State Street (STT) Risk Factor Changes

terrorism, natural disasters and pandemics; however, anticipating or addressing all potential contingencies is not possible for events of this nature.

Requirements and expectations related to sustainability or ESG disclosures continue to evolve, with requirements increasing in some jurisdictions, particularly in Europe.

In addition, impacts associated with a climate transition, including climate change-related legislative and regulatory initiatives and expectations, retrofitting of assets, purchasing carbon credits or paying carbon t…

Our businesses and the activities of our clients, our counterparties and financial market participants on which we and they rely could be adversely affected by major weather events, changing climate patterns or other…

In the normal course of business, we manage various types of sponsored investment funds through State Street Investment Management.

If higher than normal demands for liquidity from investors were to occur, managing the liquidity requirements of our collective investment pools could become more difficult.

Within our Investment Management business, we manage investment pools, such as mutual funds exchange traded funds and collective investment funds, that generally offer investors the ability to redeem their investments…

We manage assets on behalf of clients in several forms, including in collective investment pools, money market funds, securities finance collateral pools, cash collateral and other cash products and short-term investm…

Additionally, our disclosure controls and procedures may not be effective in every circumstance, and, similarly, it is possible we may identify a material weakness or significant deficiency in internal control over fi…

We also use quantitative models in our risk measurement and may fail to accurately quantify the magnitude of the risks we face.

The profitability of these contracts is largely a function of our ability to accurately calculate pricing for our services, efficiently assume our contractual responsibilities in a timely manner, control our costs and…

We manage our operations and expenses across a global model, which may include migrating certain business processes and business support functions to emerging market-based geographic hub locations, such as India, Pola…

We may also be subject to disruptions from external events that are wholly or partially beyond our control, which could cause delays or disruptions to operational functions, including information processing and financ…

Operational risk is inherent in all of our business activities.

In addition, our businesses and the markets in which we operate are continuously evolving.

aspects of our business, including operational risk and resiliency, information technology risk, cybersecurity, interest rate risk, foreign exchange risk, fiduciary risk, legal and compliance risk, liquidity risk and…

In order to maintain and grow our business, we must make strategic decisions about our current and future business plans and effectively execute upon those plans.

Due to our dependence on technology and the important role it plays in our business operations, we are attempting to improve and update our information technology infrastructure, among other things: (1) as some of our…

The third parties with which we do business, which facilitate our business activities, to whom we outsource operations or other activities, from whom we receive products or services or with whom we otherwise engage or…

impact our ability to comply with regulatory obligations, leading to regulatory fines and sanctions.

Our relationship with many of our clients is predicated on our reputation as a fiduciary and a service provider that adheres to the highest standards of ethics, service quality and regulatory compliance, as well as a…

taxes, could differ from that of the relevant governmental taxing authority, or we may experience timing or other compliance deficiencies in connection with our efforts to comply with applicable tax laws and regulatio…

In addition to income tax, we are at present, and in the future will be, under audit or other examination, and litigation or other dispute resolution proceedings, with U.S.

As a general matter, large index fund providers, such as State Street Investment Management, have been and are expected to continue to be subject to legislative and regulatory proposals, litigation or investigations f…

Adverse publicity and damage to our reputation arising from the failure or perceived failure to comply with legal, regulatory or contractual requirements could affect our ability to attract and retain clients.

different from expectations in the United States.

Our sustainability- or ESG-related investment management practices, asset stewardship and historical memberships in certain climate-oriented investor groups have become the subject of significant scrutiny by regulator…

Our Investment Management line of business provides investment management strategies and products that may incorporate the consideration of sustainability or ESG factors.

Our businesses may be adversely affected by increased and conflicting political and regulatory scrutiny of asset management, stewardship and sustainable investment strategies and services offered in the jurisdictions…

In view of the inherent difficulty of predicting the outcome of legal and regulatory matters, we cannot provide assurance as to the outcome of any pending or potential matter or, if determined adversely against us, th…

Moreover, U.S., including federal and state, and certain international governmental authorities have increasingly brought criminal actions against financial institutions, and criminal prosecutors have increasingly sou…

Regardless of the outcome of any governmental enforcement or litigation matter, responding to such matters is time-consuming and expensive and can divert the attention of senior management and lead to unfavorable publ…

responsibilities.

The businesses in which we operate are highly-regulated and subject to extensive external scrutiny that may be directed generally to participants in the businesses or markets in which we are involved or may be specifi…

result in significant restructuring or related costs or exposures or may result in inefficiencies or increased costs due to associated changes in our operating model.

The evolving regulatory environment, including changes to existing regulations and the introduction of new regulations, may also contribute to decisions we may make to suspend, reduce or withdraw from existing busines…

In addition to U.S.

proposed regulations in the United States could create increased compliance and other costs that would adversely affect our business, operations or profitability.

The breadth of our business activities, together with the scope of our global operations and varying business practices in relevant jurisdictions, increase the complexity and costs of meeting our regulatory compliance…

Our qualification in the United States as a SIFI, and our designation by the Financial Stability Board as a G-SIB, to which certain regulatory capital surcharges may apply, subjects us to incrementally higher capital…

Frank Act.

We expect that our business will remain subject to extensive regulation and supervision.

Furthermore, fiduciary, anti-competitive, voting power, governance, and other concerns with ESG investment strategies, as well as corporate sustainability and diversity, equity and inclusion practices and programs, co…

We are unable to predict what, if any, changes to the regulatory environment may be enacted by Congress, both chambers of which have majority control from the same political party, or the presidential administration a…

In particular, we are registered with the Federal Reserve as a bank holding company pursuant to the Bank Holding Company Act of 1956.

