State Street's Q4 Earnings Top as NII & Fee Income Rises, Stock Down

State Street’s STT fourth-quarter 2024 adjusted earnings of $2.60 per share surpassed the Zacks Consensus Estimate of $2.42. The bottom line also increased 27.5% from the prior-year quarter.See the Zacks Earnings Calendar to stay ahead of market-making news.However, shares of STT lost more than 3% in pre-market trading as investors turned bearish on a weak 2025 outlook. For this year, the company expects NII to be roughly flat and fee income to grow 3-5%. In 2024, NII was up 5.9% and adjusted fee income rose 6.3%.Results were aided by growth in fee revenues and higher net interest income (NII). Also, the company witnessed improvements in the total assets under custody and administration (AUC/A) and assets under management (AUM) balances. However, higher adjusted expenses hurt the results to some extent.Results excluded certain non-recurring items. Considering those, net income available to common shareholders was $728 million, up substantially from $172 million in the year-ago quarter. Our projection for the metric was $679 million.For 2024, adjusted earnings of $8.67 per share beat the consensus estimate of $8.50 and grew 13.2% year over year. Net income available to common shareholders (GAAP) was $2.48 billion, up 36.4% from 2023.STT’s Revenues Improve, Adjusted Expenses RiseTotal quarterly revenues of $3.41 billion increased 12.1% year over year. Also, the top line beat the Zacks Consensus Estimate of $3.31 billion.For 2024, total revenues grew 8.8% to $13 billion. Further, the top line beat the consensus estimate of $12.96 billion.NII was $749 million, up 10.5% year over year. The rise was driven by higher investment securities yields and loan growth, partially offset by a deposit mix shift. Our estimate for the metric was $700.2 million.The net interest margin contracted 9 basis points year over year to 1.07%. We expected NIM to be 1.12%.Total fee revenues increased 12.6% year over year to $2.66 billion. We estimated the metric to be $2.46 billion.Non-interest expenses (GAAP basis) were $2.44 billion, down 13.5% from the prior-year quarter. The fall was majorly due to the absence of the FDIC special assessment charge. Excluding notable items, adjusted expenses rose 8.2% to $2.38 billion. Our estimate for the metric was $2.31 billion.Provision for credit losses was $12 million, down 40%. We had projected the metric to be $21.3 million.The Common Equity Tier 1 ratio was 10.9% as of Dec. 31, 2024, compared with 11.6% in the corresponding period of 2023. The return on average common equity was 12.7% compared with 3.1% in the year-ago quarter.Asset Balances Increase for State StreetAs of Dec. 31, 2024, the total AUC/A was $46.56 trillion, up 11.4% year over year. The rise was driven by higher quarter-end equity market levels, and client flows. We had projected the metric to be $47 trillion.AUM was $4.72 trillion, up 14.9% year over year, primarily led by higher quarter-end market levels and net inflows. Our estimate for the metric was $4.73 trillion.STT’s Share Repurchase UpdateIn the reported quarter, State Street repurchased shares worth $550 million.Our Take on STTPersistently rising expenses and a tough operating backdrop are major concerns. Yet, relatively higher interest rates and solid business servicing wins are expected to keep supporting STT’s financials. State Street Corporation Price, Consensus and EPS Surprise State Street Corporation price-consensus-eps-surprise-chart | State Street Corporation QuoteState Street currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of STT’s Peer BanksThe Bank of New York Mellon Corporation’s BK fourth-quarter 2024 adjusted earnings of $1.72 per share surpassed the Zacks Consensus Estimate of $1.56. Also, the bottom line reflected a jump of 33.3% from the prior-year quarter.Results have been primarily aided by a rise in fee revenues and NII alongside lower provisions and non-interest expenses. AUC/A and AUM balances grew on a solid market rally. On the other hand, capital position worsened during the quarter.Solid IB and trading performance drove JPMorgan’s JPM fourth-quarter 2024 earnings to $4.81 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $4.03.Robust capital markets performance, impressive mortgage banking performance and lower provisions majorly supported JPM’s quarterly performance. On the other hand, higher adjusted non-interest expenses and a decline in NII were the undermining factors.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report The Bank of New York Mellon Corporation (BK): Free Stock Analysis Report State Street Corporation (STT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks