State Street ( STT) said third-quarter earnings rose to $477 million, or $1.09 a share, from $358 million, or 91 cents a year earlier.

On an operating basis, earnings in the third quarter rose to $1.24 a share from $1.15. Analysts surveyed by Thomson Reuters expected the bank to earn $1.19 a share in the quarter. Sales rose 24% to $2.8 billion.

State Street is one of the first recipients of government equity investments under the Treasury's decision to pump $250 billion of equity into the troubled banking sector.

State Street said Wednesday it plans to issue $2 billion of senior preferred shares to the Treasury Department along with warrants to purchase common stock with a total market price equal to about $300 million at the time of issuance.

The bank also said because of "unprecedented market illiquidity" in the third quarter, unrealized after-tax mark-to-market losses at the end of the period on its investment portfolio increased to $3.3 billion and in the asset-backed commercial paper conduits to $2.1 billion.

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