UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

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

For the quarterly period ended June 30, 2023

OR

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

For the transition period from                      to                     

Commission File No. 001-07511

STATE STREET CORPORATION

(Exact name of registrant as specified in its charter)

MA					04-2456637
(State or other jurisdiction of incorporation)					(I.R.S. Employer Identification No.)
One Congress Street
Boston,	MA				02114
(Address of principal executive offices)					(Zip Code)
		(617)	786-3000
		(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class				Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 par value per share				STT	New York Stock Exchange
Depositary Shares, each representing a 1/4,000th ownership interest in a share of				STT.PRD	New York Stock Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, without par value per share
Depositary Shares, each representing a 1/4,000th ownership interest in a share of				STT.PRG	New York Stock Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series G, without par value per share

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 July 26, 2023 was 318,640,320.

STATE STREET CORPORATION

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED

June 30, 2023

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
	Management's Discussion and Analysis of Financial Condition and Results of Operations	4
	General	4
	Overview of Financial Results	8
	Consolidated Results of Operations	10
	Total Revenue	10
	Net Interest Income	19
	Provision for Credit Losses	22
	Expenses	23
	Acquisition and Restructuring Costs	23
	Repositioning Charges	23
	Income Tax Expense	24
	Line of Business Information	24
	Investment Servicing	25
	Investment Management	26
	Financial Condition	27
	Investment Securities	27
	Loans	29
	Risk Management	30
	Credit Risk Management	30
	Liquidity Risk Management	31
	Operational Risk Management	35
	Information Technology Risk Management	35
	Market Risk Management	35
	Model Risk Management	40
	Strategic Risk Management	40
	Capital	40
	Off-Balance Sheet Arrangements	47
	Other Matters	48
	Recent Accounting Developments	48
	Quantitative and Qualitative Disclosures About Market Risk	49
	Controls and Procedures	49
	Consolidated Financial Statements	50
	Consolidated Statement of Income (unaudited)	50
	Consolidated Statement of Comprehensive Income (unaudited)	51
	Consolidated Statement of Condition	52
	Consolidated Statement of Changes in Shareholders' Equity (unaudited)	53
	Consolidated Statement of Cash Flows (unaudited)	54
	Note 1. Summary of Significant Accounting Policies	55
	Note 2. Fair Value	55
	Note 3. Investment Securities	61
	Note 4. Loans and Allowance for Credit Losses	65
	Note 5. Goodwill and Other Intangible Assets	70

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	Note 6. Other Assets	71
	Note 7. Derivative Financial Instruments	72
	Note 8. Offsetting Arrangements	76
	Note 9. Commitments and Guarantees	78
	Note 10. Contingencies	79
	Note 11. Variable Interest Entities	81
	Note 12. Shareholders' Equity	82
	Note 13. Regulatory Capital	86
	Note 14. Net Interest Income	87
	Note 15. Expenses	87
	Note 16. Earnings Per Common Share	88
	Note 17. Line of Business Information	89
	Note 18. Revenue from Contracts with Customers	89
	Note 19. Non-U.S. Activities	91
	Review Report of Independent Registered Public Accounting Firm	92
PART II	OTHER INFORMATION
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	95
Item 5	Other Information	96
Item 6	Exhibits	97
	Signatures	98

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.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

PART I. FINANCIAL INFORMATION

GENERAL

State Street Corporation is one of the world’s largest providers of financial services to institutional investors. Our clients - asset managers and owners, insurance companies, official institutions, and central banks - rely on us to deliver solutions that support their goals across the investment life cycle.

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. 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 operate in more than 100 geographic markets worldwide, including in the U.S., Canada, Latin America, Europe, the Middle East and Asia. We provide a broad range of financial products and services to institutional investors worldwide, with $39.59 trillion of AUC/A and $3.80 trillion of AUM as of June 30, 2023.

As of June 30, 2023, we had consolidated total assets of $294.56 billion, consolidated total deposits of $222.32 billion, consolidated total shareholders' equity of $24.20 billion and approximately 43,000 employees.

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.

Our executive offices are located at One Congress Street, Boston, Massachusetts 02114 (telephone (617) 786-3000). For purposes of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (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.

