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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                               ------------------------------
                                  FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 19931994         COMMISSION FILE NO. 0-5108
                       STATE STREET BOSTON CORPORATION

            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           MASSACHUSETTS                                       04-2456637


    (STATE OR OTHER JURISDICTION                             (I.R.S. EMPLOYER
          OF INCORPORATION)                                 IDENTIFICATION NO.)

         225 FRANKLIN STREET
        BOSTON, MASSACHUSETTS                                      02110

        (ADDRESS OF PRINCIPAL                                   (ZIP CODE)
          EXECUTIVE OFFICE)

                                 617-786-3000
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
                               ------------------------------

         SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  NONE
            SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                          COMMON STOCK, $1 PAR VALUE
                               (TITLE OF CLASS)
       --------------SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
                               ----------------

     INDICATE  BY CHECK MARK  WHETHER THE  REGISTRANT  (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF
1934  DURING  THE  PRECEDING  12 MONTHS  (OR FOR SUCH  SHORTER  PERIOD  THAT THE
REGISTRANT  WAS REQUIRED TO FILE SUCH  REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X]   NO [][ ]


     INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT  FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S  KNOWLEDGE,  IN DEFINITIVE PROXY OR INFORMATION  STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [ ]

     THE AGGREGATE  MARKET VALUE OF THE  REGISTRANT'S  COMMON STOCK HELD BY NON-AFFILIATESNON-
AFFILIATES  (PERSONS  OTHER  THAN  DIRECTORS  AND  EXECUTIVE  OFFICERS)  OF  THE
REGISTRANT ON FEBRUARY 28, 19941995 WAS $2,835,150,000.$2,610,805,000.

     THE  NUMBER OF SHARES  OF THE  REGISTRANT'S  COMMON  STOCK  OUTSTANDING  ON
FEBRUARY 28, 19941995 WAS 76,111,410.82,578,160.

     PORTIONS OF THE FOLLOWING DOCUMENTS ARE INCORPORATED INTO THE PARTS OF THIS
REPORT ON FORM 10-K INDICATED BELOW:

     (1) ANNUAL  REPORT TO  STOCKHOLDERS  FOR THE YEAR ENDED  DECEMBER  31, 19931994
(PARTS I AND II) AND

     (2) THE REGISTRANT'S  DEFINITIVE PROXY STATEMENT DATED MARCH 15, 199414, 1995 (PART
III)
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                                    PART I

ITEM 1.  BUSINESS

THE CORPORATIONGENERAL DEVELOPMENT OF BUSINESS
     State Street Boston Corporation  ("State Street") is a bank holding company
organized under the laws of the Commonwealth of Massachusetts.

     State Street was  organized  in 1970 and conducts its business  principally
through its  subsidiary,  State  Street Bank and Trust  Company  ("State  Street
Bank"),  which traces its  beginnings to the founding of the Union Bank in 1792.
The charter  under which State  Street Bank now  operates  was  authorized  by a
special act of the  Massachusetts  Legislature in 1891, and its present name was
adopted in 1960.

     State Street is the fourth largest provider of trust services in the United
States as ranked on the basis of 19921993 fiduciary  compensation.  The major
services contributing to fiduciary compensation are portfolio accounting,
securities custody and other related services for mutual funds/collective
investment funds; portfolio accounting, securities custody and other related
services for retirement and other financial assets of corporations, public
funds, endowments, foundations, and nuclear decommissioning trusts; investment
management for institutions through State Street Global Advisors; personal
trust; services for defined contribution plans;had
more than $1.6  trillion of assets  under  custody,  $210 billion of bonds under
trusteeship,  and corporate trust.$160  billion of assets  under  management  at year- end 1994.
Ranked on the basis of balance  sheet assets as of December 1992,June 1994,  State Street Bank
is the 28th23rd largest  commercial bank in the United States.  State Street's total
assets were $18.7$21.7 billion at December 31, 1993,1994, of which $13.5$16.0 billion,  or 72%74%,
were  investment  securities  and money market assets and $2.6$3.2 billion,  or 14%15%,
were loans. State Street had $1.6 trillion of
assets under custody, $201 billion of bonds under trusteeship, and $142
billion of assets under management at year-end 1993.

     Services are provided  from offices in the United  States,  as well as from
offices  in Canada,  Grand  Cayman,  Netherland  Antilles,  the United  Kingdom,
France, Belgium, Luxembourg,  Denmark, Germany, United Arab Emirates, Hong Kong,
Taiwan, Japan, Australia,  and New Zealand. State Street's executive offices are
located at 225 Franklin  Street,  Boston,  Massachusetts.  BUSINESSFor information as to
foreign activities, refer to Note T to the Notes to Financial Statements.

LINES OF THE CORPORATIONBUSINESS
     State  Street  has  two principalthree  lines of  business,business:  financial  asset  services,
investment  management and commercial  lending.  In 1994, 72% of net income came
from the broad and growing array of financial asset services,  16% of net income
came from investment management and 18% came from commercial lending.  Corporate
items reduced net income by 6%.

    FINANCIAL ASSET SERVICES
     Financial  asset  services  is comprisedare  primarily  accounting,  custody  and other
services for large pools of the business components that
service and manage financial assets worldwide. These include services forsuch as mutual funds and pension plans,  both
defined benefit and defined  contribution;contribution,  and corporate  trusteeship; and management of institutional financial assets and
personal trust.trusteeship.  A broad
array of bankingother services is provided, including accounting,  recordkeeping, custody, of securities, information
services and  recordkeeping; taking short-term customer funds onto State Street's balance
sheet; investment management;recordkeeping.  Also  provided are banking  functions of accepting
deposits, making loans and trading foreign exchange trading; and cash management.
    State Street began providingexchange.

     With $675 billion of mutual fund services in 1924, and now has
$683 billion of the mutual fund industry's assets under custody.custody,  State Street is the
leading  mutual  fund  custodian  in the  United  States,  servicing  37%36% of the
registered funds.  State Street began providing mutual fund services in 1924 and
servicing  pension assets in 1974.  Customers who sponsor the 1,9482,200 U.S.  mutual
funds that State Street services include investment companies,  broker/dealers,
insurance companies and others. In addition,  State Street services 192252 offshore
mutual funds and collective investment funds registered outside of the United States.in other countries.

     State  Street's  mutual  fund  services  include domestica full  array of  services
including  custody,  portfolio  and global custody
services, which incorporates safekeeping portfolio assets, settling trades,
collecting and accounting for income, monitoring corporate actions and
reporting investable cash. State Street also offers portfolio accounting,
pricing, general  ledger  accounting,  pricing,  fund
administration  and  otherinformation  services.  Shareholder  accounting is provided
through a 50%-owned affiliate.

     State Street began servicingServicing  $664  billion of  pension  assets in 1974. Servicing $574
billion ofand other  assets for North  American
customers,  itState Street is currently ranked as the largest servicer of tax exempttax-exempt  assets
for  corporations  and public funds in the United States. Financial assetStates and the largest  global
custodian  for U.S.  pension  assets.  Services  include  portfolio  accounting,
securities custody, securitieslending, and other related services are also provided for portfoliosretirement
and other  financial  assets  of  benefit  pension  plans,  unions,  endowments,
foundations,  and nuclear  decommissioning  trusts.  In  addition,  State Street
provides  global and  domestic  custody-related  services  for $66$72.2  billion in
assets for customers outside North America.
    In the late 1970s, State Street began managing assets for institutions and
was a pioneer in the development of domestic and international index funds.
The products now offered also include enhanced and fully active equity
strategies, short-term investment funds and fixed income. These products are
sold domestically and from nine locations outside the United States. At year-
end 1993, institutional assets managed were $136 billion. State Street is
ranked as the largest manager of internationally-indexed assets and the third
largest manager of tax-exempt money in the United States.
    State Street is a leading New England trustee and money manager for
individuals, and provides planned gift management services for non-profit
organizations throughout the United States.

     State Street acts as  participant  recordkeeper,  securities  custodian and
trustee for defined  contribution  plans,  such as 401(k)  plans and ESOPs,  and
issues checks for employee benefit  distributions.  Corporate trust services for
asset-backed securities,  corporate securities,  leveraged leases, and municipal
securities are provided to investment banks,  corporations,  municipalities  and
government  agencies from five offices in the United States. At year ended 1993,1994,
bonds under trusteeship totaled $201$210 billion.

     State Street acts asis a mortgage  subservicer  through Wendover Funding,  Inc. in
Greensboro,  North  Carolina.  State Street also provides card  replacement  and
other services for a bank card association,  processing of unclaimed  securities
for state governments,  and accounting  services for retained assetassets accounts of
insurance companies and clearing services for correspondent banks.companies.

