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State Street Corp.'s (STT) Chief Executive Ron Logue said Tueday he expects his firm to have a "tangible common equity" ratio of 6.5% by the end of 2009.

In February, State Street had expected a year-end TCE ratio of 4.91%. The upgraded forecast illustrates the Boston firm's improving condition.

Logue made the comments during a conference call to discuss the trust bank's second-quarter earnings.

Tangible common equity is a once-obscure measure of a firm's financial health that demonstrates how much of a company's hard assets common shareholders actually own.

State Street's de facto TCE shrunk to troubling levels last year when the firm was forced to support some complicated off-balance-sheet businesses tied to the credit markets, which froze amid the financial crisis last year. Until then, State Street hadn't expected to support the so-called conduits with its balance sheet.

State Street's Chief Financial Officer Ed Resch said Tuesday that the firm's operating earnings for 2009 will be about $4.25 to $4.50 per share.

-By Marshall Eckblad, Dow Jones Newswires; 201-938-4306; marshall.eckblad@dowjones.com