This Management's Discussion and Analysis is part of this Form 10-Q and updates the Management's Discussion and Analysis in our 2022 Annual Report on Form 10-K for the year ended December 31, 2022 previously filed with the SEC (2022 Form 10-K). The financial information contained in this Management's Discussion and Analysis and elsewhere in this Form 10-Q should be

read in conjunction with the financial and other information contained in our 2022 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:

•Recurring fair value measurements;

•Allowance for credit losses;

•Impairment of goodwill and other intangible assets; and

•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 120 to 122, “Significant Accounting Estimates” included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our 2022 Form 10-K. We did not change these significant accounting policies in the first six months of 2023.

Certain financial information provided in this Form 10-Q, including this Management's Discussion and Analysis, is presented using both a U.S. GAAP, or reported basis, and a non-GAAP basis, including certain non-GAAP measures used in the calculation of identified regulatory ratios. 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 as 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 currently applicable regulatory ratio or U.S. GAAP-basis measure. As part of our

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

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non-GAAP-basis measures, we present a fully taxable-equivalent NII that reports non-taxable revenue, such as interest income associated with tax-exempt investment securities, on a fully taxable-equivalent basis, which we believe 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-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 "Filings & Reports" tab under the “Investors” section of our corporate website at investors.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, ESG, human capital, climate, dividend and stock purchase programs, acquisitions, outcomes of legal proceedings, market growth, joint ventures and divestitures, client growth and new technologies, services, asset installations 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,” "outcome," “forecast,” "future," “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

•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 AlphaSM or State Street DigitalSM, 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, involve costs, risks and dependencies on third parties;

•Our business may be negatively affected by our failure to update and maintain our technology infrastructure or as a result of a cyber-attack or similar vulnerability in our or business partners' infrastructure;

•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.

Financial Market Risks

•We could be adversely affected by geopolitical, economic and market conditions, including, for example, as a result of liquidity or capital deficiencies (actual or perceived)

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

by other financial institutions and related market and government actions, the ongoing war in Ukraine, actions taken by central banks to address inflationary pressures, challenging conditions in global equity markets, periods of significant volatility in valuations and liquidity or other disruptions in the markets for equity, fixed income and other asset classes globally or within specific markets such as those that impacted the UK gilts in the fourth quarter of 2022;

•We have significant international operations and clients that can be adversely impacted by developments in European and Asian economies, including local, regional and geopolitical developments affecting those economies;

•Our investment securities portfolio, consolidated financial condition and consolidated results of operations could be adversely affected by changes in the financial markets, governmental action or monetary policy. For example, among other risks, increases in prevailing interest rates could lead to reduced levels of client deposits and resulting decreases in our NII;

•Our business activities expose us to interest rate risk;

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

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

•If we are unable to effectively manage our capital and liquidity, our 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 regulatory capital, credit (counterparty and otherwise) and liquidity standards and considerations;

•We face extensive and changing governmental regulation in the jurisdictions in which we operate, which may increase our costs and compliance risks and may affect our business activities and strategies;

•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;

•Our businesses may be adversely affected by increased political and regulatory scrutiny of asset management stewardship and corporate ESG practices;

•Our efforts to improve our billing processes and practices are ongoing and may result in the identification of additional billing errors;

•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 results of operations and financial condition;

•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;

•We could face liabilities for withholding and other non-income taxes, including in connection with our services to clients, as a result of tax authority examinations; and

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

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Operational Risks

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

•Shifting operational activities to non-U.S. jurisdictions, changing our operating model and outsourcing to, or insourcing from, third parties portions of our operations may expose us to increased operational risk, geopolitical risk and reputational harm and may not result in expected cost savings or operational improvements;

•Attacks or unauthorized access to our or our business partners' information technology systems or facilities, or disruptions to our or their operations, could result in significant costs, reputational damage and impacts on our business activities;

•Long-term contracts and customizing service delivery for clients 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 or may infringe upon the rights of third parties;

•The quantitative models we use to manage our business may contain errors that could adversely impact our business and regulatory compliance;

•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 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 "Filings & Reports" tab under the “Investors” section of our corporate website at investors.statestreet.com.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