     State Street provides  foreign  exchange trading and global cash management
and
trading of securitiesservices to financial  institutions and corporations.  Funds are gathered in the
form of domestic and foreign  deposits,  federal funds and securities sold under
repurchase  agreements from local, national and international  sources.  Trading
and arbitrage operations are conducted with government  securities,  futures and
options.   Municipal  dealer  activities  include   underwriting,   trading  and
distribution of general obligation  tax-
exempttax-exempt bonds and notes. Treasury centers
are located in Boston,  London, Hong Kong, Tokyo, Sydney, Munich and Sydney.Luxembourg.
State  Street  also  provides  corporate  finance  services,  including  private
placement of debt and equity, acquisitions and divestitures and project finance.

    INVESTMENT MANAGEMENT
     State Street was a pioneer in the development of domestic and international
index funds  through  State Street Global  Advisors  ("SSGA").  The products now
offered by SSGA  include  enhanced  index and  fully-active  equity  strategies,
short-term  investment funds and fixed income products.  These products are sold
and managed both  domestically  and from  locations  outside the United  States.
State Street is ranked as the largest manager of internationally-indexed  assets
and the second largest manager of tax-exempt  money in the United States.  State
Street is a leading New England trustee and money manager for  individuals,  and
provides   planned  gift  management   services  for  non-profit   organizations
throughout the United States. At year-end 1994, institutional and personal trust
assets under management totaled $160 billion.

    COMMERCIAL LENDING
     State  Street  provides   corporate   banking,   specialized   lending  and
international banking to businessesbusiness and financial  institutions.  The corporateOne-third of the
loan  portfolio  supports  the  short-term  needs of  financial  asset  services
customers  and  securities   brokers  in  conjunction  with  their  trading  and
settlement activity.  Corporate banking services are offered primarily to New England middle
market  companies.companies in the  Northeast.  Specialized  lendingLending is both  regional and
national,  with specialtiesspecialities  that include communications,cable  television,  technology- based
companies,  publishing, law firms, non-profit institutions,  broker/dealers and
other  financial  institutions.  In addition,  State Street  offers  asset-based
finance, leasing, real estate, and trade finance. Trade finance includes letters
of credit, collection,  payment and other specialized services for importers and
exporters. Dollar clearing and other correspondent banking services are
provided through an Edge Act subsidiary in New York City.

SELECTED STATISTICAL INFORMATION
     The  following  tables  contain  State  Street's  consolidated  statistical
information   relating  to,  and  should  be  read  in  conjunction   with,  the
consolidated  financial  statements.  Additionally,  certain previously reported
amounts have been reclassified to conform to the present method of presentation.



