fees~~fee revenue by 2%3% in the ~~first~~second quarter of 2022, relative to the same period in 2021. Servicing fees decreased 4% in the six months ended June 30, 2022, compared to the same period in 2021, primarily due to normal pricing headwinds, lower client activity and adjustments and the impact of currency translation, partially offset by net new business. Currency translation decreased servicing fee revenue by 2% in the six months ended June 30, 2022, relative to the same period in 2021.

Servicing fees generated outside the U.S. were approximately 47% of total servicing fees in both the ~~first quarter of~~three and six months ended June 30, 2022, compared to approximately 49% and ~~2021.~~48% in the same periods in 2021, respectively.


TABLE 6: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT(1)	TABLE 6: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT(1)							TABLE 6: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT(1)
(In billions)	(In billions)	March 31, 2022		December 31, 2021		March 31, 2021			(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Collective funds, including ETFs	Collective funds, including ETFs	$	15,140	$	15,722	$	14,052		Collective funds, including ETFs	$	13,609	$	15,722	$	15,048
Mutual funds	Mutual funds	10,825		11,575		10,439			Mutual funds	9,642		11,575		10,873
Pension products	Pension products	8,191		8,443		7,843			Pension products	7,764		8,443		8,291
Insurance and other products	Insurance and other products	7,568		7,938		7,929			Insurance and other products	7,165		7,938		8,385
Total	Total	$	41,724	$	43,678	$	40,263		Total	$	38,180	$	43,678	$	42,597


TABLE 7: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Equities	$	21,953	$	25,974	$	24,792
Fixed-income	10,716		12,587		13,079
Short-term and other investments	5,511		5,117		4,726
Total	$	38,180	$	43,678	$	42,597

TABLE 7: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS(1)
(In billions) March 31, 2022 December 31, 2021 March 31, 2021
Equities $ 25,249 $ 25,974 $ 22,825
Fixed-income 11,303 12,587 13,022
Short-term and other investments 5,172 5,117 4,416
Total $ 41,724 $ 43,678 $ 40,263


TABLE 8: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(1)(2)	TABLE 8: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(1)(2)							TABLE 8: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(1)(2)
(In billions)	(In billions)	March 31, 2022		December 31, 2021		March 31, 2021			(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Americas	Americas	$	31,027	$	32,427	$	29,530		Americas	$	28,207	$	32,427	$	31,280
Europe/Middle East/Africa	Europe/Middle East/Africa	8,103		8,599		8,256			Europe/Middle East/Africa	7,498		8,599		8,716
Asia/Pacific	Asia/Pacific	2,594		2,652		2,477			Asia/Pacific	2,475		2,652		2,601
Total	Total	$	41,724	$	43,678	$	40,263		Total	$	38,180	$	43,678	$	42,597

(1) Consistent with past practice, AUC/A values for certain asset classes are based on a lag, typically one-month.

(2) Geographic mix is generally based on the domicile of the entity servicing the funds and is not necessarily representative of the underlying asset mix.

State Street Corporation | 14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Asset servicing mandates newly announced in the ~~first~~second quarter of 2022 totaled approximately ~~$302~~$972 billion. Servicing assets remaining to be installed in future periods totaled approximately ~~$2.91~~$3.63 trillion as of ~~March 31,~~June 30, 2022, which will be reflected in AUC/A in future periods after installation and will generate servicing fee revenue in subsequent periods. The full revenue impact of such mandates will be realized as the assets are installed and additional services are added over that period.

New asset servicing mandates may be subject to completion of definitive agreements, approval of applicable boards and shareholders and customary regulatory approvals. New asset servicing mandates and servicing assets remaining to be installed in future periods exclude certain new business which has been contracted, but for which the client has not yet provided permission to publicly disclose and the expected installation date extends beyond one quarter. These excluded assets, which from time to time may be significant, will be included in new asset servicing mandates and reflected in servicing assets remaining to be installed in the period in which the client provides its permission. Servicing mandates and servicing assets remaining to be installed in future periods are presented on a gross basis and therefore also do not include the impact of clients who have notified us during the period of their intent to terminate or reduce their relationship with us, which may from time to time be significant.

~~State Street Corporation | 13~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

With respect to these new servicing mandates, once installed we may provide various services, including back office services such as custody and safekeeping, transaction processing and trade settlement, fund administration, reporting and record keeping, security servicing, fund accounting, middle office services such as investment book of records (IBOR), transaction management, loans, cash, derivatives and collateral services, recordkeeping, client reporting and investment analytics, markets services such as FX trading services, liquidity solutions, currency and collateral management, securities finance, and front office services such as portfolio management solutions, risk analytics, scenario analysis, performance and attribution, trade order and execution management, pre-trade compliance and ~~ESG~~environmental, social and governance (ESG) investment tools. Revenues associated with new servicing mandates may vary based on the breadth of services provided and the timing of installation, and the types of assets.

As a result of a decision to diversify providers, one of our large asset servicing clients has advised us it expects to move a significant portion of its ETF assets currently with State Street to one or more other providers, pending necessary approvals. We expect to continue as a significant service provider for

this client after this transition and for the client to continue to be meaningful to our business. The transition is expected to begin in 2022, but will principally occur in 2023 and 2024. For the year ended December 31, 2021, the fee revenue associated with the transitioning assets represented approximately 1.9% of our total 2021 fee revenue. The actual total revenue and income impact of this transition will reflect a range of factors, including potential growth in our continuing business with the client and expense reductions associated with the transition.

Management Fee Revenue

arrangements, as well as our relationship pricing for clients. ~~In addition,~~From the second half of 2020 through the first quarter of 2022, we were in a prolonged low-interest rate environment, ~~we have~~and waived ~~and may in the future waive~~ certain fees for our clients for money market products.

The impact of State Street Global Advisors gross money market fund fee waivers on total management fee revenue was approximately $10 million in the first quarter of 2022, down from levels in prior quarters. Following the Federal Reserve rate ~~hike~~hikes in March 2022, money market fee waivers did not have a significant impact on our management fee revenue in the second quarter of 2022, and we do not expect ~~money market fund fee waivers~~them to materially impact subsequent quarters in 2022.

Asset-based management fees for passively managed products, to which our AUM is currently primarily weighted, are generally charged at a lower fee on AUM than for actively managed products. Actively managed products may also include performance fee arrangements which are recorded when the fee is earned, based on predetermined benchmarks associated with the applicable account's performance.

State Street Corporation | 15

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

In light of the above, we estimate, using relevant information as of ~~March 31,~~June 30, 2022, and assuming that all other factors remain constant, including the impact of business won and lost and client flows, that:

•��A 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our management fees are calculated, would result in a corresponding change in our total management fee revenues, on average and over multiple quarters, of approximately 5%; and

•changes in worldwide fixed income markets, which on a weighted average basis and over time are typically less volatile than worldwide equity markets, will have a significantly smaller impact on our management fee revenues on average and over time.

Daily averages, month-end averages and year-end indices demonstrate worldwide changes in equity and debt markets that affect our management fee revenue. Year-end indices affect the values of AUM as of those dates. See Table 3: Daily Averages, Month-End Averages and Quarter-End Equity Indices for selected indices. While the specific indices presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and the performance of associated relevant indices and of client portfolios can therefore differ from the performance of the indices presented. In addition, our asset classifications may differ from those industry classifications presented.

~~State Street Corporation | 14~~

Management fees decreased

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

3% in the three months ended June 30, 2022 compared to same period in 2021, primarily due to lower average equity and fixed income market levels, a client-specific pricing adjustment, and the impact of currency translation, partially offset by the absence of the impact of money market fee waivers and net inflows from ETFs. Currency translation decreased management fees by 2% in the second quarter of 2022, relative to the same period in 2021. Management fees increased 5%1% in the ~~first quarter of~~six months ended June 30, 2022 compared to the same period in 2021, primarily due to higher average equity market levels and ~~net inflows from ETFs.~~the absence of the impact of money market fee waivers, partially offset by a client-specific pricing adjustment and the impact of currency translation. Currency translation decreased management fees by 1% in the six months ended June 30, 2022 compared to the same period in 2021.

Management fees generated outside the U.S. were approximately ~~27%~~25% and 26% of total management fees in the three and six months ended June 30, 2022, respectively, compared to approximately 26% in both the ~~first quarter of 2022~~three and six months ended June 30, 2021.

Alternative investments(2):

(1) Includes both floating- and constant-net-asset-value portfolios held in commingled structures or separate accounts.

(2) Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®Gold MiniSharesSM Trust, but act as the marketing agent.

TABLE 10: EXCHANGE-TRADED FUNDS BY ASSET CLASS(1)
(In billions) March 31, 2022 December 31, 2021 March 31, 2021
Alternative Investments(2)
$ 84 $ 72 $ 69
Equity 940 970 777
Multi Asset 1 1 —
Fixed-Income 134 135 122
Total Exchange-Traded Funds $ 1,159 $ 1,178 $ 968

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS


TABLE 10: EXCHANGE-TRADED FUNDS BY ASSET CLASS(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Alternative Investments(2)	$	77	$	72	$	73

Equity	791		970		844
Multi Asset	1		1		1
Fixed-Income	130		135		128
Total Exchange-Traded Funds	$	999	$	1,178	$	1,046

(1) ETFs are a component of AUM presented in the preceding table.

TABLE 11: GEOGRAPHIC MIX OF ASSETS UNDER MANAGEMENT(1)

(1) Geographic mix is based on client location or fund management location.

~~State Street Corporation | 15~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

Multi-Asset-Class Solutions(1)

Alternative Investments(1)(3)

Multi-Asset-Class Solutions(1)

Alternative Investments(1)(3)

Long-term institutional flows, net(4)

(1) The implementation of an improved internal data management system for product level data in the first quarter of 2021 resulted in some AUM reclassifications between the categories presented for prior periods to align with the current presentation. There was no impact to the total level of reported AUM.

(2) Includes both floating- and constant-net-asset-value portfolios held in commingled structures or separate accounts.

(3) Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®Gold MiniSharesSM Trust, but act as the marketing agent.

(4) Amounts represent long-term portfolios, excluding ETFs.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Foreign Exchange Trading Services

Foreign exchange trading services revenue, as presented in Table 2: Total Revenue, increased 4%16% and 9% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to the same ~~period~~periods in 2021, primarily due to higher FX ~~volatility,~~spreads, partially offset by lower client FX volumes. Foreign exchange trading services revenue comprises revenue generated by FX trading and revenue generated by brokerage and other trading services, which made up ~~69%~~67% and ~~31%~~33%, respectively, of foreign exchange trading services revenue in the ~~first~~second quarter of 2022, compared to and ~~70%~~66% and ~~30%~~34%, respectively, in the same period in 2021. The impact of gross money market fund fee waivers on foreign exchange trading services was ~~$10~~$1 million and $11 million in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to $8$15 million and $23 million in the same ~~period~~periods in ~~2021.~~2021, respectively. This represents a reduction in revenue on the Fund Connect platform due to the impact of fee waivers by participating money market funds, including State Street Global Advisors funds.

We primarily earn FX trading revenue by acting as a principal market-maker through both "direct sales and trading” and “indirect FX trading.”

•Direct sales and trading: Represent FX transactions at negotiated rates with clients and investment managers that contact our trading desk directly. These principal market-making activities include transactions for funds serviced by third party custodians or prime brokers, as well as those funds under custody with us.

•Indirect FX trading: Represents FX transactions with clients, for which we are the funds' custodian, or their investment managers, routed to our FX desk through our asset-servicing operation. We execute indirect FX trades as a principal at rates disclosed to our clients.

Our FX trading revenue is influenced by multiple factors, including: the volume and type of client FX transactions and related spreads; currency volatility, reflecting market conditions; and our management of exchange rate, interest rate and other market risks associated with our FX activities. The relative impact of these factors on our total FX trading revenues often differs from period to period. For example, assuming all other factors remain constant, increases or decreases in volumes or bid-offer spreads across product mix tend to result in increases or decreases, as the case may be, in client-related FX revenue.

Our clients that utilize indirect FX trading can, in addition to executing their FX transactions through dealers not affiliated with us, transition from indirect

FX trading to either direct sales and trading execution, including our “Street FX” service, or to one of our electronic trading platforms. Street FX, in which we continue to act as a principal market-maker, enables our clients to define their FX execution strategy and automate the FX trade execution process, both for funds under custody with us as well as those under custody at another bank.

~~State Street Corporation | 16~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

We also earn foreign exchange trading services revenue through "electronic FX services" and "other trading, transition management and brokerage revenue."

•Electronic FX services: Our clients may choose to execute FX transactions through one of our electronic trading platforms. These transactions generate revenue through a “click” fee.

•Other trading, transition management and brokerage revenue: As our clients look to us to enhance and preserve portfolio values, they may choose to utilize our Transition or Currency Management capabilities or transact with our Equity Trade execution group. These transactions, which are not limited to foreign exchange, generate revenue via commissions charged for trades transacted during the management of these portfolios.

Fund Connect is another one of our electronic trading platforms: it is a global trading, analytics and cash management tool with access to more than 400 money market funds from leading providers.

Securities Finance

Our securities finance business consists of three components:

(1) an agency lending program for State Street Global Advisors managed investment funds with a broad range of investment objectives, which we refer to as the State Street Global Advisors lending funds;

(2) an agency lending program for third-party investment managers and asset owners, which we refer to as the agency lending funds; and

(3) security lending transactions which we enter into as principal, which we refer to as our enhanced custody business.

Securities finance revenue earned from our agency lending activities, which is composed of our split of both the spreads related to cash collateral and the fees related to non-cash collateral, is principally a function of the volume of securities on loan, the interest rate spreads and fees earned on the underlying collateral and our share of the fee split.

State Street Corporation | 18

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

source a significant proportion of the securities furnished by us in our role as principal from third parties, we have the ability to source securities through assets under custody from clients who have designated us as an eligible borrower.

Securities finance revenue, as presented in Table 2: Total Revenue, decreased 3%2% in both the ~~first quarter of~~three and six months ended June 30, 2022, compared to the same ~~period~~periods in 2021, primarily driven by lower ~~average~~ agency ~~assets on loan,~~and enhanced custody balances, partially offset by ~~new business wins in enhanced custody.~~higher spreads.

Market influences may continue to affect client demand for securities finance, and as a result our revenue from, and the profitability of, our securities lending activities in future periods. In addition, the constantly evolving regulatory environment, including revised or proposed capital and liquidity standards, interpretations of those standards, and our own balance sheet management activities, may influence modifications to the way in which we deliver our agency lending or enhanced custody businesses, the volume of our securities lending activity and related revenue and profitability in future periods.

Software and Processing Fees

Software and processing fees revenue includes diverse types of fees and revenue, including fees from software licensing and maintenance and fees from our structured products business.

Software and processing fees revenue, presented in Table 2: Total Revenue, ~~increased 26%~~decreased 11% in the ~~first quarter of~~three months ended June 30, 2022, compared to the same period in ~~2021.~~2021, primarily driven by lower front office software and data revenue associated with CRD. Software and processing fees revenue increased 5% in the six months ended June 30, 2022, compared to the same period in 2021, primarily driven by higher front office software and data revenue associated with CRD.

Front office software and data revenue, which includes primarily revenue from CRD, Alpha Data Platform and Alpha Data Services ~~increased 44%~~, decreased 15% in the ~~first quarter of~~three months ended June 30, 2022, compared to the same period in 2021, primarily ~~due~~driven by lower on-premises renewals and the absence of episodic fees, partially offset by higher software-enabled revenues. Front office software and data revenue increased 8% in the six months ended June 30, 2022, compared to

the same period in 2021, primarily driven by higher ~~CRD~~software-enabled and professional services revenue, ~~from~~partially offset by lower on-premises ~~renewals.~~ renewals and absence of episodic fees. Revenue ~~related~~related to the front office solutions provided by CRD is primarily driven by the sale of term software licenses and SaaS, including professional services such as consulting and implementation services, software support and maintenance. Approximately 50%-70% of revenue associated with a sale of software to be installed on-premises is recognized at a point in time when the customer benefits from obtaining access to and use of the software license, with the percentage varying based on the length of the contract and other contractual terms. The remainder of revenue for on-premise installations is recognized over the length of the contract as maintenance and other services are provided. Upon renewal of an on-premises software contract, the same pattern of revenue recognition is followed with 50%-70% recognized upon renewal and the remaining balance recognized over the term of the contract. Revenue for a SaaS related arrangement, where the

~~State Street Corporation | 17~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

customer does not take possession of the software, is recognized over the term of the contract as services are provided. Upon renewal of a SaaS arrangement, revenue continues to be recognized as services are provided under the new contract. As a result of these differences in how portions of CRD revenue are accounted for, CRD revenue may vary more than other business units quarter to quarter.

Lending related and other fees, which decreased by 2% in both the ~~first quarter of~~three and six months ended June 30, 2022, compared to the same ~~period~~periods in 2021, primarily consists of fee revenue associated with our fund finance, leverage loans, municipal finance, insurance and stable value wrap businesses.

~~Other Fee Revenue~~Provision for Credit Losses

~~Other fee revenue includes market-related adjustments and income associated with certain tax-advantaged investments and other equity method investments.~~

~~Other fee revenue increased 81%~~•We recorded a $10 million provision for credit losses in the ~~first~~second quarter of 2022, compared to a $15 million reserve release in the same period in 2021, reflecting a downward shift in management's economic outlook, partially offset by a decrease in expected losses related to leveraged loans within our portfolio.

Expenses

•Total expenses were flat in the second quarter of 2022, compared to the same period in 2021, ~~primarily reflecting fair value adjustments on equity investments.~~

~~Fair value adjustments on equity~~as higher targeted business investments ~~positively impacted other fee revenue~~and wage growth were offset by ~~approximately $55 million~~productivity savings and ~~$8 million~~ongoing disciplined expense management, and the positive impact of currency translation. Currency translation decreased expenses by 3% in the ~~first~~second quarter of 2022, ~~and 2021, respectively. Market-related adjustments negatively impacted other fee revenue by approximately $15 million and $4 million in the first quarter of 2022 and 2021, respectively.~~

~~Amortization of tax-advantaged investments negatively impacted other fee revenue by approximately $24 million and $26 million in the first quarter of 2022 and 2021, respectively.~~

~~Additional information about fee revenue is provided under "Line of Business Information" included in this Management's Discussion and Analysis.~~

~~Net Interest Income~~

~~See Table 2: Total Revenue, for the breakout of interest income and interest expense for the first quarter of 2022, compared~~relative to the same period in 2021.

~~NII is defined as interest income earned on interest-earning assets less interest expense incurred on interest-bearing liabilities. Interest-earning assets, which principally consist~~Notable items

•The impact of ~~investment securities,~~

~~interest-bearing deposits with banks, loans, resale agreements and other liquid assets, are financed primarily by client deposits, short-term borrowings and long-term debt.~~

NIM represents the relationship between annualized FTE NII and average total interest-earning assets for the period. It is calculated by dividing FTE NII by average interest-earning assets. Revenue that is exempt from income taxes, mainly earned from certain investment securities (state and political subdivisions), is adjusted to a FTE basis using the U.S. federal and state statutory income tax rates.

~~NII on an FTE basis increased~~notable items in the ~~first~~second quarter of 2022 ~~compared~~includes acquisition and restructuring costs of approximately $12 million related to our proposed acquisition of the ~~same period in 2021, primarily due~~BBH Investor Services business, which is subject to ~~growth~~regulatory review and other closing conditions.

•The impact of notable items in the ~~investment portfolio and higher loan balances, as well as higher market interest rates.~~

~~Investment securities net premium amortization, which is included in interest income, was $87 million in the first~~second quarter of ~~2022, compared to $169 million in the same period in~~ 2021 ~~primarily driven by lower prepayments.~~

Interest income related to debt securities is recognized in our consolidated statement of income using the effective interest method, or on a basis approximating a level rate of return over the contractual or estimated life of the security. The rate of return considers any non-refundable fees or costs, as well as purchase premiums or discounts, resulting in amortization or accretion, accordingly. The amortization of premiums and accretion of discounts are adjusted for prepayments when they occur, which primarily impact mortgage-backed securities.

~~The following table presents the investment securities amortizable purchase premium net of discount accretion for the periods indicated:~~

TABLE 13: INVESTMENT SECURITIES NET PREMIUM AMORTIZATION
Three Months Ended March 31,
2022 2021
(Dollars in millions) MBS Non -MBS
Total(1)
MBS Non- MBS Total
Unamortized premiums, net of discounts at period end $ 665 $ 425 $ 1,090 $ 1,008 $ 602 $ 1,610
Net premium amortization(2)
48 39 87 105 64 169

~~(1)~~ ~~The investment securities portfolio duration is 2.8 years as of March 31, 2022.~~

~~(2)~~ ~~Net of discount accretion on MMLF HTM securities in 2021.~~includes:

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

◦$53 million gain on the sale of a majority share of our Wealth Management Services (WMS) business, recorded in other income;

◦legal accrual release of approximately $11 million; and

◦acquisition and restructuring costs of approximately $11 million, primarily related to our 2018 acquisition of CRD.

AUC/A and AUM

•AUC/A of $38.18 trillion decreased 10% as of June 30, 2022, compared to June 30, 2021, primarily due to lower market levels, partially offset by net new business and client flows. In the second quarter of 2022, newly announced asset servicing mandates totaled approximately $972 billion. Servicing assets remaining to be installed in future periods totaled approximately $3.63 trillion as of June 30, 2022.

•AUM of $3.48 trillion decreased 11% as of June 30, 2022, compared to June 30, 2021, primarily due to lower market levels and net outflows from our Institutional business, partially offset by net inflows from our ETF and Cash businesses.

Capital

•We declared common stock dividends of $0.57 per share, totaling $210 million in the second quarter of 2022, compared to $0.52 per share, totaling $179 million in the same period in 2021.

•In July 2022, we declared third quarter common stock dividends of $0.63 per share, representing a 10% increase on a per share basis from both the third quarter of 2021 and second quarter of 2022.

•Our standardized CET1 capital ratio decreased to 12.9% as of June 30, 2022, compared to 14.3% as of December 31, 2021, primarily reflecting lower AOCI related

to AFS securities driven by the significant increase in rates across the yield curve and the implementation of the standardized approach for counterparty credit risk (SA-CCR), partially offset by planned RWA reductions and optimization. Our Tier 1 leverage ratio decreased to 6.0% as of June 30, 2022 compared to 6.1% as of December 31, 2021, primarily driven by lower AOCI, partially offset by lower consolidated average assets. During the second quarter of 2022, we completed a number of our previously announced actions to mitigate additional AOCI risk in the current environment including a $21.23 billion transfer of securities from AFS to HTM. Given the reduction in AOCI risk, we have the ability to operate with CET1 and Tier 1 leverage capital ratios at or somewhat below the lower end of our target ranges of 10-11% and 5.25-5.75%, respectively, after the close of the proposed acquisition of the BBH Investor Services business.

Debt Issuances and Redemptions

•On May 13, 2022, we issued $500 million aggregate principal amount of 4.421% fixed-to-floating rate senior notes due 2033.

•On May 15, 2022, we redeemed $750 million aggregate principal amount of 2.653% fixed-to-floating rate senior notes due 2023.

CONSOLIDATED RESULTS OF OPERATIONS

This section discusses our consolidated results of operations for the three and six months ended June 30, 2022, compared to the same periods in 2021, and should be read in conjunction with the consolidated financial statements and accompanying notes to the consolidated financial statements in this Form 10-Q.

State Street Corporation | 10

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

~~See Table 14: Average Balances and Interest Rates - Fully Taxable-Equivalent Basis, for the breakout of NII on a FTE basis for the first quarter of 2022, compared to the same period in 2021.~~

Total Revenue

TABLE 14: AVERAGE BALANCES AND INTEREST RATES - FULLY TAXABLE-EQUIVALENT BASIS(1)
Three Months Ended March 31,
2022 2021
(Dollars in millions; fully taxable-equivalent basis) Average
Balance Interest
Revenue/Expense Rate Average
Balance Interest
Revenue/Expense Rate
Interest-bearing deposits with banks (2)
$ 76,741 $ 9 .05 % $ 95,235 $ (9) (.04) %
Securities purchased under resale agreements(3)
3,150 10 1.31 4,568 10 .88
Trading account assets 761 — — 800 — —
Investment securities:
Investment securities available-for-sale 75,226 157 .83 59,191 140 .95
Investment securities held-to-maturity 44,060 171 1.56 47,356 183 1.54
Investment securities held-to-maturity purchased under money market liquidity facility — — — 1,262 4 1.35
Total investment securities 119,286 328 1.10 107,809 327 1.21
Loans 34,407 172 2.03 28,025 142 2.05
Other interest-earning assets 23,767 5 .08 18,296 5 .10
Average total interest-earning assets $ 258,112 $ 524 .82 $ 254,733 $ 475 .76
Interest-bearing deposits:
U.S. $ 100,073 $ 4 .02 % $ 100,974 $ 3 .01 %
Non-U.S.(2)(4)
83,556 (67) (.32) 78,433 (72) (.37)
Total interest-bearing deposits(4)(5)
183,629 (63) (.14) 179,407 (69) (.16)
Securities sold under repurchase agreements 2,279 — (.02) 1,017 — .05
Short-term borrowings under money market liquidity facility — — — 1,264 4 1.21
Other short-term borrowings 872 — — 764 — .14
Long-term debt 14,265 64 1.82 13,819 60 1.74
Other interest-bearing liabilities 2,881 11 1.50 4,848 9 .73
Average total interest-bearing liabilities $ 203,926 $ 12 .02 $ 201,119 $ 4 .01
Interest rate spread .80 % .75 %
Net interest income, fully taxable-equivalent basis $ 512 $ 471
Net interest margin, fully taxable-equivalent basis .80 % .75 %
Tax-equivalent adjustment (3) (4)
Net interest income, GAAP-basis $ 509 $ 467


TABLE 2: TOTAL REVENUE
	Three Months Ended June 30,				% Change
(Dollars in millions)	2022		2021
Fee revenue:
Back office services	$	1,205	$	1,290		(7)	%
Middle office services	92		104			(12)
Servicing fees(1)	1,297		1,394			(7)
Management fees	490		504			(3)
Foreign exchange trading services	331		286			16
Securities finance	107		109			(2)
Front office software and data	126		148			(15)
Lending related and other fees	62		63			(2)
Software and processing fees(1)	188		211			(11)
Other fee revenue(1)	(43)		10			nm
Total fee revenue	2,370		2,514			(6)
Net interest income:
Interest income	704		467			51
Interest expense	120		—			nm
Net interest income	584		467			25
Other income:
Gains (losses) related to investment securities, net	(1)		—			nm
Other income	—		53			nm
Total other income	(1)		53			nm
Total revenue	$	2,953	$	3,034		(3)

	Six Months Ended June 30,					% Change
(Dollars in millions)	2022		2021
Fee revenue:
Back office services	$	2,473	$	2,556		(3)	%
Middle office services	192		207			(7)
Servicing fees(1)	2,665		2,763			(4)
Management fees	1,010		997			1
Foreign exchange trading services	690		632			9
Securities finance	203		208			(2)
Front office software and data	264		244			8
Lending related and other fees	125		127			(2)
Software and processing fees(1)	389		371			5
Other fee revenue(1)	(14)		26			nm
Total fee revenue	4,943		4,997			(1)
Net interest income:
Interest income	1,225		938			31
Interest expense	132		4			nm
Net interest income	1,093		934			17
Other income:
Gains (losses) related to investment securities, net	(2)		—			nm
Other income	—		53			nm
Total other income	(2)		53			nm
Total revenue	$	6,034	$	5,984		1

(1) ~~Rates earned/paid on interest-earning assets and interest-bearing liabilities include the impact of hedge activities associated with our asset and liability management activities where applicable.~~

~~(2)~~ ~~Negative values reflect the interest rate environment outside of the U.S. where central bank rates are below zero for several major currencies.~~

~~(3)~~ ~~Reflects the impact of balance sheet netting under enforceable netting agreements of approximately $55.02 billion for~~In the first quarter of 2022, we reclassified certain fee revenue in our Consolidated Statement of Operations, primarily moving revenues that are not directly associated with software and processing fees to a new Other fee revenue line item. In addition, we provided a disaggregation of servicing fees into Back office services and Middle office services and of software and processing fees into Front office software and data and Lending related and other fees. Prior periods were revised to reflect these changes.

nmNot meaningful

Fee Revenue

Table 2: Total Revenue, provides the breakout of fee revenue for the three and six months ended June 30, 2022 and 2021. Servicing and management fees collectively made up approximately 75% and 74% of the total fee revenue in the three and six months ended June 30, 2022, respectively, compared to ~~$87.37~~75% in both the same periods in 2021.

