State Street Corp. (NYSE:STT) stock fell nearly 8% in Wednesday's trading after the financial services company reported mixed third-quarter 2026 results.

Adjusted earnings of $3.69 per share beat the analyst consensus estimate of $3.67.

However, revenue rose 13% year over year to $4 billion, slightly missing Wall Street's estimate of $4.03 billion.

Higher fee revenue and net interest income drove the revenue growth.

Fee Revenue Climbs As Assets Grow

Fee revenue increased 11% year over year, supported by higher servicing and management fees and stronger foreign exchange trading activity.

Servicing fees rose 10%, while management fees jumped 20%. Foreign exchange trading revenue climbed 17%, software services revenue increased 5%, and securities finance revenue grew 9%.

Investment Servicing assets under custody and administration rose 15% to $59.2 trillion at quarter-end. The increase reflected higher market levels, client flows, and new business.

Meanwhile, Investment Management assets under management climbed 16% to $6.3 trillion.

CEO Highlights Record Fees and Growth Strategy

CEO Ron O'Hanley highlighted record quarterly servicing and management fees, while foreign exchange client trading volumes surged 31% year over year.

The strong performance helped State Street deliver its 11th consecutive quarter of positive year-over-year operating leverage, excluding notable items. Its pretax margin expanded to 34.6% from 31.1% a year earlier.

O'Hanley also highlighted progress in the company's growth strategy.

State Street secured its first Wealth Services mandate with one of the largest registered investment advisers in the U.S.

The agreement builds on an existing Charles River relationship and supports the company's "One State Street" strategy. The approach aims to deepen client relationships by combining services and capabilities across its businesses.

Net Interest Income Jumps 21%

Net interest income climbed 21% year over year to $864 million, supported by a 16-basis-point expansion in net interest margin.

The company recorded a $4 million release of credit loss reserves related to commercial loan sales and repayments.

State Street's standardized Common Equity Tier 1 capital ratio fell 30 basis points from a year earlier to 11%. The decline reflected shareholder payouts, higher risk-weighted assets and lower accumulated other comprehensive income.

The company returned $651 million to shareholders during the quarter, including $400 million in share repurchases and $251 million in dividends, or 92 cents per share.

STT Price Action

STT Price Action: State Street shares were down 7.82% at $160.48 at the time of publication on Wednesday, according to market data.