State Street falls to 2Q loss, hurt by charges

BOSTON (AP) — State Street Corp. said investment losses, repayment of federal TARP money and merger and integration costs pushed it to a loss in the second quarter, reversing a year-ago profit.

In the quarter ended June 30, the company posted a loss of $3.31 billion, or $7.12 per share, compared with a profit of $548 million, or $1.35 per share, in the prior year period.

A significant factor in the loss was the previously announced writedown of short-term corporate debt it administered onto its balance sheet, which created an after-tax loss of $7.91 per share.

The results included 23 cents per share for repayment of the U.S. Treasury's TARP investment and 2 cents per share in merger and integration costs associated with the 2007 acquisition of Investors Financial Services Corp.

Operating earnings, which exclude charges tied to merger and integration costs, amounted to $483 million, or $1.04 per share.

Revenue fell nearly 21 percent to $2.12 billion from $2.67 billion a year ago, as total fee revenue dropped 24 percent to $1.52 billion, and net interest revenue slid 12 percent to $580 million.

Analysts surveyed by Thomson Reuters expected a profit of 97 cents per share on revenue of $2.16 billion.

Assets under management fell nearly 18 percent to $1.56 trillion from $1.89 trillion a year ago.

The company said expenses dropped 26 percent to $1.36 billion from $1.84 billion a year ago.

Boston-based State Street provides accounting, brokerage and other services to mutual funds, retirement plans, insurance companies and other customers.

State Street shares fell $1.39, or 2.9 percent, to $47.37.