DISTRIBUTION OF AVERAGE ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
     The average  statements of condition and net interest  revenue analysis for
the years indicated are presented below.
1994 1993 1992 1991 --------------------------------- -------------------------------- ---------------------------------------------------------------- ---------------------------------- ---------------------------------- AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE ------- -------- ----------- ------- -------- ----------- ------- -------- ----------- (DOLLARS IN THOUSANDS) ASSETS Interest-bearing deposits with banks(1)banks............ $ 5,182,074 $209,246 4.04% $ 5,021,752 $201,453 4.01% $ 5,101,515 $257,615 5.05% $ 3,646,161 $261,992 7.19% Securities purchased under resale agreements .......and securities borrowed ............ 3,079,357 131,156 4.26 3,255,014 102,338 3.14 2,602,740 97,570 3.75 912,519 51,408 5.63 Federal funds sold ............ 301,121 12,929 4.29 413,601 12,642 3.06 330,019 11,579 3.51 305,391 17,793 5.83 Trading account assets ....479,962 24,289 5.06 369,050 15,551 4.21 226,290 10,081 4.45 151,840 11,850 7.80 Investment securities: U.S. Treasury and Federal agencies ................ 3,286,660 177,790 5.41 2,076,758 119,495 5.75 1,703,026 115,745 6.80 1,416,754 115,599 8.16 State and political subdivisions ...... 1,088,116 55,346 5.09 682,856 37,823 5.54 375,972 28,998 7.72 378,431 34,424 9.09 Other investments .......... 2,365,200 127,844 5.41 1,826,568 97,383 5.33 1,443,628 87,963 6.09 1,212,333 100,850 8.32 Loans(2)Loans: Domestic ............................ 2,728,849 145,609 5.34 2,261,915 113,272 5.01 1,952,638 111,329 5.70 2,019,915 156,163 7.73 Foreign .............................. 672,509 44,091 6.56 314,122 19,137 6.09 117,707 7,156 6.08 87,473 6,502 7.43 ----------- -------- ----------- -------- ----------- -------------------- --------- ------------ --------- ------------ --------- Total interest- earning assets ................ 19,183,848 928,300 4.84 16,221,636 719,094 4.43 13,853,535 728,036 5.26 10,130,817 756,581 7.47 -------- -------- ----------------- --------- --------- Cash and due from banks ...1,195,275 911,082 818,991 774,715 Allowance for loan losses ............... (58,089) (57,522) (66,767) (63,550) Premises and equipment ....462,005 435,475 358,895 268,902 Customers' acceptance liability(3)liability ............... 29,580 33,363 51,745 60,562 Other assets ........................ 1,089,909 625,133 485,720 402,961 ----------- ----------- ----------------------- ------------ ------------ Total Assets ........ $21,902,528 $18,169,167 $15,502,119 $11,574,407 ----------- ----------- ----------- ----------- ----------- -----------============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing deposits: Savings .............................. $ 1,873,656 54,902 2.93 $ 2,166,996 52,175 2.41 $ 2,153,699 67,967 3.16 $ 1,818,398 94,936 5.22 Time .................................... 118,855 4,184 3.52 157,481 4,531 2.88 162,464 6,265 3.86 306,789 18,417 6.00 Foreign .............................. 7,391,751 215,840 2.92 4,953,696 146,051 2.95 3,954,528 174,615 4.42 2,648,345 173,396 6.55 Federal funds purchased ...410,784 16,019 3.90 741,082 21,023 2.84 919,109 30,818 3.35 837,006 45,878 5.48 Securities sold under repurchase agreements ........................ 4,927,445 200,939 4.08 4,133,726 119,300 2.89 3,290,196 112,407 3.42 1,765,768 89,778 5.08 Other short-term borrowings .......... 563,221 24,777 4.40 215,948 8,156 3.78 193,927 8,281 4.27 155,810 8,235 5.29 Notes payable ...................... 258,252 11,979 4.64 510,719 19,943 3.90 388,513 18,400 4.74 234,331 20,353 8.69 Long-term debt .................... 128,130 8,625 6.73 122,403 10,023 8.19 146,394 13,327 9.10 146,407 13,238 9.04 ----------- -------- ----------- -------- ----------- -------------------- --------- ------------ --------- ------------ --------- Total interest- bearing liabilities .......15,672,094 537,265 3.43 13,002,051 381,202 2.93 11,208,830 432,080 3.85 7,912,854 464,231 5.87 -------- ---- -------- ---- -------- ------------- ----- --------- ----- --------- ----- Noninterest-bearing deposits .............................. 4,154,436 3,622,849 2,952,363 2,460,175 Acceptances outstanding(3)outstanding (3) ................. 30,098 33,956 52,423 61,150 Other liabilities .............. 863,425 477,640 401,953 367,295 Stockholders' equity ........ 1,182,475 1,032,671 886,550 772,933 ----------- ----------- ----------------------- ------------ ------------ Total Liabilities and Stockholders' Equity ............ $21,902,528 $18,169,167 $15,502,119 $11,574,407 ----------- ----------- ----------- ----------- ----------- -----------============ ============ ============ Net interest revenue $391,035 $337,892 $295,956 $292,350 -------- -------- -------- -------- -------- --------========= ========= ========= Excess of rate earned over rate paid ............. 1.41% 1.50% 1.41% 1.60% ---- ---- ---- ---- ---- ----===== ===== ===== Net Interest Margin(4)Margin 2.04% 2.08% 2.14% 2.89% ---- ---- ---- ---- ---- ----===== ===== ===== ---------- - --------- (1) Amounts reported were with non-U.S. domiciled offices of other banks. (2) Non-accrual loans are included in the average loan amounts outstanding. (3) In 1994, 1993 and 1992, 43%, 13% and 1991, 13%, 9% and 5% of acceptances were foreign. (4) Net interest margin is taxable equivalent net interest revenue divided by total average interest-earning assets.
Interest revenue on non-taxable investment securities and loans includes the effect of taxable equivalenttaxable-equivalent adjustments, using a Federal income tax rate of 35% in 1994 and 1993, and 34% in 1992, and 1991, adjusted for applicable state income taxes net of the related Federal tax benefit. DISTRIBUTION OF AVERAGE ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL (CONTINUED) The table below summarizes changes in interest revenue and interest expense due to changes in volume of interest-earning assets and interest- bearing liabilities, and changes in interest rates. Changes attributed to both volume and rate have been allocated based on the proportion of change in each category.
1994 COMPARED TO 1993 1993 COMPARED TO 1992 1992 COMPARED TO 1991--------------------------------------------- --------------------------------------------- INCREASE (DECREASE) INCREASE (DECREASE) DUE TO NET DUE TO NET ------------------------------------------------------ INCREASE ----------------------------------------------------- INCREASE VOLUME RATE (DECREASE) VOLUME RATE (DECREASE) ------ ---- ---------- ------ ---- ---------- (DOLLARS IN THOUSANDS) Interest revenue related to: Interest-bearing deposits with banks ............................. $ 6,465 $ 1,327 $ 7,792 $ (3,971) $ (52,191) $ (56,162) $ 86,856 $ (91,234) $ (4,378) Securities purchased under resale agreements .......and securities borrowed ...... (5,778) 34,596 28,818 22,047 (17,279) 4,768 68,142 (21,979) 46,163 Federal funds sold ................. (3,994) 4,281 287 2,684 (1,621) 1,063 1,338 (7,552) (6,214) Trading account assets ......... 5,237 3,501 8,738 6,044 (574) 5,470 4,488 (6,258) (1,770) Investment securities: U.S. Treasury and Federal agencies ................... 65,824 (7,529) 58,295 23,101 (19,351) 3,750 21,212 (21,067) 145 State and political subdivisions ................... 20,833 (3,310) 17,523 18,732 (9,907) 8,825 (223) (5,203) (5,426) Other investments ............. 29,132 1,504 30,461 21,349 (11,929) 9,420 17,079 (29,965) (12,886) Loans: Domestic ............................... 24,547 7,790 32,337 16,410 (14,467) 1,943 (5,051) (39,782) (44,833) Foreign ................................. 23,397 1,557 24,954 11,966 15 11,981 1,980 (1,327) 653 --------- --------- -------- -------- ---------------- ------- ------- ------- ------- ------- Total interest- earninginterest-earning assets ..................... 165,663 43,717 209,205 118,362 (127,304) (8,942) 195,821 (224,367) (28,546) --------- --------- -------- -------- --------- --------------- ------- ------- ------- ------- ------- Interest expense related to: Deposits: Savings................Savings ................ (7,646) 10,373 2,727 417 (16,209) (15,792) 15,290 (42,259) (26,969) Time ..................................... (1,240) 894 (346) (187) (1,547) (1,734) (6,898) (5,253) (12,151) Foreign ............................... 71,316 (1,187) 69,789 37,815 (66,379) (28,564) 68,813 (67,594) 1,219 Federal funds purchased ....... (11,265) 6,261 (5,004) (5,455) (4,341) (9,796) 4,150 (19,211) (15,061) Securities sold under repurchase agreements ....... 25,929 55,611 81,639 26,045 (19,151) 6,894 59,200 (36,572) 22,628 Other short-term borrowings 15,083 1,538 16,621 886 (1,012) (126) 1,798 (1,752) 46 Notes payable ........................... (11,192) 3,228 (7,964) 5,138 (3,595) 1,543 9,799 (11,752) (1,953) Long-term debt ......................... 452 (1,850) (1,398) (2,048) (1,255) (3,303) (1) 90 89 -------- --------- -------- -------- --------- --------------- ------- ------- ------- ------- ------- Total interest-bearing liabilities ..................... 81,437 74,868 156,064 62,611 (113,489) (50,878) 152,151 (184,303) (32,152) -------- --------- -------- -------- --------- --------------- ------- ------- ------- ------- ------- Net Interest Revenue ..... $ 84,226 $(31,151) $ 53,141 $ 55,751 $ (13,815) $ 41,936 $ 43,670 $ (40,064) $ 3,606 -------- --------- -------- -------- --------- -------- -------- --------- -------- -------- --------- --------======= ======= ======= ======= ======= =======
RETURN ON EQUITY AND ASSETS AND CAPITAL RATIOS The return on equity, return on assets, dividend payout ratio, equity to assets ratio and capital ratios for the years ended December 31, were as follows: 1994 1993 1992 1991 ---- ---- ---- Net income to: Average stockholders' equity ...................... 17.5% 17.4% 18.1% 18.0% Average total assets .................. .95 .99 1.03 1.20 Dividends declared to net income ...................... 22.1 21.9 20.8 20.4 Average equity to average assets ...................... 5.4 5.7 5.7 6.7 Risk-based capital ratios: Tier 1 capital .............................. 12.8 12.1 13.2 14.1 Total capital ................................ 13.4 12.7 14.6 16.4 INVESTMENT PORTFOLIO During the fourth quarter of 1992 State Street classified a portionadopted Statement of its investmentFinancial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities," on January 1, 1994. Under SFAS No. 115, debt securities portfolio as being available for sale. This reflectswhich State Street has the intent and ability to hold these securities for an indefinite period of time, not necessarily until final maturity. Securitiesto maturity may be classified as available for saleheld-to- maturity securities and reported at amortized cost. Securities that are carriednot classified as held to maturity are to be classified as available-for-sale securities and reported at the lower of amortized cost or market.fair value. Investment securities consisted of the following at December 31: 1994 1993 1992 1991 ------ ------- ---------- ---- ---- (DOLLARS IN MILLIONS) HELD FOR INVESTMENTTO MATURITY (at amortized cost) U.S. Treasury and Federal agencies ..................... $1,669 $1,272 $ 996 $1,583 State and political subdivisions ................... 1,130 1,084 451 382 Asset-backed securities ................. 2,347 2,028 1,618 1,150 Other investments ............................. 41 100 87 135 ------ ------ ----------- ----- ----- Total ................ 4,484 3,152 3,250........................... $5,187 $4,484 $3,152 ===== ===== ===== AVAILABLE FOR SALE (at fair value *) U.S. Treasuries ............ 1,122..................... $3,148 $1,122 $ 940 Other investments ............................. 79 95 ------ ----------- ----- ----- Total ................ 1,217........................... $3,227 $1,217 $ 940 ------ ------ ------ Total investment securities ......... $5,701 $4,092 $3,250 ------ ------ ------ ------ ------ ------===== ===== ===== * In 1993 and 1992, at lower of cost or market The maturities of investment securities at December 31, 19931994 and the weighted average yields (fully taxable equivalent basis) were as follows:
MATURING ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- AFTER ONE AFTER FIVE ONE YEAR BUT WITHIN BUT WITHIN AFTER OR LESS FIVE YEARS TEN YEARS TEN YEARS -------------------- ---------------------- ------------------- ------------------------------------------ ---------------------- ---------------------- AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD ------ ----- ------ ----- ------ ----- ------ ----- (DOLLARS IN MILLIONS) (DOLLARS IN MILLIONS) HELD FOR INVESTMENTTO MATURITY U.S. Treasury and Federal agencies ................... $ 636 5.14%715 5.51% $ 603 4.93%824 5.62% $ 11 4.92%68 6.08% $ 22 4.90% 701 4.50 309 6.22 71 6.87 3 9.7862 6.08% State and political subdivisions ...................... 549 6.54 406 5.91 159 4.91 17 9.21 Asset-backed securities ............ 1,141 4.88 766 4.79 112 4.75 9 4.72............. 1,315 5.91 864 5.95 105 5.97 62 5.97 Other investments .................. 72 3.89 16 6.73 2 4.91 10 7.53 ------ ------................... 37 2.32 3 6.06 1 5.00 ----- ----- ---- ---- Total ........................ 2,550 1,694 196 44........................... $2,616 $2,097 $333 $141 ===== ===== ==== ==== AVAILABLE FOR SALE U.S. Treasuries .................... 341 7.61 781 4.62Treasury ....................... $ 98 4.20% $3,051 5.83% Other investments .................. 48 6.56 47 6.61 ------ ------................... 55 5.89 23 6.74 ----- ----- Total ........................ 389 828 ------ ------ ---- ---- Total investment securities .. $2,939 $2,522 $196........................... $ 44 ------ ------ ---- ---- ------ ------ ---- ----153 $3,074 ===== =====
LOAN PORTFOLIO Domestic and foreign loans at December 31 and average loans outstanding for the years ended December 31, were as follows:
1994 1993 1992 1991 1990 1989 ---------- ---------- ---------- ----------- -------------- ---- ---- ---- ---- (DOLLARS IN THOUSANDS) Domestic: Commercial and financial .......... $2,070,145 $1,889,143 $1,519,037 $1,411,994 $1,539,069 $1,417,103 Real estate ....................... 100,549 94,073 105,156 128,376 173,530 247,072 Consumer ............................. 41,323 46,315 64,841 75,366 94,680 538,546 Lease financing ............... 341,640 254,525 251,761 211,350 199,392 196,293 ---------- ---------- ---------- ---------- ------------------------ -------------- -------------- -------------- -------------- Total domestic ........... 2,553,657 2,284,056 1,940,795 1,827,086 2,006,671 2,399,014 ---------- ---------- ---------- ---------- ------------------------ -------------- -------------- -------------- -------------- Foreign: Commercial and industrial ........510,638 295,716 50,838 67,622 55,500 48,857 Banks and other financial institutions ......52,597 25,940 8,838 7,495 38,141 14,728institutions ............... Government and official institutions ...... 1,000 1,000 1,000 1,000 1,000 institutions ............... Lease financing ............... 110,055 70,976 Other ................................... 5,274 2,486 2,242 2,112 3,762 1,423 ---------- ---------- ---------- ---------- ------------------------ -------------- -------------- -------------- -------------- Total foreign ............. 679,564 396,118 62,918 78,229 98,403 66,008 ---------- ---------- ---------- ---------- ------------------------ -------------- -------------- -------------- -------------- Total loans ................. $3,233,221 $2,680,174 $2,003,713 $1,905,315 $2,105,074 $2,465,022 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------============== ============== ============== ============== ============== Average loans outstanding .. $3,401,358 $2,576,037 $2,070,345 $2,107,388 $2,621,429 $2,467,473 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Selected loan maturities at December 31, 1993============== ============== ============== ============== ============== Selected loan maturities at December 31, 1994 were as follows:
AFTER ONE ONE YEAR BUT WITHIN AFTER OR LESS FIVE YEARS FIVE YEARS ------------------ ---------- ---------- (DOLLARS IN THOUSANDS) Commercial and financial ............................ $1,535,927 $251,609 $101,607.......................................... $1,659,317 $261,137 $149,691 Real estate ......................................... 40,098 49,960 4,015....................................................... 51,059 38,798 10,692 Foreign ............................................. 313,464 11,678 70,976
........................................................... 554,709 9,006 115,849 The following table shows the classification of the above loans due after one year according to sensitivity to changes in interest rates:
(DOLLARS IN THOUSANDS) Loans with predetermined interest rates .............................................. $201,013.................................... $235,114 Loans with floating or adjustable interest rates ..................................... 288,832 --------........................... 350,059 ------- Total ............................................................................ $489,845 -------- --------.................................................................. $585,173 ========
Loans are evaluated on an individual basis to determine the appropriateness of renewing each loan. State Street does not have a general rollover policy. Unearned revenue included in loans was $4,423,000$4,112,000 and $5,467,000$4,423,000 at December 31, 19931994 and 1992,1993, respectively. NON-ACCRUAL LOANS It is State Street's policy to place loans on a non-accrual basis when they become 60 days past due as to either principal or interest, or when in the opinion of management, full collection of principal or interest is unlikely. When the loan is placed on non-accrual, the accrual of interest is discontinued and previously recorded but unpaid interest is reversed and charged against current earnings. Past due loans are loans on which principal or interest payments are over 90 days delinquent, but where interest continues to be accrued. NON-ACCRUAL LOANS (CONTINUED) The following schedule discloses information concerning non-accrual and past due loans. NON-ACCRUAL LOANS (CONTINUED)loans:
DECEMBER 31 ------------------------------------------------------------------------------------------------------------------------------ 1994 1993 1992 1991 1990 1989 ------ ------ ------ ------ ----------------- ----------- ----------- ----------- ----------- (DOLLARS IN THOUSANDS) Non-accrual: Domestic ............................. $23,043 $26,804 $39,954 $39,620 $54,273 $19,090 Foreign .............................. 323 1,337 2,206 2,673 ------- ------- ------- ------- ------- Total non-accrual .................................. $23,043 $26,804 $40,277 $40,957 $56,479 $21,763 ------- ------- ------- ------- ------- ------- ------- ------- ------- -------======= ======= ======= ======= ======= Past due: Domestic ............................. $ 41 $ 86 $ 288 $ 44 $ 2,590 $ 1,507 Foreign .............................. 65 507 88 541 ------- ------- ------- ------- ------- Total past due ........................................ $ 41 $ 86 $ 353 $ 551 $ 2,678 $ 2,048 ------- ------- ------- ------- ------- ------- ------- ------- ------- -------======= ======= ======= ======= =======
The interest revenue for 19931994 which would have been recorded related to these non-accrual loans is $2,796,000$2,245,000 for domestic loans. The interest revenue that was recorded on these non-accrual loans was $812,000,$834,000, all of which relates to domestic loans. LoansA loan totaling $12,914,000 were$2,703,000 was restructured in 1993, are1994, is performing in accordance with theirits new terms and areis accruing at a market rate. ALLOWANCE FOR LOAN LOSSES The changes in the allowance for loan losses for the years ended December 31, were as follows:
1994 1993 1992 1991 1990 1989 ----- ----- ---- ----- ---------------- ----------- ----------- ----------- ----------- (DOLLARS IN THOUSANDS) Balance at beginning of year: Domestic ..................................................... $50,968 $56,987 $64,323 $49,007 $48,958 $48,906 Foreign ......................... 944 1,565 1,968 1,347 1,100 ------- ------- ------- ------- -------- Total allowance for loan losses .................. 57,931 65,888 50,975 50,305 50,006 ------- ------- ------- ------- ------- Provision (credit) for loan losses: Domestic ........................ 10,247 11,734 59,989 43,746 16,693 Foreign ......................... 1,073 467 23 1,915 2,727 ------- ------- ------- ------- ------- Total provision for loan losses .................. 11,320 12,201 60,012 45,661 19,420 ------- ------- ------- ------- ------- Loan charge-offs: Commercial and financial ........ 15,241 9,794 33,687 12,266 5,708 Real estate construction ........ 20 4,753 6,315 6,680 543 Real estate mortgage ............ 1,607 5,800 4,625 2,599 941 Consumer ........................ 1,416 1,811 2,273 25,197 13,627 Foreign ......................... 261 1,356 870 1,337 2,885 ------- ------- ------- ------- ------- Total loan charge-offs ...... 18,545 23,514 47,770 48,079 23,704 ------- ------- ------- ------- ------- Recoveries: Commercial and financial ........ 1,178 1,414 1,494 256 487 Real estate contruction ......... 73 259 4 9 Real estate mortgage ............ 206 488 52 Consumer ........................ 561 927 681 2,785 3,682 Foreign ......................... 187 268 444 43 405 ------- ------- ------- ------- ------- Total recoveries ............ 2,205 3,356 2,671 3,088 4,583 ------- ------- ------- ------- ------- Net loan charge-offs ........ 16,340 20,158 45,099 44,991 19,121 ------- ------- ------- ------- ------- Allowance of foreign subsidiary purchased ........................... 1,405 Balance at end of year: Domestic ........................ 50,968 56,987 64,323 49,007 48,958 Foreign ....................................................... 3,348 944 1,565 1,968 1,347 ------- ------- ------- ------- ------- Total allowance for loan losses .................. $54,316 $57,931 $65,888 $50,975 $50,305 ------- ------- ------- --------.... 54,316 57,931 65,888 50,975 50,305 ------- ------- ------- ------- ------- Provision (credit) for loan losses: Domestic ............................. 9,485 10,247 11,734 59,989 43,746 Foreign .............................. 2,084 1,073 467 23 1,915 ------- ------- ------- ------- ------- Total provision for loan losses .... 11,569 11,320 12,201 60,012 45,661 ------- ------- ------- ------- ------- Loan charge-offs: Commercial and financial ............. 10,189 15,241 9,794 33,687 12,266 Real estate construction ............. 20 4,753 6,315 6,680 Real estate mortgage ................. 1,607 5,800 4,625 2,599 Consumer ............................. 288 1,416 1,811 2,273 25,197 Foreign .............................. 261 1,356 870 1,337 ------- ------- ------- ------- ------- Total loan charge-offs ............. 10,477 18,545 23,514 47,770 48,079 ------- ------- ------- ------- ------- Recoveries: Commercial and financial ............. 1,818 1,178 1,414 1,494 256 Real estate construction ............. 90 73 259 4 Real estate mortgage ................. 125 206 488 52 Consumer ............................. 415 561 927 681 2,785 Foreign .............................. 328 187 268 444 43 ------- ------- ------- ------- ------- Total recoveries ................... 2,776 2,205 3,356 2,671 3,088 ------- ------- ------- ------- ------- Net loan charge-offs ............... 7,701 16,340 20,158 45,099 44,991 ------- ------- ------- ------- ------- Allowance of foreign subsidiary purchased 1,405 Balance at end of year: Domestic ............................. 52,424 50,968 56,987 64,323 49,007 Foreign .............................. 5,760 3,348 944 1,565 1,968 ------- ------- ------- ------- ------- Total allowance for loan losses .... $58,184 $54,316 $57,931 $65,888 $50,975 ======= ======= ======= ======= ======= Ratio of net charge-offs to average loans outstanding ....................................... .23% .63% .97% 2.14% 1.72% .77% --- --- ----- ----- ----- --- --- ----- ----- -----======= ======= ======= ======= =======