State Street Corporation | 11

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Servicing Fee Revenue

Changes in Market Valuations

Assuming that all other factors remain constant, including client activity, asset flows and pricing, we estimate, using relevant information as of June 30, 2022 that a 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our servicing fees are calculated, would result in a corresponding change in our total servicing fee revenues, on average and over multiple quarters, of approximately 3%. We estimate, similarly assuming all other factors remain constant and using relevant information as of June 30, 2022, that changes in worldwide fixed income markets, which on a weighted average basis and over time are typically less volatile than worldwide equity markets, have a significantly smaller impact on our servicing fee revenues on average and over time.


TABLE 3: DAILY AVERAGES, MONTH-END AVERAGES AND QUARTER-END EQUITY INDICES(1)
	Daily Averages of Indices				Month-End Averages of Indices				Quarter-End Indices
	Three Months Ended June 30,				Three Months Ended June 30,				As of June 30,
	2022	2021	% Change		2022	2021	% Change		2022	2021	% Change
S&P 500®	4,106	4,184	(2)	%	4,016	4,228	(5)	%	3,785	4,298	(12)	%
MSCI EAFE®	1,998	2,307	(13)		1,973	2,302	(14)		1,846	2,305	(20)
MSCI® Emerging Markets	1,055	1,351	(22)		1,052	1,366	(23)		1,001	1,375	(27)


	Daily Averages of Indices				Month-End Averages of Indices
	Six Months Ended June 30,				Six Months Ended June 30,
	2022	2021	% Change		2022	2021	% Change
S&P 500®	4,285	4,027	6	%	4,245	4,030	5	%
MSCI EAFE®	2,105	2,254	(7)		2,084	2,235	(7)
MSCI® Emerging Markets	1,120	1,357	(17)		1,113	1,347	(17)


c

(1) The index names listed in the table are service marks of their respective owners.


TABLE 4: QUARTER-END DEBT INDICES(1)
	As of June 30,
	2022	2021	% Change
Barclays Capital U.S. Aggregate Bond Index®	2,111	2,354	(10)	%
Barclays Capital Global Aggregate Bond Index®	458	541	(15)

(1) The index names listed in the table are service marks of their respective owners.

State Street Corporation | 12

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Client Activity and Asset Flows


TABLE 5: INDUSTRY ASSET FLOWS
	Three Months Ended June 30,
(In billions)	2022		2021
North America - (US Domiciled) - Morningstar Direct Market Data(1)(2)(3)
Long-Term Funds(4)	$	(275.6)	$	195.7
Money Market	(54.2)		33.1
Exchange-Traded Fund	93.2		122.6
Total Flows	$	(236.6)	$	351.4

Europe - Morningstar Direct Market Data(1)(2)(5)
Long-Term Funds(4)	$	(32.2)	$	225.8
Money Market	(4.8)		(9.8)
Exchange-Traded Fund	24.0		51.1


Total Flows	$	(13.0)	$	267.1

(1) Industry data is provided for illustrative purposes only. It is not intended to reflect our activity or our clients' activity and is indicative of only segments of the entire industry.

(3) The second quarter of 2022 data for North America (U.S. domiciled) includes Morningstar direct actuals for April and May 2022 and Morningstar direct estimates for June 2022.

(5) The second quarter of 2022 data for Europe is on a rolling three month basis for March 2022 through May 2022, sourced by Morningstar.

Net New Business

Over the five years ended December 31, 2021, net new business, which includes business both won and lost, has affected our servicing fee revenues by approximately 1% on average with a range of 0% to 3% annually and approximately 1% and 0% in 2021 and 2020, respectively. Gross new investment servicing mandates were $972 billion in the ~~same period in 2021. Excluding the impact of netting, the average interest rates would be approximately 0.07% in the first~~second quarter of 2022 ~~compared~~and $1.8 trillion per year on average over the past five years. Over the five years ended December 31, 2021, gross new annual investment servicing mandates ranged from $750 billion to ~~0.04%~~$3.5 trillion.

Servicing fee revenue associated with new servicing mandates may vary based on the breadth of services provided, the time required to install the assets, and the types of assets installed.

Revenues associated with new mandates are not reflected in our servicing fee revenue until the ~~same period~~assets have been installed. Our installation timeline, in ~~2021.~~

~~(4)~~ ~~Average rate includes~~general, can range from 6 to 36 months, with the ~~impact~~average installation timeline being approximately 9 to 12 months over the past 2 years. Our more complex installations, including new State Street Alpha mandates, will generally be on the longer end of ~~FX swap costs~~that range. With respect to the current asset mandates of approximately ($13) million for the first quarter of 2022 compared to ($21) million for the same period in 2021. Average rates for total interest-bearing deposits excluding the impact of FX swap costs were (0.11)% in the first quarter of 2022, compared to (0.11)% in the same period in 2021.

~~(5)~~ ~~Total deposits averaged $233.27 billion in the first quarter of 2022 compared to $226.23 billion in the same period in 2021.~~

Changes in the components of interest-earning assets and interest-bearing liabilities are discussed in more detail below. Additional information about the components of interest income and interest expense is provided in Note 14 to the consolidated financial statements within this Form 10-Q.

Average total interest-earning assets were $258.11 billion in the first quarter of 2022 compared to $254.73 billion in the same period in 2021. The increase is primarily due to higher client deposit balances, partially offset by a reduction in average other liabilities.

Interest-bearing deposits with banks averaged $76.74 billion in the first quarter of 2022 compared to $95.24 billion in the same period in 2021. These deposits primarily reflect our maintenance of cash balances at the Federal Reserve, the European Central Bank (ECB) and other non-U.S. central banks. The lower levels of average cash balances with central banks reflect growth in securities and loans.

Securities repurchased under resale agreements averaged $3.15 billion in the first quarter of 2022 compared to $4.57 billion in the same period in 2021. We maintain an agreement with Fixed Income Clearing Corporation (FICC), a clearing organization that enables us to net securities sold under repurchase agreements against those repurchased under resale agreements with counterparties$3.63 trillion that are ~~also members~~yet to be installed as of June 30, 2022, we expect the ~~clearing organization, when specific netting criteria are met. The impact of balance sheet netting decreased to $55.02 billion in~~conversion will occur over the first quarter of 2022 compared to $87.37 billion in the same period in 2021, primarily driven by lower gross FICC repurchase agreement volumes and the continued impact from extensive Federal Reserve stimulus. The decline on balance sheet was primarily due to lower gross FICC repurchase agreement volumes, but also reflects our ability to net a portion of our Global Treasury repurchase agreement activity.coming 36 months.

State Street Corporation | 1913

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

WePricing

Servicing fees, as presented in Table 2: Total Revenue, decreased 7% in the three months ended June 30, 2022 compared to the same period in 2021, primarily due to lower average equity and fixed income market levels, normal pricing headwinds, lower client activity and adjustments and the impact of currency translation, partially offset by net new business. Currency translation decreased servicing fee revenue by 3% in the second quarter of 2022, relative to the same period in 2021. Servicing fees decreased 4% in the six months ended June 30, 2022, compared to the same period in 2021, primarily due to normal pricing headwinds, lower client activity and adjustments and the impact of currency translation, partially offset by net new business. Currency translation decreased servicing fee revenue by 2% in the six months ended June 30, 2022, relative to the same period in 2021.

Servicing fees generated outside the U.S. were approximately 47% of total servicing fees in both the three and six months ended June 30, 2022, compared to approximately 49% and 48% in the same periods in 2021, respectively.


TABLE 6: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Collective funds, including ETFs	$	13,609	$	15,722	$	15,048
Mutual funds	9,642		11,575		10,873
Pension products	7,764		8,443		8,291
Insurance and other products	7,165		7,938		8,385
Total	$	38,180	$	43,678	$	42,597


TABLE 7: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Equities	$	21,953	$	25,974	$	24,792
Fixed-income	10,716		12,587		13,079
Short-term and other investments	5,511		5,117		4,726
Total	$	38,180	$	43,678	$	42,597


TABLE 8: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(1)(2)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Americas	$	28,207	$	32,427	$	31,280
Europe/Middle East/Africa	7,498		8,599		8,716
Asia/Pacific	2,475		2,652		2,601
Total	$	38,180	$	43,678	$	42,597

(1) Consistent with past practice, AUC/A values for certain asset classes are based on a ~~sponsoring member within FICC since 2005~~lag, typically one-month.

(2) Geographic mix is generally based on the domicile of the entity servicing the funds and is not necessarily representative of the underlying asset mix.

State Street Corporation | 14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Asset servicing mandates newly announced in the second quarter of 2022 totaled approximately $972 billion. Servicing assets remaining to be installed in future periods totaled approximately $3.63 trillion as of June 30, 2022, which will be reflected in AUC/A in future periods after installation and will generate servicing fee revenue in subsequent periods. The full revenue impact of such mandates will be realized as the assets are installed and additional services are added over that period.

With respect to these new servicing mandates, once installed we may provide various services, including back office services such as custody and safekeeping, transaction processing and trade settlement, fund administration, reporting and record keeping, security servicing, fund accounting, middle office services such as investment book of records (IBOR), transaction management, loans, cash, derivatives and collateral services, recordkeeping, client reporting and investment analytics, markets services such as FX trading services, liquidity solutions, currency and collateral management, securities finance, and front office services such as portfolio management solutions, risk analytics, scenario analysis, performance and attribution, trade order and execution management, pre-trade compliance and environmental, social and governance (ESG) investment tools. Revenues associated with new servicing mandates may vary based on the breadth of services provided and the timing of installation, and the types of assets.

this client after this transition and for the client to continue to ~~expand~~be meaningful to our business. The transition is expected to begin in 2022, but will principally occur in 2023 and 2024. For the year ended December 31, 2021, the fee revenue associated with the transitioning assets represented approximately 1.9% of our total 2021 fee revenue. The actual total revenue and income impact of this transition will reflect a range of factors, including potential growth in our continuing business with the client ~~base~~and expense reductions associated with the transition.

Management Fee Revenue

Management fees generally are affected by our level of AUM, which we report based on month-end valuations. Management fees for certain components of managed assets, such as ~~program eligibility parameters broaden. We enter into repurchase~~ETFs, mutual funds and ~~resale transactions~~Undertakings for Collective Investments in ~~eligible securities~~Transferable Securities, are affected by daily average valuations of AUM. Management fee revenue is more sensitive to market valuations than servicing fee revenue, as a higher proportion of the underlying services provided, and the associated management fees earned, are dependent on equity and fixed-income security valuations. Additional factors, such as the relative mix of assets managed, may have a significant effect on our management fee revenue. While certain management fees are directly determined by the values of AUM and the investment strategies employed, management fees may reflect other factors, including performance fee arrangements, as well as our relationship pricing for clients. From the second half of 2020 through the first quarter of 2022, we were in a prolonged low-interest rate environment, and waived certain fees for our clients for money market products. Following the Federal Reserve rate hikes in March 2022, money market fee waivers did not have a significant impact on our management fee revenue in the second quarter of 2022, and we do not expect them to materially impact subsequent quarters in 2022.

State Street Corporation | 15

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

In light of the above, we estimate, using relevant information as of June 30, 2022, and ~~with~~assuming that all other ~~FICC members~~factors remain constant, including the impact of business won and ~~pursuant~~lost and client flows, that:

��A 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our management fees are calculated, would result in a corresponding change in our total management fee revenues, on average and over multiple quarters, of approximately 5%; and

Daily averages, month-end averages and year-end indices demonstrate worldwide changes in equity and debt markets that affect our management fee revenue. Year-end indices affect the values of AUM as of those dates. See Table 3: Daily Averages, Month-End Averages and Quarter-End Equity Indices for selected indices. While the specific indices presented are indicative of general market trends, the asset types and classes relevant to ~~FICC Government Securities Division rules, submit, novate~~individual client portfolios can and do differ, and the performance of associated relevant indices and of client portfolios can therefore differ from the performance of the indices presented. In addition, our asset classifications may differ from those industry classifications presented.

Management fees decreased 3% in the three months ended June 30, 2022 compared to same period in 2021, primarily due to lower average equity and fixed income market levels, a client-specific pricing adjustment, and the impact of currency translation, partially offset by the absence of the impact of money market fee waivers and net inflows from ETFs. Currency translation decreased management fees by 2% in the ~~transactions. We may sponsor clients~~second quarter of 2022, relative to ~~clear their eligible repurchase transactions with FICC, backed by our guarantee~~the same period in 2021. Management fees increased 1% in the six months ended June 30, 2022 compared to ~~FICC~~the same period in 2021, primarily due to higher average equity market levels and the absence of the ~~prompt~~impact of money market fee waivers, partially offset by a client-specific pricing adjustment and ~~full payment and performance~~the impact of ~~our sponsored member clients’ respective obligations. We generally obtain a security interest from our sponsored clients~~currency translation. Currency translation decreased management fees by 1% in the ~~high quality securities collateral that they receive, which~~six months ended June 30, 2022 compared to the same period in 2021.

Management fees generated outside the U.S. were approximately 25% and 26% of total management fees in the three and six months ended June 30, 2022, respectively, compared to approximately 26% in both the three and six months ended June 30, 2021.


TABLE 9: ASSETS UNDER MANAGEMENT BY ASSET CLASS AND INVESTMENT APPROACH
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Equity:
Active	$	62	$	80	$	83
Passive	2,024		2,594		2,378
Total equity	2,086		2,674		2,461
Fixed-income:
Active	89		103		100
Passive	461		520		510
Total fixed-income	550		623		610
Cash(1)	403		368		381
Multi-asset-class solutions:
Active	29		34		35
Passive	173		188		172
Total multi-asset-class solutions	202		222		207
Alternative investments(2):
Active	42		56		63
Passive	192		195		175
Total alternative investments	234		251		238
Total	$	3,475	$	4,138	$	3,897

(1) Includes both floating- and constant-net-asset-value portfolios held in commingled structures or separate accounts.

(2)Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®GoldMiniSharesSM Trust, but act as the marketing agent.

State Street Corporation | 16

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS


TABLE 10: EXCHANGE-TRADED FUNDS BY ASSET CLASS(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Alternative Investments(2)	$	77	$	72	$	73

Equity	791		970		844
Multi Asset	1		1		1
Fixed-Income	130		135		128
Total Exchange-Traded Funds	$	999	$	1,178	$	1,046

(1) ETFs are a component of AUM presented in the preceding table.

(2) Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®GoldMiniSharesSM Trust, but act as the marketing agent.


TABLE 11: GEOGRAPHIC MIX OF ASSETS UNDER MANAGEMENT(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
North America	$	2,525	$	2,931	$	2,749
Europe/Middle East/Africa	521		592		570
Asia/Pacific	429		615		578
Total	$	3,475	$	4,138	$	3,897

(1) Geographic mix is ~~designed to mitigate our potential exposure to FICC.~~based on client location or fund management location.

~~Average investment securities were $119.29 billion~~


TABLE 12: ACTIVITY IN ASSETS UNDER MANAGEMENT BY PRODUCT CATEGORY
(In billions)	Equity(1)		Fixed-Income(1)		Cash(1)(2)		Multi-Asset-Class Solutions(1)		Alternative Investments(1)(3)		Total
Balance as of December 31, 2020	$	2,171	$	549	$	349	$	186	$	212	$	3,467
Long-term institutional flows, net(4)	(35)		26		(1)		1		1		(8)
Exchange-traded fund flows, net	21		9		—		—		(7)		23
Cash fund flows, net	—		—		24		—		—		24
Total flows, net	(14)		35		23		1		(6)		39
Market appreciation (depreciation)	148		(24)		—		3		(11)		116
Foreign exchange impact	(23)		(6)		—		(1)		(1)		(31)
Total market/foreign exchange impact	125		(30)		—		2		(12)		85
Balance as of March 31, 2021	2,282		554		372		189		194		3,591
Long-term institutional flows, net(4)	13		37		—		7		(2)		55
Exchange-traded fund flows, net	15		5		—		—		1		21
Cash fund flows, net	—		—		7		—		—		7
Total flows, net	28		42		7		7		(1)		83
Market appreciation (depreciation)	152		14		2		11		45		224
Foreign exchange impact	(1)		—		—		—		—		(1)
Total market/foreign exchange impact	151		14		2		11		45		223
Balance as of June 30, 2021	$	2,461	$	610	$	381	$	207	$	238	$	3,897









Balance as of December 31, 2021	$	2,674	$	623	$	368	$	222	$	251	$	4,138
Long-term institutional flows, net(4)	(25)		11		4		11		13		14
Exchange-traded fund flows, net	4		5		—		—		8		17
Cash fund flows, net	—		—		20		—		—		20
Total flows, net	(21)		16		24		11		21		51
Market appreciation (depreciation)	(113)		(34)		1		(3)		(4)		(153)
Foreign exchange impact	(10)		(4)		—		(1)		1		(14)
Total market/foreign exchange impact	(123)		(38)		1		(4)		(3)		(167)
Balance as of March 31, 2022	2,530		601		393		229		269		4,022
Long-term institutional flows, net(4)	(52)		(10)		(3)		2		(6)		(69)
Exchange-traded fund flows, net	(12)		5		—		—		(1)		(8)
Cash fund flows, net	—		—		15		—		—		15
Total flows, net	(64)		(5)		12		2		(7)		(62)
Market appreciation (depreciation)	(337)		(33)		—		(26)		(21)		(417)
Foreign exchange impact	(43)		(13)		(2)		(3)		(7)		(68)
Total market/foreign exchange impact	(380)		(46)		(2)		(29)		(28)		(485)
Balance as of June 30, 2022	$	2,086	$	550	$	403	$	202	$	234	$	3,475

(2) Includes both floating- and constant-net-asset-value portfolios held in commingled structures or separate accounts.

(3) Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®GoldMiniSharesSM Trust, but act as the marketing agent.

(4) Amounts represent long-term portfolios, excluding ETFs.

State Street Corporation | 17

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Foreign Exchange Trading Services

Foreign exchange trading services revenue, as presented in Table 2: Total Revenue, increased 16% and 9% in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, primarily due to higher FX spreads, partially offset by lower client FX volumes. Foreign exchange trading services revenue comprises revenue generated by FX trading and revenue generated by brokerage and other trading services, which made up 67% and 33%, respectively, of foreign exchange trading services revenue in the second quarter of 2022, compared to ~~$107.81 billion~~and 66% and 34%, respectively, in the same period in 2021. The ~~increase reflects higher U.S. Treasuries, agencies, MBS~~impact of gross money market fund fee waivers on foreign exchange trading services was $1 million and ~~CMBS balances,~~$11 million in the three and six months ended June 30, 2022, respectively, compared to $15 million and $23 million in the same periods in 2021, respectively. This represents a reduction in revenue on the Fund Connect platform due to the impact of fee waivers by participating money market funds, including State Street Global Advisors funds.

We primarily earn FX trading revenue by acting as a principal market-maker through both "direct sales and trading” and “indirect FX trading.”

•Indirect FX trading: Represents FX transactions with clients, for which ~~was~~we are the funds' custodian, or their investment managers, routed to our FX desk through our asset-servicing operation. We execute indirect FX trades as a principal at rates disclosed to our clients.

Our clients that utilize indirect FX trading can, in addition to executing their FX transactions through dealers not affiliated with us, transition from indirect

We also earn foreign exchange trading services revenue through "electronic FX services" and "other trading, transition management and brokerage revenue."

•Electronic FX services: Our clients may choose to execute FX transactions through one of our electronic trading platforms. These transactions generate revenue through a “click” fee.

Fund Connect is another one of our electronic trading platforms: it is a global trading, analytics and cash management tool with access to more than 400 money market funds from leading providers.

Securities Finance

Our securities finance business consists of three components:

(2) an agency lending program for third-party investment managers and asset owners, which we refer to as the agency lending funds; and

(3) security lending transactions which we enter into as principal, which we refer to as our enhanced custody business.

State Street Corporation | 18

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

As principal, our enhanced custody business borrows securities from the lending client or other market participants and then lends such securities to the subsequent borrower, either our client or a broker/dealer. We act as principal when the lending client is unable to, or elects not to, transact directly with the market and execute the transaction and furnish the securities. In our role as principal, we provide support to the transaction through our credit rating. While we source a significant proportion of the securities furnished by us in our role as principal from third parties, we have the ability to source securities through assets under custody from clients who have designated us as an eligible borrower.

Securities finance revenue, as presented in Table 2: Total Revenue, decreased 2% in both the three and six months ended June 30, 2022, compared to the same periods in 2021, primarily driven by lower agency and enhanced custody balances, partially offset by higher spreads.

Market influences may continue to affect client demand for securities finance, and as a result our revenue from, and the ~~elevated levels~~profitability of, our ~~client deposit portfolio.~~securities lending activities in future periods. In addition, the constantly evolving regulatory environment, including revised or proposed capital and liquidity standards, interpretations of those standards, and our own balance sheet management activities, may influence modifications to the way in which we deliver our agency lending or enhanced custody businesses, the volume of our securities lending activity and related revenue and profitability in future periods.

~~Loans averaged $34.41 billion~~

Software and Processing Fees

Software and processing fees revenue includes diverse types of fees and revenue, including fees from software licensing and maintenance and fees from our structured products business.

Software and processing fees revenue, presented in Table 2: Total Revenue, decreased 11% in the ~~first quarter of~~three months ended June 30, 2022, compared to ~~$28.03 billion in~~ the same period in ~~2021. Average core loans, which exclude overdrafts~~2021, primarily driven by lower front office software and ~~highlight our efforts to grow our lending portfolio over the prior year, averaged $28.83 billion~~ data revenue associated with CRD. Software and processing fees revenue increased 5% in the ~~first quarter of~~six months ended June 30, 2022, compared to $23.80 billion in the same period in 2021. The increase is primarily due to growth in CLOs in loan form and fund finance loans. Additional information about these loans is provided in Note 4 to the consolidated financial statements in this Form 10-Q.

~~Average other interest-earning assets, largely associated with our enhanced custody business, increased to $23.77 billion in the first quarter of 2022 from $18.30 billion in~~ the same period in 2021, primarily driven by ~~an increase~~higher front office software and data revenue associated with CRD.

Front office software and data revenue, which includes primarily revenue from CRD, Alpha Data Platform and Alpha Data Services, decreased 15% in the ~~level of cash collateral posted due~~three months ended June 30, 2022, compared to higher average deposits. Enhanced custody is our securities financing business where we act as principal with respect to our custody clients and generate securities finance revenue. The NII earned on these transactions is generally lower than the interest earned on other alternative investments.

~~Aggregate average total interest-bearing deposits increased to $183.63 billion in the first quarter of 2022 from $179.41 billion in~~ the same period in ~~2021. Average U.S. interest-bearing deposits increased as a result of U.S. monetary policy~~2021, primarily driven by lower on-premises renewals and the ~~level~~absence of ~~global interest rates. Future deposit levels will be influenced~~episodic fees, partially offset by higher software-enabled revenues. Front office software and data revenue increased 8% in the ~~underlying asset servicing business, client deposit behavior and market conditions, including the size of the Federal Reserve balance sheet and the general levels of U.S. and non-U.S. interest rates.~~six months ended June 30, 2022, compared to

~~Average other short-term borrowings increased to $0.87 billion in the first quarter of 2022 from $0.76 billion in~~ the same period in ~~2021.~~2021, primarily driven by higher software-enabled and professional services revenue, partially offset by lower on-premises renewals and absence of episodic fees. Revenue related to the front office solutions provided by CRD is primarily driven by the sale of term software licenses and SaaS, including professional services such as consulting and implementation services, software support and maintenance. Approximately 50%-70% of revenue associated with a sale of software to be installed on-premises is recognized at a point in time when the customer benefits from obtaining access to and use of the software license, with the percentage varying based on the length of the contract and other contractual terms. The remainder of revenue for on-premise installations is recognized over the length of the contract as maintenance and other services are provided. Upon renewal of an on-premises software contract, the same pattern of revenue recognition is followed with 50%-70% recognized upon renewal and the remaining balance recognized over the term of the contract. Revenue for a SaaS related arrangement, where the customer does not take possession of the software, is recognized over the term of the contract as services are provided. Upon renewal of a SaaS arrangement, revenue continues to be recognized as services are provided under the new contract. As a result of these differences in how portions of CRD revenue are accounted for, CRD revenue may vary more than other business units quarter to quarter.

~~Average long-term debt was $14.27 billion~~Lending related and other fees, which decreased by 2% in both the ~~first quarter of~~three and six months ended June 30, 2022, compared to ~~$13.82 billion in~~ the same ~~period~~periods in ~~2021. These amounts reflect issuances, redemptions and maturities~~2021, primarily consists of ~~senior debt during the respective periods.~~

Average other interest-bearing liabilities were $2.88 billion in the first quarter of 2022 compared to $4.85 billion in the same period in 2021. Other interest-bearing liabilities primarily reflect our level of cash collateral received from clients in connectionfee revenue associated with our ~~enhanced custody business, which is presented on a net basis where we have enforceable netting agreements.~~

~~Several factors could affect future levels of NII~~fund finance, leverage loans, municipal finance, insurance and NIM, including the volume and mix of client deposits and funding sources; central bank actions; balance sheet management activities; changes in the level and slope of U.S. and non-U.S. interest rates; revised or proposed regulatory capital or liquidity standards, or interpretations of those standards; the yields earned on securities purchased compared to the yields earned on securities sold or matured; and changes in the type and amount of credit or other loans we extend.

Based on market conditions and other factors, including regulatory standards, we continue to reinvest the majority of the proceeds from pay-downs and maturities of investment securities in highly-rated U.S. and non-U.S. securities, such as federal agency MBS, sovereign debt securities and U.S. Treasury and agency securities. The pace at which we reinvest and the types of investment securities purchased will depend on the impact of market conditions, the implementation of regulatory standards, including interpretation of those standards and other factors over time. We expect these factors and the levels of global interest rates to impact our reinvestment program and future levels of NII and NIM.stable value wrap businesses.