OVERVIEW OF FINANCIAL RESULTS

TABLE 1: OVERVIEW OF FINANCIAL RESULTS
	Three Months Ended June 30,						% Change
(Dollars in millions, except per share amounts)	2023			2022
Total fee revenue	$	2,419		$	2,370		2	%
Net interest income	691			584			18
Total other income	—			(1)			nm
Total revenue	3,110			2,953			5
Provision for credit losses	(18)			10			nm
Total expenses	2,212			2,108			5
Income before income tax expense	916			835			10
Income tax expense	153			88			74
Net income	$	763		$	747		2
Adjustments to net income:
Dividends on preferred stock(1)	$	(37)		$	(35)		6
Net income available to common shareholders	$	726		$	712		2
Earnings per common share:
Basic	$	2.20		$	1.94		13
Diluted	2.17			1.91			14
Average common shares outstanding (in thousands):
Basic	329,383			367,375			(10)
Diluted	333,540			372,123			(10)
Cash dividends declared per common share	$	0.63		$	0.57		11
Return on average common equity	13.0		%	12.1		%	90 bps
Pre-tax margin	29.5			28.3			120
	Six Months Ended June 30,						% Change
(Dollars in millions, except per share amounts)	2023			2022
Total fee revenue	$	4,754		$	4,943		(4)	%
Net interest income	1,457			1,093			33
Total other income	—			(2)			nm
Total revenue	6,211			6,034			3
Provision for credit losses	26			10			nm
Total expenses	4,581			4,435			3
Income before income tax expense	1,604			1,589			1
Income tax expense	292			238			23
Net income	$	1,312		$	1,351		(3)
Adjustments to net income:
Dividends on preferred stock(1)	$	(60)		$	(55)		9
Earnings allocated to participating securities(2)	(1)			(1)			—
Net income available to common shareholders	$	1,251		$	1,295		(3)
Earnings per common share:
Basic	$	3.73		$	3.53		6
Diluted	3.68			3.48			6
Average common shares outstanding (in thousands):
Basic	335,212			366,961			(9)
Diluted	339,473			372,080			(9)
Cash dividends declared per common share	$	1.26		$	1.14		11
Return on average common equity	11.1		%	10.8		%	30 bps
Pre-tax margin	25.8			26.3			(50)

(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.

nm 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 second quarter of 2023 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 three and six months ended June 30, 2023 compared to the same periods of 2022, 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 2022 period to the relevant 2023 period results.

Financial Results and Highlights

•Second quarter of 2023 financial performance:

◦Earnings per share (EPS) of $2.17, in the second quarter of 2023, increased 14% as compared to the same period of 2022.

◦Total revenue increased 5% in the second quarter of 2023, compared to the same period of 2022, due to higher NII and fee revenue.

◦Total expenses increased 5% in the second quarter of 2023, compared to the same period of 2022, primarily reflecting higher salaries, headcount and business investments, partially offset by ongoing productivity savings.

◦Return on equity was 13.0%, an increase from 12.1% in the same period of 2022, primarily due to an increase in net income available to common shareholders and lower average common shareholders' equity. Pre-tax margin of 29.5% in the second quarter of 2023, increased from 28.3% in the same period of 2022, primarily due to an increase in total revenue, partially offset by higher total expenses.

◦Operating leverage was positive 0.4% points in the second quarter of 2023. 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 same period of the prior year.

◦Fee operating leverage was negative 2.8% points in the second quarter of 2023. Fee operating leverage represents the difference between the percentage change in total fee

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

revenue and the percentage change in total expenses, in each case relative to the same period of the prior year.

◦We returned approximately $1.3 billion to our shareholders in the form of common stock dividends and common share repurchases.

Revenue

•Total fee revenue increased 2% in the second quarter of 2023, compared to the same period of 2022, reflecting higher software and processing fees, securities finance and other fee revenue, partially offset by lower servicing fees, management fees, and FX trading services revenue.

•Servicing fee revenue decreased 3% in the second quarter of 2023, compared to the same period of 2022, primarily driven by lower client activity and adjustments and below average pricing headwinds, partially offset by net new business.

•Management fee revenue decreased 6% in the second quarter of 2023, compared to the same period of 2022, primarily due to net outflows in prior periods and a shift of certain management fees into NII associated with management fees related to certain U.S. ETFs with unique structures, partially offset by higher average market levels.

