State Street Corporation Announces Second-Quarter Results; Operating Profit Improves Sequentially; Global Securities Services Integration on Track

July 15, 2003

BOSTON--(BUSINESS WIRE)--July 15, 2003--State Street Corporation announced today a second-quarter loss per share of $0.07, representing a net loss of $23 million on revenue of $1,082 million. Results for the second quarter include pre-tax restructuring charges of $292 million, or $0.57 per share, related to State Street's previously announced expense-reduction program. In addition, the company has settled the previously disclosed tax matter relating to its REIT with the Massachusetts Department of Revenue, creating a tax benefit of $13 million, or $0.04 per share, which represents half of the $0.08 provision taken in the first quarter of 2003. The company has agreed to sell certain real estate in suburban Boston, resulting in a $13 million pre-tax charge, or $0.03 per share. Also, the company recorded pre-tax merger and integration costs of $18 million, or $0.03 per share, related to the Global Securities Services business (GSS), which State Street acquired from Deutsche Bank on January 31. These second-quarter items, in the aggregate, result in a net charge of $0.59 per share.

In reporting its financial results for the second quarter of 2003, State Street has prepared information in four categories:

    --  "Reported" results are in accordance with generally accepted
        accounting principles (GAAP).

    --  "Operating" results are "reported" results excluding
        significant charges, such as restructuring charges, the
        settlement of the REIT tax matter, the writedown associated
        with the pending sale of certain real estate, merger and
        integration costs, and results of the divested Corporate Trust
        business. They are presented on a taxable-equivalent basis.

    --  "GSS contribution" results are the revenue and expenses,
        including financing costs and amortization of intangibles,
        attributable to the GSS business acquired on January 31, 2003,
        as well as revenue and expenses from "out-of-scope" GSS
        business that were not part of the acquisition, but commenced
        in the second quarter of 2003. Per-share amounts reflect the
        effect on outstanding shares due to the acquisition.

    --  "Baseline" results are "operating" results excluding "GSS
        contribution" and are presented on a taxable-equivalent basis.

State Street believes that providing non-GAAP financial information assists investors and others by providing them with financial information in a format that provides comparable financial trends of ongoing business activities.

Baseline earnings per share were $0.52, compared to baseline earnings per share of $0.56 for the second quarter of 2002, and up 13% from $0.46 in the first quarter. Second quarter of 2002 baseline results exclude $9 million of pre-tax income, or $0.02 per share, attributable to the Corporate Trust business divested at the end of 2002 and excludes $20 million, or $0.04 per share, for severance and outplacement costs, now reclassified as a restructuring charge and excluded from baseline results. Baseline revenue of $958 million was down 4% from the second quarter of 2002, primarily due to lower net interest income and securities lending revenue, partially offset by the increase in servicing fees.

In the second quarter, the GSS business contributed $150 million in total revenue; $148 million of fee revenue, $5 million in "out-of-scope" fee revenue, and $2 million of net interest revenue, offset by net interest costs of $5 million attributable to the acquisition financing. The GSS business operated on a break-even basis in the second quarter on a per-share basis, whether or not "out-of-scope" revenue and expenses are included.

Operating earnings per share, which exclude the one-time charges recorded in the second quarter of 2003, were $0.52, down 7% from a year ago, but up 18% from $0.44 in the first quarter. Operating revenue increased 11%, or $113 million, to $1,108 million from the second quarter of 2002. Operating return on stockholders' equity was 13.4% for the quarter.

The following table summarizes State Street's baseline, GSS, operating, and reported results for the second quarters of 2002 and 2003. Detailed information is available in the Addendum Selected Financial Information tables included with this press release.