Provision for Credit Losses

•We recorded a $10 million provision for credit losses in the second quarter of 2022, compared to a $15 million reserve release in the same period in 2021, reflecting a downward shift in management's economic outlook, partially offset by a decrease in expected losses related to leveraged loans within our portfolio.

Expenses

•Total expenses were flat in the second quarter of 2022, compared to the same period in 2021, as higher targeted business investments and wage growth were offset by productivity savings and ongoing disciplined expense management, and the positive impact of currency translation. Currency translation decreased expenses by 3% in the second quarter of 2022, relative to the same period in 2021.

Notable items

•The impact of notable items in the second quarter of 2022 includes acquisition and restructuring costs of approximately $12 million related to our proposed acquisition of the BBH Investor Services business, which is subject to regulatory review and other closing conditions.

•The impact of notable items in the second quarter of 2021 includes:

State Street Corporation | 9

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

◦$53 million gain on the sale of a majority share of our Wealth Management Services (WMS) business, recorded in other income;

◦legal accrual release of approximately $11 million; and

◦acquisition and restructuring costs of approximately $11 million, primarily related to our 2018 acquisition of CRD.

AUC/A and AUM

Capital

•We declared common stock dividends of $0.57 per share, totaling $210 million in the second quarter of 2022, compared to $0.52 per share, totaling $179 million in the same period in 2021.

•In July 2022, we declared third quarter common stock dividends of $0.63 per share, representing a 10% increase on a per share basis from both the third quarter of 2021 and second quarter of 2022.

•Our standardized CET1 capital ratio decreased to 12.9% as of June 30, 2022, compared to 14.3% as of December 31, 2021, primarily reflecting lower AOCI related

to AFS securities driven by the significant increase in rates across the yield curve and the implementation of the standardized approach for counterparty credit risk (SA-CCR), partially offset by planned RWA reductions and optimization. Our Tier 1 leverage ratio decreased to 6.0% as of June 30, 2022 compared to 6.1% as of December 31, 2021, primarily driven by lower AOCI, partially offset by lower consolidated average assets. During the second quarter of 2022, we completed a number of our previously announced actions to mitigate additional AOCI risk in the current environment including a $21.23 billion transfer of securities from AFS to HTM. Given the reduction in AOCI risk, we have the ability to operate with CET1 and Tier 1 leverage capital ratios at or somewhat below the lower end of our target ranges of 10-11% and 5.25-5.75%, respectively, after the close of the proposed acquisition of the BBH Investor Services business.

Debt Issuances and Redemptions

•On May 13, 2022, we issued $500 million aggregate principal amount of 4.421% fixed-to-floating rate senior notes due 2033.

•On May 15, 2022, we redeemed $750 million aggregate principal amount of 2.653% fixed-to-floating rate senior notes due 2023.

CONSOLIDATED RESULTS OF OPERATIONS

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Total Revenue


TABLE 2: TOTAL REVENUE
	Three Months Ended June 30,				% Change
(Dollars in millions)	2022		2021
Fee revenue:
Back office services	$	1,205	$	1,290		(7)	%
Middle office services	92		104			(12)
Servicing fees(1)	1,297		1,394			(7)
Management fees	490		504			(3)
Foreign exchange trading services	331		286			16
Securities finance	107		109			(2)
Front office software and data	126		148			(15)
Lending related and other fees	62		63			(2)
Software and processing fees(1)	188		211			(11)
Other fee revenue(1)	(43)		10			nm
Total fee revenue	2,370		2,514			(6)
Net interest income:
Interest income	704		467			51
Interest expense	120		—			nm
Net interest income	584		467			25
Other income:
Gains (losses) related to investment securities, net	(1)		—			nm
Other income	—		53			nm
Total other income	(1)		53			nm
Total revenue	$	2,953	$	3,034		(3)

	Six Months Ended June 30,					% Change
(Dollars in millions)	2022		2021
Fee revenue:
Back office services	$	2,473	$	2,556		(3)	%
Middle office services	192		207			(7)
Servicing fees(1)	2,665		2,763			(4)
Management fees	1,010		997			1
Foreign exchange trading services	690		632			9
Securities finance	203		208			(2)
Front office software and data	264		244			8
Lending related and other fees	125		127			(2)
Software and processing fees(1)	389		371			5
Other fee revenue(1)	(14)		26			nm
Total fee revenue	4,943		4,997			(1)
Net interest income:
Interest income	1,225		938			31
Interest expense	132		4			nm
Net interest income	1,093		934			17
Other income:
Gains (losses) related to investment securities, net	(2)		—			nm
Other income	—		53			nm
Total other income	(2)		53			nm
Total revenue	$	6,034	$	5,984		1

nmNot meaningful

Fee Revenue

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Servicing Fee Revenue

Changes in Market Valuations


TABLE 3: DAILY AVERAGES, MONTH-END AVERAGES AND QUARTER-END EQUITY INDICES(1)
	Daily Averages of Indices				Month-End Averages of Indices				Quarter-End Indices
	Three Months Ended June 30,				Three Months Ended June 30,				As of June 30,
	2022	2021	% Change		2022	2021	% Change		2022	2021	% Change
S&P 500®	4,106	4,184	(2)	%	4,016	4,228	(5)	%	3,785	4,298	(12)	%
MSCI EAFE®	1,998	2,307	(13)		1,973	2,302	(14)		1,846	2,305	(20)
MSCI® Emerging Markets	1,055	1,351	(22)		1,052	1,366	(23)		1,001	1,375	(27)


	Daily Averages of Indices				Month-End Averages of Indices
	Six Months Ended June 30,				Six Months Ended June 30,
	2022	2021	% Change		2022	2021	% Change
S&P 500®	4,285	4,027	6	%	4,245	4,030	5	%
MSCI EAFE®	2,105	2,254	(7)		2,084	2,235	(7)
MSCI® Emerging Markets	1,120	1,357	(17)		1,113	1,347	(17)


c

(1) The index names listed in the table are service marks of their respective owners.


TABLE 4: QUARTER-END DEBT INDICES(1)
	As of June 30,
	2022	2021	% Change
Barclays Capital U.S. Aggregate Bond Index®	2,111	2,354	(10)	%
Barclays Capital Global Aggregate Bond Index®	458	541	(15)

(1) The index names listed in the table are service marks of their respective owners.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Client Activity and Asset Flows


TABLE 5: INDUSTRY ASSET FLOWS
	Three Months Ended June 30,
(In billions)	2022		2021
North America - (US Domiciled) - Morningstar Direct Market Data(1)(2)(3)
Long-Term Funds(4)	$	(275.6)	$	195.7
Money Market	(54.2)		33.1
Exchange-Traded Fund	93.2		122.6
Total Flows	$	(236.6)	$	351.4

Europe - Morningstar Direct Market Data(1)(2)(5)
Long-Term Funds(4)	$	(32.2)	$	225.8
Money Market	(4.8)		(9.8)
Exchange-Traded Fund	24.0		51.1


Total Flows	$	(13.0)	$	267.1

(1) Industry data is provided for illustrative purposes only. It is not intended to reflect our activity or our clients' activity and is indicative of only segments of the entire industry.

(3) The second quarter of 2022 data for North America (U.S. domiciled) includes Morningstar direct actuals for April and May 2022 and Morningstar direct estimates for June 2022.

(5) The second quarter of 2022 data for Europe is on a rolling three month basis for March 2022 through May 2022, sourced by Morningstar.

Net New Business

Over the five years ended December 31, 2021, net new business, which includes business both won and lost, has affected our servicing fee revenues by approximately 1% on average with a range of 0% to 3% annually and approximately 1% and 0% in 2021 and 2020, respectively. Gross new investment servicing mandates were $972 billion in the second quarter of 2022 and $1.8 trillion per year on average over the past five years. Over the five years ended December 31, 2021, gross new annual investment servicing mandates ranged from $750 billion to $3.5 trillion.

Servicing fee revenue associated with new servicing mandates may vary based on the breadth of services provided, the time required to install the assets, and the types of assets installed.

Revenues associated with new mandates are not reflected in our servicing fee revenue until the assets have been installed. Our installation timeline, in general, can range from 6 to 36 months, with the average installation timeline being approximately 9 to 12 months over the past 2 years. Our more complex installations, including new State Street Alpha mandates, will generally be on the longer end of that range. With respect to the current asset mandates of approximately $3.63 trillion that are yet to be installed as of June 30, 2022, we expect the conversion will occur over the coming 36 months.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Pricing


TABLE 6: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Collective funds, including ETFs	$	13,609	$	15,722	$	15,048
Mutual funds	9,642		11,575		10,873
Pension products	7,764		8,443		8,291
Insurance and other products	7,165		7,938		8,385
Total	$	38,180	$	43,678	$	42,597


TABLE 7: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Equities	$	21,953	$	25,974	$	24,792
Fixed-income	10,716		12,587		13,079
Short-term and other investments	5,511		5,117		4,726
Total	$	38,180	$	43,678	$	42,597


TABLE 8: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(1)(2)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Americas	$	28,207	$	32,427	$	31,280
Europe/Middle East/Africa	7,498		8,599		8,716
Asia/Pacific	2,475		2,652		2,601
Total	$	38,180	$	43,678	$	42,597

(1) Consistent with past practice, AUC/A values for certain asset classes are based on a lag, typically one-month.

(2) Geographic mix is generally based on the domicile of the entity servicing the funds and is not necessarily representative of the underlying asset mix.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

With respect to these new servicing mandates, once installed we may provide various services, including back office services such as custody and safekeeping, transaction processing and trade settlement, fund administration, reporting and record keeping, security servicing, fund accounting, middle office services such as investment book of records (IBOR), transaction management, loans, cash, derivatives and collateral services, recordkeeping, client reporting and investment analytics, markets services such as FX trading services, liquidity solutions, currency and collateral management, securities finance, and front office services such as portfolio management solutions, risk analytics, scenario analysis, performance and attribution, trade order and execution management, pre-trade compliance and environmental, social and governance (ESG) investment tools. Revenues associated with new servicing mandates may vary based on the breadth of services provided and the timing of installation, and the types of assets.

Management Fee Revenue

Management fees generally are affected by our level of AUM, which we report based on month-end valuations. Management fees for certain components of managed assets, such as ETFs, mutual funds and Undertakings for Collective Investments in Transferable Securities, are affected by daily average valuations of AUM. Management fee revenue is more sensitive to market valuations than servicing fee revenue, as a higher proportion of the underlying services provided, and the associated management fees earned, are dependent on equity and fixed-income security valuations. Additional factors, such as the relative mix of assets managed, may have a significant effect on our management fee revenue. While certain management fees are directly determined by the values of AUM and the investment strategies employed, management fees may reflect other factors, including performance fee arrangements, as well as our relationship pricing for clients. From the second half of 2020 through the first quarter of 2022, we were in a prolonged low-interest rate environment, and waived certain fees for our clients for money market products. Following the Federal Reserve rate hikes in March 2022, money market fee waivers did not have a significant impact on our management fee revenue in the second quarter of 2022, and we do not expect them to materially impact subsequent quarters in 2022.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

In light of the above, we estimate, using relevant information as of June 30, 2022, and assuming that all other factors remain constant, including the impact of business won and lost and client flows, that:

Management fees decreased 3% in the three months ended June 30, 2022 compared to same period in 2021, primarily due to lower average equity and fixed income market levels, a client-specific pricing adjustment, and the impact of currency translation, partially offset by the absence of the impact of money market fee waivers and net inflows from ETFs. Currency translation decreased management fees by 2% in the second quarter of 2022, relative to the same period in 2021. Management fees increased 1% in the six months ended June 30, 2022 compared to the same period in 2021, primarily due to higher average equity market levels and the absence of the impact of money market fee waivers, partially offset by a client-specific pricing adjustment and the impact of currency translation. Currency translation decreased management fees by 1% in the six months ended June 30, 2022 compared to the same period in 2021.


TABLE 9: ASSETS UNDER MANAGEMENT BY ASSET CLASS AND INVESTMENT APPROACH
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Equity:
Active	$	62	$	80	$	83
Passive	2,024		2,594		2,378
Total equity	2,086		2,674		2,461
Fixed-income:
Active	89		103		100
Passive	461		520		510
Total fixed-income	550		623		610
Cash(1)	403		368		381
Multi-asset-class solutions:
Active	29		34		35
Passive	173		188		172
Total multi-asset-class solutions	202		222		207
Alternative investments(2):
Active	42		56		63
Passive	192		195		175
Total alternative investments	234		251		238
Total	$	3,475	$	4,138	$	3,897

(1) Includes both floating- and constant-net-asset-value portfolios held in commingled structures or separate accounts.

(2)Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®GoldMiniSharesSM Trust, but act as the marketing agent.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS


TABLE 10: EXCHANGE-TRADED FUNDS BY ASSET CLASS(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
Alternative Investments(2)	$	77	$	72	$	73

Equity	791		970		844
Multi Asset	1		1		1
Fixed-Income	130		135		128
Total Exchange-Traded Funds	$	999	$	1,178	$	1,046

(1) ETFs are a component of AUM presented in the preceding table.

(2) Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®GoldMiniSharesSM Trust, but act as the marketing agent.


TABLE 11: GEOGRAPHIC MIX OF ASSETS UNDER MANAGEMENT(1)
(In billions)	June 30, 2022		December 31, 2021		June 30, 2021
North America	$	2,525	$	2,931	$	2,749
Europe/Middle East/Africa	521		592		570
Asia/Pacific	429		615		578
Total	$	3,475	$	4,138	$	3,897

(1) Geographic mix is based on client location or fund management location.


TABLE 12: ACTIVITY IN ASSETS UNDER MANAGEMENT BY PRODUCT CATEGORY
(In billions)	Equity(1)		Fixed-Income(1)		Cash(1)(2)		Multi-Asset-Class Solutions(1)		Alternative Investments(1)(3)		Total
Balance as of December 31, 2020	$	2,171	$	549	$	349	$	186	$	212	$	3,467
Long-term institutional flows, net(4)	(35)		26		(1)		1		1		(8)
Exchange-traded fund flows, net	21		9		—		—		(7)		23
Cash fund flows, net	—		—		24		—		—		24
Total flows, net	(14)		35		23		1		(6)		39
Market appreciation (depreciation)	148		(24)		—		3		(11)		116
Foreign exchange impact	(23)		(6)		—		(1)		(1)		(31)
Total market/foreign exchange impact	125		(30)		—		2		(12)		85
Balance as of March 31, 2021	2,282		554		372		189		194		3,591
Long-term institutional flows, net(4)	13		37		—		7		(2)		55
Exchange-traded fund flows, net	15		5		—		—		1		21
Cash fund flows, net	—		—		7		—		—		7
Total flows, net	28		42		7		7		(1)		83
Market appreciation (depreciation)	152		14		2		11		45		224
Foreign exchange impact	(1)		—		—		—		—		(1)
Total market/foreign exchange impact	151		14		2		11		45		223
Balance as of June 30, 2021	$	2,461	$	610	$	381	$	207	$	238	$	3,897









Balance as of December 31, 2021	$	2,674	$	623	$	368	$	222	$	251	$	4,138
Long-term institutional flows, net(4)	(25)		11		4		11		13		14
Exchange-traded fund flows, net	4		5		—		—		8		17
Cash fund flows, net	—		—		20		—		—		20
Total flows, net	(21)		16		24		11		21		51
Market appreciation (depreciation)	(113)		(34)		1		(3)		(4)		(153)
Foreign exchange impact	(10)		(4)		—		(1)		1		(14)
Total market/foreign exchange impact	(123)		(38)		1		(4)		(3)		(167)
Balance as of March 31, 2022	2,530		601		393		229		269		4,022
Long-term institutional flows, net(4)	(52)		(10)		(3)		2		(6)		(69)
Exchange-traded fund flows, net	(12)		5		—		—		(1)		(8)
Cash fund flows, net	—		—		15		—		—		15
Total flows, net	(64)		(5)		12		2		(7)		(62)
Market appreciation (depreciation)	(337)		(33)		—		(26)		(21)		(417)
Foreign exchange impact	(43)		(13)		(2)		(3)		(7)		(68)
Total market/foreign exchange impact	(380)		(46)		(2)		(29)		(28)		(485)
Balance as of June 30, 2022	$	2,086	$	550	$	403	$	202	$	234	$	3,475

(2) Includes both floating- and constant-net-asset-value portfolios held in commingled structures or separate accounts.

(3) Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®GoldMiniSharesSM Trust, but act as the marketing agent.

(4) Amounts represent long-term portfolios, excluding ETFs.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Foreign Exchange Trading Services

Foreign exchange trading services revenue, as presented in Table 2: Total Revenue, increased 16% and 9% in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, primarily due to higher FX spreads, partially offset by lower client FX volumes. Foreign exchange trading services revenue comprises revenue generated by FX trading and revenue generated by brokerage and other trading services, which made up 67% and 33%, respectively, of foreign exchange trading services revenue in the second quarter of 2022, compared to and 66% and 34%, respectively, in the same period in 2021. The impact of gross money market fund fee waivers on foreign exchange trading services was $1 million and $11 million in the three and six months ended June 30, 2022, respectively, compared to $15 million and $23 million in the same periods in 2021, respectively. This represents a reduction in revenue on the Fund Connect platform due to the impact of fee waivers by participating money market funds, including State Street Global Advisors funds.

We primarily earn FX trading revenue by acting as a principal market-maker through both "direct sales and trading” and “indirect FX trading.”

Our clients that utilize indirect FX trading can, in addition to executing their FX transactions through dealers not affiliated with us, transition from indirect

We also earn foreign exchange trading services revenue through "electronic FX services" and "other trading, transition management and brokerage revenue."

•Electronic FX services: Our clients may choose to execute FX transactions through one of our electronic trading platforms. These transactions generate revenue through a “click” fee.

Fund Connect is another one of our electronic trading platforms: it is a global trading, analytics and cash management tool with access to more than 400 money market funds from leading providers.

Securities Finance

Our securities finance business consists of three components:

(2) an agency lending program for third-party investment managers and asset owners, which we refer to as the agency lending funds; and

(3) security lending transactions which we enter into as principal, which we refer to as our enhanced custody business.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

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Software and Processing Fees

Software and processing fees revenue includes diverse types of fees and revenue, including fees from software licensing and maintenance and fees from our structured products business.

Software and processing fees revenue, presented in Table 2: Total Revenue, decreased 11% in the three months ended June 30, 2022, compared to the same period in 2021, primarily driven by lower front office software and data revenue associated with CRD. Software and processing fees revenue increased 5% in the six months ended June 30, 2022, compared to the same period in 2021, primarily driven by higher front office software and data revenue associated with CRD.

Front office software and data revenue, which includes primarily revenue from CRD, Alpha Data Platform and Alpha Data Services, decreased 15% in the three months ended June 30, 2022, compared to the same period in 2021, primarily driven by lower on-premises renewals and the absence of episodic fees, partially offset by higher software-enabled revenues. Front office software and data revenue increased 8% in the six months ended June 30, 2022, compared to

the same period in 2021, primarily driven by higher software-enabled and professional services revenue, partially offset by lower on-premises renewals and absence of episodic fees. Revenue related to the front office solutions provided by CRD is primarily driven by the sale of term software licenses and SaaS, including professional services such as consulting and implementation services, software support and maintenance. Approximately 50%-70% of revenue associated with a sale of software to be installed on-premises is recognized at a point in time when the customer benefits from obtaining access to and use of the software license, with the percentage varying based on the length of the contract and other contractual terms. The remainder of revenue for on-premise installations is recognized over the length of the contract as maintenance and other services are provided. Upon renewal of an on-premises software contract, the same pattern of revenue recognition is followed with 50%-70% recognized upon renewal and the remaining balance recognized over the term of the contract. Revenue for a SaaS related arrangement, where the customer does not take possession of the software, is recognized over the term of the contract as services are provided. Upon renewal of a SaaS arrangement, revenue continues to be recognized as services are provided under the new contract. As a result of these differences in how portions of CRD revenue are accounted for, CRD revenue may vary more than other business units quarter to quarter.

Lending related and other fees, which decreased by 2% in both the three and six months ended June 30, 2022, compared to the same periods in 2021, primarily consists of fee revenue associated with our fund finance, leverage loans, municipal finance, insurance and stable value wrap businesses.

Other Fee Revenue

Other fee revenue includes market-related adjustments and income associated with certain tax-advantaged investments and other equity method investments.

Other fee revenue decreased $53 million and $40 million in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, primarily driven by market-related adjustments which negatively impacted other fee revenue by approximately $39 million and $54 million in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.

Additional information about fee revenue is provided under "Line of Business Information" included in this Management's Discussion and Analysis.

State Street Corporation | 19

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Net Interest Income

See Table 2: Total Revenue, for the breakout of interest income and interest expense for the three and six months ended June 30, 2022, compared to the same periods in 2021.

NII is defined as interest income earned on interest-earning assets less interest expense incurred on interest-bearing liabilities. Interest-earning assets, which principally consist of investment securities, interest-bearing deposits with banks, loans, resale agreements and other liquid assets, are financed primarily by client deposits, short-term borrowings and long-term debt.

NII on an FTE basis increased in the three and six months ended June 30, 2022, compared to the same periods in 2021, primarily due to higher market interest rates and higher loan balances.

Investment securities net purchase premium amortization, which is included in interest income, was $66 million and $153 million for the three and six months ended June 30, 2022, compared to $157 million and $326 million in the same periods in 2021, respectively, primarily driven by lower prepayments from higher long-end interest rates.

The following table presents the investment securities amortizable purchase premium net of discount accretion for the periods indicated:


TABLE 13: INVESTMENT SECURITIES NET PREMIUM AMORTIZATION








	Three Months Ended June 30,
	2022						2021
(Dollars in millions)	MBS		Non -MBS		Total(1)		MBS		Non- MBS		Total
Unamortized purchase premiums, net of discounts at period end(2)	$	586	$	301	$	887	$	895	$	575	$	1,470
Net premium amortization(3)	40		26		66		101		56		157

(1) The investment securities portfolio duration is 2.8 years as of June 30, 2022.

(2)Excludes any premium or discounts created from the transfer of investment securities at fair value from AFS to HTM during the second quarter of 2022.

(3) Net of discount accretion on MMLF HTM securities in 2021.

State Street Corporation | 20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

See Table 14: Average Balances and Interest Rates - Fully Taxable-Equivalent Basis, for the breakout of NII on a FTE basis for the three and six months ended June 30, 2022, compared to the same periods in 2021.


TABLE 14: AVERAGE BALANCES AND INTEREST RATES - FULLY TAXABLE-EQUIVALENT BASIS(1)
	Three Months Ended June 30,
	2022						2021
(Dollars in millions; fully taxable-equivalent basis)	Average Balance		Interest Revenue/Expense		Rate		Average Balance		Interest Revenue/Expense		Rate
Interest-bearing deposits with banks (2)	$	76,531	$	70	.36	%	$	99,438	$	(4)	(.02)	%
Securities purchased under resale agreements(3)	2,022		38		7.47		3,958		3		.28
Trading account assets	746		—		.01		729		—		—
Investment securities:
Investment securities available-for-sale	54,767		124		.91		66,225		145		.88
Investment securities held-to-maturity	59,162		230		1.55		45,243		166		1.47
Investment securities held-to-maturity purchased under money market liquidity facility	—		—		—		13		—		1.28
Total investment securities	113,929		354		1.24		111,481		311		1.12
Loans	35,826		200		2.23		29,471		157		2.14
Other interest-earning assets	22,199		45		.83		20,939		3		.07
Average total interest-earning assets	$	251,253	$	707	1.13		$	266,016	$	470	.71
Interest-bearing deposits:
U.S.	$	97,273	$	63	.26	%	$	110,269	$	1	—	%
Non-U.S.(2)(4)	80,055		(40)		(.20)		83,248		(66)		(.32)
Total interest-bearing deposits(4)(5)	177,328		23		.05		193,517		(65)		(.14)
Securities sold under repurchase agreements	4,486		3		.26		477		—		(.02)
Short-term borrowings under money market liquidity facility	—		—		—		13		—		1.25
Other short-term borrowings	680		1		.73		893		1		.27
Long-term debt	13,702		72		2.12		13,461		54		1.60
Other interest-bearing liabilities	2,518		21		3.31		5,682		10		.80
Average total interest-bearing liabilities	$	198,714	$	120	.24		$	214,043	$	—	—
Interest rate spread					.89	%					.71	%
Net interest income, fully taxable-equivalent basis			$	587					$	470
Net interest margin, fully taxable-equivalent basis					.94	%					.71	%
Tax-equivalent adjustment			(3)						(3)
Net interest income, GAAP-basis			$	584					$	467
	Six Months Ended June 30,
	2022						2021
(Dollars in millions; fully taxable-equivalent basis)	Average Balance		Interest Revenue/Expense		Rate		Average Balance		Interest Revenue/Expense		Rate
Interest-bearing deposits with banks(2)	$	76,635	$	79	.21	%	$	97,348	$	(13)	(.03)	%
Securities purchased under resale agreements(3)	2,583		48		3.74		4,261		13		.60
Trading account assets	754		—		.01		764		—		—
Investment securities:
Investment securities available-for-sale	64,940		281		.87		62,728		285		.91
Investment securities held-to-maturity	51,653		401		1.55		46,294		349		1.51
Investment securities held-to-maturity purchased under money market liquidity facility	—		—		—		634		4		1.35
Total investment securities	116,593		682		1.17		109,656		638		1.17
Loans	35,120		372		2.13		28,752		299		2.10
Other interest-earning assets	22,979		50		.44		19,625		8		.09
Average total interest-earning assets	$	254,664	$	1,231	.97		$	260,406	$	945	.73
Interest-bearing deposits:
U.S.	$	98,665	$	67	.14	%	$	105,647	$	4	.01	%
Non-U.S.(2)(4)	81,796		(107)		(.26)		80,854		(138)		(.34)
Total interest-bearing deposits(4)(5)	180,461		(40)		(.04)		186,501		(134)		(.15)
Securities sold under repurchase agreements	3,389		3		.17		745		—		.02
Short-term borrowings under money market liquidity facility	—		—		—		635		4		1.21
Other short-term borrowings	776		1		.32		829		1		.21
Long-term debt	13,982		137		1.97		13,639		114		1.67
Other interest-bearing liabilities	2,698		31		2.34		5,268		19		.77
Average total interest-bearing liabilities	$	201,306	$	132	.13		$	207,617	$	4	—
Interest rate spread					.84	%					.73	%
Net interest income, fully taxable-equivalent basis			$	1,099					$	941
Net interest margin, fully taxable-equivalent basis					.87	%					.73	%
Tax-equivalent adjustment			(6)						(7)
Net interest income, GAAP-basis			$	1,093					$	934

(1) Rates earned/paid on interest-earning assets and interest-bearing liabilities include the impact of hedge activities associated with our asset and liability management activities where applicable.

(2) Negative values reflect the interest rate environment outside of the U.S. where central bank rates are below zero for several major currencies.

