I will now turn the call over to Mr. Andy Clark. Mr. Clark, you may begin.Andy Clark Thanks, Wendy, and welcome, everyone. With us today are Gerald Hassell, our Chairman, President and CEO; Todd Gibbons, our CFO, as well as several members of our executive management team. Before we begin, let me remind you that our remarks today may include forward-looking statements. Actual results may differ materially from those indicated or implied by the forward-looking statements as a result of various factors. These factors include those identified in the cautionary statement on Page 12 of the press release and those identified in our documents filed with the SEC that are available on our website, bnymellon.com. Forward-looking statements in this call speak only as of today, April 18, 2012, and we will not update forward-looking statements. This morning's press release provides the highlights of our results. We also have the Quarterly Earnings Review document available on our website, which provides a quarterly review of the total company and individual businesses. We will be using the Quarterly Earnings Review document to discuss our results. Now I'd like to turn the call over to Gerald. Gerald? Gerald L. Hassell Thanks, Andy, and good morning, everyone, and thanks for joining us today. For the quarter, we generated net income of $619 million and earnings per share of $0.52, which compares to $0.50 in the first quarter of last year and $0.42 in the fourth quarter of 2011. Total revenues were up 6% sequentially. If you exclude the Shareowner Services business that we sold right at year end 2011, on a reported basis, revenue was up 3%. Now that improvement reflected the solid sequential growth in investment management and investment services fees. We clearly benefited from new business coming on board and improved market values. Now we achieved that growth in spite of the fact that levels of client activity remained lower than normal. Now as an indicator of that, volumes -- indicator of the volumes, the combined share volume on the New York Stock Exchange, the net effect was down 17% year-over-year and 10% sequentially.
Lower volatility in the currency markets also negatively impacted our foreign exchange and investment services fee revenues. Most of our other core investment services metrics showed positive trends. And in investment management, the key metrics we focus on are flows and investment performance. We had our 10th consecutive quarter of positive long-term flows of $7 billion, and we're pleased to see nice improvements in the performance of our U.S. equity products. So overall, the trends remain encouraging. While we can't control market conditions, we made good progress in controlling what we can, which is winning new business, managing our expenses carefully and strengthening our balance sheet.On the new business front, in addition to the positive long-term flows and investment management, Asset Servicing had its strongest quarter in terms of new business wins in 12 months. I should also mention that during the quarter, in Asset Servicing, we were ranked #1 in our peer group in terms of service quality in both the R&M and global custody surveys. That speaks to our success of maintaining our focus on our clients as we transform the Asset Servicing business to simultaneously improve the client experience and business profitability. In fact, our quality scores rose year-over-year, which is encouraging. On the expense front, we're seeing the early benefits of our operational excellence initiatives. On an operating basis, total expenses were up 4% sequentially, which mostly reflected higher litigation and legal expenses and some seasonal staff expense. On an operating basis, again adjusting for the sale of Shareowner Services, revenues were up 6% sequentially while expenses were up 4%, producing 200 basis points of positive operating leverage. In terms of capital, we generated nearly $700 million of Basel I Tier 1 common, and we delivered a strong 21% return on that increased level of equity. We also repurchased more than 17 million shares during the quarter.
The strength of our balance sheet was borne out by the results of the latest Fed stress test, which reflects the strength of our business model and the excellent quality of our balance sheet. The results also show our continuing ability to return capital to our shareholders while maintaining our strong capital position. As a result, there was no objection to our annual capital plan, which includes the continuation of our current dividend and the repurchase of up to $1.16 billion of outstanding common stock in the next 12 months. This is consistent with a combined dividend and share buyback ratio of 60% to 65% that we have discussed at our Investor's Day.Read the rest of this transcript for free on seekingalpha.com