State Street Corp. (NYSE:STT) shares rose Friday after the bank reported stronger-than-expected first-quarter results, driven by broad-based fee growth and higher net interest income.

Strong Q1 Earnings and Revenue Beat

The company posted adjusted earnings of $2.84 per share, topping analysts’ estimates of $2.63. Revenue increased 16% year over year to $3.796 billion, exceeding the Street’s expectation of $3.658 billion.

Fee revenue rose 15%, driven by broad-based strength across the franchise. Servicing fees increased 11%, and management fees jumped 23%, while foreign exchange trading surged 29%. Software services grew 7%, and securities finance revenue saw a modest 2% gain.

CEO Ron O’Hanley said, “We delivered record quarterly fee revenue, net interest income, and total revenue, generating meaningful year-over-year positive operating leverage and pretax margin expansion, excluding notable items. In a dynamic operating environment, the momentum across Investment Services, Investment Management, and Markets underscores the strength of our franchise.”

Investment Servicing assets under custody and/or administration rose 17% to $54.5 trillion at quarter-end, reflecting higher market levels, client flows, and net new business. Investment Management assets under management increased 20% to $5.6 trillion.

State Street launched 57 new products and solutions during the quarter.

Net Interest Income and Credit Costs

Net interest income rose 17% to $835 million, driven by a 16-basis-point expansion in net interest margin and a 1% increase in average interest-earning assets.

The provision for credit losses increased to $16 million from $12 million a year earlier, primarily reflecting commercial loan exposure and a shifting macroeconomic backdrop. The company also recorded $89 million in net repositioning costs, largely tied to workforce rationalization.

State Street’s standardized CET1 ratio stood at 10.6%, down 40 basis points from a year earlier, reflecting capital returns and higher risk-weighted assets.

The bank returned $633 million to shareholders during the quarter, including $400 million in share repurchases and $233 million in dividends, or 84 cents per share.

CEO Commentary and Outlook

“Looking ahead, how the macro and geopolitical environment will evolve is uncertain. What we can control is how we run the firm — remaining disciplined, supporting our clients, and managing the company for resilience across a range of environments. We are encouraged by our momentum, appropriately mindful of risks, and confident in our ability to continue to grow and deliver even more as we move through the year,” O’Hanley said.

STT Price Action: State Street shares were up 4.54% at $148.34 at the time of publication on Friday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

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