BOSTON ( TheStreet) -- State Street ( STT) reported third-quarter net income available to common shareholders of $543 million, or $1.10 a share, increasing from EPS of a dollar the previous quarter, and $1.08 a year earlier. Excluding items related to "discount accretion related to former conduit securities consolidated onto the Company's balance sheet in 2009" and a tax benefit "related to a restructuring of former non-U.S. conduit assets" and acquisition restructuring costs, State Street said its third-quarter operating earnings were 96 cents a share, beating the consensus estimate of 88 cents among analysts polled by Thomson Reuters.
Operating earnings matched the previous quarter, but rose from 86 cents a share in the third quarter of 2010. CEO Joseph Hooley said the year-over-year operating improvement reflected "prior period new business wins as well as stronger foreign exchange revenue," and that third-quarter expenses declined form the second quarter because of "expense savings from the business operations and information technology transformation program we launched last November," and "reductions in incentive compensation" for employees. Hooley added that the company remained in a "strong capital position," ending "the third quarter with a tier 1 common ratio of 16.0%," after repurchasing "5.8 million of our common shares during the third quarter , which brought the total shares purchased in 2011 to 10.7 million, leaving about $225 million remaining to complete the previously announced share purchase program authorized by our Board of Directors in March." Total revenue for the third quarter was $2.41 billion, declining from $2.47 billion the previous quarter, but rising 12% from $2.12 billion in the third quarter of 2010. Total expenses declined 2.5% quarter-over-quarter to $1.71 billion, but increase 12% year-over-year to $1.76 billion State Street's second-quarter return on average common equity was 9.8%, declining from 10.2% in both the previous quarter and the third quarter of 2010. Servicing fees saw a slightly quarter-over-quarter decline to $1.1 billion in the third quarter, but were up 10% year-over year, reflecting State Street's acquisition of the Bank of Ireland's assets management business. Trading services fees grew 7% quarter-over-quarter and 47% year-over-year to $334 million, mainly reflecting a 91% increase in foreign exchange revenue to $204 million, because of higher volatility.