(3) Reflects the impact of balance sheet netting under enforceable netting agreements of approximately $71.10 billion and $126.12 billion for the three and six months ended June 30, 2022, respectively compared to $61.59 billion and $74.41 billion for the same periods in 2021, respectively. Excluding the impact of netting, the average interest rates would be approximately 0.21% and 0.07% in the three and six months ended June 30, 2022, respectively, compared to 0.02% and 0.03% in the same periods in 2021, respectively.

(4) Average rate includes the impact of FX swap costs of approximately ($3) million and ($16) million for the three and six months ended June 30, 2022, respectively, compared to ($16) million and ($37) million for the same periods in 2021, respectively. Average rates for total interest-bearing deposits excluding the impact of FX swap costs were 0.06% and (0.03)% in the three and six months ended June 30, 2022, respectively, compared to (0.10)% in both the same periods in 2021.

(5) Total deposits averaged $228.42 billion and $230.83 billion in the three and six months ended June 30, 2022, respectively, compared to $242.31 billion and $234.32 billion in the same periods in 2021, respectively.

State Street Corporation | 21

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Average total interest-earning assets were $251.25 billion and $254.66 billion in the three and six months ended June 30, 2022, respectively, compared to $266.02 billion and $260.41 billion in the same periods in 2021, respectively. The decreases in both periods are primarily due to lower client deposit balances.

Interest-bearing deposits with banks averaged $76.53 billion and $76.64 billion in the three and six months ended June 30, 2022, respectively, compared to $99.44 billion and $97.35 billion in the same periods in 2021, respectively. These deposits primarily reflect our maintenance of cash balances at the Federal Reserve, the European Central Bank (ECB) and other non-U.S. central banks. The lower levels of average cash balances reflect lower client deposit balances and a mix shift into securities and loans.

Securities repurchased under resale agreements averaged $2.02 billion and $2.58 billion in the three and six months ended June 30, 2022, respectively, compared to $3.96 billion and $4.26 billion in the same periods in 2021, respectively. We maintain an agreement with Fixed Income Clearing Corporation (FICC), a clearing organization that enables us to net securities sold under repurchase agreements against those repurchased under resale agreements with counterparties that are also members of the clearing organization, when specific netting criteria are met. The impact of balance sheet netting increased to $71.10 billion and $126.12 billion in the three and six months ended June 30, 2022, respectively, compared to $61.59 billion and $74.41 billion in the same periods in 2021, respectively, primarily driven by an increase in FICC repo volumes.

We have been a sponsoring member within FICC since 2005 and continue to expand our client base as program eligibility parameters broaden. We enter into repurchase and resale transactions in eligible securities with sponsored clients and with other FICC members and, pursuant to FICC Government Securities Division rules, submit, novate and net the transactions. We may sponsor clients to clear their eligible repurchase transactions with FICC, backed by our guarantee to FICC of the prompt and full payment and performance of our sponsored member clients’ respective obligations. We generally obtain a security interest from our sponsored clients in the high quality securities collateral that they

receive, which is designed to mitigate our potential exposure to FICC.

Average investment securities were $113.93 billion and $116.59 billion in the three and six months ended June 30, 2022, respectively, compared to $111.48 billion and $109.66 billion in the same periods in 2021, respectively. The increases in both periods reflect higher U.S. Treasuries and agencies, MBS and CMBS balances, which was primarily driven by a mix shift from interest-bearing deposits with banks.

Loans averaged $35.83 billion and $35.12 billion in the three and six months ended June 30, 2022, respectively, compared to $29.47 billion and $28.75 billion in the same periods in 2021, respectively. Average core loans, which exclude overdrafts and highlight our efforts to grow our lending portfolio over the prior year, averaged $29.28 billion and $29.06 billion in the three and six months ended June 30, 2022, respectively, compared to $25.49 billion and $24.65 billion in the same periods in 2021, respectively. The increases in both periods are primarily due to growth in CLOs in loan form and fund finance loans. Additional information about these loans is provided in Note 4 to the consolidated financial statements in this Form 10-Q.

Average other interest-earning assets, largely associated with our enhanced custody business, increased to $22.20 billion and $22.98 billion in the three and six months ended June 30, 2022, respectively, from $20.94 billion and $19.63 billion in the same periods in 2021, respectively, primarily driven by an increase in the level of cash collateral posted. Enhanced custody is our securities financing business where we act as principal with respect to our custody clients and generate securities finance revenue. The NII earned on these transactions is generally lower than the interest earned on other alternative investments.

Aggregate average total interest-bearing deposits decreased to $177.33 billion and $180.46 billion in the three and six months ended June 30, 2022, respectively, from $193.52 billion and $186.50 billion in the same periods in 2021, respectively. While average U.S. deposits decreased in both periods, they remain significantly higher than pre-pandemic levels and have not yet been significantly impacted by rising interest rates. Future deposit levels will be influenced by the underlying asset servicing business, client deposit behavior and market conditions, including the size of the Federal Reserve balance sheet and the general levels of U.S. and non-U.S. interest rates.

Average other short-term borrowings decreased to $0.68 billion and $0.78 billion in the three and six months ended June 30, 2022, respectively, from

State Street Corporation | 22

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

$0.89 billion and $0.83 billion in the same periods in 2021, respectively.

Average long-term debt was $13.70 billion and $13.98 billion in the three and six months ended June 30, 2022, respectively, compared to $13.46 billion and $13.64 billion in the same periods in 2021, respectively. These amounts reflect issuances, redemptions and maturities of senior debt during the respective periods.

Average other interest-bearing liabilities were $2.52 billion and $2.70 billion in the three and six months ended June 30, 2022, respectively, compared to $5.68 billion and $5.27 billion in the same periods in 2021, respectively. Other interest-bearing liabilities primarily reflect our level of cash collateral received from clients in connection with our enhanced custody business, which is presented on a net basis where we have enforceable netting agreements.

Several factors could affect future levels of NII and NIM, including the volume and mix of client deposits and funding sources; central bank actions; balance sheet management activities; changes in the level and slope of U.S. and non-U.S. interest rates; revised or proposed regulatory capital or liquidity standards, or interpretations of those standards; the yields earned on securities purchased compared to the yields earned on securities sold or matured; and changes in the type and amount of credit or other loans we extend.

Provision for Credit Losses

We recorded noa $10 million provision for credit losses in the ~~first~~second quarter of 2022, ~~as positive changes in the mix of loans in our portfolio were offset by~~reflecting a downward shift in management's economic ~~outlook.~~outlook, partially offset by a decrease in expected losses related to leveraged loans within our portfolio. This compares to a $9$15 million reserve release in the ~~first~~second quarter of 2021.

Additional information is provided under “Loans” in "Financial Condition" in this Management's Discussion and Analysis and in Note 4 to the consolidated financial statements in this Form 10-Q.

Expenses

Table 15: Expenses, provides the breakout of expenses for the three and six months ended June 30, 2022 compared to the same periods in 2021.


TABLE 15: EXPENSES
	Three Months Ended June 30,				% Change
(Dollars in millions)	2022		2021
Compensation and employee benefits	$	1,046	$	1,077	(3)	%
Information systems and communications	392		398		(2)
Transaction processing services	240		263		(9)
Occupancy	96		100		(4)
Amortization of other intangible assets	60		63		(5)
Acquisition costs	12		11		9
Restructuring charges, net	—		—		—
Other:
Professional services	84		75		12
Other	178		124		44
Total other	262		199		32
Total expenses	$	2,108	$	2,111	—
Number of employees at quarter-end	40,354		39,146		3

	Six Months Ended June 30,				% Change
(Dollars in millions)	2022		2021
Compensation and employee benefits	$	2,278	$	2,319	(2)	%
Information systems and communications	815		819		—
Transaction processing services	504		533		(5)
Occupancy	191		209		(9)
Amortization of other intangible assets	121		121		—
Acquisition costs	21		22		(5)
Restructuring charges, net	—		(1)		(100)
Other:
Professional services	181		155		17
Other	324		266		22
Total other	505		421		20
Total expenses	$	4,435	$	4,443	—

Compensation and employee benefits expenses decreased 3% in the second quarter of 2022, compared to the same period in 2021, primarily due to lower incentive compensation and the impact of currency translation, partially offset by higher merit increases and contractor spend. Compensation and employee benefits expenses decreased 2% in the six months ended June 30, 2022, compared to the same period in 2021, primarily due to lower incentive compensation and the impact of currency translation, partially offset by higher merit increases, contractor spend and seasonal expenses. Currency translation decreased compensation and employee benefits expenses by 4% and 2% in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.

Total headcount increased 3% as of June 30, 2022 compared to June 30, 2021, primarily driven by hiring in global hubs and insourcing of strategic technology functions from vendors, partially offset by a reduction in high cost locations.

State Street Corporation | 2023

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

~~Expenses~~

~~Table 15: Expenses, provides the breakout of expenses for the first quarter of 2022 compared to the same period in 2021.~~

TABLE 15: EXPENSES
Three Months Ended March 31, % Change
(Dollars in millions) 2022 2021
Compensation and employee benefits $ 1,232 $ 1,242 (1) %
Information systems and communications 423 421 —
Transaction processing services 264 270 (2)
Occupancy 95 109 (13)
Amortization of other intangible assets 61 58 5
Acquisition costs 9 11 (18)
Restructuring charges, net — (1) (100)
Other:
Professional services 97 80 21
Other 146 142 3
Total other 243 222 9
Total expenses $ 2,327 $ 2,332 —
Number of employees at quarter-end 39,335 39,318 —

~~Compensation~~Information systems and ~~employee benefits~~communications expenses decreased 1%2% in the ~~first~~second quarter of 2022, compared to the same period in 2021, primarily due to ~~lower headcount in high cost locations~~episodic credits related to vendor pricing optimization initiatives and ~~lower salaries, partially offset by higher seasonal expenses.~~

~~Seasonal deferred incentive compensation expenses were $208 million in the first quarter of 2022 compared to $176 million in the same period in 2021.~~

~~Total headcount was flat as of March 31, 2022 compared to March 31, 2021, primarily driven by hiring in global hubs, offset by a reduction in high cost locations.~~

infrastructure rationalization. Information systems and communications expenses ~~were~~was flat in the ~~first quarter of~~six months ended June 30, 2022, compared to the same period in ~~2021, primarily reflecting the absence of notable items reported in the first quarter of 2021, offset by higher technology infrastructure investments.~~2021.

Transaction processing services expenses decreased 2%9% and 5% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to the same ~~period~~periods in 2021, primarily ~~reflecting the absence of notable items reported in the first quarter of 2021, partially offset by higher sub-custody and higher broker fees, primarily~~ due to ~~higher transaction volumes.~~lower sub-custody costs.

Occupancy expenses decreased ~~13%~~4% and 9% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to the same ~~period~~periods in 2021, primarily due to footprint ~~optimization.~~optimization and the impact of currency translation. Currency translation decreased occupancy expenses by 4% and 3% in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.

Amortization of other intangible assets ~~increased~~decreased 5% and was flat in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to the same ~~period~~periods in 2021, ~~primarily due~~reflecting the impact of currency translation which reduced amortization of other intangible assets by 3% in both the three and six months ended June 30, 2022, relative to the ~~lift-out~~same periods in ~~the first quarter of 2021 of the depository bank and fund~~

~~administrator activities of Fideuram Bank Luxembourg, a subsidiary of Intesa Sanpaolo.~~2021.

Other expenses increased 9%32% and 20% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to the same ~~period~~periods in 2021, primarily driven by higher professional services, ~~partially offset by lower sub-advisory fees.~~recoverable client-related expenses and travel costs.

Acquisition Costs

We recorded approximately $9$12 million and $21 million of acquisition costs in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, related to our proposed acquisition of the BBH Investor services business. We expect to incur up to approximately $590 million of total acquisition and integration costs related to the acquisition through the third year following its closing. The acquisition is subject to regulatory reviews and other closing conditions.

We recorded approximately $11 million and $22 million of acquisition costs in the ~~first quarter of~~three and six months ended June 30, 2021, respectively, related to our acquisition of CRD in 2018. Starting in 2022, we no longer distinguish certain CRD costs as acquisition costs.

Restructuring and Repositioning Charges

The following table presents aggregate activity for repositioning charges for the periods indicated:


TABLE 16: RESTRUCTURING AND REPOSITIONING CHARGES	TABLE 16: RESTRUCTURING AND REPOSITIONING CHARGES					TABLE 16: RESTRUCTURING AND REPOSITIONING CHARGES
(In millions)	(In millions)	Employee Related Costs		Real Estate Actions			Asset and Other Write-offs		Total		(In millions)	Employee Related Costs		Real Estate Actions		Total
Accrual Balance at December 31, 2020	Accrual Balance at December 31, 2020	$	190	$	6		$	—	$	196	Accrual Balance at December 31, 2020	$	190	$	6	$	196
Accruals for Beacon	Accruals for Beacon	(1)		—			—		(1)		Accruals for Beacon	(1)		—		(1)
Accruals for Repositioning Charges	Accruals for Repositioning Charges	—		2			—		2		Accruals for Repositioning Charges	—		2		2
Payments and Other Adjustments	Payments and Other Adjustments	(9)		(2)			—		(11)		Payments and Other Adjustments	(9)		(2)		(11)
Accrual Balance at March 31, 2021	Accrual Balance at March 31, 2021	$	180	$	6		$	—	$	186	Accrual Balance at March 31, 2021	180		6		186

Payments and Other Adjustments											Payments and Other Adjustments	(34)		—		(34)
Accrual Balance at June 30, 2021											Accrual Balance at June 30, 2021	$	146	$	6	$	152

Accrual Balance at December 31, 2021	Accrual Balance at December 31, 2021	$	68	$	6		$	—	$	74	Accrual Balance at December 31, 2021	$	68	$	6	$	74

Payments and Other Adjustments	Payments and Other Adjustments	(17)		(1)			—		(18)		Payments and Other Adjustments	(17)		(1)		(18)
Accrual Balance at March 31, 2022	Accrual Balance at March 31, 2022	$	51	$	5		$	—	$	56	Accrual Balance at March 31, 2022	51		5		56

Payments and Other Adjustments											Payments and Other Adjustments	(11)		—		(11)
Accrual Balance at June 30, 2022											Accrual Balance at June 30, 2022	$	40	$	5	$	45

Income Tax Expense

Income tax expense was ~~$150~~$88 million and $238 million in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to ~~$108~~$175 million and $283 million in the same ~~period~~periods in ~~2021.~~2021, respectively. Our effective tax rate was ~~19.9%~~10.5% and 15.0% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to ~~17.2%~~18.6% and 18.1% in the same ~~period~~periods in 2021, respectively, primarily due to higher benefits from the reassessment of a ~~lower impact of~~deferred tax ~~advantaged investments.~~

~~State Street Corporation | 21~~

asset valuation allowance.

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

LINE OF BUSINESS INFORMATION

Our operations are organized into two lines of business: Investment Servicing and Investment Management, which are defined based on products and services provided. The results of operations for these lines of business are not necessarily comparable with those of other companies, including companies in the financial services industry.

Our Investment Servicing line of business provides a range of services to our clients. Through State Street Institutional Services, State Street Global Markets, State Street Digital, and CRD, we provide services for institutional clients, including mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, investment managers, foundations and endowments worldwide. Our financial services and products allow our large institutional investor clients to execute financial transactions on a daily basis in markets across the

State Street Corporation | 24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

globe. As most institutional investors cannot economically or efficiently build their own technology and operational processes necessary to facilitate their global securities settlement needs, our primary role as a global trust and custody bank is to aid our clients to efficiently perform services associated with the clearing, settlement and execution of securities transactions and related payments.

Products under the Investment Servicing line of business include: back office products such as custody, accounting, regulatory reporting, investor services, performance and analytics; middle office products such as IBOR, transaction management, loans, cash, derivatives and collateral services, record keeping, client reporting and investment analytics; foreign exchange, brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk and compliance analytics; and financial data management to support institutional investors.

Included within our Investment Servicing line of business is CRD, which we acquired in October 2018. The Charles River Investment Management System is a technology offering which is designed to automate and simplify the institutional investment process across asset classes, from portfolio management and risk analytics through trading and post-trade settlement, with integrated compliance and managed data throughout. With the acquisition of CRD, we took the first step in building our front-to-back platform, State Street Alpha. Today our State Street Alpha platform combines portfolio management, trading and execution, analytics and

compliance tools, and advanced data aggregation and integration with other industry platforms and providers. In 2021, we further expanded our technology offering with the acquisition of Mercatus, Inc., enabling the launch of Alpha for Private Markets.

In 2021, we established State Street Digital to focus on the development of digital assets and technologies, including crypto, central bank digital currency, blockchain and tokenization, including the evolution of a new integrated business and digital operating model designed to support our clients' digital investment cycle.

Following ~~completion~~consummation of our proposed acquisition of the BBH Investor Services business, the acquired business will be included within our Investment Servicing line of business. The acquisition is subject to regulatory reviews and other closing conditions.

~~The regulatory review process for~~We have been engaged in discussions with banking regulators regarding our proposed

acquisition of the BBH Investor Services business ~~has progressed more slowly than anticipated. Some~~and the related regulatory ~~approvals, most notably approvals of the relevant U.S. federal banking agencies, remain outstanding. We are evaluating~~review process and potential modifications to the proposed transaction that ~~are intended to~~may facilitate resolution of that process. Based on those discussions, we have developed with BBH proposed modifications to the ~~bank~~transaction structure may provide a path to consummating the transaction. The proposed modifications include changes to the operating model and legal entity structure and changes to the regulatory ~~review.~~approvals required to complete the transaction. As part of the discussions with BBH, State Street is seeking amendments to the transaction terms, including the purchase price, given the changes to the planned operating model. Any modification to the transaction terms would be subject to review and approval by both BBH and our Board of Directors. We ~~are working towards concluding regulatory reviews~~intend during the third ~~quarter. While we~~quarter to finalize the proposed structure and contractual terms and confirm our approach with regulators. Assuming the financial and operational aspects of the proposed modifications are ~~engaged in an ongoing dialogue with~~timely finalized and contracted, subject to regulatory approval and other closing conditions, the ~~relevant U.S. federal banking agencies,~~parties are aiming to close the transaction at the end of the fourth quarter of 2022. However, there exists significant timing uncertainty and risk that closing will extend beyond that timeline. There can be no assurance that a mutually acceptable modified transaction will be entered into or as to the timing or outcome of ~~their~~any regulatory ~~review.~~approvals and other closing conditions for that modified transaction. Absent further agreement of the parties, after September 6, 2022 either party can terminate the transaction without penalty.

Investment Management, through State Street Global Advisors, provides a broad range of investment management strategies and products for our clients. Our investment management strategies and products span the risk/reward spectrum for equity, fixed income and cash assets, including core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities and alternative investment strategies. Our AUM is currently primarily weighted to indexed strategies. In addition, we provide a breadth of services and solutions, including ~~environmental, social and governance~~ESG investing, defined benefit and defined contribution and Global Fiduciary Solutions (formerly Outsourced Chief Investment Officer). State Street Global Advisors is also a provider of ETFs, including the SPDR® ETF brand. While management fees are primarily determined by the values of AUM and the investment strategies employed, management fees reflect other factors as well, including the benchmarks specified in the respective management agreements related to performance fees.

For information about our two lines of business, as well as the revenues, expenses and capital ~~allocation methodologies associated with them, refer~~

State Street Corporation | 2225

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

allocation methodologies associated with them, refer to Note 17 to the consolidated financial statements in this Form 10-Q.

Investment Servicing


TABLE 17: INVESTMENT SERVICING LINE OF BUSINESS RESULTS	TABLE 17: INVESTMENT SERVICING LINE OF BUSINESS RESULTS											TABLE 17: INVESTMENT SERVICING LINE OF BUSINESS RESULTS
(Dollars in millions, except where otherwise noted)	(Dollars in millions, except where otherwise noted)	Three Months Ended March 31,							% Change					(Dollars in millions, except where otherwise noted)			Three Months Ended June 30,										% Change
			2022			2021							(Dollars in millions, except where otherwise noted)					2022		2021			% Change

Servicing fees	Servicing fees		$	1,368		$	1,369			—	%					Servicing fees						$			1,297						$	1,394				(7)	%
Foreign exchange trading services	Foreign exchange trading services		342			333				3						Foreign exchange trading services						313					270							16
Securities finance	Securities finance		93			95				(2)						Securities finance						102					106							(4)

Software and processing fees	Software and processing fees		201			160				26						Software and processing fees						188					211							(11)
Other fee revenue	Other fee revenue		46			14				nm						Other fee revenue						(12)					3							nm
Total fee revenue	Total fee revenue		2,050			1,971				4						Total fee revenue						1,888					1,984							(5)
Net interest income	Net interest income		509			473				8						Net interest income						588					468							26
Total other income	Total other income		(1)			—				nm						Total other income						(1)					—							nm
Total revenue	Total revenue		2,558			2,444				5						Total revenue						2,475					2,452							1
Provision for credit losses	Provision for credit losses		—			(9)				nm						Provision for credit losses						10					(15)							nm
Total expenses	Total expenses		1,925			1,879				2						Total expenses						1,767					1,755							1
Income before income tax expense	Income before income tax expense		$	633		$	574			10						Income before income tax expense						$	698				$	712						(2)
Pre-tax margin	Pre-tax margin		24.7		%	23.5		%		120 bps						Pre-tax margin						28.2		%			29.0		%					(80) bps

(Dollars in millions, except where otherwise noted)															(Dollars in millions, except where otherwise noted)				Six Months Ended June 30,											% Change
																					2022					2021
Servicing fees															Servicing fees						$	2,665				$	2,763						(4)		%
Foreign exchange trading services															Foreign exchange trading services						655					603							9
Securities finance															Securities finance						195					201							(3)
Software and processing fees															Software and processing fees						389					371							5
Other fee revenue															Other fee revenue						34					17							nm
Total fee revenue															Total fee revenue						3,938					3,955							—
Net interest income															Net interest income						1,097					941							17
Total other income															Total other income						(2)					—							nm
Total revenue															Total revenue						5,033					4,896							3
Provision for credit losses															Provision for credit losses						10					(24)							nm
Total expenses															Total expenses						3,692					3,634							2
Income before income tax expense															Income before income tax expense						$	1,331				$	1,286						3
Pre-tax margin															Pre-tax margin						26.4		%			26.3		%					10 bps

nm Not meaningful

Servicing Fees

Servicing fees, as presented in Table 17: Investment Servicing Line of Business Results, ~~were flat~~decreased 7% in the ~~first quarter of~~three months ended June 30, 2022, compared to the same period in 2021, ~~as higher~~primarily due to lower average equity and fixed income market levels, normal pricing headwinds, lower client activity and ~~flows, average equity market levels, and net new business were offset by normal pricing headwinds~~adjustments and the impact of currency ~~translation.~~translation, partially offset by net new business. Currency translation ~~negatively impacted~~decreased servicing ~~fees~~fee revenue by 2%3% in the ~~first~~second quarter of 2022, relative to the same period in 2021. Servicing fees decreased 4% in the six months ended June 30, 2022, compared to the same period in ~~2021.~~

~~Additional information about~~2021, primarily due to normal pricing headwinds, lower client activity and adjustments and the impact of currency translation, partially offset by net new business. Currency translation decreased servicing ~~fees is provided under "Fee Revenue"~~fee revenue by 2% in ~~"Consolidated Results of Operations" included~~the six months ended June 30, 2022, relative to the same period in ~~this Management's Discussion and Analysis.~~2021.

For additional information about the impact of worldwide equity and fixed-income valuations, ~~on our fee revenue,~~ as well as other key drivers of our servicing fee revenue, refer to "Fee Revenue" in "Consolidated Results of Operations" included in this Management's Discussion and Analysis.

Expenses

Total expenses for Investment Servicing increased 1% and 2% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to the same ~~period~~periods in 2021, as expense growth from higher technology infrastructure investments and ~~higher incentive compensation~~merit increases was partially offset by productivity savings, on-going expense management initiatives and currency translation benefit. Currency translation decreased expenses for Investment Servicing by 1%3% and 2% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, relative to the same ~~period~~periods in 2021. Seasonal deferred incentive compensation expense and payroll taxes were $161 million in the

~~first quarter of~~ six months ended June 30, 2022 compared to $141 million in the same period in 2021. Additional information about expenses is provided under "Expenses" in "Consolidated Results of Operations" included in this Management's Discussion and Analysis.

State Street Corporation | 26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Investment Management


TABLE 18: INVESTMENT MANAGEMENT LINE OF BUSINESS RESULTS	TABLE 18: INVESTMENT MANAGEMENT LINE OF BUSINESS RESULTS					TABLE 18: INVESTMENT MANAGEMENT LINE OF BUSINESS RESULTS
(Dollars in millions, except where otherwise noted)	(Dollars in millions, except where otherwise noted)	Three Months Ended March 31,								% Change			(Dollars in millions, except where otherwise noted)		Three Months Ended June 30,					% Change
			2022				2021									2022	2021
Management fees(1)	Management fees(1)		$	520			$	493			5	%		Management fees(1)			$	490		$	504			(3)	%
Foreign exchange trading services(2)	Foreign exchange trading services(2)		17				13				31			Foreign exchange trading services(2)			18			16				13
Securities finance	Securities finance		3				4				(25)			Securities finance			5			3				67
Software and processing fees(3)	Software and processing fees(3)		—				—				nm			Software and processing fees(3)			—			—				nm
Other fee revenue(1)	Other fee revenue(1)		(17)				2				nm			Other fee revenue(1)			(31)			7				nm
Total fee revenue	Total fee revenue		523				512				2			Total fee revenue			482			530				(9)
Net interest income	Net interest income		—				(6)				(100)			Net interest income			(4)			(1)				nm
Total revenue	Total revenue		523				506				3			Total revenue			478			529				(10)
Provision for credit losses			—				—				nm

Total expenses	Total expenses		389				397				(2)			Total expenses			327			346				(5)
Income before income tax expense	Income before income tax expense		$	134			$	109			23			Income before income tax expense			$	151		$	183			(17)
Pre-tax margin	Pre-tax margin		25.6		%		21.5		%		410 bps			Pre-tax margin			31.6		%	34.6		%		(300) bps

(Dollars in millions, except where otherwise noted)														(Dollars in millions, except where otherwise noted)		Six Months Ended June 30,							% Change
																	2022			2021
Management fees(1)														Management fees(1)			$	1,010		$	997			1	%
Foreign exchange trading services(2)														Foreign exchange trading services(2)			35			29				21
Securities finance														Securities finance			8			7				14
Software and processing fees(3)														Software and processing fees(3)			—			—				nm
Other fee revenue(1)														Other fee revenue(1)			(48)			9				nm
Total fee revenue														Total fee revenue			1,005			1,042				(4)
Net interest income														Net interest income			(4)			(7)				(43)
Total revenue														Total revenue			1,001			1,035				(3)

Total expenses														Total expenses			716			743				(4)
Income before income tax expense														Income before income tax expense			$	285		$	292			(2)
Pre-tax margin														Pre-tax margin			28.5		%	28.2		%		30 bps

(1) Includes revenues from SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust AUM where we are not the investment manager but act as the marketing agent.

(2) Includes revenue for reimbursements received for certain ETFs associated with State Street Global Advisors where we act as the distribution and marketing agent.