•Foreign exchange trading services revenue decreased 8% in the second quarter of 2023, compared to the same period of 2022, primarily reflecting lower client FX volumes and FX volatility.

•Securities finance revenue increased 9% in the second quarter of 2023, compared to the same period of 2022, primarily due to higher agency spreads.

•Software and processing fees revenue increased 18% in the second quarter of 2023, compared to the same period of 2022, primarily driven by higher front office software and data revenue associated with CRD.

•Other fee revenue increased $101 million in the second quarter of 2023, compared to the same period of 2022, primarily due to a tax credit investment accounting change and the absence of negative market-related adjustments.

•NII increased 18% in the second quarter of 2023, compared to the same period of 2022, primarily due to higher short-term market rates from global central bank rate hikes, an increase in long-term interest rates and balance sheet positioning. This was partially

offset by lower average client deposits, which included a mix shift from non-interest bearing towards interest-bearing.

Provision for Credit Losses

•In the second quarter of 2023, we recorded an $18 million reserve release, driven by the release of the allowance for credit losses related to our support of a U.S. financial institution in the first quarter of 2023, partially offset by an increase in loan loss reserves associated with credit portfolio rating changes.

Expenses

•Total expenses increased 5% in the second quarter of 2023, compared to the same period of 2022, primarily reflecting higher salaries, headcount and business investments, partially offset by ongoing productivity savings.

Notable items

•There were no notable items in the second quarter of 2023.

•Notable items in the second quarter of 2022 comprised acquisition and restructuring costs of approximately $12 million related to the BBH Investor Services acquisition transaction that we are no longer pursuing.

AUC/A and AUM

•AUC/A of $39.6 trillion as of June 30, 2023, increased 4% compared to June 30, 2022, primarily due to higher quarter-end equity market levels and client flows. In the second quarter of 2023, newly announced asset servicing mandates totaled approximately $141 billion, primarily in the asset owners, official institutions and alternatives client segments. We onboarded $1.2 trillion of AUC/A during the second quarter of 2023. Servicing assets remaining to be installed in future periods totaled approximately $2.4 trillion as of June 30, 2023.

•AUM of $3.8 trillion as of June 30, 2023, increased 9.3% compared to June 30, 2022, primarily due to higher quarter-end market levels.

Capital

•In the second quarter of 2023, we returned a total of approximately $1.3 billion of capital to our shareholders in the form of common stock dividends and common share repurchases.

◦We declared aggregate common stock dividends of $0.63 per share, totaling $203 million in the second

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

quarter of 2023, compared to $0.57 per share, totaling $210 million in the same period of 2022.

◦In July 2023, we declared third quarter common stock dividends of $0.69 per share, representing a 10% increase on a per share basis from dividends declared in both the third quarter of 2022 and the second quarter of 2023.

◦In the second quarter of 2023, we acquired 14.8 million shares of common stock at an average per share cost of $71.08 and an aggregate cost of approximately $1.05 billion. These purchases were all conducted under the share repurchase program approved by our Board of Directors in January 2023, authorizing the purchase of up to $4.5 billion of our common stock through December 31, 2023.

•Our standardized CET1 capital ratio decreased to 11.8% as of June 30, 2023, compared to 13.6% as of December 31, 2022, primarily driven by the continuation of common share repurchases, partially offset by retained earnings. As we continue to deploy capital to our businesses, we may see modest RWA growth over the coming quarters, subject to market volatility. Our Tier 1 leverage ratio decreased to 5.8% as of June 30, 2023, compared to 6.0% as of December 31, 2022, primarily driven by the continuation of common share repurchases, partially offset by lower consolidated average assets reflecting lower client deposits. Given the current global economic environment, and our plans for share repurchases, we currently expect our CET1 and Tier 1 leverage capital ratios to move into our target ranges of 10-11% and 5.25-5.75%, respectively, in the second half of the year.

Debt Issuances

•On May 18, 2023, we issued $1 billion aggregate principal amount of 5.104% fixed-to-floating rate senior notes due 2026 and $1 billion aggregate principal amount of 5.159% fixed-to-floating rate senior notes due 2034.