Dollars in millions except per share data; shares in millions

                                   Three months ended
                      June 30, 2003June 30, 2002
             Baseline  GSS   Operating  Reported   Operating  Reported
               (b)     (c)      (a)                    (a)

Fee revenue    $741$153$894$881$725$745
All other
 revenue        217     (3)      214       201          270     258
Total revenue   958    150     1,108     1,082          995   1,003
Total expenses  689    140       829     1,139          704     738
Taxes           102      3       105       (34)         106      87
Net income     $167$7$174      $(23)        $185$178

Diluted eps   $0.52$0.00$0.52    $(0.07)       $0.56$0.54
Diluted
 shares         320              334       334          328     328

(a) excludes significant charges and in 2002, the results of the
    divested Corporate Trust business; presented on a
    taxable-equivalent basis
(b) excludes GSS contribution and significant charges; presented
    on a taxable-equivalent basis
(c) revenue and expenses, including financing costs and amortization
    of intangibles, attributable to the GSS business acquired
    January 31, 2003, as well as revenue and expenses from
    "out-of-scope" business which was not part of the transaction,
    but excluding merger and integration costs. Per-share amounts
    reflect the effect on outstanding shares due to the acquisition.

David A. Spina, State Street's chairman and chief executive officer, said, "I feel very good about our business, in terms of both the opportunities we have in front of us and our ability to perform. State Street is a very strong company today. We're the world leader in investment servicing, institutional investment management, and securities lending. We're on schedule in integrating the GSS business. We continue to win more than our share of new business. And we have succeeded in reducing our operating expense run rate, meeting the objectives we established at the beginning of the quarter.

"I am excited about our future, and look forward to the benefits we'll realize from our significantly larger scale and our ability to find new ways to help our clients succeed. All of us at State Street are committed to creating outstanding value for our stockholders. We are laying a solid foundation for State Street's continued long-term growth."

SECOND-QUARTER RESULTS VS. FIRST QUARTER

On a reported basis, the second quarter loss per share of $0.07 compares to net income per share of $0.29 in the first quarter. Total revenue in the second quarter of $1,082 million is up 6% versus $1,020 million in the first quarter.

On a baseline basis, second quarter net income of $0.52 per diluted share is up 13% from $0.46 per share on a revenue gain of 2%, from $941 million to $958 million, and a $16 million, or 2% reduction in expenses to $689 million.

SECOND QUARTER RESULTS VS. YEAR-AGO QUARTER

On a reported basis, the second-quarter loss per share was $0.07, reflecting a net loss of $23 million, and total revenue was $1,082 million. In the second quarter of 2002, State Street earned $178 million, or $0.54 per share, on $1,003 million in revenue.

On an operating basis, diluted earnings per share were $0.52. Net income was $174 million, and revenue was $1,108 million. In the second quarter of 2002, net income was $185 million, or $0.56 per share, on revenue of $995 million.

On a baseline basis, diluted earnings per share were $0.52, net income was $167 million, and revenue was $958 million in the second quarter.

State Street generates revenue by providing sophisticated global investors with integrated products, services and strategies that support their investment and business goals. The following review of specific revenue and expense lines uses baseline results to provide consistent comparable data to the year-earlier period.

Servicing fees are derived from accounting, administration, custody, daily pricing, performance and analytics, compliance monitoring, and operations outsourcing for investment managers. Baseline servicing fees were up 7%, to $390 million from $365 million. The increase was attributable to business gained through an acquisition in July 2002, as well as from new business from existing and new clients, offset by lower average equity markets. Daily average values for the S&P 500 Index were down 12% from the second quarter of 2002; daily average values for the MSCI(R) EAFE Index(SM) were down 15%. Total assets under custody were $8.5 trillion, including $1.9 trillion attributable to the GSS business.

Baseline management fees from investment management services, delivered through State Street Global Advisors, were $125 million, compared to $129 million a year ago. Management fees reflected continued new business success, but were affected by a decline in average month-end equity valuations. Total assets under management were $901 billion, compared to $770 billion the previous year.

Baseline securities lending revenue was $57 million in the quarter, compared to $68 million the previous year. The decline in securities lending revenue reflects narrower interest-rate spreads due to a less favorable interest-rate environment compared to a year ago, which more than offset growth in volume of securities on loan.