(3) Includes other revenue items that are primarily driven by equity market movements.

nm Not meaningful

Investment Management total revenue ~~increased~~decreased 10% and 3% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to the same ~~period~~periods in 2021.

Management Fees

Management fees decreased 3% in the three months ended June 30, 2022, compared to the same period in 2021, primarily due to lower average equity and fixed income market levels, a client-specific pricing adjustment, and the impact of currency translation, partially offset by the absence of the impact of money market fee waivers and net inflows from ETFs. Currency translation decreased management fees by 2% in the second quarter of 2022, relative to the same period in 2021. Management fees increased 5%1% in the ~~first quarter of~~six months ended June 30, 2022 compared to the same period in 2021, primarily due to higher average equity market levels and ~~net inflows from ETFs. FX rates impacted~~the absence of the impact of money

market fee waivers, partially offset by a client-specific pricing adjustment and the impact of currency translation. Currency translation decreased management fees ~~negatively~~ by 1% in the ~~first quarter of~~six months ended June 30, 2022 ~~relative~~compared to the same period in 2021.

~~Additional~~For additional information about the impact of worldwide equity and fixed-income valuations, as well as other key drivers of our management fees ~~is provided under~~revenue, refer to "Fee Revenue" in "Consolidated Results of Operations" included in this Management's Discussion and Analysis.

Expenses

Total expenses for Investment Management decreased 2%5% and 4% in the ~~first quarter of~~three and six months ended June 30, 2022, respectively, compared to the same ~~period~~periods in 2021, primarily due to savings from on-going expense management initiatives ~~partially offset by higher~~and lower incentive compensation. Currency translation decreased expenses for Investment Management by 1% in both the ~~first quarter of~~three and six months ended June 30, 2022, relative to the same ~~period~~periods in 2021. Seasonal deferred incentive compensation expense and payroll taxes were $47 million in the ~~first quarter of~~six months ended June 30, 2022, compared to $35 million in the same period in 2021.

~~State Street Corporation | 23~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

Additional information about expenses is provided under "Expenses" in "Consolidated Results of Operations" included in this Management's Discussion and Analysis.

For additional information about our two lines of business, as well as the revenues, expenses and capital allocation methodologies associated with them, refer to Note 18 to the consolidated financial statements in this Form 10-Q.

FINANCIAL CONDITION

The structure of our consolidated statement of condition is primarily driven by the liabilities generated by our Investment Servicing and Investment Management lines of business. Our clients' needs and our operating objectives determine balance sheet volume, mix and currency denomination. As our clients execute their worldwide cash management and investment activities, they utilize deposits and short-term investments that constitute the majority of our liabilities. These liabilities are generally in the form of interest-bearing transaction account deposits, which are denominated in a variety of currencies; non-interest-bearing demand deposits; and repurchase agreements, which generally serve as short-term investment alternatives for our clients.

Deposits and other liabilities resulting from client initiated transactions are invested in assets that generally have contractual maturities significantly longer than our liabilities; however, we evaluate the operational nature of our deposits and seek to maintain appropriate short-term liquidity of those liabilities that are not operational in nature and maintain longer-termed assets for our operational deposits. Our assets consist primarily of securities held in our AFS or HTM portfolios and short-duration

State Street Corporation | 27

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

financial instruments, such as interest-bearing deposits with banks and securities purchased under resale agreements. The actual mix of assets is determined by the characteristics of the client liabilities and our desire to maintain a well-diversified portfolio of high-quality assets.

The following information on our financial condition is based on our average balance sheet, which we believe is the better measure of our balance sheet trends as period-end balances can be impacted by the timing of client activities including deposits and withdrawals.


TABLE 19: AVERAGE STATEMENT OF CONDITION(1)	TABLE 19: AVERAGE STATEMENT OF CONDITION(1)						TABLE 19: AVERAGE STATEMENT OF CONDITION(1)
		Three Months Ended March 31,				Six Months Ended June 30,
(In millions)	(In millions)	2022		2021			(In millions)	2022		2021
Assets:	Assets:						Assets:
Interest-bearing deposits with banks	Interest-bearing deposits with banks	$	76,741	$	95,235		Interest-bearing deposits with banks	$	76,635	$	97,348
Securities purchased under resale agreements	Securities purchased under resale agreements	3,150		4,568			Securities purchased under resale agreements	2,583		4,261
Trading account assets	Trading account assets	761		800			Trading account assets	754		764
Investment securities:	Investment securities:						Investment securities:

Investment securities available-for-sale	Investment securities available-for-sale	75,226		59,191			Investment securities available-for-sale	64,940		62,728
Investment securities held-to-maturity	Investment securities held-to-maturity	44,060		47,356			Investment securities held-to-maturity	51,653		46,294
Investment securities held-to-maturity purchased under money market liquidity facility	Investment securities held-to-maturity purchased under money market liquidity facility	—		1,262			Investment securities held-to-maturity purchased under money market liquidity facility	—		634
Total investment securities	Total investment securities	119,286		107,809			Total investment securities	116,593		109,656
Loans	Loans	34,407		28,025			Loans	35,120		28,752
Other interest-earning assets	Other interest-earning assets	23,767		18,296			Other interest-earning assets	22,979		19,625
Average total interest-earning assets	Average total interest-earning assets	258,112		254,733			Average total interest-earning assets	254,664		260,406
Cash and due from banks	Cash and due from banks	4,018		4,529			Cash and due from banks	3,923		5,065
Other non-interest-earning assets	Other non-interest-earning assets	32,880		37,066			Other non-interest-earning assets	34,626		36,823
Average total assets	Average total assets	$	295,010	$	296,328		Average total assets	$	293,213	$	302,294
Liabilities and shareholders’ equity:	Liabilities and shareholders’ equity:						Liabilities and shareholders’ equity:
Interest-bearing deposits:	Interest-bearing deposits:						Interest-bearing deposits:
U.S.	U.S.	$	100,073	$	100,974		U.S.	$	98,665	$	105,647
Non-U.S.	Non-U.S.	83,556		78,433			Non-U.S.	81,796		80,854
Total interest-bearing deposits(2)	Total interest-bearing deposits(2)	183,629		179,407			Total interest-bearing deposits(2)	180,461		186,501
Securities sold under repurchase agreements	Securities sold under repurchase agreements	2,279		1,017			Securities sold under repurchase agreements	3,389		745
Short-term borrowings under money market liquidity facility	Short-term borrowings under money market liquidity facility	—		1,264			Short-term borrowings under money market liquidity facility	—		635
Other short-term borrowings	Other short-term borrowings	872		764			Other short-term borrowings	776		829
Long-term debt	Long-term debt	14,265		13,819			Long-term debt	13,982		13,639
Other interest-bearing liabilities	Other interest-bearing liabilities	2,881		4,848			Other interest-bearing liabilities	2,698		5,268
Average total interest-bearing liabilities	Average total interest-bearing liabilities	203,926		201,119			Average total interest-bearing liabilities	201,306		207,617
Non-interest-bearing deposits~~(2)~~(3)	Non-interest-bearing deposits~~(2)~~(3)	49,639		46,825			Non-interest-bearing deposits~~(2)~~(3)	50,368		47,815
Other non-interest-bearing liabilities	Other non-interest-bearing liabilities	14,678		22,423			Other non-interest-bearing liabilities	15,326		21,269
Preferred shareholders’ equity	Preferred shareholders’ equity	1,976		2,378			Preferred shareholders’ equity	1,976		2,177
Common shareholders’ equity	Common shareholders’ equity	24,791		23,583			Common shareholders’ equity	24,237		23,416
Average total liabilities and shareholders’ equity	Average total liabilities and shareholders’ equity	$	295,010	$	296,328		Average total liabilities and shareholders’ equity	$	293,213	$	302,294

(1) Additional information about our average statement of condition, primarily our interest-earning assets and interest-bearing liabilities, is provided in "Net Interest Income" included in this Management's Discussion and Analysis.

(2) Total deposits averaged ~~$233.27~~$230.83 billion in the ~~first quarter of~~six months ended June 30, 2022 compared to ~~$226.23~~$234.32 billion in the same period in 2021.

~~State Street Corporation | 24~~

(3)

Average non-interest bearing deposits are primarily composed of deposit balances denominated in U.S. dollars.

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

Investment Securities


TABLE 20: CARRYING VALUES OF INVESTMENT SECURITIES	TABLE 20: CARRYING VALUES OF INVESTMENT SECURITIES					TABLE 20: CARRYING VALUES OF INVESTMENT SECURITIES

(In millions)	(In millions)	March 31, 2022		December 31, 2021			(In millions)	June 30, 2022		December 31, 2021
Available-for-sale:	Available-for-sale:						Available-for-sale:
U.S. Treasury and federal agencies:	U.S. Treasury and federal agencies:						U.S. Treasury and federal agencies:
Direct obligations	Direct obligations	$	20,943	$	17,939		Direct obligations	$	9,411	$	17,939
Mortgage-backed securities	Mortgage-backed securities	18,741		18,208			Mortgage-backed securities	10,271		18,208
Total U.S. Treasury and federal agencies	Total U.S. Treasury and federal agencies	39,684		36,147			Total U.S. Treasury and federal agencies	19,682		36,147
Non-U.S. debt securities:	Non-U.S. debt securities:						Non-U.S. debt securities:
Mortgage-backed securities	Mortgage-backed securities	2,268		1,995			Mortgage-backed securities	1,959		1,995
Asset-backed securities	Asset-backed securities	2,066		2,087			Asset-backed securities	1,876		2,087
Non-U.S. sovereign, supranational and non-U.S. agency	Non-U.S. sovereign, supranational and non-U.S. agency	20,729		23,547			Non-U.S. sovereign, supranational and non-U.S. agency	14,927		23,547
Other(1)	Other(1)	3,389		3,098			Other(1)	2,204		3,098
Total non-U.S. debt securities	Total non-U.S. debt securities	28,452		30,727			Total non-U.S. debt securities	20,966		30,727
Asset-backed securities:	Asset-backed securities:						Asset-backed securities:
Student loans(2)	Student loans(2)	187		211			Student loans(2)	150		211

Collateralized loan obligations(3)	Collateralized loan obligations(3)	2,411		2,155			Collateralized loan obligations(3)	2,334		2,155
Non-agency CMBS and RMBS(4)	Non-agency CMBS and RMBS(4)	168		52			Non-agency CMBS and RMBS(4)	195		52
Other	Other	90		91			Other	89		91
Total asset-backed securities	Total asset-backed securities	2,856		2,509			Total asset-backed securities	2,768		2,509
State and political subdivisions	State and political subdivisions	1,202		1,272			State and political subdivisions	1,034		1,272

Other U.S. debt securities(5)	Other U.S. debt securities(5)	2,154		2,744			Other U.S. debt securities(5)	1,004		2,744

Total available-for-sale securities~~(6)~~(7)	Total available-for-sale securities~~(6)~~(7)	$	74,348	$	73,399		Total available-for-sale securities~~(6)~~(7)	$	45,454	$	73,399
Held-to-maturity:	Held-to-maturity:						Held-to-maturity:
U.S. Treasury and federal agencies:	U.S. Treasury and federal agencies:						U.S. Treasury and federal agencies:
Direct obligations	Direct obligations	$	720	$	2,170		Direct obligations	$	11,424	$	2,170
Mortgage-backed securities	Mortgage-backed securities	35,784		33,481			Mortgage-backed securities	41,660		33,481
Total U.S. Treasury and federal agencies	Total U.S. Treasury and federal agencies	36,504		35,651			Total U.S. Treasury and federal agencies	53,084		35,651
Non-U.S. debt securities:	Non-U.S. debt securities:						Non-U.S. debt securities:

Non-U.S. sovereign, supranational and non-U.S. agency	Non-U.S. sovereign, supranational and non-U.S. agency	3,763		1,564			Non-U.S. sovereign, supranational and non-U.S. agency	6,443		1,564

Total non-U.S. debt securities	Total non-U.S. debt securities	3,763		1,564			Total non-U.S. debt securities	6,443		1,564
Asset-backed securities:	Asset-backed securities:						Asset-backed securities:
Student loans(2)	Student loans(2)	4,651		4,908			Student loans(2)	4,468		4,908

Non-agency CMBS and RMBS~~(7)~~(8)	Non-agency CMBS and RMBS~~(7)~~(8)	285		307			Non-agency CMBS and RMBS~~(7)~~(8)	266		307
Total asset-backed securities	Total asset-backed securities	4,936		5,215			Total asset-backed securities	4,734		5,215

Total held-to-maturity securities~~(6)~~(7)	Total held-to-maturity securities~~(6)~~(7)	$	45,203	$	42,430		Total held-to-maturity securities~~(6)~~(7)	$	64,261	$	42,430

(1) As of ~~March 31,~~June 30, 2022 and December 31, 2021, the ~~fair~~carrying value includes non-U.S. corporate bonds of ~~$1.80~~$1.10 billion and $1.53 billion, respectively.

(2) Primarily comprised of securities guaranteed by the federal government with respect to at least 97% of defaulted principal and accrued interest on the underlying loans.

(3) Excludes collateralized loan obligations in loan form. Refer to Note 4 for additional information.

(4) Consists entirely of non-agency CMBS as of both ~~March 31,~~June 30, 2022 and December 31, 2021.

(5) As of ~~March 31,~~June 30, 2022 and December 31, 2021, the ~~fair~~carrying value of U.S. corporate bonds was ~~$2.03~~$1.00 billion and $2.44 billion, respectively.

(6)An immaterial amount of accrued interest related to HTM and AFS investment securities was excluded from the amortized cost basis for the period ended ~~March 31,~~June 30, 2022.

(7) Approximately $21.23 billion was transferred from AFS to HTM securities in the second quarter of 2022.

(8)As of ~~March 31,~~June 30, 2022 and December 31, 2021, the total amortized cost included ~~$273~~$256 million and $292 million, respectively, of non-agency CMBS and ~~$12~~$11 million and $14 million of non-agency RMBS, respectively.

~~(8)~~ ~~Approximately $2.3 billion was transferred from AFS to HTM securities in the first quarter of 2022.~~

State Street Corporation | 28

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Additional information about our investment securities portfolio is provided in Note 3 to the consolidated financial statements in this Form 10-Q.

We manage our investment securities portfolio to align with the interest rate and duration characteristics of our client liabilities and in the context of the overall structure of our consolidated statement of condition, in consideration of the global interest rate environment. We consider a well-diversified, high-credit quality investment securities portfolio to be an important element in the management of our consolidated statement of condition.

~~Actions are underway that are intended~~During the second quarter of 2022, we completed a number of our previously announced actions to mitigate additional AOCI risk in the current environment including ~~but not limited to, transfers~~a $21.23 billion transfer of securities from AFS to ~~HTM,~~HTM. While these measures may serve to mitigate additional AOCI risk, we continue to be exposed to risks associated with sudden or significant AOCI deterioration, particularly in an environment of continuing significant, and ~~shortening the portfolio duration through hedging activities and portfolio runoff.~~potentially, historic interest rate increases. There can be no assurance that ~~such measures~~we will ~~be sufficient if the pace of rate increases continues at a historical level.~~not experience further, potentially material AOCI deterioration.

Average duration of our investment securities portfolio was 2.8 years and 2.9 years as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively.

Approximately ~~93%~~96% and 92% of the carrying value of the portfolio was rated “AAA” or “AA” as of ~~both March 31,~~June 30, 2022 and December 31, ~~2021.~~2021, respectively.


TABLE 21: INVESTMENT PORTFOLIO BY EXTERNAL CREDIT RATING	TABLE 21: INVESTMENT PORTFOLIO BY EXTERNAL CREDIT RATING					TABLE 21: INVESTMENT PORTFOLIO BY EXTERNAL CREDIT RATING
		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
AAA(1)	AAA(1)	81	%	79	%	AAA(1)	84	%	79	%
AA	AA	12		13		AA	12		13
A	A	4		4		A	2		4
BBB	BBB	3		4		BBB	2		4

		100	%	100	%		100	%	100	%

(1) Includes U.S. Treasury and federal agency securities that are split-rated, “AAA” by Moody’s Investors Service and “AA+” by Standard & Poor’s and also includes Agency MBS securities which are not explicitly rated but which have an explicit or assumed guarantee from the U.S. government.

As of ~~March 31,~~June 30, 2022 and December 31, 2021, the investment portfolio was diversified with respect to asset class composition. The following table presents the composition of these asset classes.

TABLE 22: INVESTMENT PORTFOLIO BY ASSET CLASS
March 31, 2022 December 31, 2021
U.S. Agency
Mortgage-backed securities 34 % 33 %
Foreign sovereign 20 21
U.S. Treasuries 18 17
Asset-backed securities 10 10
Other credit 18 19
100 % 100 %

~~State Street Corporation | 25~~


TABLE 22: INVESTMENT PORTFOLIO BY ASSET CLASS
	June 30, 2022		December 31, 2021
U.S. Agency Mortgage-backed securities	35	%	33	%
Foreign sovereign	19		21
U.S. Treasuries	19		17
Asset-backed securities	10		10
Other credit	17		19
	100	%	100	%

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

Non-U.S. Debt Securities

Approximately ~~27%~~25% and 28% of the aggregate carrying value of our investment securities portfolio was non-U.S. debt securities as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively.


TABLE 23: NON-U.S. DEBT SECURITIES(1)	TABLE 23: NON-U.S. DEBT SECURITIES(1)					TABLE 23: NON-U.S. DEBT SECURITIES(1)
(In millions)	(In millions)	March 31, 2022		December 31, 2021		(In millions)	June 30, 2022		December 31, 2021
Available-for-sale:	Available-for-sale:					Available-for-sale:
Canada	Canada	$	4,372	$	4,502	Canada	$	3,874	$	4,502
Australia	Australia	3,059		3,019		Australia	2,601		3,019
United Kingdom						United Kingdom	1,628		1,961
Germany	Germany	1,988		2,130		Germany	1,342		2,130
United Kingdom		1,947		1,961
France	France	1,737		2,180		France	1,078		2,180
Austria						Austria	910		1,478
Hong Kong						Hong Kong	778		—
Japan	Japan	1,293		1,332		Japan	751		1,332
Austria		1,196		1,478
Netherlands	Netherlands	925		1,109		Netherlands	656		1,109
Finland						Finland	432		837
Italy	Italy	832		803		Italy	334		803
Finland		808		837
Brazil						Brazil	185		—
Spain						Spain	182		1,227
Republic of Korea						Republic of Korea	146		201
Belgium	Belgium	536		1,050		Belgium	16		1,050
Ireland	Ireland	535		744		Ireland	5		744
Hong Kong		408		—
Spain		318		1,227
Other(2)	Other(2)	8,498		8,355		Other(2)	6,048		8,154
Total	Total	$	28,452	$	30,727	Total	$	20,966	$	30,727
Held-to-maturity:	Held-to-maturity:					Held-to-maturity:
Spain	Spain	$	859	$	—	Spain	$	801	$	—
Belgium						Belgium	691		—
France	France	475		—		France	602		—
Belgium		238		—
Ireland						Ireland	441		—
Singapore	Singapore	233		222		Singapore	346		222
Austria	Austria	222		—		Austria	312		—
Finland						Finland	208		—
Netherlands	Netherlands	180		—		Netherlands	169		—
Germany	Germany	95		—		Germany	121		—
Other(2)	Other(2)	1,461		1,342		Other(2)	2,752		1,342
Total	Total	$	3,763	$	1,564	Total	$	6,443	$	1,564

(1) Geography is determined primarily based on the domicile of collateral or issuer.

(2) As of ~~March 31,~~June 30, 2022, other non-U.S. investments include ~~$7.71~~$5.75 billion of supranational bonds in AFS securities and ~~$1.46~~$2.75 billion of supranational bonds in HTM securities.

State Street Corporation | 29

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Approximately ~~82%~~87% and 81% of the aggregate carrying value of these non-U.S. debt securities was rated “AAA” or “AA” as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. The majority of these securities comprised senior positions within the security structures; these positions have a level of protection provided through subordination and other forms of credit protection. As of ~~March 31,~~June 30, 2022 and December 31, 2021, ~~respectively,~~ approximately 26% and 24%, respectively, of the aggregate carrying value of these non-U.S. debt securities was floating-rate.

As of ~~March 31,~~June 30, 2022, our non-U.S. debt securities had an average market-to-book ratio of ~~98.2%~~97.5%, and an aggregate pre-tax net unrealized loss of ~~$580~~$693 million, composed of gross unrealized gains of ~~$27~~$11 million and gross unrealized losses of ~~$607~~$704 million. These unrealized amounts included:

•a pre-tax net unrealized loss of ~~$510~~$565 million, composed of gross unrealized gains of ~~$27~~$6 million and gross unrealized losses of ~~$537~~

$571 million, associated with non-U.S. AFS debt securities; and

•a pre-tax net unrealized loss of ~~$70~~$128 million, composed of gross unrealized gains of $5 million and gross unrealized losses of ~~$70~~$133 million, associated with non-U.S. HTM debt securities.

As of ~~March 31,~~June 30, 2022, the underlying collateral for non-U.S. MBS and ABS primarily included Australian, U.K., Netherlands ~~Spanish~~ and Italian mortgages. The securities listed under “Canada” were composed of Canadian government securities and provincial bonds, corporate debt and non-U.S. agency securities. The securities listed under “France” were composed of sovereign bonds, corporate debt, covered bonds, ABS and Non-U.S. agency securities. The securities listed under “Japan” were substantially composed of Japanese government securities.

Municipal Obligations

We carried approximately ~~$1.20~~$1.03 billion of municipal securities classified as state and political subdivisions in our investment securities portfolio as of ~~March 31,~~June 30, 2022, as shown in Table 20: Carrying Values of Investment Securities, all of which were classified as AFS. As of ~~March 31,~~June 30, 2022, we also provided approximately ~~$8.62~~$8.44 billion of credit and liquidity facilities to municipal issuers.

TABLE 24: STATE AND MUNICIPAL OBLIGORS(1)
(Dollars in millions) Total Municipal
Securities
Credit and
Liquidity
Facilities(2)
Total % of Total Municipal
Exposure
March 31, 2022
State of Issuer:
Texas $ 209 $ 2,357 $ 2,566 26 %
California 103 1,703 1,806 18
New York 247 1,304 1,551 16
Massachusetts 236 593 829 8
Tennessee — 482 482 5
Total $ 795 $ 6,439 $ 7,234
December 31, 2021
State of Issuer:
Texas $ 221 $ 2,357 $ 2,578 25 %
California 108 2,005 2,113 21
New York 271 1,112 1,383 14
Massachusetts 245 696 941 9
Tennessee — 491 491 5
Total $ 845 $ 6,661 $ 7,506


TABLE 24: STATE AND MUNICIPAL OBLIGORS(1)
(Dollars in millions)	Total Municipal Securities		Credit and Liquidity Facilities(2)		Total		% of Total Municipal Exposure
June 30, 2022
State of Issuer:
Texas	$	196	$	2,326	$	2,522	27	%
New York	185		1,607		1,792		19
California	86		1,524		1,610		17
Massachusetts	217		512		729		8
Tennessee	—		482		482		5
Total	$	684	$	6,451	$	7,135

December 31, 2021
State of Issuer:
Texas	$	221	$	2,357	$	2,578	25	%
California	108		2,005		2,113		21
New York	271		1,112		1,383		14
Massachusetts	245		696		941		9
Tennessee	—		491		491		5

Total	$	845	$	6,661	$	7,506

(1) Represented 5% or more of our aggregate municipal credit exposure of approximately ~~$9.82~~$9.47 billion and $10.22 billion across our businesses as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively.

(2) Includes municipal loans which are also presented within Table 25: U.S. and Non-U.S. Loans.

Our aggregate municipal securities exposure presented in Table 24: State and Municipal Obligors, was concentrated primarily with highly-rated counterparties, with approximately ~~88%~~89% of the obligors rated “AAA” or “AA” as of ~~March 31,~~June 30, 2022. As of that date, approximately ~~26%~~28% and ~~74%~~72% of our aggregate municipal securities exposure was associated with general obligation and revenue

~~State Street Corporation | 26~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

bonds, respectively. The portfolios are also diversified geographically, with the states that represent our largest exposures widely dispersed across the U.S.

Additional information with respect to our assessment of impairment of our municipal securities is provided in Note 3 to the consolidated financial statements in this Form 10-Q.

State Street Corporation | 30

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Loans


TABLE 25: U.S. AND NON- U.S. LOANS	TABLE 25: U.S. AND NON- U.S. LOANS					TABLE 25: U.S. AND NON- U.S. LOANS
(In millions)	(In millions)	March 31, 2022		December 31, 2021			(In millions)	June 30, 2022		December 31, 2021
Domestic(1):	Domestic(1):						Domestic(1):
Commercial and financial:	Commercial and financial:						Commercial and financial:
Fund Finance(2)	Fund Finance(2)	$	11,649	$	12,396		Fund Finance(2)	$	12,363	$	12,396
Leveraged loans	Leveraged loans	3,147		3,106			Leveraged loans	2,468		3,106

Overdrafts	Overdrafts	3,181		1,796			Overdrafts	2,220		1,796
Other(3)	Other(3)	2,014		2,262			Other(3)	1,968		2,262
Commercial real estate	Commercial real estate	2,558		2,554			Commercial real estate	2,682		2,554

Total domestic	Total domestic	22,549		22,114			Total domestic	21,701		22,114
Foreign(1):	Foreign(1):						Foreign(1):
Commercial and financial:	Commercial and financial:						Commercial and financial:
Fund Finance(2)	Fund Finance(2)	7,746		7,778			Fund Finance(2)	8,131		7,778
Leveraged loans	Leveraged loans	1,283		1,328			Leveraged loans	1,123		1,328

Overdrafts	Overdrafts	3,563		1,312			Overdrafts	2,610		1,312

Total foreign	Total foreign	12,592		10,418			Total foreign	11,864		10,418
Total loans(2)(4)	Total loans(2)(4)	35,141		32,532			Total loans(2)(4)	33,565		32,532
Allowance for loan losses	Allowance for loan losses	(86)		(87)			Allowance for loan losses	(95)		(87)
Loans, net of allowance	Loans, net of allowance	$	35,055	$	32,445		Loans, net of allowance	$	33,470	$	32,445

(1) Domestic and foreign categorization is based on the borrower’s country of domicile.

(2) Fund finance loans include primarily ~~$8,254 million~~$8.17 billion private equity capital call finance loans, ~~$6,555 million~~$6.48 billion loans to real money funds, ~~$2,483 million~~$4.11 billion collateralized loan obligations in loan form and ~~$1,243 million~~$1.26 billion loans to business development companies as of ~~March 31,~~June 30, 2022, compared to ~~$9,147 million~~$9.15 billion private equity capital call finance loans, ~~$6,397 million~~$6.40 billion loans to real money funds, ~~$2,913 million~~$2.91 billion collateralized loan obligations in loan form and ~~$1,387 million~~$1.39 billion loans to business development companies as of December 31, 2021.

(3) Includes ~~$1,529 million~~$1.53 billion securities finance loans, ~~$462~~$420 million loans to municipalities and ~~$22~~$21 million other loans as of ~~March 31,~~June 30, 2022 and ~~$1,784 million~~$1.78 billion securities finance loans, $455 million loans to municipalities and $23 million other loans as of December 31, 2021.