Most of our businesses are subject to extensive regulation and supervision by multiple regulatory and supervisory bodies, and many of the clients to which we provide services are themselves subject to a broad range of…

Our implementation of capital and liquidity requirements may not be approved or may be objected to by the Federal Reserve, and the Federal Reserve may impose capital requirements in excess of our expectations or requi…

We are required by the Federal Reserve to conduct periodic stress testing of our business operations and to develop an annual capital plan and are subject to supervisory stress testing, all as part of the Federal Rese…

Not all of our competitors have similarly been designated as systemically important nor are all of them subject to the same degree of regulation as a bank or financial holding company, and therefore some of our compet…

interpretations of the regulatory intent.

Banking regulators could change the Basel III rule or their interpretations as they apply to us, including changes to these standards or interpretations made in regulations implementing

The risk that we may be perceived as less creditworthy than other market participants is higher in market environments, which may have recently experienced and may experience in the future, in which consolidation, and…

Additionally, our counterparties, as well as our clients, rely on our financial strength and stability and evaluate the risks of doing business with us.

the financial markets and securities law requirements and standards.

In addition, while not obligations of ours, the investment products that we manage for third parties may be exposed to liquidity risks.

In managing our liquidity, our primary source of short-term funding is client deposits, which are predominantly transaction-based deposits by institutional investors.

Because the demand for credit by our clients, particularly settlement-related extensions of credit, is difficult to predict and control, and may be at its peak at times of disruption in the securities markets, and bec…

We rely primarily on fee-based services to derive our revenue.

Given the limited number of strong counterparties in the current market, we are not able

relation to one entity or product even though our exposure to an entity’s affiliates or across product types is over-collateralized.

•Leveraged loans: We invest in leveraged loans, both in the United States and in Europe.

•U.S.

•Securities lending and repurchase agreement indemnification: On behalf of clients enrolled in our securities lending program, we lend securities to banks, broker/dealers and other institutions.

•Settlement risks: We are exposed to settlement risks, particularly in our payments and foreign exchange activities.

circumstances that excuse performance under force majeure or other provisions, the risk of loss on such cash on deposit would be ours rather than the clients.

relationships in all jurisdictions in which our clients invest, including emerging and other underdeveloped markets, and markets subject to sanctions.

large U.S.

•Effects of interest rates.

•Asset class concentration.

AFS investment securities are recognized in AOCI and included in Tier 1 capital.

Our investment securities portfolio represents a greater proportion of our consolidated statement of condition, while our loan portfolio represented approximately 13% of our total assets as of December 31, 2025, a sma…

In addition, as our business grows globally and a significant percentage of our revenue is earned (and of our expenses paid) in currencies other than U.S.

the risk of being unable to cross-sell acquired products or services to our existing clients.

The integration and the retention and development of the benefits of our acquisitions result in risks to our business and other uncertainties.

Through our acquisitions or joint ventures, we may also assume unknown or undisclosed business, operational, tax, regulatory and other liabilities, fail to properly assess known contingent liabilities or assume busine…

condition.

We acquire complementary businesses and technologies, enter into strategic alliances and divest portions of our business.

and clients, understanding third party rights, delineating ownership and exit rights, protection of intellectual property and other confidential information, competition for employees with the necessary expertise and…

Our clients include institutional investors, such as mutual funds, collective investment funds, UCITS, hedge funds and other investment pools, corporate and public retirement plans, insurance companies, official insti…

management, and in our financial results, due to the significant size of our relationship with many of our institutional clients, and are also subject to significant pricing pressure due to trends in the market for cu…

Some of our competitors, including our competitors in core services, have substantially greater capital resources than we do, are not subject to as stringent capital or other regulatory requirements as we are, or may…

market new products, particularly in the “Fintech” sector including through State Street Alpha and broader digital asset-related initiatives or in attractive areas of focus such as wealth servicing and alternative inv…

of its direct affect on State Street, based on the broader societal impact of the matter.

financial market infrastructure’s) facilities, operations or personnel or may otherwise disrupt our or their business activities and resiliency capabilities, including our or their provision of products and services o…

are deemed to be the primary beneficiary of these funds, we may be required to consolidate these funds in our consolidated financial statements under U.S.

were less than $1.00.

jurisdictions in which we operate or market our products and services.

We also use quantitative models in our risk measurement and may fail to accurately quantify the magnitude of the risks we face.

issues.

locations or joint ventures or in which our outsourcing vendors locate their operations, particularly in locations where we have a concentration of our operational activities, such as India, Poland and China.

additional attention, oversight and controls which involve an enhanced risk of episodic or continued failure as well as additional costs.

processes or to new technologies, and the introduction of new products and services client types or jurisdictions, can exacerbate these risks.

be superseded in the marketplace, after significant investment by us, by more effective innovative technologies or solutions to which we may not have access.

significant costs or limitations on our business activities.

In particular, we, like other financial services firms, will continue to face increasing cyber-threats,

Adverse publicity and damage to our reputation arising from the failure or perceived failure to comply with legal, regulatory or contractual requirements

In view of the inherent difficulty of predicting the outcome of legal and regulatory matters, we cannot provide assurance as to the outcome of any pending or potential matter or, if determined adversely against us, th…

Additional information is provided under “Supervision and Regulation” in Business in this Form 10-K.

In particular, we are registered with the Federal Reserve as a bank holding company pursuant to the Bank Holding Company Act of 1956.

Our implementation of capital and liquidity requirements may not be approved or may be objected to by the Federal Reserve, and the Federal Reserve may impose capital requirements in excess of our expectations or requi…