Baseline foreign exchange trading revenue was $93 million for the quarter, compared to $92 million a year ago.

Baseline brokerage fees were $27 million, compared to $31 million a year ago, driven by lower transaction volumes. Baseline processing fees and other increased $9 million to $49 million. Securities gains of $8 million compared to $10 million last year.

Baseline net interest revenue was $209 million, a decline of $52 million, or 20%, from a year ago. Lower yields on assets, reflecting the continuing decline in interest rates, drove the decrease in net interest revenue. State Street provides repurchase agreements and deposit services for clients' investment activities, which generate net interest revenue.

Baseline operating expenses were $689 million, down $15 million, or about 2%, from $704 million a year ago. Lower direct controllable expenses and salaries and benefits expenses largely offset increased spending for transaction processing services, information systems and communications, and occupancy expenses. State Street has implemented cost-reduction plans expected to reduce operating expenses by approximately $110 million for the remainder of 2003. The company will continue to invest in the key initiatives that offer the greatest opportunity for future growth.

GSS ACQUISITION AND INTEGRATION UPDATE

Based on the second quarter 2003 operations, the business as acquired, excluding "out-of-scope" revenue and expenses, is generating approximately $580 million of annualized revenue and about $532 million of annualized expenses. The results do not include revenue and expenses associated with the GSS business in Italy (which closed this month) and Austria. As previously disclosed, we expect to retain 89% of the available client revenue acquired, which excludes "out-of-scope" revenue. State Street is ahead of schedule in reducing GSS expenses in the acquired business, and expects to meet or exceed its targets for cost savings.

Based on the first five-months' operating results, excluding "out-of-scope" revenue and expenses, State Street believes it will meet its previously-disclosed expectation that the acquisition will be dilutive to operating earnings per share by approximately $0.01 to $0.03 in 2003. The merger and restructuring costs associated with the acquisition in 2003 are expected to be $90-110 million on a pre-tax basis, approximately $55 million of which have been recorded in the first two quarters.

EXPENSE CONTROL MEASURES

After taking into effect the full impact of the recent employee reductions, the Corporation's workforce would stand at about 19,100 which includes the employees devoted to the GSS business. As previously disclosed, State Street expects to add between 800 and 1000 employees over the next year, as well as continuing its previously announced staff reductions related to the acquired GSS business. As previously announced, State Street completed a number of actions which are expected to reduce its operating expenses by approximately $55 million per quarter for the remainder of 2003, compared to its first-quarter baseline run rate, all else being equal.

INVESTOR CONFERENCE CALL

State Street will webcast an investor conference call today, Tuesday, July 15, 2003, at 9:30 a.m. EDT, available at www.statestreet.com/stockholder. The conference call will also be available via telephone, at +1 719/457-2621. Recorded replays of the conference call will be available on the web site, and by telephone at +1 402/220-4230, beginning at noon Friday. This press release and additional financial information is available on State Street's website, at www.statestreet.com/stockholder, under "Financial Reports."

State Street Corporation (NYSE: STT) is the world's leading specialist in providing sophisticated global investors with investment servicing and investment management. With $8.5 trillion in assets under custody and $901 billion in assets under management, State Street is headquartered in Boston, Massachusetts and operates in 22 countries and over 100 markets worldwide. For more information, visit State Street's web site at www.statestreet.com or call 877/639-7788 (NEWS STT) toll-free in the United States and Canada, or +1 202/266-3340 outside those countries.