(4) As of ~~March 31,~~June 30, 2022, excluding overdrafts, floating rate loans totaled ~~$25,781 million~~$25.98 billion and fixed rate loans totaled ~~$2,615 million.~~$2.75 billion. We have entered into interest rate swap agreements to hedge the forecasted cash flows associated with LIBOR indexed floating-rate loans. Refer to Note 10 to the consolidated financial statements included under Item 8, Financial Statements and Supplementary Data, in our 2021 Form 10-K for additional details.

The increase in foreign loans as of ~~March 31,~~June 30, 2022 compared to December 31, 2021 was primarily driven by higher levels of client overdrafts.

As of ~~both March 31,~~June 30, 2022 and December 31, 2021, our leveraged loans totaled approximately $3.59 billion and $4.43 ~~billion.~~billion, respectively. We sold ~~$89~~$770 million of leveraged loans in the ~~first~~second quarter of 2022, of which ~~$51~~$155 million remained unsettled and was held for sale as of ~~March 31, 2022, (which was settled subsequently in April 2022).~~June 30, 2022.

In addition, we had binding unfunded commitments as of ~~March 31,~~June 30, 2022 and December 31, 2021 of ~~$155~~$53 million and $124 million, respectively, to participate in syndications of

leveraged loans. Additional information about these unfunded commitments is provided in Note 9 to the consolidated financial statements in this Form 10-Q.

These leveraged loans, which are primarily rated “speculative” under our internal risk-rating framework (refer to Note 4 to the consolidated financial statements in this Form 10-Q), are externally rated “BBB,” “BB” or “B,” with approximately ~~95%~~96% and 94%

of the loans rated “BB” or “B” as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. Our investment strategy involves generally limiting our investment to larger, more liquid credits underwritten by major global financial institutions, applying our internal credit analysis process to each potential investment and diversifying our exposure by counterparty and industry segment. However, these loans have significant exposure to credit losses relative to higher-rated loans in our portfolio.

Additional information about all of our loan segments, as well as underlying classes, is provided in Note 4 to the consolidated financial statements in this Form 10-Q.

No loans were modified in troubled debt restructurings as of both ~~March 31,~~June 30, 2022 and December 31, 2021.

Allowance for credit losses


TABLE 26: ALLOWANCE FOR CREDIT LOSSES	TABLE 26: ALLOWANCE FOR CREDIT LOSSES					TABLE 26: ALLOWANCE FOR CREDIT LOSSES
		Three Months Ended March 31,					Six Months Ended June 30,
(In millions)	(In millions)	2022		2021				(In millions)	2022		2021
Allowance for credit losses:	Allowance for credit losses:							Allowance for credit losses:
Beginning balance	Beginning balance	$	108	$	148			Beginning balance	$	108	$	148

Provision for credit losses (funded commitments)								Provision for credit losses (funded commitments)	12		(19)
Provisions for credit losses (unfunded commitments)	Provisions for credit losses (unfunded commitments)	—		(7)				Provisions for credit losses (unfunded commitments)	(2)		(3)
Provisions for credit losses (held-to-maturity securities and all other)	Provisions for credit losses (held-to-maturity securities and all other)	—		(2)				Provisions for credit losses (held-to-maturity securities and all other)	—		(2)
Charge-offs(1)	Charge-offs(1)	(1)		—				Charge-offs(1)	(4)		(1)

Other(2)	Other(2)	—		(4)				Other(2)	—		(2)
Ending balance	Ending balance	$	107	$	135			Ending balance	$	114	$	121

(1) The charge-offs are related to commercial and financial loans.

(2) Consists primarily of foreign currency translation.

We recorded noa $10 million provision for credit losses in both the ~~first quarter of~~three and six months ended June 30, 2022, ~~as positive changes in the mix of loans in our portfolio were offset by~~reflecting a downward shift in management's economic outlook, partially offset by a decrease in expected losses related to leveraged loans within our portfolio, compared to a $9$15 million and $24 million reserve release in the same ~~period~~periods in ~~2021.~~2021, respectively.

As of ~~March 31,~~June 30, 2022, approximately ~~$61~~$69 million of our allowance for credit losses was related to leveraged loans included in the commercial and financial segment compared to ~~$92~~$74 million as of ~~March 31,~~June 30, 2021. As our view on current and future economic scenarios ~~change,~~changes, our allowance for credit losses related to these loans may be impacted through a change to the provisions for credit losses, reflecting credit migration within our loan portfolio, as well as changes in management's economic outlook as of year-end. The remaining ~~$46~~$45 million and ~~$43~~$47 million as of June 30, 2022 and 2021, respectively, was related to other loans, commercial real estate loans, off-balance sheet commitments and other

State Street Corporation | 2731

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

~~million as of March 31, 2022 and 2021, respectively, was related to other loans, commercial real estate loans, off-balance sheet commitments and other~~ financial assets held at amortized cost, including investment securities.

An allowance for credit losses is recognized on HTM securities upon acquisition of the security, and on AFS securities when the fair value and expected future cash flows of the investment securities are less than their amortized cost basis. Our assessment of impairment involves an evaluation of economic and security-specific factors. Such factors are based on estimates, derived by management, which contemplate current market conditions and security-specific performance. To the extent that market conditions are worse than management's expectations or due to idiosyncratic bond performance, the credit-related component of impairment, in particular, could increase and would be recorded in the provision for credit losses. Additional information with respect to the allowance for credit losses, net impairment losses and gross unrealized losses related to investment securities, is provided in Note 3 to the consolidated financial statements in this Form 10-Q.

Cross-Border Outstandings

Cross-border outstandings are amounts payable to us by non-U.S. counterparties which are denominated in U.S. dollars or other non-local currency, as well as non-U.S. local currency claims not funded by local currency liabilities. Our cross-border outstandings consist primarily of deposits with banks; loans and lease financing, including short-duration advances; investment securities; amounts related to FX and interest rate contracts; and securities finance. In addition to credit risk, cross-border outstandings carry the risk that, as a result of political or economic conditions in a country, borrowers may be unable to meet their contractual repayment obligations of principal and/or interest when due because of the unavailability of, or restrictions on, FX needed by borrowers to repay their obligations.

As market and economic conditions change, the major independent credit rating agencies may downgrade U.S. and non-U.S. financial institutions and sovereign issuers which have been, and may in the future be, significant counterparties to us, or whose financial instruments serve as collateral on which we rely for credit risk mitigation purposes, and may do so again in the future. As a result, we may be exposed to increased counterparty risk, leading to negative ratings volatility.

The cross-border outstandings presented in Table 27: Cross-border outstandings, represented approximately ~~23%~~29% and 27% of our consolidated total

assets as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively.

TABLE 27: CROSS-BORDER OUTSTANDINGS(1)
(In millions)
Investment Securities and Other Assets
Derivatives and Securities on Loan Total Cross-Border Outstandings
March 31, 2022
Germany $ 26,433 $ 114 $ 26,547
United Kingdom 11,534 815 12,349
Canada 9,810 498 10,308
Japan 6,408 1,344 7,752
Luxembourg 6,775 703 7,478
Australia 5,720 439 6,159
Ireland 2,736 1,265 4,001
December 31, 2021
Germany $ 30,263 $ 202 $ 30,465
United Kingdom 13,075 1,287 14,362
Japan 10,713 878 11,591
Canada 8,201 999 9,200
Australia 6,862 534 7,396
Luxembourg 6,300 601 6,901
Ireland 2,822 852 3,674


TABLE 27: CROSS-BORDER OUTSTANDINGS(1)
(In millions)	Investment Securities and Other Assets		Derivatives and Securities on Loan		Total Cross-Border Outstandings
June 30, 2022
Germany	$	28,465	$	498	$	28,963
United Kingdom	10,326		8,589		18,915
Japan	7,995		1,315		9,310
Canada	6,199		2,170		8,369
Australia	5,755		1,357		7,112
Luxembourg	5,291		978		6,269

Ireland	1,877		3,126		5,003


France	1,877		1,881		3,758
December 31, 2021
Germany	$	30,263	$	202	$	30,465
United Kingdom	13,075		1,287		14,362
Japan	10,713		878		11,591
Canada	8,201		999		9,200
Australia	6,862		534		7,396
Luxembourg	6,300		601		6,901
Ireland	2,822		852		3,674

(1) Cross-border outstandings included countries in which we do business, and which amounted to at least 1% of our consolidated total assets as of the dates indicated.

As of ~~March 31,~~June 30, 2022, there were no countries whose aggregate cross-border outstandings amount to between 0.75% and 1% of our consolidated assets. As of December 31, 2021, aggregate cross-border outstandings in France amounted to between 0.75% and 1% of our consolidated total assets, at approximately ~~$2.63 billion and $2.83 billion, respectively.~~$2.83 billion.

Risk Management

In the normal course of our global business activities, we are exposed to a variety of risks, some inherent in the financial services industry, others more specific to our business activities. Our risk management framework focuses on material risks, which include the following:

•credit and counterparty risk;

•liquidity risk, funding and management;

•operational risk;

•information technology risk;

•market risk associated with our trading activities;

•market risk associated with our non-trading activities, which we refer to as asset-and-liability management, and which consists primarily of interest rate risk;

•model risk;

•strategic risk; and

•reputational, fiduciary and business conduct risk.

State Street Corporation | 32

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Many of these risks, as well as certain of the factors underlying each of these risks that could affect our businesses and our consolidated financial

~~State Street Corporation | 28~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

statements, are discussed in detail on pages 23 to 51 included under Item 1A, Risk Factors, in our 2021 Form 10-K.

For additional information about our risk management, including our risk appetite framework and risk governance committee structure, refer to pages 83 to 88 included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, Risk Management, in our 2021 Form 10-K.

Credit Risk Management

We define credit risk as the risk of financial loss if a counterparty, borrower or obligor, collectively referred to as a counterparty, is either unable or unwilling to repay borrowings or settle a transaction in accordance with underlying contractual terms. We assume credit risk in our traditional non-trading lending activities, such as overdrafts, loans and contingent commitments, in our investment securities portfolio, where recourse to a counterparty exists, and in our direct and indirect trading activities, such as securities purchased under a resale agreement, principal securities lending and FX and indemnified agency securities lending. We also assume credit risk in our day-to-day treasury and securities and other settlement operations, in the form of deposit placements and other cash balances, with central banks or private sector institutions and fees receivables.

Allowance for Credit Losses

We maintain an allowance for credit losses to support certain on-balance sheet credit exposures, including financial assets held at amortized cost. We also maintain an allowance for unfunded commitments and letters of credit to support our off-balance sheet credit exposure. The two components together represent the allowance for credit losses. Review and evaluation of the adequacy of the allowance for credit losses is ongoing throughout the year, but occurs at least quarterly, and is based, among other factors, on our evaluation of the level of risk in the portfolio and the estimated effects of our forecasts on our counterparties. We utilize multiple economic scenarios, consisting of a baseline, upside and downside scenarios, to develop management's forecast of future expected losses.

~~The economic forecast utilized in~~In the ~~first~~second quarter of 2022, ~~reflects positive changes in the mix of loans in~~ our ~~portfolio, offset by~~allowance estimate reflected a downward shift in management's economic ~~outlook.~~outlook, partially offset by a decrease in expected losses resulting from a reduction in leveraged loan balances within our portfolio. Allowance estimates remain subject to continued model and economic uncertainty and management

may use qualitative adjustments. If future data and forecasts deviate relative to the forecasts utilized to determine our allowance for credit losses as of ~~March 31,~~June 30, 2022, or if credit risk migration is higher or lower than

forecasted for reasons independent of the economic forecast, our allowance for credit losses will also change.

Additional information about the allowance for credit losses is provided in Notes 3 and 4 to the consolidated financial statements in this Form 10-Q.

For additional information about our credit risk management framework, including our core policies and principles, structure and organization, credit ratings, risk parameter estimates, credit risk mitigation, credit limits, reporting, monitoring and controls, refer to pages 88 to 93 included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, Credit Risk Management, in our 2021 Form 10-K.

Liquidity Risk Management

Our liquidity framework contemplates areas of potential risk based on our activities, size and other appropriate risk-related factors. In managing liquidity risk we employ limits, maintain established metrics and early warning indicators and perform routine stress testing to identify potential liquidity needs. This process involves the evaluation of a combination of internal and external scenarios which assist us in measuring our liquidity position and in identifying potential increases in cash needs or decreases in available sources of cash, as well as the potential impairment of our ability to access the global capital markets.

We manage our liquidity on a global, consolidated basis. We also manage liquidity on a stand-alone basis at our Parent Company, as well as at certain branches and subsidiaries of State Street Bank. State Street Bank generally has access to markets and funding sources limited to banks, such as the federal funds market and the Federal Reserve's discount window. The Parent Company is managed to a more conservative liquidity profile, reflecting narrower market access. Additionally, the Parent Company typically holds, or has direct access to, primarily through SSIF, a direct subsidiary of the Parent Company, and the support agreement, as discussed in the "Uses of Liquidity" section of this Management's Discussion and Analysis, enough cash to meet its current debt maturities and cash needs, as well as those projected over the next one-year period. Reference our SPOE Strategy as discussed in the "Uses of Liquidity" section of this Management's Discussion and Analysis. Absent financial distress at the Parent Company, the liquid assets available at SSIF continue to be available to the Parent Company. As of ~~March 31,~~June 30, 2022, our Parent Company and State ~~Street Bank had no senior notes or subordinated debentures outstanding that will mature in the next twelve months.~~

State Street Corporation | 2933

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

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Street Bank had approximately $1.75 billion of senior notes or subordinated debentures outstanding that will mature in the next twelve months.

As a systemically important financial institution, our liquidity risk management activities are subject to heightened and evolving regulatory requirements, including interpretations of those requirements, under specific U.S. and international regulations and also resulting from published and unpublished guidance, supervisory activities, such as stress tests, resolution planning, examinations and other regulatory interactions. Satisfaction of these requirements could, in some cases, result in changes in the composition of our investment portfolio, reduced NII or NIM, a reduction in the level of certain business activities or modifications to the way in which we deliver our products and services. If we fail to meet regulatory requirements to the satisfaction of our regulators, we could receive negative regulatory stress test results, incur a resolution plan deficiency or determination of a non-credible resolution plan or otherwise receive an adverse regulatory finding. Our efforts to satisfy, or our failure to satisfy, these regulatory requirements could materially adversely affect our business, financial condition or results of operations.

For additional information on our liquidity risk management, as well as liquidity metrics, refer to pages 93 to 98 included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, Liquidity Risk Management, in our 2021 Form 10-K. For additional information on our liquidity ratios, including LCR and the net stable funding ratio, refer to page 14 included under Item 1, Business, in our 2021 Form 10-K.

Asset Liquidity

Central to the management of our liquidity is asset liquidity, which consists primarily of HQLA. HQLA is the amount of liquid assets that qualify for inclusion in the LCR. As a banking organization, we are subject to a minimum LCR under the LCR rule approved by U.S. banking regulators. The LCR is intended to promote the short-term resilience of internationally active banking organizations, like us, to improve the banking industry's ability to absorb shocks arising from market stress over a 30 calendar day period and improve the measurement and management of liquidity risk. The LCR measures an institution’s HQLA against its net cash outflows. HQLA primarily consists of unencumbered cash and certain high quality liquid securities that qualify for inclusion under the LCR rule. We report LCR to the Federal Reserve daily. For the quarters ended ~~March 31,~~June 30, 2022 and December 31, 2021, daily average LCR for the Parent Company was 106% and 105%, respectively. The impact of higher deposits on the

Parent Company's LCR is offset by a cap, known as the transferability restriction, on the HQLA from State Street Bank and Trust that can be recognized at the Parent Company as defined in the U.S. LCR Final

Rule as it prohibits the upstreaming of liquidity under stress. The average HQLA for the Parent Company under the LCR final rule definition was ~~$151.57~~$141.22 billion and $159.36 billion, post-prescribed haircuts, for the quarters ended ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. For the quarter ended ~~March 31,~~June 30, 2022, LCR for State Street Bank and Trust was approximately ~~127%~~122%. State Street Bank and Trust's LCR is higher than the Parent Company's LCR, primarily due to application of the transferability restriction in the LCR Final Rule to the calculation of the Parent Company's LCR. This restriction limits the HQLA used in the calculation of the Parent Company's LCR to the amount of net cash outflows of its principal banking subsidiary (State Street Bank and Trust). This transferability restriction does not apply in the calculation of State Street Bank and Trust's LCR, and therefore State Street Bank and Trust's LCR reflects the benefit of all of its HQLA holdings.

We maintained average cash balances in excess of regulatory requirements governing deposits with the Federal Reserve of approximately ~~$72.79~~$72.53 billion at the Federal Reserve, the ECB and other non-U.S. central banks for the quarter ended ~~March 31,~~June 30, 2022, and $83.48 billion for the quarter ended December 31, 2021. The lower levels of average cash balances with central banks reflect lower levels of client deposits.

Liquid securities carried in our asset liquidity include securities pledged without corresponding advances from the Federal Reserve Bank of Boston (FRBB), the FHLB, and other non-U.S. central banks. State Street Bank is a member of the FHLB. This membership allows for advances of liquidity in varying terms against high-quality collateral, which helps facilitate asset-and-liability management. As of both ~~March 31,~~June 30, 2022 and December 31, 2021, we ~~had~~had no outstanding borrowings from the FHLB.

Access to primary, intra-day and contingent liquidity provided by these utilities is an important source of contingent liquidity with utilization subject to underlying conditions. As of both ~~March 31,~~June 30, 2022 and December 31, 2021, we had no outstanding primary credit borrowings from the FRBB discount window or any other central bank facility.

In addition to the securities included in our asset liquidity, we have significant amounts of other unencumbered investment securities. These securities are available sources of liquidity, although not as rapidly deployed as those included in our asset liquidity.

~~The average fair value of total unencumbered securities was $101.68 billion for the quarter ended March 31, 2022, compared to $99.47 billion for the quarter ended December 31, 2021.~~

State Street Corporation | 3034

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The average fair value of total unencumbered securities was $91.34 billion for the quarter ended June 30, 2022, compared to $99.47 billion for the quarter ended December 31, 2021.

Uses of Liquidity

Significant uses of our liquidity could result from the following: withdrawals of client deposits; ~~draw-downs~~drawdowns by our custody clients of lines of credit; advances to clients to settle securities transactions; increases in our investment and loan portfolios; or other permitted purposes. Such circumstances would generally arise under stress conditions including deterioration in credit ratings. A recurring use of our liquidity involves our deployment of HQLA from our investment portfolio to post collateral to financial institutions serving as sources of securities under our enhanced custody program.

We had unfunded commitments to extend credit with gross contractual amounts totaling ~~$33.76~~$32.94 billion and $33.03 billion and standby letters of credit totaling ~~$2.62~~$2.54 billion and $3.24 billion as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. These amounts do not reflect the value of any collateral. As of ~~March 31,~~June 30, 2022, approximately ~~75%~~78% of our unfunded commitments to extend credit and ~~32%~~38% of our standby letters of credit expire within one year. Since many of our commitments are expected to expire or renew without being drawn upon, the gross contractual amounts do not necessarily represent our future cash requirements.

Resolution Planning

Under Section 165(d) of the Dodd-Frank Act, we are required to submit a resolution plan on a biennial basis jointly to the Federal Reserve and the FDIC (the Agencies). The purpose of our resolution plan is to describe our preferred resolution strategy and to demonstrate that we have the resources and capabilities to execute on that strategy in the event of major financial distress. Through resolution planning, we seek to maintain our role as a key infrastructure provider within the financial system, while minimizing risk to the financial system.

The final rule published in the Federal Register on November 1, 2019 requires a full resolution plan and a targeted resolution plan on an alternating basis in the relevant submission years. We submitted our updated 2021 targeted 165(d) resolution plan by July 1, 2021. The targeted resolution plan included the core elements of resolution planning and some specific firm level information about the impact of the COVID-19 pandemic on resolution planning. In addition, actions taken to remediate the 2019 shortcoming related to the implementation of governance mechanisms were included in the plan. Our next full resolution plan is due July 1, 2023.

In the event of material financial distress, our preferred resolution strategy is the SPOE Strategy. The SPOE Strategy provides that prior to the bankruptcy of the Parent Company and pursuant to a support agreement among the Parent Company,

SSIF (a direct subsidiary of the Parent Company), our Beneficiary Entities (as defined below) and certain of our other entities, SSIF is obligated, up to its available resources, to recapitalize and/or provide liquidity to State Street Bank and the other entities benefiting from such capital and/or liquidity support (collectively with State Street Bank, “Beneficiary Entities”), in amounts designed to prevent the Beneficiary Entities from themselves entering into resolution proceedings. Following the recapitalization of, or provision of liquidity to the Beneficiary Entities, the Parent Company would enter into a bankruptcy proceeding under the U.S. Bankruptcy Code. The Beneficiary Entities and our other subsidiaries would be transferred to a newly organized holding company held by a reorganization trust for the benefit of the Parent Company’s claimants.

Under the support agreement, the Parent Company has pre-funded SSIF by contributing certain of its assets (primarily its liquid assets, cash deposits, investments in intercompany debt, investments in marketable securities and other cash and non-cash equivalent investments) to SSIF at the time it entered into the support agreement and will continue to contribute such assets, to the extent available, on an on-going basis. In consideration for these contributions, SSIF has agreed in the support agreement to provide capital and liquidity support to the Parent Company and all of the Beneficiary Entities in accordance with the Parent Company’s capital and liquidity policies. Under the support agreement, the Parent Company is only permitted to retain cash needed to meet its upcoming obligations and to fund expected expenses during a potential bankruptcy proceeding. SSIF has provided the Parent Company with a committed credit line and issued (and may issue) one or more promissory notes to the Parent Company (the Parent Company Funding Notes) that together are intended to allow the Parent Company to continue to meet its obligations throughout the period prior to the occurrence of a "Recapitalization Event", which is defined under the support agreement as the earlier occurrence of: (1) one or more capital and liquidity thresholds being breached or (2) the authorization by the Parent Company's Board of Directors for the Parent Company to commence bankruptcy proceedings. The support agreement does not obligate SSIF to maintain any specific level of resources and SSIF may not have sufficient resources to implement the SPOE Strategy.

State Street Corporation | 35

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

In the event a Recapitalization Event occurs, the obligations outstanding under the Parent Company Funding Notes would automatically convert into or be exchanged for capital contributed to SSIF. The obligations of the Parent Company and SSIF under the support agreement are secured through a security

~~State Street Corporation | 31~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION~~

~~AND RESULTS OF OPERATIONS~~

agreement that grants a lien on the assets that the Parent Company and SSIF would use to fulfill their obligations under the support agreement to the Beneficiary Entities. SSIF is a distinct legal entity separate from the Parent Company and the Parent Company’s other affiliates.

In accordance with our policies, we are required to monitor, on an ongoing basis, the capital and liquidity needs of State Street Bank and our other Beneficiary Entities. To support this process, we have established a trigger framework that identifies key actions that would need to be taken or decisions that would need to be made if certain events tied to our financial condition occur. The trigger thresholds are set at levels intended to provide for the availability of sufficient capital and liquidity to enable an orderly resolution without extraordinary government support that results in us emerging from resolution as a stabilized institution with market confidence restored.

Upon the occurrence of a Recapitalization Event: (1) SSIF would not be authorized to provide any further liquidity to the Parent Company; (2) the Parent Company would be required to contribute to SSIF any remaining assets it is required to contribute to SSIF under the support agreement, (which specifically exclude amounts designated to fund expected expenses during a potential bankruptcy proceeding); (3) SSIF would be required to provide capital and liquidity support to the Beneficiary Entities to support such entities’ continued operation to the extent of its available resources and consistent with the support agreement; and (4) the Parent Company would be expected to commence Chapter 11 proceedings under the U.S. Bankruptcy Code. No person or entity, other than a party to the support agreement, should rely on any of our affiliates being or remaining a Beneficiary Entity or receiving capital or liquidity support pursuant to the support agreement, including in evaluating any of our entities from a creditor's perspective or determining whether to enter into a contractual relationship with any of our entities.

State Street Bank is also required to submit periodically to the FDIC a plan for resolution in the event of its failure, referred to as an IDI plan. We submitted our last IDI plan before July 1, 2018. In November 2018, the FDIC had announced that until the FDIC completed revisions to its IDI plan requirements, no IDI plans would be required to be filed. On June 25, 2021, the FDIC issued a policy statement on resolution plans for IDIs that allows for

content streamlining and adjusts the frequency of submissions to a three-year cycle. State Street Bank’s next IDI plan submission deadline is December 1, 2023.

Additionally, we are required to submit a recovery plan to the Federal Reserve. This plan includes detailed governance triggers and contingency actions that can be implemented in a timely manner in the event of extreme financial ~~distress in those entities.~~distress. We also have recovery planning requirements in certain international jurisdictions where we operate.

Funding

Deposits

We provide products and services including custody, accounting, administration, daily pricing, FX services, cash management, financial asset management, securities finance and investment advisory services. As a provider of these products and services, we generate client deposits, which have generally provided a stable, low-cost source of funds. As a global custodian, clients place deposits with our entities in various currencies. As of both ~~March 31,~~June 30, 2022 and December 31, 2021, approximately 65% of our average total deposit balances were denominated in U.S. dollars, 15% in EUR, 10% in ~~the British pound Sterling (GBP)~~GBP and 10% in all other currencies.

Short-Term Funding

Our on-balance sheet liquid assets are also an integral component of our liquidity management strategy. These assets provide liquidity through maturities of the assets, but more importantly, they provide us with the ability to raise funds by pledging the securities as collateral for borrowings or through outright sales. In addition, our access to the global capital markets gives us the ability to source incremental funding from wholesale investors. As discussed earlier under “Asset Liquidity,” State Street Bank's membership in the FHLB allows for advances of liquidity with varying terms against high-quality collateral.

Short-term secured funding also comes in the form of securities lent or sold under agreements to repurchase. These transactions are short-term in nature, generally overnight and are collateralized by high-quality investment securities. These balances were ~~$4.28~~$0.95 billion and $1.58 billion as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively.

State Street Bank currently maintains a line of credit with a financial institution of CAD ~~$1.40~~$1.40 billion, or approximately ~~$1.12~~$1.09 billion, as of ~~March 31,~~June 30, 2022, to support its Canadian securities processing operations. The line of credit has no stated termination date and is cancelable by either party with prior notice. As of both ~~March 31,~~June 30, 2022 and ~~December 31, 2021, there was no balance outstanding on this line of credit.~~

State Street Corporation | 3236

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

December 31, 2021, there was no balance outstanding on this line of credit.

Long-Term Funding

We have the ability to issue debt and equity securities under our current universal shelf registration statement to meet current commitments and business needs. ~~The total amount remaining for issuance under the registration statement is $2.25 billion as of March 31, 2022.~~ In addition, State Street Bank also has current authorization from the Board to issue ~~up to $5 billion in~~ unsecured senior debt. The total amount remaining for issuance pursuant to this authority is $2.15 billion as of June 30, 2022.

On February 7, 2022, we issued $300 million aggregate principal amount of 1.746% fixed-to-floating rate senior notes due 2026, $650 million aggregate principal amount of 2.203% fixed-to-floating rate senior notes due 2028 and $550 million aggregate principal amount of 2.623% fixed-to-floating rate senior notes due 2033.

