State Street ( STT) shares sunk Tuesday morning after the firm reported a wide second-quarter loss, despite the bank's repayment of bailout funds.

The Boston-based banker's bank swung to a loss of $3.3 billion, or $7.12 per share, last quarter from a profit of $548 million, or $1.35 per share, a year earlier. Its shares were tumbling 3% at $47.33 in recent trading.

Results included a previously disclosed charge of $3.7 billion, or $7.91 per share, to put asset-backed commercial paper conduits back onto its balance sheet. State Street also paid $106 million, or 23 cents per share, to buy back preferred stock sold to the government through the Troubled Asset Relief Program, and $7 million, or 2 cents per share, in legacy costs for the 2007 acquisition of Financial Services Corp.

Excluding those charges, State Street would have earned $483 million, or $1.04 per share, above the average analyst estimate of 97 cents per share, according to Thomson Reuters. Its revenue of $2.12 billion, down 26% over the past year, missed expectations of $2.16 billion.

Chairman and CEO Ronald Logue noted "a number of significant milestones" reached during the quarter, including State Street passing the Federal Reserve's stress test, its repayment of bailout funds, strengthening its tangible common equity ratio, and issuing stock and debt in mid-May. State Street has repaid not only funds from the Troubled Asset Relief Program, but also bought back the TARP warrants in early July.

"With these actions, our capital ratios are among the strongest in our industry, and we have performed well against the TCE Improvement Plan that we announced on Feb. 5," said Logue.

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