State Street Corporation announced third-quarter 2009 earnings per common share of $1.04 on revenue of $2.236 billion compared with $1.09 per share on revenue of $2.771 billion in the third quarter of 2008. Expenses in the third quarter of 2009 are $1.483 billion, compared with $1.925 billion in the third quarter of 2008. For the third quarter of 2009, return on common shareholders equity was 16.0%, up from 13.6% in the third quarter of 2008.
Compared to the second quarter of 2009, third-quarter 2009 results improved from a loss of $(7.12) per share on revenue of $2.122 billion. The second quarter of 2009 includes an after-tax extraordinary loss of $(3.684) billion or $(7.91) per share related to the effect of the consolidation of the State Street-administered asset-backed commercial paper (ABCP) conduits onto the Companys balance sheet. Expenses in the second quarter of 2009 were $1.364 billion.
For the second quarter of 2009, return on common shareholders equity was 13.0% before the extraordinary loss.
In addition to presenting State Streets financial results in conformity with U.S. generally accepted accounting principles (GAAP), management also presents results on an operating basis in order to highlight comparable financial trends and other characteristics with respect to State Streets ongoing business operations from period to period. A full reconciliation of operating-basis results to GAAP results is included in the addendum at the end of this press release. Also see Additional Information.Operating-basis results in the third quarter of 2009 of $1.05 per share exclude $(11) million in pre-tax merger and integration costs associated with the Investors Financial Services Corp. (Investors Financial) acquisition. Operating-basis results for the third quarter of 2008 excluded a $350 million gain on the sale of CitiStreet, $8 million of net interest revenue from acting as an intermediary under the AMLF, a reduction of net interest revenue of $(98) million to establish a reserve for the SILO transactions, a charge of $(200) million for a reserve to address our estimated net exposure on an indemnification obligation associated with collateralized repurchase agreements with Lehman, and merger and integration costs of $(30) million associated with the acquisition of Investors Financial. Excluding the extraordinary loss, operating-basis results for the second quarter of 2009 also exclude $(106) million related to repayment of the U.S. Treasurys TARP CPP investment, and $(12) million in merger and integration costs associated with the Investors Financial acquisition. Net interest revenue on an operating basis for all periods is presented on a fully taxable-equivalent basis.
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