State Street Corp.'s (STT) first-quarter net income fell 10% on a loan-loss provision related to mortgages acquired in the prior quarter.

The parent of State Street Global Advisors posted net income of $476 million, or $1.02 a share, down from $530 million, or $1.35 a share, a year earlier. The latest results included a net 2 cents in merger and integration costs.

Revenue decreased 22% to $2 billion as net interest revenue fell 9.1% on a decrease in customer deposit volumes and spreads. Analysts surveyed by Thomson Reuters expected earnings of $1.02 a share on revenue of $2.29 billion.

The company recorded an $84 million provision for loan losses during the quarter due to deteriorating economic conditions in order to provide for expected losses related to commercial mortgage loans acquired in the fourth quarter.

Unrealized mark-to-market losses at State Street's investment portfolio fell to $5.9 billion from the prior quarter's $6.3 billion.

The company's tangible common equity ratio, which measures how much of a bank's hard assets its common shareholders actually own, was 5.87%, up from 4.6% in the prior quarter and 3.3% in the prior year.

All three major ratings agencies lowered their credit ratings on the asset manager in the past few months on soaring unrealized losses posted in the fourth quarter of last year and possible pressure to raise capital if those losses were realized in the future. State Street has said it is confident it won't have to take a write-down, but investors fear it will have to consolidate and realize those losses.

State Street's shares were off 1.3% to $30.25 in premarket trading. The stock has rebounded in the last three months but has still lost more than half its value in the last year.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; kerry.grace@dowjones.com