CONSOLIDATED RESULTS OF OPERATIONS

This section discusses our consolidated results of operations for the three and six months ended June 30, 2023 compared to the same periods of 2022 and should be read in conjunction with the consolidated financial statements and accompanying notes to the consolidated financial statements in this Form 10-Q.

Total Revenue

TABLE 2: TOTAL REVENUE
	Three Months Ended June 30,				% Change
(Dollars in millions)	2023		2022
Fee revenue:
Back office services	$	1,164	$	1,205	(3)	%
Middle office services	95		92		3
Servicing fees	1,259		1,297		(3)
Management fees	461		490		(6)
Foreign exchange trading services	303		331		(8)
Securities finance	117		107		9
Front office software and data	162		126		29
Lending related and other fees	59		62		(5)
Software and processing fees	221		188		18
Other fee revenue	58		(43)		nm
Total fee revenue	2,419		2,370		2
Net interest income:
Interest income	2,232		704		nm
Interest expense	1,541		120		nm
Net interest income	691		584		18
Other income:
Gains (losses) related to investment securities, net	—		(1)		nm
Total other income	—		(1)		nm
Total revenue	$	3,110	$	2,953	5
	Six Months Ended June 30,				% Change
(Dollars in millions)	2023		2022
Fee revenue:
Back office services	$	2,295	$	2,473	(7)	%
Middle office services	181		192		(6)
Servicing fees	2,476		2,665		(7)
Management fees	918		1,010		(9)
Foreign exchange trading services	645		690		(7)
Securities finance	226		203		11
Front office software and data	271		264		3
Lending related and other fees	115		125		(8)
Software and processing fees	386		389		(1)
Other fee revenue	103		(14)		nm
Total fee revenue	4,754		4,943		(4)
Net interest income:
Interest income	4,259		1,225		nm
Interest expense	2,802		132		nm
Net interest income	1,457		1,093		33
Other income:
Gains (losses) related to investment securities, net	—		(2)		nm
Total other income	—		(2)		nm
Total revenue	$	6,211	$	6,034	3

nm Not meaningful

State Street Corporation | 10

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Fee Revenue

Table 2: Total Revenue, provides the breakout of fee revenue for the three and six months ended June 30, 2023 and 2022. Servicing and management fees collectively made up approximately 71% of the total fee revenue in both the three and six months ended June 30, 2023, and 75% and 74% for the same periods of 2022, respectively.

Servicing Fee Revenue

Servicing fees, as presented in Table 2: Total Revenue, decreased 3% in the three months ended June 30, 2023, compared to the same period of 2022, primarily driven by lower client activity and adjustments and below average pricing headwinds, partially offset by net new business. Servicing fees decreased 7% in the six months ended June 30, 2023, compared to the same period of 2022, primarily driven by lower average fixed income market levels, client activity and adjustments and below average pricing headwinds, partially offset by net new business.

Servicing fees generated outside the U.S. were approximately 47% and 46% of total servicing fees in the three and six months ended June 30, 2023, respectively, and 47% in both the three and six months ended June 30, 2022.

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 and the asset classes for which the services are performed affect 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 time 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, 2022, we estimate that worldwide equity and fixed income market valuations impacted our servicing fees revenue by approximately 2% on average with a range of (4)% to 8% annually and approximately (4)% and 8% in 2022 and 2021, respectively. The impact of changes in worldwide fixed income markets on our servicing fees, which historically was included within client activity and asset flows, is now reflected within change in market valuations. 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.

Assuming that all other factors remain constant, including client activity, asset flows and pricing, we estimate, using relevant information as of June 30, 2023 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, 2023, 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 smaller corresponding impact on our servicing fee revenues on average and over time. In periods of higher fixed income market volatility such as we have been experiencing since the second quarter of 2022, the impact of fixed income markets on our servicing fee revenues may increase.