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those related to the pace at which State Street adds new clients or at which existing clients use additional services, the value of global and regional financial markets, the pace of cross-border investment activity, changes in interest rates, the pace of worldwide economic growth and rates of inflation, the extent of volatility in currency markets, consolidations among clients and competitors, State Street's business mix, the dynamics of markets State Street serves, and State Street's success at integrating and converting acquisitions into its business. Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in State Street's 2002 annual report and subsequent SEC filings. State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, July 15, 2003, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

STATE STREET CORPORATION
                      Addendum Earnings Digest(1)

             (Dollars in millions, except per share data)

                                   Quarter ended June 30,

                                        2003(2)  2002      % Change

Revenue                                 $1,082$1,003          8

Earnings                                   (23)    178

Diluted earnings per share                (.07)    .54



                                  Six Months ended June 30,

                                       2003(2)   2002      % Change

Revenue                                 $2,102$1,984          6

Earnings                                    73     356       (79)

Diluted earnings per share                 .22    1.08       (80)


(1) Information presented in accordance with accounting principles
    generally accepted in the United States.
(2) Includes the impact of restructuring charges.


                       STATE STREET CORPORATION
                Addendum Selected Financial Information

I. CONSOLIDATED STATEMENT OF INCOME PREPARED IN ACCORDANCE WITH
   ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES


                               Quarter ended      Six months ended
                                  June 30,            June 30,
(Dollars in millions,
 except per share data)        2003      2002      2003      2002

Fee Revenue
Servicing fees             $    482$    384$    920$    753
Management fees                 130       129       255       253
Global securities lending        76        68       131       132
Foreign exchange trading        103        91       175       159
Brokerage fees                   27        31        57        54
Processing fees and other        63        42       133        91
Total fee revenue               881       745     1,671     1,442

Net Interest Revenue
Interest revenue                401       510       798     1,034
Interest expense                208       261       401       504
Net interest revenue            193       249       397       530
Provision for loan losses                   1                   2
Net interest revenue after
 provision for loan losses      193       248       397       528

Gains on the sales of
 available-for-sale
 investment securities            8        10        34        14
Total Revenue                 1,082     1,003     2,102     1,984

Operating Expenses
Salaries and employee
 benefits                       444       424       887       845
Information systems and
 communications                 140        91       270       187
Transaction processing
 services                        79        59       151       118
Occupancy                        76        60       147       120
Merger and integration costs     18                  55
Restructuring                   292        20       292        20
Other                            90        84       171       163
Total operating expenses      1,139       738     1,973     1,453
Income before income taxes      (57)      265       129       531
Income taxes                    (34)       87        56       175
Net Income                 $    (23) $    178$     73$    356

Earnings Per Share
Basic                      $   (.07) $    .55  $    .22  $   1.10
Diluted                        (.07)      .54       .22      1.08

Average Shares Outstanding
 (in thousands)
     Basic                  331,325   323,858   330,452   323,774
     Diluted                333,971   328,262   333,039   328,450

Return on equity                  -%     17.3%      7.2%     17.8%

Cash dividends declared
 per share                 $    .14  $    .12  $    .27  $    .23


II. OTHER FINANCIAL INFORMATION

                                        Quarters ended June 30,
(Dollars in millions, except per
share data or where otherwise indicated)     2003      2002

Assets under custody  (in billions)       $  8,516$  6,202
Assets under management (in billions)          901       770
Assets under trusteeship (in billions)           -       689

Total assets                              $ 83,102$ 80,328
Long-term debt                               1,676     1,272
Stockholders' equity                         5,085     4,187

Closing price per share of
 common stock                             $  39.40$  44.70STATE STREET CORPORATION
                Addendum Selected Financial Information

III. INCOME STATEMENT INFORMATION

                            Reconciliation of Financial Results

                                   (Dollars in millions)
                             Three Months Ended June 30, 2003

                  Baseline    GSS        Operating          Reported
                  Results   Results(a,d)  Results   Other    Results
Fee Revenue
Servicing fees     $390$92$482       $       $482
Management fees     125         5           130                130
Global securities
 lending             57        19            76                 76
Foreign exchange
 trading             93        10           103                103
Brokerage fees       27                      27                 27
Processing fees
 and other           49        27            76      (13)(b)    63
Total fee revenue   741       153           894      (13)(b)   881