ALLOWANCE FOR LOAN LOSSES (CONTINUED) State Street establishes an allowance for loan losses to absorb probable credit losses. Management's review of the adequacy of the allowance for loan losses is ongoing throughout the year and is based, among other factors, on the evaluation of the level of risk in the portfolio, the volume of adversely classified loans, previous loss experience, current trends, and expected economic conditions and theirits effect on borrowers. While the allowance is established to absorb probable losses inherent in the total loan portfolio, management allocates the allowance for loan losses to specific loans, selected portfolio segments and certain off-balance sheet exposures and commitments. Adversely classified loans in excess of $1 million are individually reviewed to evaluate risk of loss and assigned a specific allocation of the allowance. The allocations are based on an assessment of potential risk of loss and include evaluations of the borrowers' financial strength, cash flows, collateral, appraisals and guarantees. The allocations to portfolio segments and off-balance sheet exposures are based on management's evaluation of relevant factors, including the current level of problem loans and current economic trends. These allocations are also based on subjective estimates and management judgment, and are subject to change from quarter-to-quarter. In addition, a portion of the allowance remains unallocated as a general reserve for the entire loan portfolio. The provision for loan losses is a charge to earnings for the current period which is required to maintain the total allowance at a level considered adequate in relation to the level of risk in the loan portfolio. The provision for loan losses was $11.3$11.6 million for 1993,1994, which compares to $12.2$11.3 million in 1992.1993. At December 31, 1993,1994, the allowance for loan losses was $54.3$58.2 million, or 2.03%1.80% of loans. This compares to an allowance of $57.9$54.3 million or 2.89%2.03% of loans a year ago. This decline reflects improvement in measures of credit quality and improvement in the outlook for general economic conditions and its affecteffect on borrowers. The decline in the allowance for loan losses as a percentage of loan volume is also attributable to the growth in loan exposures to financial asset services customers and securities brokers in conjunction with their trading and settlement activity. These loan exposures are generally short-term, usually overnight, and are structured to have relatively low credit exposure. CREDIT QUALITY At December 31, 1993,1994, loans comprised 14%15% of State Street's assets, compared to over 55% for other banking companies of comparable size. State Street's loan policies limit the size of individual loan exposures to reduce risk through diversification. In 1993,1994, net charge-offs declined from $20.1$16.3 million to $16.3$7.7 million. Net charge-offs as a percentage of average loans were .63%.23% compared to .97%.63% for 1992.1993. At December 31, 1993,1994, total non-performing assets were $37.9$27.4 million, a $14.9$10.5 million decrease from year-end 1992. Non-performing1993. For 1994 and 1993, respectively, non-performing assets include $23.0 million and $26.8 million of non-accrual loans and $4.4 million and $11.1 million of other real estate owned. In 1993,1994, loans placed on non-accrual status were more than offset by charge-offs, payments, and the return to accrual status of several loans. The decline in other real estate owned resulted from property sales. In 1993,1994, measures of credit quality improved, as discussed above, as did the general economic outlook. The economy in the Northeast began to expand modestly after several years of decline. We expect continued improvement inthese levels of credit quality to continue in 1994.in 1995. It is anticipated that charge-off's in 1995 will approximate the 1994 level and will be primarily in the commercial and financial category. CROSS-BORDER OUTSTANDINGS Countries with which State Street has cross-border outstandings (primarily deposits with banks and letters of credit)credit to banks and other financial institutions) of at least 1% of its total assets all of which were to banks and other financial institutions, at December 31, 1994, 1993 1992 and 1991,1992, were as follows:
1993 1992 1991 --------- --------- --------- (DOLLARS IN THOUSANDS) Japan ............................................... $1,688,130 $1,630,148 $1,316,383 United Kingdom ...................................... 613,515 524,352 517,720 France .............................................. 519,565 444,637 371,585 Australia ........................................... 498,671 174,652 Italy ............................................... 367,931 420,535 283,605 Germany ............................................. 339,477 371,657 209,166 Canada .............................................. 289,152 220,217 180,472 Netherlands ......................................... 224,622 Hong Kong ........................................... 206,443 Switzerland ......................................... 175,052 167,360 ---------- ---------- ---------- Total outstandings ............................ $4,747,506 $3,961,250 $3,046,291 ---------- ---------- ---------- ---------- ---------- ----------
1994 1993 1992 ----------- ----------- ----------- (DOLLARS IN THOUSANDS) Japan ................................. $1,708,021 $1,688,130 $1,630,148 United Kingdom ........................ 543,055 613,515 524,352 France ................................ 461,919 519,565 444,637 Australia ............................. 648,697 498,671 174,652 Italy ................................. 527,682 367,931 420,535 Germany ............................... 438,624 339,477 371,657 Canada ................................ 265,322 289,152 220,217 Netherlands ........................... 101,797 224,622 Hong Kong ............................. 206,443 Switzerland ........................... 175,052 ----------- ----------- ----------- Total outstandings ................ $4,695,117 $4,747,506 $3,961,250 =========== =========== =========== Aggregate of cross-border outstandings in countries having between .75% and 1% of total assets at December 31, 1994 was $176,988,000 (Switzerland); December 31, 1993 was $171,688,000 (Belgium); and at December 31, 1992 was $139,333,000 (Austria); and at December 31, 1991 was $136,792,000 (Sweden). At December 31, 19931994 there was $499,000$2,308,000 of cross-border risk with Mexico. DEPOSITS The average balance and rates paid on interest-bearing deposits for the years ended December 31, were as follows:
1994 1993 1992 1991 ---------------------- ----------------------- ---------------------------------------------- --------------------- AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE BALANCE RATE BALANCE RATE BALANCE RATE ------------ -------- ----------- ------- ---------- ------- ------- --------------- ----------- -------- (DOLLARS IN THOUSANDS) Domestic: Noninterest-bearing deposits ................deposits........... $4,092,884 $3,589,812 $2,920,939 $2,434,756 Savings deposits ..........deposits.... 1,873,656 2.93% 2,166,996 2.41% 2,153,699 3.16% 1,818,398 5.22% Time deposits .............deposits....... 118,855 3.52 157,481 2.88 162,464 3.86 306,789 6.00 ---------- ---------- ---------- Total domestic ........domestic.... $6,085,395 $5,914,289 $5,237,102 $4,559,943 ---------- ---------- ---------- ---------- ---------- ----------========== ========== ========== Foreign: Noninterest-bearing deposits ................deposits.......... $ 61,552 $ 33,037 $ 31,424 $ 25,419 Time deposits .............Interest-bearing... 7,391,751 2.92% 4,953,696 2.952.95% 3,954,528 4.42 2,648,345 6.554.42% ---------- ---------- ---------- Total foreign .........foreign.... $7,453,303 $4,986,733 $3,985,952 $2,673,764 ---------- ---------- ---------- ---------- ---------- ----------
Maturities of domestic certificates of deposit of $100,000 or more at December 31, 1993,========== ========== ========== Maturities of domestic certificates of deposit of $100,000 or more at December 31, 1994, were as follows:
(DOLLARS IN THOUSANDS) 3 months or less .......................................................... $62,947..................................... $79,992 3 to 6 months ............................................................. 8,058........................................ 4,651 6 to 12 months ............................................................ 3,063....................................... 3,452 Over 12 months ............................................................ 7,902 -------....................................... 2,416 ------ Total ............................................................... $81,970 ------- -------............................................ $90,511 =======
At December 31, 1993,1994, substantially all foreign time deposit liabilities were in amounts of $100,000 or more. Included in noninterest-bearing deposits were foreign deposits of $44,816,000, $28,519,000 $41,492,000 and $22,188,000$41,492,000 at December 31, 1994, 1993 1992 and 1991.1992. SHORT-TERM BORROWINGS The following table reflects the amounts outstanding and weighted average interest rates of the primary components of short-term borrowings as of and for the years ended: FEDERAL SECURITIES SOLD FUNDS UNDER REPURCHASE PURCHASED AGREEMENTS --------- ---------- (DOLLARS IN THOUSANDS) Balance as of December 31: 1993 ................................. $ 269,083 $2,972,928 1992 ................................. 623,670 2,751,416 1991 ................................. 587,985 3,821,035 Maximum outstanding at any month end: 1993 ................................. $1,081,811 $5,297,210 1992 ................................. 1,522,522 4,313,852 1991 ................................. 1,106,712 3,890,188 Average outstanding during the year: 1993 ................................. $ 741,082 $4,133,726 1992 ................................. 919,109 3,290,196 1991 ................................. 837,006 1,765,768 Weighted average interest rate at year end: 1993 ................................. 2.7% 2.7% 1992 ................................. 2.3 2.8 1991 ................................. 3.7 4.1 Weighted average interest rate during the year: 1993 ................................. 2.8 2.9 1992 .................................
