State Street started 2026 with first-quarter net income of $764 million, up 19% from $644 million a year earlier and 2% higher than $747 million in the fourth quarter. Diluted earnings per share rose to $2.49 from $2.04 a year ago and $2.42 in the prior quarter.
Total revenue climbed to $3.796 billion, up 16% from $3.284 billion in the first quarter of 2025 and 4% from $3.667 billion in the fourth quarter. Fee revenue reached $2.960 billion, a 15% increase year over year and a 3% increase quarter over quarter. Net interest income rose to $835 million, up 17% from $714 million a year earlier and 4% from $802 million in the prior quarter.
Within fee revenue, servicing fees increased to $1.409 billion from $1.275 billion a year ago, management fees to $724 million from $587 million, foreign exchange trading services to $435 million from $337 million, software services to $169 million from $158 million, and other fee revenue to $107 million from $99 million. Securities finance was the only major fee line to decline year over year, slipping to $116 million from $114 million.
Expenses rose to $2.811 billion from $2.450 billion a year ago and $2.741 billion in the prior quarter. Compensation and employee benefits increased to $1.441 billion from $1.262 billion a year ago, information systems and communications rose to $637 million from $497 million, and transaction processing services climbed to $293 million from $266 million. Occupancy fell to $101 million from $103 million.
Pre-tax margin improved to 25.5% from 25.0% a year earlier and 25.0% in the prior quarter. Return on average common equity rose to 11.6% from 10.6% a year ago, while return on average tangible common equity increased to 17.6% from 16.4%.
Assets under custody and/or administration reached $54.515 trillion, up 17% from $46.733 trillion a year earlier and 1% from $53.800 trillion in the fourth quarter. Assets under management rose to $5.620 trillion, up 20% from $4.665 trillion a year ago, though down slightly from $5.665 trillion in the prior quarter.
On the AUC/A side, collective funds including ETFs rose to $18.338 trillion from $15.430 trillion a year ago, pension products to $10.912 trillion from $9.377 trillion, and insurance and other products to $11.956 trillion from $9.783 trillion. By asset class, equities increased to $32.243 trillion from $27.508 trillion, fixed income to $14.030 trillion from $11.900 trillion, and short-term and other investments to $8.242 trillion from $7.325 trillion.
AUM was shaped by $49 billion in net inflows, offset by $86 billion in market depreciation and an $8 billion foreign exchange drag. By asset class, fixed income posted $28 billion of net inflows and cash added $8 billion, while equity saw a $94 billion market decline and multi-asset a $6 billion decline. By vehicle, ETFs attracted $25 billion of net inflows, separately managed accounts $30 billion, and other commingled funds outflows of $6 billion.
Capital return totaled $633 million in the quarter, including $400 million of share repurchases and $233 million in dividends. State Street’s CET1 ratio ended at 10.6%, down from 11.0% in the prior quarter and 11.0% a year earlier. As a result of these announcements, the company's shares have moved -0.99% on the market, and are now trading at a price of $125.66. For more information, read the company's full 8-K submission here.