Net Interest
 Revenue            209        (3)(c)        206     (13)(e)   193
Provision for
 loan losses
Net interest revenue
 after provision for
 loan losses
 (taxable-equivalent
 basis)             209        (3)(c)        206     (13)(e)   193

Gains on the sales of
 available-for-sale
 investment
 securities, net      8                        8                 8
     Total Revenue  958       150          1,108     (26)    1,082

Operating Expenses
Salaries and
 employee benefits  391        53            444               444
Information
 systems and
 communications     100        40            140               140
Transaction
 processing services 63        16             79                79
Occupancy            65        11             76                76
Merger and
 integration costs                                    18        18
Restructuring                                        292       292
Other                70        20(g)          90                90
     Total operating
      expenses      689       140            829     310     1,139
Income before
 income taxes       269        10            279    (336)     (57)
Income taxes         89         3             92    (126)(f)  (34)
Taxable-equivalent
 adjustment          13                       13     (13)(e)
Net Income         $167$7$174   $(197)    $(23)

Earnings Per
 Share             $.52        $-           $.52   $(.59)   $(.07)

Average Diluted
 Shares (in
 thousands)     319,904    14,067        333,971          333,971

Return on equity   13.0%                    13.4%               -%

Notes:
Reported results agree with the Corporation's Consolidated
Statement of Income

(a) Includes $5 million of revenue and $7 million of expenses
    related to out-of-scope client relationships
(b) Represents a valuation reserve on certain assets classified as
    available-for-sale
(c) Includes $5 million of net interests costs attributable to the
    GSS acquisition financing
(d) Includes ($.03) impact due to changes in shares outstanding
    attributable to the acquisition
(e) Taxable-equivalent adjustment is not included in reported
    results
(f) Reflects the settlement of the previously announced Massachusetts
    tax legislation issue ($13 million tax benefit) as well as the
    tax benefit related to the valuation reserve and restructuring,
    merger and integration costs
(g) Includes amortization of intangibles expense of $7 millionSTATE STREET CORPORATION
                Addendum Selected Financial Information

III. INCOME STATEMENT INFORMATION

                          Reconciliation of Financial Results

                                (Dollars in millions)
                            Six Months Ended June 30, 2003


                 Baseline    GSS        Operating            Reported
                 Results   Results(a,d)  Results   Other      Results
Fee Revenue
Servicing fees     $770$150$920      $          $920
Management fees     247        8           255                  255
Global securities
 lending            102       29           131                  131
Foreign exchange
 trading            160       15           175                  175
Brokerage fees       57                     57                   57
Processing fees
 and other           99       47           146    (13)(b)       133
Total fee revenue 1,435      249         1,684    (13)(b)     1,671

Net Interest
 Revenue            430       (7)(c)       423    (26)(e)       397
Provision for
 loan losses
Net interest
 revenue after
 provision for
 loan losses        430       (7)(c)       423    (26)(e)       397
(taxable-
 equivalent
 basis)

Gains on the
 sales of
 available-for-
 sale investment
 securities, net     34                     34                   34
Total Revenue     1,899      242         2,141    (39)        2,102

Operating Expenses
Salaries and
 employee benefits  799       88           887                  887
Information
 systems and
 communications     200       70           270                  270
Transaction
 processing
 services           128       23           151                  151
Occupancy           129       18           147                  147
Merger and
 integration costs                                 55            55
Restructuring                                     292           292
Other               138       33(g)        171                  171
Total operating
 expenses         1,394      232         1,626    347         1,973
Income before
 income taxes       505       10           515   (386)          129
Income taxes        167        3           170   (114) (f)       56
Taxable-equivalent
 adjustment          26                     26    (26)(e)
Net Income         $312$7$319  $(246)          $73

Earnings Per
 Share             $.98    $(.02)(d)      $.96  $(.74)         $.22

Average Diluted
 Shares (in
 thousands)     318,972   14,067       333,039              333,039

Return on equity   12.4%                  12.7%                 7.2%

Notes:
Reported results agree with the Corporation's Consolidated
Statement of Income.