FEDERAL SECURITIES SOLD FUNDS UNDER REPURCHASE PURCHASED AGREEMENTS --------- ---------------- (DOLLARS IN THOUSANDS) Balance as of December 31: 1994 ......................................................... $ 113,143 $4,798,261 1993 ......................................................... 269,083 2,972,928 1992 ......................................................... 623,670 2,751,416 Maximum outstanding at any month end: 1994 ......................................................... $ 745,443 $6,684,105 1993 ......................................................... 1,081,811 5,297,210 1992 ......................................................... 1,522,522 4,313,852 Average outstanding during the year: 1994 ......................................................... $ 410,784 $4,927,445 1993 ......................................................... 741,082 4,133,726 1992 ......................................................... 919,109 3,290,196 Weighted average interest rate at year end: 1994 ......................................................... 5.3% 4.9% 1993 ......................................................... 2.7 2.7 1992 ......................................................... 2.3 2.8 Weighted average interest rate during the year: 1994 ......................................................... 3.9% 4.1% 1993 ......................................................... 2.8 2.9 1992 ......................................................... 3.4 3.4 1991 ................................. 5.5 5.1
COMPETITION State Street is subject to competitionoperates in a highly competitive environment in all areas of its productsbusiness on a world wide basis, including servicing financial assets, investment management and markets worldwide.commercial lending. In addition to facing strong competition from other deposit taking institutions, State Street competes withfaces strong competition from investment management firms, private trustees, insurance companies, mutual funds, broker/dealers, investment banking firms, law firms, benefit consultants, and business service companies. As State Street expands globally, additional typessources of competition are encountered. EMPLOYEES At December 31, 1993,1994, State Street had 10,11711,127 employees, of whom 9,68410,766 were full-time. REGULATION AND SUPERVISION State Street is registered with the Board of Governors of the Federal Reserve System (the "Board") as a bank holding company pursuant to the Bank Holding Company Act of 1956, as amended (the "Act"). The Act, with certain exceptions, limits the activities that may be engaged in by State Street and its non-bank subsidiaries to those which are deemed by the Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. In making such determination, the Board must consider whether the performance of any such activity by a subsidiary of State Street can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest or unsound banking practices. The Board is authorized to differentiate between activities commenced de novo and those commenced by the acquisition in whole or in part of a going concern. The Board may order a bank holding company to terminate any activity or its ownership or control of a nonbank subsidiary if the Board finds that such activity or ownership or control constitutes a serious risk to the financial safety, soundness or stability of a subsidiary bank and is inconsistent with sound banking principles or statutory purposes. In the opinion of management, all of State Street's present subsidiaries are within the statutory standard or are otherwise permissible. The Act also requires a bank holding company to obtain prior approval of the Board before it may acquire substantially all the assets of any bank or ownership or control of more than 5% of the voting shares of any bank. TheUntil September 29, 1995, the Act prohibits a bank holding company from acquiring shares of a bank located outside the state in which the operations of the holding company's banking subsidiaries are principally conducted unless such an acquisition is specifically authorized by statute of the other state. On September 29, 1994, President Clinton signed into law the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate Act"). The Interstate Act generally authorizes bank holding companies to acquire banks located in any state commencing on September 29, 1995. In addition, it generally authorizes national and state chartered banks to merge across state lines (and thereby create interstate branches) commencing June 1, 1997. Under the provisions of the Interstate Act, states are permitted to "opt out" of this latter interstate branching authority by taking action prior to the commencement date. States may also "opt in" early (i.e., prior to June 1, 1997) to the interstate merger provisions. Further, the Interstate Act provides that states may act affirmatively to permit de novo branching by banking institutions across state lines. The Board has established risk-based capital guidelines that require minimum ratios of capital to risk-weighted assets and certain off-balance sheet credit exposure. The Board also maintains a leverage ratio guideline that is a measure of capital to total average balance sheet assets. Information on State Street's capital appears in State Street's 1994 Annual Report to Stockholders on page 34 and is incorporated by reference. State Street and its non-bank subsidiaries are affiliates of State Street Bank under the federal banking laws, which impose certain restrictions on transfers of funds in the form of loans, extensions of credit, investments or asset REGULATION AND SUPERVISION (CONTINUED) purchases by State Street Bank to State Street and its non-bank subsidiaries. Transfers of this kind to State Street and its non-bank subsidiaries by State Street Bank are limited to 10% of State Street Bank's capital and surplus with respect to each affiliate and to 20% in the aggregate, and are also subject to certain collateral requirements. A bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or lease or sale of property or furnishing of services. Federal law also provides that certain transactions with affiliates must be on terms and under circumstances, including credit standards that are substantially the same, or at least as favorable to the institution as those prevailing at the time for comparable transactions involving other non-qualified companies or, in the absence of comparable transactions, on terms and under circumstances, including credit standards, that in good faith would be offered to, or would apply to, nonaffiliated companies. The Board has jurisdiction to regulate the terms of certain debt issues of bank holding companies. State Street, State Street Bank and their affiliates are also subject to restrictions with respect to issuing, floating and underwriting, or publicly selling or distributing, securities in the United States. State Street and its affiliates are able to underwrite and deal in specific categories of securities, including U.S. government and certain agency, state, and municipal securities. Board policy requires a bank holding company to act as a source of financial strength for its subsidiary banks and to commit resources to support such banks. Under this policy, State Street may be required to commit resources to its subsidiary banks in circumstances where it might not do so absent such policy. In the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to a priority payment. The primary banking agency responsible for regulating State Street and its subsidiaries, including State Street Bank, for both domestic and international operations is the Federal Reserve Bank of Boston. State Street is also subject to the Massachusetts bank holding company statute. The Massachusetts statute requires prior approval by the Massachusetts Board of Bank Incorporation for the acquisition by State Street of more than 5% of the voting shares of any additional bank and for other forms of bank acquisitions. State Street's banking subsidiaries located in France, Japan and Luxembourg are also subject to regulationsupervision and examination by thevarious regulatory authorities of those countries. The capital of each of these banking subsidiaries is in excess of the minimum legal capital requirements as set by those authorities. State Street Bank is a member of the Federal Reserve System and the Federal Deposit Insurance Corporation (the "FDIC") and is subject to applicable federal and state banking laws and to supervision and examination by the Federal Reserve Bank of Boston, as well as by the Massachusetts Commissioner of Banks,the FDIC, and the regulatory authorities of those countries in which a branch of State Street Bank is located. In 1990, Massachusetts adopted a lawOther subsidiary banks are subject to supervision and examination by the Office of the Comptroller of the Currency or by the appropriate state banking regulatory authorities of the states in which permits Massachusettsthey are located. State Street's foreign banking institutionssubsidiaries are also subject to acquireregulation by the regulatory authorities of the countries in which they are located. The capital of each of these banking institutions locatedsubsidiaries is in other states based on a reciprocal basis.excess of the minimum legal capital requirements as set by those authorities. RECENT STATUTORY DEVELOPMENTS The Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") broadened the enforcement powers of the federal banking agencies, including increased power to impose fines and penalties, over all financial institutions, including bank holding companies and commercial banks. As a result of FIRREA, State Street Bank and any or all of its subsidiaries can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC after August 9, 1989, in connection with (a) the default of State Street Bank or any other subsidiary bank or (b) any assistance provided by the FDIC to State Street Bank or any other subsidiary bank in danger of default. In 1990, Massachusetts adopted a law which permits Massachusetts banking institutions to acquire banking institutions located in other states based on a reciprocal basis. The Crime Control Act of 1990 further broadened the enforcement powers of the federal banking agencies in a significant number of areas. The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") has as its primary objectives to recapitalize the Bank Insurance Fund ("BIF") and strengthen the regulation and supervision of financial institutions. During 1993,1994, the federal banking agencies continued the process of promulgating regulations to implement the statute. The "Prompt Corrective Action" provisions of the FDICIA are for the stated purpose: "to resolve the problems of insured depository institutions at the least possible long-term loss to the deposit insurance fund." Each federal banking agency has implemented prompt corrective action regulations for the institutions that it regulates. The statute requires or permits the agencies to take certain supervisory actions when an insured depository institution falls within one of five specifically enumerated capital categories. It also restricts or prohibits certain activities and requires the submission of a capital restoration plan when an insured institution becomes undercapitalized. The implementing regulations establish the numerical limits for the capital categories and establish procedures for issuing and contesting prompt corrective action directives. The five tiers of capital measurement range from "well capitalized" to "critically undercapitalized". To be within the category "well capitalized", an insured depository institution must have a total risk-basedrisk- based capital ratio of 10.0 percent or greater, a Tier 1 risk-based capital ratio of 6.0 percent or greater, and a leverage ratio of 5.0 percent or greater, and the institution must not be subject to an order, written agreement, capital directive, or prompt corrective action directive to meet specific capital