On March 30, 2022, we redeemed $750 million aggregate principal amount of 2.825% ~~Fixed-to-Floating Rate Senior Notes~~fixed-to-floating rate senior notes due 2023.

On ~~April 14,~~May 13, 2022, we ~~notified the holders~~issued $500 million aggregate principal amount of ~~our~~4.421% fixed-to-floating rate senior notes due 2033.

On May 15, 2022, we redeemed $750 million aggregate principal amount of 2.653% ~~Fixed-to-Floating Rate Senior Notes~~fixed-to-floating rate senior notes due ~~2023 that we will redeem all of the Notes on May 15, 2022.~~2023.

Agency Credit Ratings

Our ability to maintain consistent access to liquidity is fostered by the maintenance of high investment grade ratings as measured by the major independent credit rating agencies. Factors essential to maintaining high credit ratings include:

•diverse and stable core earnings;

•relative market position;

•strong risk management;

•strong capital ratios;

•diverse liquidity sources, including the global capital markets and client deposits;

•strong liquidity monitoring procedures; and

•preparedness for current or future regulatory developments.

High ratings limit borrowing costs and enhance our liquidity by:

•providing assurance for unsecured funding and depositors;

•increasing the potential market for our debt and improving our ability to offer products;

•serving markets; and

•engaging in transactions in which clients value high credit ratings.

A downgrade or reduction of our credit ratings could have a material adverse effect on our liquidity by restricting our ability to access the capital markets,

which could increase the related cost of funds. In turn, this could cause the sudden and large-scale withdrawal of unsecured deposits by our clients, which could lead to ~~draw-downs~~drawdowns of unfunded

commitments to extend credit or trigger requirements under securities purchase commitments; or require additional collateral or force terminations of certain trading derivative contracts.

A majority of our derivative contracts have been entered into under bilateral agreements with counterparties who may require us to post collateral or terminate the transactions based on changes in our credit ratings. We assess the impact of these arrangements by determining the collateral that would be required assuming a downgrade by all rating agencies. The additional collateral or termination payments related to our net derivative liabilities under these arrangements that could have been called by counterparties in the event of a downgrade in our credit ratings below levels specified in the agreements is provided in Note 7 to the consolidated financial statements in this Form 10-Q. Other funding sources, such as secured financing transactions and other margin requirements, for which there are no explicit triggers, could also be adversely affected.

Operational Risk Management

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.

Tight labor markets, the ongoing war in Ukraine and lingering impacts from the COVID-19 pandemic are resulting in stress on the operating environment and have increased, and may continue to increase, operational risk. The war in Ukraine also heightens information technology risk exposures, including cyber-threats. See also “Information Technology Risk Management” below.

For additional information about our operational risk framework, refer to pages 99 to 102 included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, "Operational Risk Management", in our 2021 Form 10-K.

Information Technology Risk Management

We define information technology risk as the risk associated with the use, ownership, operation, involvement, influence and adoption of information technology. Information technology risk includes risks triggered by technology non-compliance with regulatory obligations, information security and privacy incidents, business disruption, technology internal control and process gaps, technology operational events and adoption of new business technologies.

State Street Corporation | 37

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

For additional information about our information technology risk framework and associated risks, refer to pages 102 to 103 included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, "Information

~~State Street Corporation | 33~~


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


TABLE 28: TEN-DAY VALUE-AT-RISK ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS	TABLE 28: TEN-DAY VALUE-AT-RISK ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS																			TABLE 28: TEN-DAY VALUE-AT-RISK ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS
		Three Months Ended														As of March 31, 2022		As of December 31, 2021				As of March 31, 2021					Three Months Ended																						As of June 30, 2022	As of March 31, 2022		As of June 30, 2021
		March 31, 2022						December 31, 2021						March 31, 2021															June 30, 2022												March 31, 2022						As of March 31, 2022							As of June 30, 2021	June 30, 2021
(In thousands)	(In thousands)	Avg.		Max.		Min.		Avg.		Max.		Min.		Avg.							Max.			Min.				VaR				VaR			VaR		(In thousands)	Avg.			Max.	Min.							Avg.	Max.		Min.							Avg.			Max.			VaR	VaR
Global Markets	Global Markets	$	11,401	$	25,779	$	3,341	$	15,393	$	27,068	$	7,005	$	13,008	$	25,411	$	5,252			$	4,474		$	16,998				$	14,587		Global Markets	$	8,248	$	16,319		$	3,830			$	11,401	$	25,779	$	3,341		$	15,283	$	25,020		$	6,974	$	9,152		$	4,474		$	20,989
Global Treasury	Global Treasury	776		1,714		559		1,287		4,232		255		5,915		9,762		3,820				1,079			3,556					9,655			Global Treasury	971		1,522			788				776		1,714		559			4,342		9,451			460		1,522			1,079			3,667
Diversification	Diversification	(849)		(1,418)		(399)		(1,212)		(3,997)		(373)		(3,736)		(2,884)		(2,576)				(1,214)			(4,519)					(8,973)			Diversification	(1,055)		(1,602)			(925)				(849)		(1,418)		(399)			(2,671)		(7,136)			474		(2,366)			(1,214)			(812)
Total VaR	Total VaR	$	11,328	$	26,075	$	3,501	$	15,468	$	27,303	$	6,887	$	15,187	$	32,289	$	6,496			$	4,339		$	16,035				$	15,269		Total VaR	$	8,164	$	16,239		$	3,693			$	11,328	$	26,075	$	3,501		$	16,954	$	27,335		$	7,908	$	8,308		$	4,339		$	23,844

TABLE 29: TEN-DAY STRESSED VALUE-AT-RISK ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS	TABLE 29: TEN-DAY STRESSED VALUE-AT-RISK ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS																			TABLE 29: TEN-DAY STRESSED VALUE-AT-RISK ASSOCIATED WITH TRADING ACTIVITIES FOR COVERED POSITIONS
		Three Months Ended														As of March 31, 2022		As of December 31, 2021				As of March 31, 2021					Three Months Ended																						As of June 30, 2022	As of March 31, 2022		As of June 30, 2021
		March 31, 2022						December 31, 2021						March 31, 2021															June 30, 2022												March 31, 2022						As of March 31, 2022							As of June 30, 2021	June 30, 2021
(In thousands)	(In thousands)	Avg.		Max.		Min.		Avg.		Max.		Min.		Avg.							Max.			Min.				VaR				VaR			VaR		(In thousands)	Avg.			Max.	Min.							Avg.	Max.		Min.							Avg.			Max.			VaR	VaR
Global Markets	Global Markets	$	37,341	$	64,435	$	23,242	$	41,818	$	73,273	$	20,522	$	34,572	$	79,687	$	13,779			$	40,529		$	65,840				$	21,264		Global Markets	$	42,486	$	97,420		$	20,553			$	37,341	$	64,435	$	23,242		$	36,478	$	74,475		$	13,037	$	43,306		$	40,529		$	56,998
Global Treasury	Global Treasury	2,977		8,428		778		4,423		14,632		814		17,714		26,312		10,095				5,687			12,419					25,763			Global Treasury	3,125		7,903			1,057				2,977		8,428		778			12,644		29,651			2,042		5,642			5,687			6,462
Diversification	Diversification	(3,825)		(9,841)		(1,365)		(5,862)		(15,397)		(1,533)		(7,398)		(10,040)		(3,453)				(9,063)			(17,505)					(26,260)			Diversification	(4,491)		(9,384)			(2,690)				(3,825)		(9,841)		(1,365)			(6,471)		(8,193)			1,690		(5,396)			(9,063)			8,473
Total Stressed VaR	Total Stressed VaR	$	36,493	$	63,022	$	22,655	$	40,379	$	72,508	$	19,803	$	44,888	$	95,959	$	20,421			$	37,153		$	60,754				$	20,767		Total Stressed VaR	$	41,120	$	95,939		$	18,920			$	36,493	$	63,022	$	22,655		$	42,651	$	95,933		$	16,769	$	43,552		$	37,153		$	71,933


TABLE 30: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1)	TABLE 30: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1)																						TABLE 30: TEN-DAY VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1)
		As of March 31, 2022						As of December 31, 2021					As of March 31, 2021								As of June 30, 2022	As of March 31, 2022		As of June 30, 2021
(In thousands)	(In thousands)	Foreign Exchange Risk		Interest Rate Risk		Volatility Risk			Foreign Exchange Risk		Interest Rate Risk		Volatility Risk		Foreign Exchange Risk		Interest Rate Risk		Volatility Risk						(In thousands)	Foreign Exchange Risk		Interest Rate Risk		Volatility Risk		Foreign Exchange Risk		Interest Rate Risk		Volatility Risk		Foreign Exchange Risk		Interest Rate Risk		Volatility Risk
By component:	By component:																								By component:
Global Markets	Global Markets	$	2,512	$	3,368	$	495		$	6,945	$	16,424	$	108	$	12,476	$	11,164	$	857					Global Markets	$	6,109	$	6,010	$	127	$	2,512	$	3,368	$	495	$	6,859	$	16,327	$	701
Global Treasury	Global Treasury	889		815		—			531		3,688		—		39		9,734		—						Global Treasury	750		1,538		—		889		815		—		97		3,950		—
Diversification	Diversification	(869)		(899)		—			(877)		(3,682)		—		(22)		(5,477)		—						Diversification	(529)		(2,469)		—		(869)		(899)		—		(234)		687		—
Total VaR	Total VaR	$	2,532	$	3,284	$	495		$	6,599	$	16,430	$	108	$	12,493	$	15,421	$	857					Total VaR	$	6,330	$	5,079	$	127	$	2,532	$	3,284	$	495	$	6,722	$	20,964	$	701


TABLE 31: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1)	TABLE 31: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1)																					TABLE 31: TEN-DAY STRESSED VaR ASSOCIATED WITH TRADING ACTIVITIES BY RISK FACTOR(1)
		As of March 31, 2022						As of December 31, 2021					As of March 31, 2021						As of June 30, 2022				As of March 31, 2022						As of June 30, 2021
(In thousands)	(In thousands)	Foreign Exchange Risk		Interest Rate Risk		Volatility Risk			Foreign Exchange Risk		Interest Rate Risk		Volatility Risk		Foreign Exchange Risk		Interest Rate Risk			Volatility Risk				(In thousands)	Foreign Exchange Risk		Interest Rate Risk			Volatility Risk		Foreign Exchange Risk		Interest Rate Risk		Volatility Risk		Foreign Exchange Risk		Interest Rate Risk		Volatility Risk
By component:	By component:																							By component:
Global Markets	Global Markets	$	8,352	$	57,507	$	540		$	9,445	$	63,368	$	157	$	16,046	$	26,866		$	939			Global Markets	$	7,440	$	39,764		$	200	$	8,352	$	57,507	$	540	$	10,456	$	59,710	$	747
Global Treasury	Global Treasury	1,076		5,746		—			667		13,218		—		62		25,260			—				Global Treasury	1,375		5,766			—		1,076		5,746		—		117		6,350		—
Diversification	Diversification	(1,403)		(7,286)		—			(1,551)		(17,500)		—		(16)		(6,387)			—				Diversification	(709)		(6,631)			—		(1,403)		(7,286)		—		(191)		8,450		—
Total Stressed VaR	Total Stressed VaR	$	8,025	$	55,967	$	540		$	8,561	$	59,086	$	157	$	16,092	$	45,739		$	939			Total Stressed VaR	$	8,106	$	38,899		$	200	$	8,025	$	55,967	$	540	$	10,382	$	74,510	$	747


TABLE 32: KEY INTEREST RATES FOR BASELINE FORECASTS	TABLE 32: KEY INTEREST RATES FOR BASELINE FORECASTS									TABLE 32: KEY INTEREST RATES FOR BASELINE FORECASTS
		March 31, 2022(1)				March 31, 2021					June 30, 2022(1)						June 30, 2021
		Fed Funds Target		10-Year Treasury		Fed Funds Target		10-Year Treasury			Fed Funds Target		ECB Target(2)		10-Year Treasury		Fed Funds Target		ECB Target(2)		10-Year Treasury
Spot rates	Spot rates	0.50	%	2.35	%	0.25	%	1.74	%	Spot rates	1.75	%	(0.50)	%	3.01	%	0.25	%	(0.50)	%	1.47	%
12-month forward rates	12-month forward rates	2.25		2.73		0.25		2.05		12-month forward rates	3.75		1.25		3.40		0.25		(0.50)		1.83


TABLE 33: NET INTEREST INCOME SENSITIVITY	TABLE 33: NET INTEREST INCOME SENSITIVITY													TABLE 33: NET INTEREST INCOME SENSITIVITY
		March 31, 2022(1)						March 31, 2021							June 30, 2022(1)						June 30, 2021
(In millions)	(In millions)	U.S. Dollar		All Other Currencies		Total		U.S. Dollar		All Other Currencies		Total		(In millions)	U.S. Dollar		All Other Currencies		Total		U.S. Dollar		All Other Currencies		Total
Rate change:	Rate change:	Benefit (Exposure)						Benefit (Exposure)						Rate change:	Benefit (Exposure)						Benefit (Exposure)
Parallel shifts:	Parallel shifts:													Parallel shifts:
+100 bps shock	+100 bps shock	$	133	$	398	$	531	$	805	$	245	$	1,050	+100 bps shock	$	(28)	$	471	$	443	$	644	$	286	$	930
–100 bps shock	–100 bps shock	(118)		(193)		(311)		493		129		622		–100 bps shock	13		(356)		(343)		804		155		959
Steeper yield curve:	Steeper yield curve:													Steeper yield curve:
'+100 bps shift in long-end rates(2)	'+100 bps shift in long-end rates(2)	83		14		97		154		2		156		'+100 bps shift in long-end rates(2)	22		6		28		134		1		135
'-100 bps shift in short-end rates(2)	'-100 bps shift in short-end rates(2)	(16)		(179)		(195)		645		131		776		'-100 bps shift in short-end rates(2)	38		(350)		(312)		954		156		1,110
Flatter yield curve:	Flatter yield curve:													Flatter yield curve:
'+100 bps shift in short-end rates(2)	'+100 bps shift in short-end rates(2)	53		383		436		659		244		903		'+100 bps shift in short-end rates(2)	(50)		465		415		510		284		794
'-100 bps shift in long-end rates(2)	'-100 bps shift in long-end rates(2)	(100)		(14)		(114)		(142)		(2)		(144)		'-100 bps shift in long-end rates(2)	(24)		(6)		(30)		(148)		(2)		(150)


TABLE 34: REGULATORY CAPITAL STRUCTURE AND RELATED REGULATORY CAPITAL RATIOS
					State Street Corporation												State Street Bank
(Dollars in millions)					Basel III Advanced Approaches March 31, 2022			Basel III Standardized Approach March 31, 2022			Basel III Advanced Approaches December 31, 2021			Basel III Standardized Approach December 31, 2021			Basel III Advanced Approaches March 31, 2022			Basel III Standardized Approach March 31, 2022			Basel III Advanced Approaches December 31, 2021			Basel III Standardized Approach December 31, 2021
Common shareholders' equity:
Common stock and related surplus					$	11,266		$	11,266		$	11,291		$	11,291		$	13,033		$	13,033		$	13,047		$	13,047
Retained earnings					25,612			25,612			25,238			25,238			16,286			16,286			15,700			15,700
Accumulated other comprehensive income (loss)					(2,698)			(2,698)			(1,133)			(1,133)			(2,478)			(2,478)			(926)			(926)
Treasury stock, at cost					(9,932)			(9,932)			(10,009)			(10,009)			—			—			—			—
Total					24,248			24,248			25,387			25,387			26,841			26,841			27,821			27,821
Regulatory capital adjustments:
Goodwill and other intangible assets, net of associated deferred tax liabilities					(8,830)			(8,830)			(8,935)			(8,935)			(8,564)			(8,564)			(8,667)			(8,667)
Other adjustments(1)					(392)			(392)			(505)			(505)			(209)			(209)			(309)			(309)
Common equity tier 1 capital					15,026			15,026			15,947			15,947			18,068			18,068			18,845			18,845
Preferred stock					1,976			1,976			1,976			1,976			—			—			—			—


Tier 1 capital					17,002			17,002			17,923			17,923			18,068			18,068			18,845			18,845
Qualifying subordinated long-term debt					1,586			1,586			1,588			1,588			749			749			752			752

Adjusted allowance for credit losses					—			105			—			108			—			105			—			108

Total capital					$	18,588		$	18,693		$	19,511		$	19,619		$	18,817		$	18,922		$	19,597		$	19,705
Risk-weighted assets:





Credit risk(2)					$	67,631		$	124,962		$	63,735		$	109,554		$	60,693		$	121,825		$	57,405		$	106,405
Operational risk(3)					45,575			NA			45,550			NA			42,863			NA			42,813			NA




Market risk					1,763			1,763			2,113			2,113			1,763			1,763			2,113			2,113
Total risk-weighted assets					$	114,969		$	126,725		$	111,398		$	111,667		$	105,319		$	123,588		$	102,331		$	108,518



Capital Ratios:	2022 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(4)		2021 Minimum Requirements Including Capital Conservation Buffer and G-SIB Surcharge(4)
Common equity tier 1 capital	8.0	%	8.0	%	13.1		%	11.9		%	14.3		%	14.3		%	17.2		%	14.6		%	18.4		%	17.4		%
Tier 1 capital	9.5		9.5		14.8			13.4			16.1			16.1			17.2			14.6			18.4			17.4
Total capital	11.5		11.5		16.2			14.8			17.5			17.6			17.9			15.3			19.2			18.2


TABLE 35: CAPITAL ROLL-FORWARD	TABLE 35: CAPITAL ROLL-FORWARD									TABLE 35: CAPITAL ROLL-FORWARD
(In millions)	(In millions)	Basel III Advanced Approaches March 31, 2022		Basel III Standardized Approach March 31, 2022		Basel III Advanced Approaches December 31, 2021		Basel III Standardized Approach December 31, 2021		(In millions)	Basel III Advanced Approaches June 30, 2022		Basel III Standardized Approach June 30, 2022		Basel III Advanced Approaches December 31, 2021		Basel III Standardized Approach December 31, 2021
Common equity tier 1 capital:	Common equity tier 1 capital:									Common equity tier 1 capital:
Common equity tier 1 capital balance, beginning of period	Common equity tier 1 capital balance, beginning of period	$	15,947	$	15,947	$	14,377	$	14,377	Common equity tier 1 capital balance, beginning of period	$	15,947	$	15,947	$	14,377	$	14,377
Net income	Net income	604		604		2,693		2,693		Net income	1,351		1,351		2,693		2,693
Changes in treasury stock, at cost	Changes in treasury stock, at cost	77		77		600		600		Changes in treasury stock, at cost	111		111		600		600
Dividends declared	Dividends declared	(229)		(229)		(897)		(897)		Dividends declared	(474)		(474)		(897)		(897)
Goodwill and other intangible assets, net of associated deferred tax liabilities	Goodwill and other intangible assets, net of associated deferred tax liabilities	105		105		84		84		Goodwill and other intangible assets, net of associated deferred tax liabilities	307		307		84		84
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(1,565)		(1,565)		(1,320)		(1,320)		Accumulated other comprehensive income (loss)	(2,554)		(2,554)		(1,320)		(1,320)
Other adjustments	Other adjustments	87		87		410		410		Other adjustments	194		194		410		410
Changes in common equity tier 1 capital	Changes in common equity tier 1 capital	(921)		(921)		1,570		1,570		Changes in common equity tier 1 capital	(1,065)		(1,065)		1,570		1,570
Common equity tier 1 capital balance, end of period	Common equity tier 1 capital balance, end of period	15,026		15,026		15,947		15,947		Common equity tier 1 capital balance, end of period	14,882		14,882		15,947		15,947
Additional tier 1 capital:	Additional tier 1 capital:									Additional tier 1 capital:
Tier 1 capital balance, beginning of period	Tier 1 capital balance, beginning of period	17,923		17,923		16,848		16,848		Tier 1 capital balance, beginning of period	17,923		17,923		16,848		16,848
Changes in common equity tier 1 capital	Changes in common equity tier 1 capital	(921)		(921)		1,570		1,570		Changes in common equity tier 1 capital	(1,065)		(1,065)		1,570		1,570
Net issuance (redemption) of preferred stock	Net issuance (redemption) of preferred stock	—		—		(495)		(495)		Net issuance (redemption) of preferred stock	—		—		(495)		(495)

Changes in tier 1 capital	Changes in tier 1 capital	(921)		(921)		1,075		1,075		Changes in tier 1 capital	(1,065)		(1,065)		1,075		1,075
Tier 1 capital balance, end of period	Tier 1 capital balance, end of period	17,002		17,002		17,923		17,923		Tier 1 capital balance, end of period	16,858		16,858		17,923		17,923
Tier 2 capital:	Tier 2 capital:									Tier 2 capital:
Tier 2 capital balance, beginning of period	Tier 2 capital balance, beginning of period	1,588		1,696		962		1,109		Tier 2 capital balance, beginning of period	1,588		1,696		962		1,109
Net issuance and changes in long-term debt qualifying as tier 2	Net issuance and changes in long-term debt qualifying as tier 2	(2)		(2)		627		627		Net issuance and changes in long-term debt qualifying as tier 2	(207)		(207)		627		627

Changes in adjusted allowance for credit losses	Changes in adjusted allowance for credit losses	—		(3)		(1)		(40)		Changes in adjusted allowance for credit losses	—		5		(1)		(40)

Changes in tier 2 capital	Changes in tier 2 capital	(2)		(5)		626		587		Changes in tier 2 capital	(207)		(202)		626		587
Tier 2 capital balance, end of period	Tier 2 capital balance, end of period	1,586		1,691		1,588		1,696		Tier 2 capital balance, end of period	1,381		1,494		1,588		1,696
Total capital:	Total capital:									Total capital:
Total capital balance, beginning of period	Total capital balance, beginning of period	19,511		19,619		17,810		17,957		Total capital balance, beginning of period	19,511		19,619		17,810		17,957
Changes in tier 1 capital	Changes in tier 1 capital	(921)		(921)		1,075		1,075		Changes in tier 1 capital	(1,065)		(1,065)		1,075		1,075
Changes in tier 2 capital	Changes in tier 2 capital	(2)		(5)		626		587		Changes in tier 2 capital	(207)		(202)		626		587
Total capital balance, end of period	Total capital balance, end of period	$	18,588	$	18,693	$	19,511	$	19,619	Total capital balance, end of period	$	18,239	$	18,352	$	19,511	$	19,619


TABLE 36: ADVANCED & STANDARDIZED APPROACHES RISK-WEIGHTED ASSETS ROLL-FORWARD	TABLE 36: ADVANCED & STANDARDIZED APPROACHES RISK-WEIGHTED ASSETS ROLL-FORWARD									TABLE 36: ADVANCED & STANDARDIZED APPROACHES RISK-WEIGHTED ASSETS ROLL-FORWARD

(In millions)	(In millions)	Basel III Advanced Approaches March 31, 2022		Basel III Standardized Approach March 31, 2022		Basel III Advanced Approaches December 31, 2021		Basel III Standardized Approach December 31, 2021		(In millions)	Basel III Advanced Approaches June 30, 2022		Basel III Standardized Approach June 30, 2022		Basel III Advanced Approaches December 31, 2021		Basel III Standardized Approach December 31, 2021
Total risk-weighted assets, beginning of period	Total risk-weighted assets, beginning of period	$	111,398	$	111,667	$	109,705	$	117,080	Total risk-weighted assets, beginning of period	$	111,398	$	111,667	$	109,705	$	117,080
Changes in credit risk-weighted assets:	Changes in credit risk-weighted assets:									Changes in credit risk-weighted assets:
Net increase (decrease) in investment securities-wholesale	Net increase (decrease) in investment securities-wholesale	(2,005)		(106)		(476)		(707)		Net increase (decrease) in investment securities-wholesale	(3,904)		(2,796)		(476)		(707)
Net increase (decrease) in loans	Net increase (decrease) in loans	(386)		2,368		2,017		946		Net increase (decrease) in loans	(2,251)		(2,292)		2,017		946
Net increase (decrease) in securitization exposures	Net increase (decrease) in securitization exposures	63		59		(404)		(489)		Net increase (decrease) in securitization exposures	82		78		(404)		(489)
Net increase (decrease) in repo-style transaction exposures	Net increase (decrease) in repo-style transaction exposures	(244)		(2,338)		(440)		(1,658)		Net increase (decrease) in repo-style transaction exposures	(964)		(6,773)		(440)		(1,658)
Net increase (decrease) in over-the-counter derivatives exposures(1)	Net increase (decrease) in over-the-counter derivatives exposures(1)	3,366		10,980		(1,353)		(863)		Net increase (decrease) in over-the-counter derivatives exposures(1)	2,848		11,658		(1,353)		(863)
Net increase (decrease) in all other(2)	Net increase (decrease) in all other(2)	3,102		4,445		1,024		(2,567)		Net increase (decrease) in all other(2)	3,713		4,137		1,024		(2,567)
Net increase (decrease) in credit risk-weighted assets	Net increase (decrease) in credit risk-weighted assets	3,896		15,408		368		(5,338)		Net increase (decrease) in credit risk-weighted assets	(476)		4,012		368		(5,338)
Net increase (decrease) in market risk-weighted assets	Net increase (decrease) in market risk-weighted assets	(350)		(350)		(75)		(75)		Net increase (decrease) in market risk-weighted assets	(275)		(275)		(75)		(75)
Net increase (decrease) in operational risk-weighted assets	Net increase (decrease) in operational risk-weighted assets	25		N/A		1,400		N/A		Net increase (decrease) in operational risk-weighted assets	(200)		N/A		1,400		N/A
Total risk-weighted assets, end of period	Total risk-weighted assets, end of period	$	114,969	$	126,725	$	111,398	$	111,667	Total risk-weighted assets, end of period	$	110,447	$	115,404	$	111,398	$	111,667


TABLE 37: TIER 1 AND SUPPLEMENTARY LEVERAGE RATIOS	TABLE 37: TIER 1 AND SUPPLEMENTARY LEVERAGE RATIOS							TABLE 37: TIER 1 AND SUPPLEMENTARY LEVERAGE RATIOS
(Dollars in millions)	(Dollars in millions)	March 31, 2022			December 31, 2021			(Dollars in millions)	June 30, 2022			December 31, 2021
State Street:	State Street:							State Street:
Tier 1 capital	Tier 1 capital	$	17,002		$	17,923		Tier 1 capital	$	16,858		$	17,923
Average assets	Average assets	295,010			303,007			Average assets	291,435			303,007
Less: adjustments for deductions from tier 1 capital and other	Less: adjustments for deductions from tier 1 capital and other	(9,222)			(9,440)			Less: adjustments for deductions from tier 1 capital and other	(8,909)			(9,440)
Adjusted average assets for tier 1 leverage ratio	Adjusted average assets for tier 1 leverage ratio	285,788			293,567			Adjusted average assets for tier 1 leverage ratio	282,526			293,567
Additional SLR exposure	Additional SLR exposure	43,395			32,985			Additional SLR exposure	44,486			32,985
Adjustments for deductions of qualifying central bank deposits	Adjustments for deductions of qualifying central bank deposits	(73,789)			(84,113)			Adjustments for deductions of qualifying central bank deposits	(72,383)			(84,113)
Total assets for SLR	Total assets for SLR	$	255,394		$	242,439		Total assets for SLR	$	254,629		$	242,439
Tier 1 leverage ratio	Tier 1 leverage ratio	5.9		%	6.1		%	Tier 1 leverage ratio	6.0		%	6.1		%
Supplementary leverage ratio	Supplementary leverage ratio	6.7			7.4			Supplementary leverage ratio	6.6			7.4

State Street Bank:	State Street Bank:							State Street Bank:
Tier 1 capital	Tier 1 capital	$	18,068		$	18,845		Tier 1 capital	$	18,174		$	18,845
Average assets	Average assets	291,458			299,379			Average assets	288,139			299,379
Less: adjustments for deductions from tier 1 capital and other	Less: adjustments for deductions from tier 1 capital and other	(8,773)			(8,976)			Less: adjustments for deductions from tier 1 capital and other	(8,474)			(8,976)
Adjusted average assets for tier 1 leverage ratio	Adjusted average assets for tier 1 leverage ratio	282,685			290,403			Adjusted average assets for tier 1 leverage ratio	279,665			290,403
Additional SLR exposure	Additional SLR exposure	43,462			32,985			Additional SLR exposure	44,628			32,985
Adjustments for deductions of qualifying central bank deposits	Adjustments for deductions of qualifying central bank deposits	(73,789)			(84,113)			Adjustments for deductions of qualifying central bank deposits	(72,383)			(84,113)
Total assets for SLR	Total assets for SLR	$	252,358		$	239,275		Total assets for SLR	$	251,910		$	239,275
Tier 1 leverage ratio	Tier 1 leverage ratio	6.4		%	6.5		%	Tier 1 leverage ratio	6.5		%	6.5		%
Supplementary leverage ratio	Supplementary leverage ratio	7.2			7.9			Supplementary leverage ratio	7.2			7.9


			Amount equal to:
TLAC			Greater of: •21.5% of total RWA (18.0% minimum plus 2.5% plus a G-SIB surcharge calculated for these purposes under Method 1 of 1.0% plus any applicable counter- cyclical buffer, which is currently 0%); and •9.5% of total leverage exposure (7.5% minimum plus the SLR buffer of 2.0%), as defined by the SLR final rule.
Qualifying external LTD			Greater of: •7.0% of RWA (6.0% minimum plus a G-SIB surcharge calculated for these purposes under method 2 of 1.0%); and •4.5% of total leverage exposure, as defined by the SLR final rule.


