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State Street Gains as Q1 Earnings Beat on NII, Fee Revenue Growth
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Key Takeaways
STT reported Q1 EPS of $2.84, beating estimates and rising from $2.04 a year ago.
State Street saw record $3.80B revenues, driven by NII growth and higher fee income.
STT posted record AUC/A and AUM growth, while expenses and provisions increased.
State Street’s (STT - Free Report) first-quarter 2026 adjusted earnings of $2.84 per share surpassed the Zacks Consensus Estimate of $2.60. The bottom line compared favorably with earnings of $2.04 in the prior-year quarter.
Shares of the company gained 2% in the pre-market trading on a better-than-expected quarterly performance. However, a full day’s trading session will depict a clearer picture.
Results have been aided by year-over-year growth in net interest income (NII) and fee revenues. Also, the company witnessed improvements in the total assets under custody and administration (AUC/A) and assets under management (AUM) balances. However, higher expenses and provisions acted as spoilsports.
Results in the reported quarter excluded certain non-recurring items. After considering those, net income available to common shareholders (GAAP basis) was $705 million, up 18.1% from the year-ago quarter.
STT’s Revenues Improve, Expenses Rise
Total revenues were a record $3.80 billion, which increased 15.6% year over year. The top line surpassed the Zacks Consensus Estimate of $3.63 billion.
NII was $835 million, up 16.9% year over year. The rise was driven by an increase in average interest-earning assets.
The net interest margin expanded 16 basis points year over year to 1.16%.
Total fee revenues increased 15.2% year over year to $2.96 billion. The rise was driven by an increase in all fee income components.
Non-interest expenses were $2.81 billion, up 14.7% from the prior-year quarter. The rise was due to an increase in all cost components, except for occupancy costs.
Provision for credit losses was $16 million, up 33.3% from the prior-year quarter.
The Common Equity Tier 1 ratio was 10.6% as of March 31, 2026, compared with 11% in the corresponding period of 2025. The return on average common equity was 11.6% compared with 10.6% in the year-ago quarter.
Asset Balances Increase for State Street
As of March 31, 2026, the total AUC/A was a record $54.52 trillion, up 16.7% year over year. The rise was driven by higher quarter-end equity market levels, client flows and net new business.
AUM was $5.62 trillion, up 20.5% year over year, led by higher quarter-end market levels and net inflows.
STT’s Share Repurchase Update
In the reported quarter, State Street repurchased shares worth $400 million.
Our Take on State Street
STT’s strategic buyouts, rising AUM balance and solid business servicing wins are expected to keep supporting its financials. However, persistently rising expenses and concentrated fee-based revenues are concerning.
State Street Corporation Price, Consensus and EPS Surprise
Bank of America’s (BAC - Free Report) first-quarter 2026 earnings of $1.11 per share handily surpassed the Zacks Consensus Estimate of $1.00. The bottom line grew 24.7% year over year.
Improvement in the trading and investment banking (IB) business, along with higher NII, drove Bank of America’s total revenues. While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.
JPMorgan (JPM - Free Report) posted first-quarter 2026 earnings of $5.94 per share, up 17.2% from $5.07 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $5.49.
JPMorgan reported net revenues of $49.8 billion, which increased 10% year over year. The metric also topped the consensus mark of $48.6 billion. JPM’s quarterly results were powered by a record Markets performance, a robust IB business and higher NII.
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State Street Gains as Q1 Earnings Beat on NII, Fee Revenue Growth
Key Takeaways
State Street’s (STT - Free Report) first-quarter 2026 adjusted earnings of $2.84 per share surpassed the Zacks Consensus Estimate of $2.60. The bottom line compared favorably with earnings of $2.04 in the prior-year quarter.
Shares of the company gained 2% in the pre-market trading on a better-than-expected quarterly performance. However, a full day’s trading session will depict a clearer picture.
Results have been aided by year-over-year growth in net interest income (NII) and fee revenues. Also, the company witnessed improvements in the total assets under custody and administration (AUC/A) and assets under management (AUM) balances. However, higher expenses and provisions acted as spoilsports.
Results in the reported quarter excluded certain non-recurring items. After considering those, net income available to common shareholders (GAAP basis) was $705 million, up 18.1% from the year-ago quarter.
STT’s Revenues Improve, Expenses Rise
Total revenues were a record $3.80 billion, which increased 15.6% year over year. The top line surpassed the Zacks Consensus Estimate of $3.63 billion.
NII was $835 million, up 16.9% year over year. The rise was driven by an increase in average interest-earning assets.
The net interest margin expanded 16 basis points year over year to 1.16%.
Total fee revenues increased 15.2% year over year to $2.96 billion. The rise was driven by an increase in all fee income components.
Non-interest expenses were $2.81 billion, up 14.7% from the prior-year quarter. The rise was due to an increase in all cost components, except for occupancy costs.
Provision for credit losses was $16 million, up 33.3% from the prior-year quarter.
The Common Equity Tier 1 ratio was 10.6% as of March 31, 2026, compared with 11% in the corresponding period of 2025. The return on average common equity was 11.6% compared with 10.6% in the year-ago quarter.
Asset Balances Increase for State Street
As of March 31, 2026, the total AUC/A was a record $54.52 trillion, up 16.7% year over year. The rise was driven by higher quarter-end equity market levels, client flows and net new business.
AUM was $5.62 trillion, up 20.5% year over year, led by higher quarter-end market levels and net inflows.
STT’s Share Repurchase Update
In the reported quarter, State Street repurchased shares worth $400 million.
Our Take on State Street
STT’s strategic buyouts, rising AUM balance and solid business servicing wins are expected to keep supporting its financials. However, persistently rising expenses and concentrated fee-based revenues are concerning.
State Street Corporation Price, Consensus and EPS Surprise
State Street Corporation price-consensus-eps-surprise-chart | State Street Corporation Quote
State 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 Other Banks
Bank of America’s (BAC - Free Report) first-quarter 2026 earnings of $1.11 per share handily surpassed the Zacks Consensus Estimate of $1.00. The bottom line grew 24.7% year over year.
Improvement in the trading and investment banking (IB) business, along with higher NII, drove Bank of America’s total revenues. While provisions declined in the quarter on a year-over-year basis, non-interest expenses increased, which hurt the results to some extent.
JPMorgan (JPM - Free Report) posted first-quarter 2026 earnings of $5.94 per share, up 17.2% from $5.07 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $5.49.
JPMorgan reported net revenues of $49.8 billion, which increased 10% year over year. The metric also topped the consensus mark of $48.6 billion. JPM’s quarterly results were powered by a record Markets performance, a robust IB business and higher NII.