requirements. An insured institution is "adequately capitalized" if it has a total risk-based capital ratio of 8.0 percent or greater, a Tier 1 risk-based capital ratio of 4.0 percent or greater, and a leverage ratio of 4.0 percent or greater (or a leverage ratio of 3.0 percent or greater if the institution is rated composite 1 under the regulatory rating system). The final three capital categories are levels of undercapitalized, which trigger mandatory statutory provisions. While other factors in addition to capital ratios determine an institution's capital category, State Street and State Street Bank eachBank's capital ratios were within the "well-capitalized" category at December 31, 1993. The FDICIA requires the FDIC to recapitalize the BIF within a prescribed time frame of 15 years and to adopt a risk-based deposit insurance assessment system. The FDIC adopted a BIF recapitalization schedule REGULATION AND SUPERVISION (CONTINUED) and a final rule establishing a permanent risk-based assessment system, which is based on definitions of capital categories consistent with the "Prompt Corrective Actions" provisions. The rule is effective with the assessment period starting on January 1, 1994. Depending on which of the nine capital and supervisory categories a bank falls in, deposit insurance premiums will continue to range from 23 cents per $100 of domestic deposits for well- capitalized, financially sound institutions to a maximum of 31 cents for the lowest category. The Federal Reserve Board adopted a final rule, as required by the FDICIA, prescribing standards that will limit the risks posed by an insured depository institution's exposure to any other depository institution. Banks are required to develop written policies and procedures to monitor credit exposure to other banks, and to limit to 50% and 25% of total capital exposure to "undercapitalized" banks in 19941995 and 1995,1996, respectively. As required by the FDICIA, the FDIC adopted a regulation that permits only well capitalized banks, and adequately capitalized banks that have received waivers from the FDIC, to accept, renew or rollover brokered deposits. Regulations have also been adopted by the FDIC to limit the activities conducted as a principal by, and the equity investments of, state-chartered banks to those permitted for national banks. Banks may apply to the FDIC for approval to continue to engage in excepted investments and activities. Other FDICIA regulations adopted require independent audits, an independent audit committee of the bank's board of directors, stricter truth- in-savings provisions, and standards for real estate lending. The FDICIA amended deposit insurance coverage and the FDIC has implemented a rule specifying the treatment of accounts to be insured up to $100,000. Under other provisions of FDICIA, the federal banking agencies have proposed safety and soundness standards for banks in a number of areas including: internal controls, internal audit systems, information systems, credit underwriting, interest rate risk, executive compensation and minimum earnings. The agencies have also proposed rules to revise risk-based capital standards to take account of interest rate risk, as required by FDICIA. It is anticipated that the FDICIA and related regulations willmay result in higher costs for the banking industry in terms of deposit insurance assessments and costs of compliance and recordkeeping. Legislation enacted as part of the Omnibus Budget Reconciliation Act of 1993 provides that deposits in U.S. offices and certain claims for administrative expenses and employee compensation against a U.S. insured depository institution which has failed will be afforded a priority over other general unsecured claims, including deposits in non-U.S. offices and claims under non-depository contracts in all offices, against such an institution in the "liquidation of other resolution" of such and institution by any receiver. Accordingly, such priority creditors (including FDIC, as the subrogee of insured depositors) of State Street Bank will be entitled to priority over unsecured creditors in the event of a "liquidation or other resolution" of such institution. DIVIDENDS As a bank holding company, State Street is a legal entity separate and distinct from State Street Bank and its other non-bank subsidiaries. State Street's principal source of cash revenues is dividends from State Street Bank and its other non-bank subsidiaries. The right of State Street to participate as a stockholder in any distribution of assets of a subsidiary upon its liquidation or reorganization or otherwise is subject to the prior claims by creditors of the subsidiary, including obligations for federal funds purchased and securities sold under repurchase agreements, as well as deposit liabilities. Payment of dividends by State Street Bank is subject to provisions of the Massachusetts banking law which provideprovides that dividends may be paid out of net profits provided (i) capital stock and surplus remain unimpaired, (ii) dividend and retirement fund requirements of any preferred stock have been met, (iii) surplus equals or exceeds capital stock, and (iv) there are deducted from net profits any losses and bad debts, as defined, in excess of reserves specifically established therefor. Under the Federal Reserve Act, the approval of the Board of Governors of the Federal Reserve System would be required if dividends declared by the Bank in any year would exceed the total of its net profits for that year combined with retained net profits for the preceding two years, less any required transfers to surplus. Under applicable federal and state law restrictions, at December 31, 19931994 State Street Bank could have declared and paid dividends of $366,454,000$426,554,000 without regulatory approval. Future dividend payments of the Bank and non-bank subsidiaries cannot be determined at this time. ECONOMIC CONDITIONS AND GOVERNMENT POLICIES Economic policies of the government and its agencies influence the operating environment of State Street. Monetary policy conducted by the Federal Reserve Board directly affects the level of interest rates and overall credit conditions of the economy. Policy instruments utilized by the Federal Reserve Board include open market operations in U.S. Government securities, changes in reserve requirements for depository institutions, and changes in the discount rate and availability of borrowing from the Federal Reserve. ITEM 2. PROPERTIES State Street's headquarters are located in the State Street Bank Building, a 34-story building at 225 Franklin Street, Boston, Massachusetts, which was completed in 1965. State Street leases approximately 415,000451,000 square feet (or approximately 45%49% of the space in this building) for a 30-year initial term with two successive extension options of 20 years each at rentals to be negotiated. State Street exercised the first of the two (2) options which will be effective on January 1, 1996 for a term of 20 years. State Street owns five buildings located in Quincy, Massachusetts, a suburb of Boston. Four of the buildings, containing a total of approximately 1,365,000 square feet, function as theState Street Bank's operations facilities. TheState Street Bank occupies approximately 1,275,0001,320,000 square feet and subleases the remaining space. The fifth building, with 186,000 square feet, is leased to Boston Financial Data Services, Inc., a 50% owned affiliate. Additionally, State Street owns a 98,000 square foot building in Westborough, Massachusetts for use as a second data center. The remaining offices and facilities of State Street and its subsidiaries are leased. As of December 31, 1993,1994, the aggregate mortgage and lease payments, net of sublease revenue, payable within one year amounted to $23,632,000,$29,066,000, plus assessments for real estate tax, cleaning and operating escalations. For additional information relating to premises, see Note E to the Notes to Financial Statements. ITEM 3. LEGAL PROCEEDINGS State Street is subject to pending and threatened legal actions that arise in the normal course of business. In the opinion of management, after discussion with counsel, these can be successfully defended or resolved without a material adverse effect on State Street's financial position or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 4.A. EXECUTIVE OFFICERS OF THE REGISTRANT The following table sets forth certain information with regard to each executive officer of State Street. As used herein, the term "executive officer" means an officer who performs policy-making functions for State Street.
NAME AGE POSITION - ---- --- -------- Marshall N. Carter ............................ 54....................................... 55 Chairman and Chief Executive Officer David A. Spina ................................ 51........................................... 52 Vice Chairman George J. Fesus ............................... 51.......................................... 52 Executive Vice President, Chief Financial Officer and Treasurer A. Edward Allinson ............................ 59....................................... 60 Executive Vice President Dale L. Carleton .............................. 49......................................... 50 Executive Vice President Susan Comeau .................................. 52............................................. 53 Executive Vice President James J. Darr ............................................ 48 Executive Vice President Howard H. Fairweather ......................... 55.................................... 56 Executive Vice President Charles J. Kelly .............................. 49......................................... 50 Executive Vice President Ronald E. Logue ............................... 48.......................................... 49 Executive Vice President Nicholas A. Lopardo ........................... 47...................................... 48 Executive Vice President Albert E. Petersen ............................ 48....................................... 49 Executive Vice President William M. Reghitto ...................................... 52 Executive Vice President David J. Sexton ............................... 54.......................................... 55 Executive Vice President Norton Q. Sloan ............................... 57.......................................... 58 Executive Vice President