State Street Corporation | 11

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

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,
	2023	2022	% Change		2023	2022	% Change		2023	2022	% Change
S&P 500®	4,206	4,106	2	%	4,267	4,016	6	%	4,450	3,785	18	%
MSCI EAFE®	2,122	1,998	6		2,106	1,973	7		2,132	1,846	15
MSCI® Emerging Markets	987	1,055	(6)		975	1,052	(7)		989	1,001	(1)

	Daily Averages of Indices				Month-End Averages of Indices
	Six Months Ended June 30,				Six Months Ended June 30,
	2023	2022	% Change		2023	2022	% Change
S&P 500®	4,103	4,285	(4)	%	4,159	4,245	(2)	%
MSCI EAFE®	2,091	2,105	(1)		2,094	2,084	—
MSCI® Emerging Markets	992	1,120	(11)		985	1,113	(12)

(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,
	2023	2022	% Change
Bloomberg U.S. Aggregate Bond Index®	2,092	2,111	(1)	%
Bloomberg Global Aggregate Bond Index®	452	458	(1)

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

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, 2022, we estimate that client activity and asset flows, together, impacted our servicing fees revenue by approximately 0% on average with a range of (2)% to 1% annually and approximately 0% and (1)% in 2022 and 2021, respectively. As noted under "Changes in Market Valuations" in this section, this analysis now excludes, but in prior reporting previously included, the impact of changes in worldwide fixed income markets on our servicing fees. 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.

TABLE 5: INDUSTRY ASSET FLOWS
	Three Months Ended June 30,
(In billions)	2023		2022
North America - (US Domiciled) - Morningstar Direct Market Data(1)(2)(3)
Long-Term Funds(4)	$	(113.3)	$	(277.9)
Money Market	160.6		(35.1)
Exchange-Traded Fund	136.2		93.2
Total Flows	$	183.5	$	(219.8)
Europe - Morningstar Direct Market Data(1)(2)(5)
Long-Term Funds(4)	$	(6.6)	$	(79.5)
Money Market	58.8		(7.3)
Exchange-Traded Fund	28.9		16.0
Total Flows	$	81.1	$	(70.8)

(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 second quarter of 2023 data for North America (U.S. domiciled) includes Morningstar direct actuals for April 2023 and May 2023 and Morningstar direct estimates for June 2023.

(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 EMEA are composed of the European market flows mainly in Equities, Allocation and Fixed-Income asset classes.

(5) The second quarter of 2023 data for Europe is on a rolling three month basis for March 2023 through May 2023, sourced by Morningstar.

State Street Corporation | 12

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Net New Business

Over the five years ended December 31, 2022, net new business, which includes business both won and lost, has affected our servicing fee revenues by approximately 0% on average with a range of 0% to 1% annually and approximately 1% in both 2022 and 2021.

Gross investment servicing mandates were $141 billion in the second quarter of 2023 and $2.00 trillion per year on average over the past five years. Over the five years ended December 31, 2022, gross annual investment servicing mandates ranged from approximately $0.79 trillion to $3.52 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. We expect that 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 $2.36 trillion that are yet to be installed as of June 30, 2023, we expect the conversion will occur over the coming 24 months, with approximately 40% expected to be installed in the remainder of 2023 and approximately 60% in 2024. The expected timing of these installations is subject to change due to a variety of factors, including adjusted implementation schedules agreed with clients, scope adjustments, and product and functionality changes.

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, once installed, can vary materially. On average, over the five years ended December 31, 2022, we estimate that pricing pressure with respect to existing clients has impacted our servicing fees by approximately (3)% annually, with the impact ranging from (2)% to (4)% in any given year and approximately (2)% in both 2022 and 2021. 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.

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 60%, 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 25% 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.

TABLE 6: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT(1)(2)
(In billions)	June 30, 2023		December 31, 2022		June 30, 2022
Collective funds, including ETFs	$	13,210	$	12,261	$	13,609
Mutual funds	10,438		9,610		9,642
Pension products	8,037		7,734		7,764
Insurance and other products	7,904		7,138		7,165
Total	$	39,589	$	36,743	$	38,180

State Street Corporation | 13

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

TABLE 7: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS(2)
(In billions)	June 30, 2023		December 31, 2022		June 30, 2022
Equities	$	22,454	$	20,575	$	21,953
Fixed-income	10,812		10,318		10,716
Short-term and other investments	6,323		5,850		5,511
Total	$	39,589	$	36,743	$	38,180

TABLE 8: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(2)(3)
(In billions)	June 30, 2023		December 31, 2022		June 30, 2022
Americas	$	28,220	$	26,981	$	28,207
Europe/Middle East/Africa	8,658		7,136		7,498
Asia/Pacific	2,711		2,626		2,475
Total	$	39,589	$	36,743	$	38,180

(1) Certain previously reported amounts presented have been reclassified to conform to current-period presentation.