(a) Includes $5 million of revenue and $7 million of expenses
    related to out-of-scope client relationships
(b) Represents a valuation reserve on certain assets classified as
    available-for-sale
(c) Includes $10 million of net interests costs attributable to
    the GSS acquisition financing
(d) Includes ($.05) impact due to changes in shares outstanding
    attributable to the acquisition
(e) Taxable-equivalent adjustment is not included in reported
    results
(f) Reflects the impact of a certain Massachusetts tax legislation
    issue ($12 million tax expense) as well as the tax benefit related
    to the valuation reserve and restructuring, merger and
    integration costs
(g) Includes amortization of intangibles expense of $12 millionSTATE STREET CORPORATION
                Addendum Selected Financial Information

IV. INCOME STATEMENT INFORMATION - BASELINE YEAR OVER YEAR

Baseline results are reported results excluding GSS contribution,
restructuring, merger and integration costs, valuation reserves, tax
legislation impact and results of a divested business and are
presented on a taxable-equivalent basis.


                     For the Quarter Ended   For the Six Months Ended
                            June 30,                  June 30,

(Dollars in millions,
 except per
 share data)        2003   2002(a)  % Change  2003   2002(a)  % Change

Fee Revenue
Servicing fees      $390$365       7 %   $770$714        8 %
Management fees      125      129      (3)     247      253       (2)
Global securities
 lending              57       68     (16)     102      132      (23)
Foreign exchange
 trading              93       92       1      160      160
Brokerage fees        27       31     (14)      57       54        4
Processing fees
 and other            49       40      18       99       88       11
     Total fee
      revenue        741      725       2    1,435    1,401        2

Net Interest
 Revenue             209      261              430      554
Provision for loan
 losses                         1                        2
Net interest
 revenue after
 provision for
 loan losses         209      260     (20)     430      552      (22)
(taxable-
 equivalent basis)

Gains on the sales
 of available-for-
 sale investment
 securities, net       8       10     (23)      34       14
     Total Revenue   958      995      (4)   1,899    1,967       (3)

Operating Expenses
Salaries and
 employee benefits   391      415      (6)     799      828       (4)
Information
 systems and
 communications      100       90      10      200      184        8
Transaction
 processing
 services             63       58      10      128      116       11
Occupancy             65       59      10      129      118       10
Other                 70       82     (15)     138      158      (13)
     Total operating
      expenses       689      704      (2)   1,394    1,404       (1)
     Income before
      income taxes   269      291      (8)     505      563      (10)
Income taxes          89       91              167      176
Taxable-equivalent
 adjustment           13       15               26       30
     Net Income     $167$185      (9)    $312$357      (13)

Diluted Earnings
 Per Share          $.52     $.56      (7)    $.98    $1.08       (9)

(a) Reflects restatement of originally issued financial results to
    exclude the results of operations of the divested Corporate Trust
    activities and the reclassification of certain restructuring
    costs now shown as a component of reported results rather than
    baseline results


                       STATE STREET CORPORATION
                Addendum Selected Financial Information

IV. INCOME STATEMENT INFORMATION - OPERATING

Operating results are reported results excluding significant
charges, restructuring, merger and integration costs and results of a
divested business and are presented on a taxable-equivalent basis.


