State Street Shares Slide as Deposits Decline

State Street logo on glass building
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Key Takeaways

  • Shares of State Street (STT) fell on a decline in deposits and fee revenue for the first quarter of 2023.
  • The custodian bank's quarterly earnings per share (EPS) fell year over year and came in short of analyst forecasts.
  • Charles Schwab (SCHW) also announced a decline in deposits, but an increase in net income sent Schwab shares higher.

Shares of Boston-based State Street (STT) fell after it reported that deposits and fee revenue dropped in the first quarter of 2023.

One of the nation's largest custodian banks, State Street reported that its total deposits were down $11.8 billion in the first quarter from a year ago, a decrease of 9%.

Since the Federal Deposit Insurance Corp. (FDIC) took over Silicon Valley Bank and Signature Bank after bank runs decimated deposits, investors have been watching banks closely for more signs that customers are taking their money out.

State Street reported earnings per share (EPS) of $1.52, more than 10 cents per share lower than analyst estimates and down from $1.57 the year before. The bank's first quarter total revenue of $3.1 billion was also short of projections, while net income fell to $549 million, a drop of 9.1% from the prior year's first quarter.

Charles Schwab (SCHW) also announced a loss of deposits, reporting that customers took out $41 billion in deposits in the first quarter. However, Charles Schwab reported that its net income rose 14% from a year ago to $1.6 billion, sending shares 4% higher.

State Street shares dropped 9.2% on April 17 and are down about 6% so far in 2023.

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