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

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

Asset servicing mandates newly announced in the second quarter of 2023 totaled approximately $141 billion. Servicing assets remaining to be installed in future periods totaled approximately $2.36 trillion as of June 30, 2023, 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 based on factors present on or about the time the contract was signed and are not updated based on subsequent developments, including changes in assets, market valuations, scope and, potentially, termination. Such assets therefore 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.

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, 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 and 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 investment tools. Revenues associated with new servicing mandates may vary based on the breadth of services provided, the timing of installation, and the types of assets.

As previously disclosed, in early 2021, due to 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 began in 2022, but we expect it will principally occur in 2023 and 2024 and will impact our fee revenue and income growth trends most notably beginning in the third quarter of 2023 through 2025. For the year ended December 31, 2022, the fee revenue associated with the assets yet to transition represented approximately 1.7% of our total 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

Management fees decreased 6% in the three months ended June 30, 2023, compared to the same period of 2022, primarily due to net outflows in prior periods and a shift of certain management fees into NII associated with management fees related to certain U.S. ETFs with unique structures, partially offset by higher average market levels. Management fees decreased 9% in the six months ended June 30, 2023, compared to the same period of 2022, primarily due to lower average market levels, the aforementioned shift of certain management fees into NII and cumulative net outflows since June 30, 2022.

State Street Corporation | 14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Management fees generated outside the U.S. were approximately 26% of total management fees in both the three and six months ended June 30, 2023, and 25% and 26% in the three and six months ended June 30, 2022, respectively.

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.

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.

In light of the above, we estimate, using relevant information as of June 30, 2023, 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 corresponding impact on our management fee revenues on average and over time.

Daily averages, month-end averages and quarter-end indices demonstrate worldwide changes in equity and debt markets that affect our management fee revenue. Quarter-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.

TABLE 9: ASSETS UNDER MANAGEMENT BY ASSET CLASS AND INVESTMENT APPROACH
(In billions)	June 30, 2023		December 31, 2022		June 30, 2022
Equity:
Active	$	59	$	54	$	62
Passive	2,288		2,074		2,024
Total equity	2,347		2,128		2,086
Fixed-income:
Active	84		83		89
Passive	505		471		461
Total fixed-income(1)	589		554		550
Cash(1)	390		376		403
Multi-asset-class solutions:
Active	25		28		29
Passive	220		181		173
Total multi-asset-class solutions	245		209		202
Alternative investments(2):
Active	38		35		42
Passive	188		179		192
Total alternative investments	226		214		234
Total	$	3,797	$	3,481	$	3,475

(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.

State Street Corporation | 15

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

TABLE 10: GEOGRAPHIC MIX OF ASSETS UNDER MANAGEMENT(1)
(In billions)	June 30, 2023		December 31, 2022		June 30, 2022
North America	$	2,785	$	2,544	$	2,525
Europe/Middle East/Africa	553		511		521
Asia/Pacific	459		426		429
Total	$	3,797	$	3,481	$	3,475

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

TABLE 11: EXCHANGE-TRADED FUNDS BY ASSET CLASS(1)
(In billions)	June 30, 2023		December 31, 2022		June 30, 2022
Alternative Investments(2)	$	70	$	67	$	77
Equity	919		817		791
Multi Asset	1		1		1
Fixed-Income	142		134		130
Total Exchange-Traded Funds	$	1,132	$	1,019	$	999

(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®Gold MiniSharesSM Trust, but act as the marketing agent.

TABLE 12: ACTIVITY IN ASSETS UNDER MANAGEMENT BY PRODUCT CATEGORY
(In billions)	Equity		Fixed-Income		Cash(1)		Multi-Asset-Class Solutions		Alternative Investments(2)		Total
Balance as of December 31, 2021	$	2,674	$	623	$	368	$	222	$	251	$	4,138
Long-term institutional flows, net(3)	(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(3)	(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 appre