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

Earnings Performance - State Street's Q4 2024 adjusted earnings of $2.60 per share beat the Zacks Consensus Estimate of $2.42 and increased 27.5% YoY [1] - For 2024, adjusted earnings of $8.67 per share surpassed the consensus estimate of $8.50 and grew 13.2% YoY [4] - Net income available to common shareholders (GAAP) was $2.48 billion in 2024, up 36.4% from 2023 [4] Revenue Growth - Q4 2024 total revenues of $3.41 billion increased 12.1% YoY and beat the consensus estimate of $3.31 billion [5] - 2024 total revenues grew 8.8% to $13 billion, surpassing the consensus estimate of $12.96 billion [5] - NII in Q4 2024 was $749 million, up 10.5% YoY, driven by higher investment securities yields and loan growth [6] - Total fee revenues in Q4 2024 increased 12.6% YoY to $2.66 billion, beating the estimate of $2.46 billion [6] Expense Management - Non-interest expenses (GAAP basis) in Q4 2024 were $2.44 billion, down 13.5% YoY, mainly due to the absence of the FDIC special assessment charge [7] - Adjusted expenses in Q4 2024 rose 8.2% to $2.38 billion, higher than the estimate of $2.31 billion [7] - Provision for credit losses in Q4 2024 was $12 million, down 40% from the projected $21.3 million [7] Asset Balances - Total AUC/A as of Dec 31, 2024, was $46.56 trillion, up 11.4% YoY, driven by higher equity market levels and client flows [9] - AUM as of Dec 31, 2024, was $4.72 trillion, up 14.9% YoY, primarily due to higher market levels and net inflows [9] Capital and Shareholder Returns - Common Equity Tier 1 ratio was 10.9% as of Dec 31, 2024, compared to 11.6% in 2023 [8] - Return on average common equity was 12.7% in Q4 2024, up from 3.1% in the year-ago quarter [8] - State Street repurchased shares worth $550 million in Q4 2024 [10] Peer Performance - Bank of New York Mellon's Q4 2024 adjusted earnings of $1.72 per share beat the consensus estimate of $1.56 and increased 33.3% YoY [12] - JPMorgan's Q4 2024 earnings of $4.81 per share surpassed the consensus estimate of $4.03, driven by strong capital markets and mortgage banking performance [13] Outlook - State Street expects NII to be roughly flat and fee income to grow 3-5% in 2025 [2] - Despite a weak 2025 outlook, higher interest rates and solid business servicing wins are expected to support State Street's financials [11]