TABLE 38: TOTAL LOSS-ABSORBING CAPACITY	TABLE 38: TOTAL LOSS-ABSORBING CAPACITY									TABLE 38: TOTAL LOSS-ABSORBING CAPACITY
		As of March 31, 2022									As of June 30, 2022
(Dollars in millions)	(Dollars in millions)	Actual				Requirement				(Dollars in millions)	Actual				Requirement
Total loss-absorbing capacity	Total loss-absorbing capacity									Total loss-absorbing capacity
Risk-weighted assets	Risk-weighted assets	$	30,775	24.3	%	$	27,246	21.5	%	Risk-weighted assets	$	29,261	25.4	%	$	24,812	21.5	%
Supplemental leverage ratio	Supplemental leverage ratio	30,775		12.1		24,262		9.5		Supplemental leverage ratio	29,261		11.5		24,190		9.5
Long-term debt:	Long-term debt:									Long-term debt:
Risk-weighted assets	Risk-weighted assets	12,380		9.8		8,871		7.0		Risk-weighted assets	11,903		10.3		8,078		7.0
Supplemental leverage ratio	Supplemental leverage ratio	12,380		4.8		11,493		4.5		Supplemental leverage ratio	11,903		4.7		11,458		4.5


	TABLE 41: SHARES REPURCHASED
Three Months Ended March 31, 2022		Three Months Ended March 31, 2021
	Shares Acquired (In millions)	Average Cost per Share		Total Acquired (In millions)		Shares Acquired (In millions)	Average Cost per Share		Total Acquired (In millions)
	—	$	—	$	—	6.2	$	76.21	$	475


TABLE 41: SHARES REPURCHASED




Three Months Ended June 30, 2021					Six Months Ended June 30, 2021
Shares Acquired (In millions)	Average Cost per Share		Total Acquired (In millions)		Shares Acquired (In millions)	Average Cost per Share		Total Acquired (In millions)
5.0	$	84.71	$	425	11.2	$	80.00	$	900


TABLE 42: COMMON STOCK DIVIDENDS	TABLE 42: COMMON STOCK DIVIDENDS											TABLE 42: COMMON STOCK DIVIDENDS
		Three Months Ended March 31,								Three Months Ended June 30,
		2022				2021							2022				2021
		Dividends Declared per Share		Total (In millions)		Dividends Declared per Share		Total (In millions)					Dividends Declared per Share		Total (In millions)		Dividends Declared per Share		Total (In millions)

Common Stock	Common Stock	$	0.57	$	209	$	0.52	$	182			Common Stock	$	0.57	$	210	$	0.52	$	179

										Six Months Ended June 30,
											2022		2021
													Dividends Declared per Share		Total (In millions)		Dividends Declared per Share		Total (In millions)
Common Stock												Common Stock	$	1.14	$	419	$	1.04	$	361


(Dollars in millions, except per share amounts, shares in thousands)	Preferred Stock		Common Stock			Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total
			Shares	Amount								Shares	Amount


































































Balance at December 31, 2020	$	2,471	503,880	$	504	$	10,205	$	23,442	$	187	150,723	$	(10,609)	$	26,200
Net income								519							519
Other comprehensive income (loss)										(605)					(605)
Preferred stock redeemed	(495)							(5)							(500)
Cash dividends declared:
Common stock - $0.52 per share								(182)							(182)
Preferred stock								(25)							(25)
Common stock acquired												6,233	(475)		(475)
Common stock awards exercised						22						(1,111)	49		71
Other								2				2			2
Balance at March 31, 2021	$	1,976	503,880	$	504	$	10,227	$	23,751	$	(418)	155,847	$	(11,035)	$	25,005






















Balance at December 31, 2021	$	1,976	503,880	$	504	$	10,787	$	25,238	$	(1,133)	137,897	$	(10,009)	27,363
Net income								604							604
Other comprehensive income (loss)										(1,565)					(1,565)

Cash dividends declared:
Common stock - $0.57 per share								(209)							(209)
Preferred stock								(20)							(20)

Common stock awards exercised						(11)						(1,132)	77		66
Other						(14)		(1)				—			(15)
Balance at March 31, 2022	$	1,976	503,880	$	504	$	10,762	$	25,612	$	(2,698)	136,765	$	(9,932)	$	26,224


Standard	Description	Date of Adoption	Effects on the financial statements or other significant matters
ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures	The standard addresses two topics: 1) eliminates the accounting guidance for TDRs, now requiring an entity to determine whether a modification results in a new loan or a continuation of an existing loan, as well as expanding disclosures related to modifications and 2) requires disclosure of current period gross write-offs of financing receivables within the vintage disclosures table.	January 1, 2023, early adoption permitted	We do not expect the new standard to have a significant impact as, to date, no loans have been modified in troubled debt restructurings and write-offs of financing receivables are insignificant.
ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method	The standard makes targeted amendments to 1) expand the existing last-of-layer method to allow multiple hedging layers of a single closed portfolio (now renamed portfolio layer method), 2) expand the scope of the portfolio layer method to include nonprepayable financial assets, 3) clarify which hedging instruments are eligible for designation in a portfolio layer hedge, 4) provide additional guidance on the accounting for, and disclosure of, hedge basis adjustments that are applicable to the portfolio layer method and 5) define how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio.	January 1, 2023, early adoption permitted	We are currently evaluating the impact of the new standard and the early adoption provisions.


	Fair Value Measurements on a Recurring Basis
	As of March 31, 2022
(In millions)	Quoted Market Prices in Active Markets (Level 1)		Pricing Methods with Significant Observable Market Inputs (Level 2)		Pricing Methods with Significant Unobservable Market Inputs (Level 3)		Impact of Netting(1)		Total Net Carrying Value in Consolidated Statement of Condition
Assets:
Trading account assets:
U.S. government securities	$	40	$	—	$	—			$	40
Non-U.S. government securities	—		140		—				140
Other	—		574		—				574

Total trading account assets	40		714		—				754
Available-for-sale investment securities:
U.S. Treasury and federal agencies:
Direct obligations	20,943		—		—				20,943
Mortgage-backed securities	—		18,741		—				18,741
Total U.S. Treasury and federal agencies	20,943		18,741		—				39,684
Non-U.S. debt securities:
Mortgage-backed securities	—		2,268		—				2,268
Asset-backed securities	—		2,066		—				2,066
Non-U.S. sovereign, supranational and non-U.S. agency	—		20,729		—				20,729
Other	—		3,389		—				3,389
Total non-U.S. debt securities	—		28,452		—				28,452
Asset-backed securities:
Student loans	—		187		—				187



Collateralized loan obligations	—		2,411		—				2,411
Non-agency CMBS and RMBS(2)	—		168		—				168
Other	—		90		—				90
Total asset-backed securities	—		2,856		—				2,856






State and political subdivisions	—		1,202		—				1,202

Other U.S. debt securities	—		2,154		—				2,154





Total available-for-sale investment securities	20,943		53,405		—				74,348
Other assets:
Derivative instruments:
Foreign exchange contracts	—		20,913		6		$	(14,142)	6,777
Interest rate contracts	9		—		—		—		9

Total derivative instruments	9		20,913		6		(14,142)		6,786


Other	15		647		—		—		662
Total assets carried at fair value	$	21,007	$	75,679	$	6	$	(14,142)	$	82,550
Liabilities:
Accrued expenses and other liabilities:




Derivative instruments:
Foreign exchange contracts	$	4	$	21,201	$	3	$	(13,888)	$	7,320
Interest rate contracts	—		—		—		—		—
Other derivative contracts	—		299		—		—		299
Total derivative instruments	4		21,500		3		(13,888)		7,619

Total liabilities carried at fair value	$	4	$	21,500	$	3	$	(13,888)	$	7,619


		Fair Value Measurements Using Significant Unobservable Inputs																				Fair Value Measurements Using Significant Unobservable Inputs
		Three Months Ended March 31, 2022																				Three Months Ended June 30, 2022
		Fair Value as of December 31, 2021		Total Realized and Unrealized Gains (Losses)(1)				Purchases		Sales		Settlements		Transfers into Level 3			Transfers out of Level 3			Fair Value as of March 31, 2022(1)			Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of March 31, 2022			Fair Value as of March 31, 2022		Total Realized and Unrealized Gains (Losses)(1)				Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Fair Value as of June 30, 2022(1)		Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of June 30, 2022
(In millions)	(In millions)			Recorded in Revenue(1)		Recorded in Other Comprehensive Income(1)										(In millions)			Recorded in Revenue(1)						Recorded in Other Comprehensive Income(1)
Assets:	Assets:																												Assets:

Other assets:	Other assets:																										Other assets:
Derivative instruments:	Derivative instruments:																								Derivative instruments:
Foreign exchange contracts	Foreign exchange contracts	$	—	$	3	$	—	$	3	$	—	$	—	$	—		$	—		$	6		$	3	Foreign exchange contracts	$	6	$	—	$	—	$	9	$	—	$	—	$	—	$	—	$	15	$	2

Total derivative instruments	Total derivative instruments	—		3		—		3		—		—		—			—			6			3		Total derivative instruments	6		—		—		9		—		—		—		—		15		2
Total assets carried at fair value	Total assets carried at fair value	$	—	$	3	$	—	$	3	$	—	$	—	$	—		$	—		$	6		$	3	Total assets carried at fair value	$	6	$	—	$	—	$	9	$	—	$	—	$	—	$	—	$	15	$	2


	Fair Value Measurements Using Significant Unobservable Inputs
	Three Months Ended June 30, 2021
	Fair Value as of March 31, 2021		Total Realized and Unrealized Gains (Losses)(1)				Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Fair Value as of June 30, 2021(1)		Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of June 30, 2021
(In millions)			Recorded in Revenue(1)		Recorded in Other Comprehensive Income(1)
Assets:
Available-for-sale Investment securities:

Asset-backed securities:
Collateralized loan obligations	$	106	$	—	$	—	$	—	$	—	$	—	$	—	$	(106)	$	—

Total asset-backed securities	106		—		—		—		—		—		—		(106)		—








Other U.S. debt securities	15		—		—		—		—		—		—		(15)		—
Total available-for-sale investment securities	121		—		—		—		—		—		—		(121)		—
Other assets:
Derivative instruments:
Foreign exchange contracts	6		(5)		—		2		—		(1)		—		—		2		$	—
Total derivative instruments	6		(5)		—		2		—		(1)		—		—		2		—
Total assets carried at fair value	$	127	$	(5)	$	—	$	2	$	—	$	(1)	$	—	$	(121)	$	2	$	—


	Fair Value Measurements Using Significant Unobservable Inputs
	Six Months Ended June 30, 2021
	Fair Value as of December 31, 2020		Total Realized and Unrealized Gains (Losses)(1)				Purchases		Sales		Settlements		Transfers into Level 3		Transfers out of Level 3		Fair Value as of June 30, 2021(1)		Change in Unrealized Gains (Losses) Related to Financial Instruments Held as of June 30, 2021
(In millions)			Recorded in Revenue(1)		Recorded in Other Comprehensive Income(1)
Assets:
Available-for-sale Investment securities:

Asset-backed securities:
Collateralized loan obligations	$	14	$	—	$	—	$	106	$	—	$	—	$	—	$	(120)	$	—

Total asset-backed securities	14		—		—		106		—		—		—		(120)		—








Other U.S. debt securities	—		—		—		—		—		—		15		(15)		—
Total available-for-sale investment securities	14		—		—		106		—		—		15		(135)		—
Other assets:
Derivative instruments:
Foreign exchange contracts	2		(3)		—		3		—		—		—		—		2		$	(1)
Total derivative instruments	2		(3)		—		3		—		—		—		—		2		(1)
Total assets carried at fair value	$	16	$	(3)	$	—	$	109	$	—	$	—	$	15	$	(135)	$	2	$	(1)


		Quantitative Information about Level 3 Fair Value Measurements															Quantitative Information about Level 3 Fair Value Measurements
		Fair Value						Range				Weighted-Average					Fair Value						Range				Weighted-Average
(Dollars in millions)	(Dollars in millions)	As of March 31, 2022		As of December 31, 2021		Valuation Technique	Significant Unobservable Input(1)	As of March 31, 2022				As of March 31, 2022		As of December 31, 2021		(Dollars in millions)	As of June 30, 2022		As of December 31, 2021		Valuation Technique	Significant Unobservable Input(1)	As of June 30, 2022				As of June 30, 2022		As of December 31, 2021
Significant unobservable inputs readily available to State Street:	Significant unobservable inputs readily available to State Street:															Significant unobservable inputs readily available to State Street:
Assets:	Assets:															Assets:
Derivative Instruments, foreign exchange contracts	Derivative Instruments, foreign exchange contracts	$	6	$	—	Option model	Volatility	7.2	%	-	22.7%	13.3	%	15.2	%	Derivative Instruments, foreign exchange contracts	$	15	$	—	Option model	Volatility	5.4	%	-	19.8%	11.9	%	15.2	%
Total	Total	$	6	$	—											Total	$	15	$	—
Liabilities:	Liabilities:															Liabilities:
Derivative instruments, foreign exchange contracts	Derivative instruments, foreign exchange contracts	$	(3)	$	—	Option model	Volatility	7.2	%	-	22.8%	8.8	%	14.7	%	Derivative instruments, foreign exchange contracts	$	15	$	—	Option model	Volatility	5.4	%	-	19.7%	11.9	%	14.7	%
Total	Total	$	(3)	$	—											Total	$	15	$	—


						Fair Value Hierarchy											Fair Value Hierarchy
(In millions)	(In millions)	Reported Amount		Estimated Fair Value		Quoted Market Prices in Active Markets (Level 1)		Pricing Methods with Significant Observable Market Inputs (Level 2)		Pricing Methods with Significant Unobservable Market Inputs (Level 3)		(In millions)	Reported Amount		Estimated Fair Value		Quoted Market Prices in Active Markets (Level 1)		Pricing Methods with Significant Observable Market Inputs (Level 2)		Pricing Methods with Significant Unobservable Market Inputs (Level 3)
March 31, 2022
June 30, 2022												June 30, 2022
Financial Assets:	Financial Assets:											Financial Assets:
Cash and due from banks	Cash and due from banks	$	2,976	2,976		$	2,976	$	—	$	—	Cash and due from banks	$	3,515	3,515		$	3,515	$	—	$	—
Interest-bearing deposits with banks	Interest-bearing deposits with banks	104,010		104,010		—		104,010		—		Interest-bearing deposits with banks	91,360		91,360		—		91,360		—
Securities purchased under resale agreements	Securities purchased under resale agreements	803		803		—		803		—		Securities purchased under resale agreements	5,203		5,203		—		5,203		—

Investment securities held-to-maturity	Investment securities held-to-maturity	45,203		42,834		702		42,132		—		Investment securities held-to-maturity	64,261		60,103		11,331		48,772		—
Net loans(1)	Net loans(1)	35,055		35,069		—		32,802		2,267		Net loans(1)	33,470		33,209		—		31,009		2,200
Other(2)	Other(2)	1		1		—		1		—		Other(2)	1		1		—		1		—
Financial Liabilities:	Financial Liabilities:											Financial Liabilities:
Deposits:	Deposits:											Deposits:
Non-interest-bearing	Non-interest-bearing	$	61,797	$	61,797	$	—	$	61,797	$	—	Non-interest-bearing	$	55,062	$	55,062	$	—	$	55,062	$	—
Interest-bearing - U.S.	Interest-bearing - U.S.	104,962		104,962		—		104,962		—		Interest-bearing - U.S.	107,262		107,262		—		107,262		—
Interest-bearing - non-U.S.	Interest-bearing - non-U.S.	84,284		84,284		—		84,284		—		Interest-bearing - non-U.S.	79,589		79,589		—		79,589		—
Securities sold under repurchase agreements	Securities sold under repurchase agreements	4,277		4,277		—		4,277		—		Securities sold under repurchase agreements	951		951		—		951		—

Other short-term borrowings	Other short-term borrowings	18		18		—		18		—		Other short-term borrowings	73		73		—		73		—

Long-term debt	Long-term debt	13,922		13,555		—		13,408		147		Long-term debt	13,530		12,771		—		12,633		138
Other(2)	Other(2)	1		1		—		1		—		Other(2)	1		1		—		1		—


		As of March 31, 2022													As of June 30, 2022
		Less than 12 months				12 months or longer				Total					Less than 12 months				12 months or longer				Total
(In millions)	(In millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		(In millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Available-for-sale:	Available-for-sale:													Available-for-sale:
U.S. Treasury and federal agencies:	U.S. Treasury and federal agencies:													U.S. Treasury and federal agencies:
Direct obligations	Direct obligations	$	16,587	$	644	$	3,454	$	114	$	20,041	$	758	Direct obligations	$	6,778	$	283	$	2,062	$	38	$	8,840	$	321
Mortgage-backed securities	Mortgage-backed securities	11,858		391		880		89		12,738		480		Mortgage-backed securities	9,768		119		278		20		10,046		139
Total U.S. Treasury and federal agencies	Total U.S. Treasury and federal agencies	28,445		1,035		4,334		203		32,779		1,238		Total U.S. Treasury and federal agencies	16,546		402		2,340		58		18,886		460
Non-U.S. debt securities:	Non-U.S. debt securities:													Non-U.S. debt securities:
Mortgage-backed securities	Mortgage-backed securities	1,376		10		37		—		1,413		10		Mortgage-backed securities	1,783		18		41		—		1,824		18
Asset-backed securities	Asset-backed securities	1,650		8		76		—		1,726		8		Asset-backed securities	1,637		23		166		2		1,803		25
Non-U.S. sovereign, supranational and non-U.S. agency	Non-U.S. sovereign, supranational and non-U.S. agency	12,826		275		1,744		134		14,570		409		Non-U.S. sovereign, supranational and non-U.S. agency	12,529		301		1,454		73		13,983		374
Other	Other	1,675		57		665		53		2,340		110		Other	1,423		87		637		67		2,060		154
Total non-U.S. debt securities	Total non-U.S. debt securities	17,527		350		2,522		187		20,049		537		Total non-U.S. debt securities	17,372		429		2,298		142		19,670		571
Asset-backed securities:	Asset-backed securities:													Asset-backed securities:
Student loans	Student loans	93		1		25		—		118		1		Student loans	102		2		16		—		118		2
Collateralized loan obligations	Collateralized loan obligations	2,021		9		49		—		2,070		9		Collateralized loan obligations	1,902		36		433		7		2,335		43
Non-agency CMBS and RMBS	Non-agency CMBS and RMBS	124		2		—		—		124		2		Non-agency CMBS and RMBS	195		5		—		—		195		5

Other														Other	89		1		—		—		89		1
Total asset-backed securities	Total asset-backed securities	2,238		12		74		—		2,312		12		Total asset-backed securities	2,288		44		449		7		2,737		51

State and political subdivisions	State and political subdivisions	361		3		44		4		405		7		State and political subdivisions	667		6		43		4		710		10

Other U.S. debt securities	Other U.S. debt securities	1,107		32		244		17		1,351		49		Other U.S. debt securities	763		48		238		22		1,001		70

Total	Total	$	49,678	$	1,432	$	7,218	$	411	$	56,896	$	1,843	Total	$	37,636	$	929	$	5,368	$	233	$	43,004	$	1,162


March 31, 2022		Commercial and Financial		Commercial Real Estate		Total Loans
June 30, 2022								June 30, 2022	Commercial and Financial		Commercial Real Estate		Total Loans
(In millions)	(In millions)	Commercial and Financial		Commercial Real Estate		Total Loans		(In millions)
Investment grade	Investment grade							Investment grade	$	26,549	$	2,373	$	28,922
Speculative	Speculative	5,018		269		5,287		Speculative	3,851		220		4,071
Special mention	Special mention	229		62		291		Special mention	162		89		251
Substandard	Substandard	167		—		167		Substandard	166		—		166

Total(1)(2)	Total(1)(2)	$	32,526	$	2,558	$	35,084	Total(1)(2)	$	30,728	$	2,682	$	33,410


(In millions)	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total(1)
Domestic loans:
Commercial and financial:
Risk Rating:
Investment grade	$	1,988	$	59	$	347	$	2	$	37	$	—	$	13,591	$	16,024
Speculative	1,096		351		706		425		350		7		343		3,278
Special mention	—		—		70		29		19		—		—		118
Substandard	—		5		71		56		8		—		—		140


Total commercial and financing	$	3,084	$	415	$	1,194	$	512	$	414	$	7	$	13,934	$	19,560
Commercial real estate:
Risk Rating:
Investment grade	$	580	$	129	$	383	$	657	$	276	$	197	$	—	$	2,222
Speculative	24		49		149		20		—		28		—		270
Special mention	—		—		22		40		—		—		—		62



Total commercial real estate	$	604	$	178	$	554	$	717	$	276	$	225	$	—	$	2,554
Non-U.S. loans:
Commercial and financial:
Risk Rating:
Investment grade	$	4,087	$	—	$	—	$	—	$	—	$	—	$	4,863	$	8,950
Speculative	561		201		264		204		120		31		55		1,436


Substandard	—		—		—		24		—		—		—		24

Total commercial and financing	$	4,648	$	201	$	264	$	228	$	120	$	31	$	4,918	$	10,410











Total loans(2)	$	8,336	$	794	$	2,012	$	1,457	$	810	$	263	$	18,852	$	32,524


	Six Months Ended June 30, 2022
	Commercial and Financial
(In millions)	Leveraged Loans		Other Loans(1)		Commercial Real Estate		Available-for-sale Securities		Off-Balance Sheet Commitments		All Other		Total
Allowance for credit losses:
Beginning balance	$	61	$	12	$	14	$	2	$	19	$	—	$	108
Charge-offs	(4)		—		—		—		—		—		(4)
Provision	12		(2)		2		—		(2)		—		10



Ending balance	$	69	$	10	$	16	$	2	$	17	$	—	$	114


(In millions)	(In millions)	Investment Servicing		Investment Management		Total		(In millions)	Investment Servicing		Investment Management		Total
Goodwill:	Goodwill:							Goodwill:
Ending balance December 31, 2020	Ending balance December 31, 2020	$	7,413	$	270	$	7,683	Ending balance December 31, 2020	$	7,413	$	270	$	7,683
Acquisitions(1)	Acquisitions(1)	66		—		66		Acquisitions(1)	66		—		66
Divestitures(2)	Divestitures(2)	(17)		—		(17)		Divestitures(2)	(17)		—		(17)
Foreign currency translation	Foreign currency translation	(108)		(3)		(111)		Foreign currency translation	(108)		(3)		(111)
Ending balance December 31, 2021	Ending balance December 31, 2021	$	7,354	$	267	$	7,621	Ending balance December 31, 2021	$	7,354	$	267	$	7,621
Acquisitions	Acquisitions	3		—		3		Acquisitions	3		—		3

Foreign currency translation	Foreign currency translation	(41)		(1)		(42)		Foreign currency translation	(155)		(4)		(159)
Ending balance March 31, 2022		$	7,316	$	266	$	7,582
Ending balance June 30, 2022								Ending balance June 30, 2022	$	7,202	$	263	$	7,465


March 31, 2022		Gross Carrying Amount			Accumulated Amortization				Net Carrying Amount
June 30, 2022							June 30, 2022	Gross Carrying Amount					Accumulated Amortization				Net Carrying Amount
(In millions)	(In millions)			Gross Carrying Amount			Accumulated Amortization					Net Carrying Amount			(In millions)
Other intangible assets:	Other intangible assets:				Other intangible assets:
Client relationships	Client relationships	$	2,766					$	(1,526)				$	1,240	Client relationships	$		2,710			$	(1,535)	$	1,175
Technology	Technology	403			(151)				252		Technology	401				(159)			242
Core deposits	Core deposits	691			(456)				235		Core deposits	679				(457)			222
Other	Other	94			(77)				17		Other	89				(74)			15
Total	Total	$	3,954		$	(2,210)			$	1,744	Total	$	3,879			$	(2,225)		$	1,654

December 31, 2021	December 31, 2021	Gross Carrying Amount			Accumulated Amortization				Net Carrying Amount		December 31, 2021	Gross Carrying Amount				Accumulated Amortization			Net Carrying Amount
(In millions)	(In millions)						(In millions)
Other intangible assets:	Other intangible assets:														Other intangible assets:
Client relationships	Client relationships	$	2,786		$	(1,497)			$	1,289	Client relationships	$	2,786			$	(1,497)		$	1,289
Technology	Technology	403			(142)				261		Technology	403				(142)			261
Core deposits	Core deposits	696			(451)				245		Core deposits	696				(451)			245
Other	Other	96			(75)				21		Other	96				(75)			21
Total	Total	$	3,981		$	(2,165)			$	1,816	Total	$	3,981			$	(2,165)		$	1,816