State Street Corporation – Committed to deliver long-term value to our shareholders

State Street Corporation (NYSE:STT) today announced full-year and fourth-quarter 2011 earnings per common share of $3.79 and $0.76, respectively, compared to full-year and fourth-quarter 2010 earnings per share of $3.09 and $0.16, respectively.

Revenue of $9.594 billion in full-year 2011 increased 7% from $8.953 billion in 2010 and expenses were $7.058 billion, up 3% from $6.842 billion in 2010. Return on average common shareholders’ equity was 10.0% in 2011 and 9.5% in 2010.

Fourth-quarter 2011 revenue of $2.315 billion increased 13% from $2.043 billion in the fourth quarter of 2010 and decreased 5% from $2.427 billion in the third quarter of 2011. Expenses of $1.784 billion compared to $1.792 billion in the fourth quarter of 2010 and decreased 1% from $1.798 billion in the third quarter of 2011. Earnings per common share in the fourth quarter of 2011 were $0.76, up from $0.16 in the fourth quarter of 2010 (which reflected the effects of a fourth-quarter 2010 investment portfolio repositioning and separate fourth-quarter 2010 restructuring charges) and down from $1.10 in the third quarter of 2011. Return on average common shareholders’ equity was 7.8% for the fourth quarter of 2011, compared to 1.8% for the fourth quarter of 2010 and 11.2% for the third quarter of 2011.

Consistent with its previously announced program, State Street recorded $58 million ($0.08 per share) of pre-tax charges during the fourth quarter associated with its business operations and information technology transformation program.

Fourth-quarter 2011 results also reflected additional expense control measures designed to better calibrate the Company’s expenses to its outlook for its capital markets-facing businesses in 2012, which resulted in pre-tax charges of $120 million ($0.15 per share). The majority of these charges related to our withdrawal from our fixed-income trading initiative, and the remaining costs were associated with severance and benefits costs for targeted staff reductions.

Joseph L. Hooley, State Street’s chairman, president and chief executive officer, said, “Overall, 2011 was a very successful year amid extremely challenging market conditions. Revenue in the year was characterized by a strong first half followed by a weaker second half, the result of volatile markets and risk-averse investor behavior. Despite these conditions, comparing 2011 with 2010, we were able to achieve strong growth in both revenue and earnings per share.”

He continued, “Our focus on delivering for our clients continues to drive new opportunities for us. In 2011 we won mandates for $1.4 trillion in assets to be serviced, $270 billion of which are scheduled for installation in 2012. State Street Global Advisors (SSgA) continues to benefit from growth in ETF assets, adding 32 new ETF strategies in 2011.”

Hooley added, “Our results for 2011 also demonstrated the positive impact of the expense controls we put in place, especially the progress of the business operations and information technology transformation program, relative to compensation and employee benefits expenses. We will continue to manage our expenses in 2012 to address the impact of challenging capital markets.”

Hooley concluded, “We remain committed to delivering long-term value to our shareholders and maintaining our strong capital position. In the fourth quarter of 2011, we purchased approximately 5.6 million shares of our common stock, which brought the total shares purchased in 2011 to 16.3 million. We ended the fourth quarter with a tier 1 common ratio of 16.9%. We submitted our 2012 capital plan to the Federal Reserve Bank earlier this month as required, and we continue to prioritize increasing return of capital to shareholders through dividends and our share repurchase program.”

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.