Bank Earnings Look Solid
A slew of midsized banks reported quarterly earnings Tuesday, with most of them performing slightly better than expected.
One of the standout performers was State Street (STT), the Boston-based processing and servicing bank, which handily surpassed analyst estimates on both earnings and revenue.
State Street reported a 29% gain in net income in the quarter. The bank said it earned $292 million, or 87 cents a share, compared to $226 million, or 67 cents a share, a year ago. Revenue rose 16% to $1.5 billion.
On an operating basis, which excluded a 3-cent gain from a discontinued operation, the bank earned 84 cents a share.Analysts, as surveyed by Thomson Financial, were expecting State Street to earn 77 cents a share in the quarter on an operating basis. Revenue was expected to come in at $1.46 billion. Fee revenue, which includes fees from processing stock and bond trades, as well as servicing accounts for other financial institutions, at State rose 15% to $1.26 billion. Two regional lenders also beat Wall Street estimates, but by less-impressive margins. Southern regional lender AmSouth (ASO) earned $181 million, or 52 cents a share, compared to $179 million, or 50 cents a share, a year ago. The bank reported strong loan growth and gains in deposits in the quarter. Analysts were expecting the bank to earn 51 cents a share in the quarter. Minneapolis-based US Bancorp (USB) earned $1.15 billion, or 63 cents a share, compared to $1.07 billion, or 57 cents a share, a year earlier. Analysts were expecting the bank to earn 62 cents a share in the quarter.
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