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State Street's Q4'16 net income climbs YOY

State Street Corp. on Jan. 25 reported fourth-quarter 2016 GAAP net income available to common shareholders of $557 million, or $1.43 per share, compared to $547 million, or $1.34 per share, in the fourth quarter of 2015. For full year 2016, GAAP net income available to common shareholders was $1.97 billion, or $4.97 per share, compared to $1.85 billion, or $4.47 per share in 2015.

The S&P Capital IQ consensus estimate for normalized EPS for the fourth quarter is $1.32 and $5.09 for full year 2016.

An acceleration of deferred compensation expense of 41 cents per share and an aggregate reduction of accrued tax expense of 54 cents per share boosted the company's fourth-quarter results by 13 cents per share. Results for the quarter also included a tax benefit of $145 million, or 37 cents per share, from the designation of the company's foreign earnings as indefinitely invested overseas.

The fourth-quarter results also included the estimated revenue of $64 million, estimated expenses of $58 million and nonrecurring acquisition costs of $25 million associated with the GE Asset Management business, which the Boston-based company acquired July 1, 2016.

New asset servicing mandates totaled approximately $1.4 trillion in 2016, of which $180 billion was recorded in the fourth quarter. In the asset management business, the company recorded fourth-quarter net inflows of $16 billion and net outflows of $42 billion during full year 2016.

Total revenue for the quarter was $2.53 billion, compared to $2.54 billion in the last quarter of 2015. Provision for loan losses was $2 million in the fourth quarter, compared to $1 million in the year-ago period.

Chairman and CEO Joseph Hooley said that among the company's strategic priorities this year is advancing its digital leadership through State Street Beacon, its multiyear transformation program, which in 2016 delivered $175 million in estimated annual pretax savings.

State Street purchased approximately $325 million of common stock at an average price of $76.70 per share in the fourth quarter of 2016.