                    For the Quarter Ended    For the Six Months Ended
                           June 30,                  June 30,

(Dollars in millions,
 except per
 share data)        2003   2002(a) % Change   2003   2002(a)  % Change

Fee Revenue
Servicing fees      $482$365      32 %    $920$714        29 %
Management fees      130     129       1       255     253         1
Global securities
 lending              76      68      12       131     132
Foreign exchange
 trading             103      92      13       175     160        10
Brokerage fees        27      31     (14)       57      54         4
Processing fees and
 other                76      40      90       146      88        65
     Total fee
      revenue        894     725      23     1,684   1,401        20

Net Interest
 Revenue             206     261               423     554
Provision for loan
 losses                        1                         2
Net interest
 revenue after
 provision for loan
 losses              206     260     (21)      423     552       (23)
(taxable-equivalent
 basis)

Gains on the sales
 of available-for-
 sale investment
 securities, net       8      10     (23)       34      14
     Total Revenue 1,108     995      11     2,141   1,967         9

Operating Expenses
Salaries and
 employee benefits   444     415       7       887     828         7
Information systems
 and communications  140      90      55       270     184        46
Transaction
 processing
 services             79      58      37       151     116        31
Occupancy             76      59      29       147     118        25
Other                 90      82      10       171     158         8
     Total operating
      expenses       829     704      18     1,626   1,404        16
     Income before
      income taxes   279     291      (4)      515     563        (9)
Income taxes          92      91               170     176
Taxable-equivalent
 adjustment           13      15                26      30
     Net Income     $174$185      (6)     $319$357       (11)

 Diluted Earnings
  Per Share         $.52    $.56      (7)     $.96   $1.08       (11)

(a) Reflects restatement of originally issued financial results to
    exclude the results of operations of the divested Corporate Trust
    activities and the reclassification of certain restructuring
    costs now shown as a component of reported results rather than
    operating results

                       STATE STREET CORPORATION
             Addendum Consolidated Statement of Condition


                                    June 30,   December 31,   June 30,
(Dollars in millions)                 2003         2002         2002

Assets
Cash and due from banks             $ 5,580$ 1,361$ 1,960
Interest-bearing deposits
 with banks                          22,198       28,143       25,602
Securities purchased under
 resale agreements
 and securities borrowed             10,657       17,215       17,771
Federal funds sold                    1,050                     2,550
Trading account assets                  444          984          872
Investment securities                29,704       28,071       20,016
Loans (less allowance of
 $61, $61 and $63)                    5,957        4,113        5,368
Premises and equipment                1,015          887          863
Accrued income receivable               942          823          853
Goodwill                              1,213          462          477
Other intangible assets                 495          127          139
Other assets                          3,847        3,608        3,857
Total Assets                        $83,102$85,794$80,328

Liabilities
Deposits:
Noninterest-bearing                 $11,491$ 7,279$10,031
Interest-bearing -- U.S.              6,411        9,005        8,657
Interest-bearing -- Non-U.S.         30,454       29,184       28,284
Total Deposits                       48,356       45,468       46,972

Securities sold under repurchase
 agreements                          19,891       21,963       20,122
Federal funds purchased               1,153        3,895        1,972
Other short-term borrowings           2,035        3,440        1,131
Accrued taxes and other expenses      2,238        1,967        1,649
Other liabilities                     2,668        3,004        3,023
Long-term debt                        1,676        1,270        1,272
Total Liabilities                    78,017       81,007       76,141

Stockholders' Equity
Preferred stock, no par:
 authorized 3,500,000; issued none
Common stock, $1 par: authorized
 500,000,000; issued 337,135,000,
 329,992,000 and 329,994,000            337          330          330
Surplus                                 336          104          103
Retained earnings                     4,455        4,472        3,893
Accumulated other comprehensive
  income                                146          106          117
Treasury stock at cost (4,268,000,
 5,065,000 and 5,949,000 shares)       (189)        (225)        (256)
Total Stockholders' Equity            5,085        4,787        4,187
Total Liabilities and
 Stockholders' Equity               $83,102$85,794$80,328
    CONTACT: State Street Corporation
             Edward J. Resch, 617-664-1110
             or
             Investors:
             Kelley MacDonald, 617-664-3477
             or
             Media:
             Hannah Grove, 617-664-3377

    SOURCE: State Street Corporation