Second-quarter 2015 operating-basis1 EPS was $1.37, down 1.4% compared to the second quarter of 2014, with a 2.1% increase in revenue to $2.7 billion. Servicing fees increased 2.9% compared to the second quarter of 2014 and increased 4.1% compared to the first quarter of 2015...
In announcing today's financial results, Joseph L. Hooley, State Street's chairman and chief executive officer said, "Second-quarter 2015 results reflect the strength of our core business, as evidenced by 4% growth in servicing fees compared to the first quarter of 2015, and also reflect the benefit of seasonal securities finance activity.”
Hooley continued, “Net interest revenue in the second-quarter of 2015 continued to experience pressure as a result of the ongoing low interest rate environment. Year-to-date we remain on track for the growth rate of operating-basis fee revenue to exceed the growth rate of operating-basis expenses by at least 200 basis points in 2015.”
Hooley also said, “Towards the end of the second quarter of 2015 we saw a number of significant market disruptions, including the possibility of Greece exiting the Eurozone and elevated equity market volatility in China, all of which drove markets down in June and reduced risk appetite."
Hooley concluded, "We remain focused on returning capital to our shareholders. During the second quarter of 2015, we purchased approximately $350 million of our common stock and at quarter end had approximately $1.45 billion remaining on our March 2015 common stock purchase program, authorizing the purchase of up to $1.8 billion of our common stock through June 30, 2016. We also increased our quarterly common stock dividend to $0.34 per share starting in the second quarter of 2015."
Second-Quarter 2015 GAAP-Basis Results:
• Earnings per common share (EPS) of $.94 increased from $.90 in the first quarter of 2015 and decreased from $1.38 in the second quarter of 2014. Second and first-quarter 2015 results include net after-tax charges of $156 million and $150 million, or $0.37 and $0.36 per share, respectively, to increase our legal accrual associated with indirect foreign exchange matters.
• Net income available to common shareholders of $393 million increased from $377 million in the first quarter of 2015 and decreased from $602 million in the second quarter of 2014.
• Revenue of $2.61 billion was flat versus the first quarter of 2015 and increased from $2.60 billion in the second quarter of 2014.
• Net interest revenue of $535 million decreased from $546 million in the first quarter of 2015 and from $561 million in the second quarter of 2014.
• Provision for loan losses of $2 million decreased from $4 million in the first quarter of 2015 and was flat with $2 million in the second quarter of 2014.
• Expenses of $2.13 billion increased from $2.10 billion in the first quarter of 2015 and from $1.85 billion in the second quarter of 2014.
• Return on average common shareholders' equity (ROE) of 8.3% increased from 7.9% in the first quarter of 2015 and decreased from 11.9% in the second quarter of 2014.