Why Is State Street (STT) Up 2.5% Since Last Earnings Report?

Core Viewpoint - State Street Corporation reported strong Q3 2024 earnings, surpassing estimates and showing significant year-over-year growth in both earnings and revenues, driven by increased fee revenues and net interest income (NII) [2][4][10]. Financial Performance - Adjusted earnings per share for Q3 2024 were $2.26, exceeding the Zacks Consensus Estimate of $2.08, and reflecting a 17.1% increase from the prior year [2]. - Net income available to common shareholders reached $682 million, a 71.4% increase from the previous year, surpassing projections [3]. - Total revenues amounted to $3.34 billion, an 11.9% year-over-year increase, and exceeded the Zacks Consensus Estimate of $3.18 billion [4]. - NII was reported at $723 million, up 15.9% year over year, driven by higher investment securities yields and loan growth [4]. - Total fee revenues increased by 10.8% to $2.62 billion, also beating estimates [5]. Expense Management - Non-interest expenses rose to $2.31 billion, a 5.9% increase, attributed to higher costs across nearly all components [5]. - The provision for credit losses was $26 million, compared to no provision in the prior year [5]. - The company is implementing measures to improve operating efficiency, targeting additional productivity savings of nearly $500 million [12]. Asset Management - As of September 30, 2024, total assets under custody/administration (AUC/A) reached $46.76 trillion, a 16.8% increase year over year [7]. - Assets under management (AUM) were $4.73 trillion, up 28.9%, primarily due to higher market levels and net inflows [7]. Shareholder Returns - In the reported quarter, State Street repurchased shares worth $450 million [8]. Future Outlook - The company anticipates servicing fee sales of $350-$400 million in 2024, with total fee revenues expected to be at or slightly above the higher end of the 4-5% growth range [10]. - The average deposit balance is projected to remain stable in the second half of 2024 [11]. - CET1 and Tier 1 leverage ratios are expected to be between 10-11% and 5.25-5.75%, respectively [13]. Industry Context - State Street operates within the Zacks Banks - Major Regional industry, where peers like The Bank of New York Mellon Corporation have also reported positive earnings growth [17][18].