All executive officers are elected by the Board of Directors. There are no family relationships betweenamong any directorof the directors and executive officerofficers of State Street. With the exception of Messrs. Carter, Allinson, Logue and Petersen, all of the executive officers have been officers of State Street for five years or more. Mr. Carter became President of State Street in July, 1991, Chief Executive Officer in January, 1992 and Chairman in January, 1993. Prior to joining State Street, he was with Chase Manhattan Bank for 15 years, including the last three as head of global securities services. Mr. Allinson became an officer of State Street in March, 1990. Prior to joining State Street, he was President of Mitchell Hutchins Asset Management, a subsidiary of PaineWebber Incorporated, responsible for six financial service subsidiaries. Mr. Petersen became an officer of State Street in August, 1991. Prior to joining State Street, he was an Executive Vice President at First Empire State Corporation, a bank holding company, responsible for operations and systems. Mr. Logue became an officer of State Street in 1991. Prior to joining State Street, he was Executive Vice President at Bank of New England Corporation where he was head of processing services. Mr. Sloan retired effective December 31, 1994 and Mr. Fesus resigned effective February 16, 1995, at which time Mr. Spina became Chief Financial Officer and Treasurer. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Information concerning the market prices of and dividends on State Street's common stock during the past two years appears on page 3435 of State Street's 19931994 Annual Report to Stockholders and is incorporated by reference. There were 5,8866,028 stockholders of record at February 28,December 31, 1994. During 1994, State Street's common stock iswas traded over-the-counter on the NASDAQ National MarkerMarket System, ticker symbol: STBK. In February 1995, State Street's common stock was listed for trading on the New York Stock Exchange, ticker symbol: STT. ITEM 6. SELECTED FINANCIAL DATA The information is set forth on page 21 of State Street's 19931994 Annual Report to Stockholders and is incorporated by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The information required by this item appears in State Street's 19931994 Annual Report to Stockholders on pages 23 and 34 and pages 22 through 3537 and is incorporated by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL FINANCIAL DATA The Consolidated Financial Statements, Report of Independent Auditors and Supplemental Financial Data appearing on pages 3638 through 5559 of State Street's 19931994 Annual Report to Stockholders and are incorporated by reference. ITEM 9. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information concerning State Street's directors appears on pages 1 through 6 of State Street's Proxy Statement for the 19941995 Annual Meeting of Stockholders under the caption "Election of Directors" which Statement is to be filed with the Securities and Exchange Commission. Such information is incorporated by reference. Information concerning State Street's executive officers appears under the caption "Executive Officers of the Registrant" in Item 4.A. of this Report. Information concerning compliance with Section 16(a) of the Securities Exchange Act appears on page 8 of State Street's Proxy Statement for the 1995 Annual Meeting of Stockholders under the caption "Compliance with Section 16 (a) of the Securities Exchange Act." Such information is incorporated by reference. ITEM 11. EXECUTIVE COMPENSATION Information concerning compensation of the executives of State Street appears on pages 109 through 1716 in State Street's Proxy Statement for the 19941995 Annual Meeting of Stockholders under the caption "Executive Compensation". Such information is incorporated by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information concerning security ownership of certain beneficial owners and management appears on pages 7 and 8 in State Street's Proxy Statement for the 19941995 Annual Meeting of Stockholders under the caption "Beneficial Ownership of Shares". Such information is incorporated by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information concerning certain relationships and related transactions appears on page 98 in State Street's Proxy Statement for the 19941995 Annual Meeting of Stockholders under the caption "Certain Transactions". Such information is incorporated by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) (1) Financial Statements -- The following consolidated financial statements of State Street included in its Annual Report to Stockholders for the year ended December 31, 1993, are incorporated by reference in Item 8 hereof: Consolidated Statement of Income--Years ended December 31, 1993, 1992 and 1991 Consolidated Statement of Condition--December 31, 1993 and 1992 Consolidated Statement of Cash Flows -- Years ended December 31, 1993, 1992 and 1991 Consolidated Statement of Changes in Stockholders' Equity -- Years ended December 31, 1993, 1992 and 1991 Notes to Financial Statements Report of Independent Auditors (2) Financial Statement Schedules -- Schedules to the consolidated financial statements required by Article 9 of Regulation S-X are not required under the related instructions, are inapplicable, or the information is contained herein and therefore have been omitted. (3) Exhibits A list of the exhibits filed or incorporated by reference appears following page 16 of this Report, which information is incorporated by reference. (b) Reports on Form 8-K A current report on Form 8-K dated October 8, 1993 was filed which reported on the issuance by State Street of $100 million principal amount of 5.95% notes due September 15, 2003.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) (1) Financial Statements -- The following consolidated financial statements of State Street included in its Annual Report to Stockholders for the year ended December 31, 1994, are incorporated by reference in Item 8 hereof: Consolidated Statement of Income--Years ended December 31, 1994, 1993 and 1992 Consolidated Statement of Condition--December 31, 1994 and 1993 Consolidated Statement of Cash Flows--Years ended December 31, 1994, 1993 and 1992 Consolidated Statement of Changes in Stockholders' Equity--Years ended December 31, 1994, 1993 and 1992 Notes to Financial Statements Report of Independent Auditors (2) Financial Statement Schedules--Schedules to the consolidated financial statements required by Article 9 of Regulation S-X are not required under the related instructions, are inapplicable, or the information is contained herein and therefore have been omitted. (3) Exhibits A list of the exhibits filed or incorporated by reference appears following page 17 of this Report, which information is incorporated by reference. (b) Reports on Form 8-K No reports on Form 8-K were filed during the last quarter of the period covered by this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, on March 17, 1994,16, 1995, thereunto duly authorized. STATE STREET BOSTON CORPORATION By REX S. SCHUETTE -----------------------------------------By -------------------------------- REX S. SCHUETTE Senior Vice President and Comptroller Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 17, 1994,16, 1995, by the following persons on behalf of the registrant and in the capacities indicated. OFFICERS: OFFICERS: MARSHALL N. CARTER DAVID A. SPINA - ---------------------------------------------------- ----------------------------------------------------------------------------------------------------- ------------------------------------------------- MARSHALL N. CARTER, Chairman and Chief Executive DAVID A. SPINA, Vice Chairman, Treasurer and Officer Chief ExecutiveFinancial Officer GEORGE J. FESUS REX S. SCHUETTE - ---------------------------------------------------- ------------------------------------------------ GEORGE J. FESUS, Executive Vice President,------------------------------------------------- REX S. SCHUETTE, Senior Vice President Chief Financial Officer and Treasurer and Comptroller DIRECTORS: TENLEY E. ALBRIGHT JOSEPH A. BAUTE - ---------------------------------------------------- ----------------------------------------------------------------------------------------------------- ------------------------------------------------- TENLEY E. ALBRIGHT JOSEPH A. BAUTE I. MACALLISTER BOOTH JAMES I. CASH - ---------------------------------------------------- ----------------------------------------------------------------------------------------------------- ------------------------------------------------- I. MACALLISTER BOOTH JAMES I. CASH TRUMAN S. CASNER NADER F. DAREHSHORI - ---------------------------------------------------- ----------------------------------------------------------------------------------------------------- ------------------------------------------------- TRUMAN S. CASNER NADER F. DAREHSHORI LOIS D. JULIBER CHARLES F. KAYE - ---------------------------------------------------- ----------------------------------------------------------------------------------------------------- ------------------------------------------------- LOIS D. JULIBER CHARLES F. KAYE GEORGE H. KIDDER - ---------------------------------------------------- ------------------------------------------------ GEORGE H. KIDDERCHARLES R. LAMANTIA JOHN M. KUCHARSKI ----------------------------------------------------- ------------------------------------------------- CHARLES R. LAMANTIA JOHN M. KUCHARSKI DENNIS J. PICARD DAVID B. PERINI - ---------------------------------------------------- ------------------------------------------------ CHARLES R. LAMANTIA----------------------------------------------------- ------------------------------------------------- DENNIS J. PICARD DAVID B. PERINI DENNIS J. PICARD BERNARD W. REZNICEK - ---------------------------------------------------- ------------------------------------------------ DENNIS J. PICARDALFRED POE ----------------------------------------------------- ------------------------------------------------- BERNARD W. REZNICEK ALFRED POE ROBERT E. WEISSMAN - ----------------------------------------------------------------------------------------------------- ROBERT E. WEISSMAN
EXHIBIT INDEX EXHIBIT 2. PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR SUCCESSION 2.1 Acquisition agreement dated September 27, 1994 among Registrant, Kemper Financial Services, Inc. and DST Systems, Inc. pertaining to the acquisition of IFTC Holdings, Inc. (filed with the Securities and Exchange Commission as Exhibit 2 to Registrant's Quarterly Report on Form 10Q for the quarter ended September 30, 1994 and incorporated by reference). EXHIBIT 3. ARTICLES OF INCORPORATION AND BY-LAWS 3.1 Restated Articles of Organization as amended (filed with the Securities and Exchange Commission as Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1988 and incorporated by reference) 3.2 By-laws as amended (filed with the Securities and Exchange Commission as Exhibit 3.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 19911992 and incorporated by reference) 3.3 Certificate of Designation, Preferences and Rights (filed with the Securities and Exchange Commission as Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 19911992 and incorporated by reference) EXHIBIT 4. INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS 4.1 The description of the Company's Common Stock included in the Company's effective registration statement report on Form 10, as filed with the Securities and Exchange Commission on September 3, 1970 and amended on May 12, 1971 and incorporated by reference. 4.2 Rights Agreement dated as of September 15, 1988 between State Street Boston Corporation and The First National Bank of Boston, Rights Agent (filed with the Securities and Exchange Commission as Exhibit 4 to Registrant's Current Report on Form 8-K dated September 30, 1988 and incorporated by reference) 4.24.3 Amendment to Rights Agreement dated as of September 20, 1990 between State Street Boston Corporation and The First National Bank of Boston, Rights Agent (filed with the Securities and Exchange Commission as Exhibit 4 to Registrant's Quarterly Report on Form 10- Q10-Q for the quarter ended September 30, 1990 and incorporated by reference) 4.34.4 Indenture dated as of May 1, 1983 between State Street Boston Corporation and Morgan Guaranty Trust Company of New York, Trustee, relating to the Company's 7 3/4% Convertible Subordinated Debentures due 2008 (filed with the Securities and Exchange Commission as Exhibit 4 to the Registrant's Registration Statement on Form S-3 filed on April 22, 1983, Commission File No. 2-83251 and incorporated by reference) 4.5 Indenture dated as of August 2, 19931994 between State Street Boston Corporation and The First National Bank of Boston, as trustee (filed with the Securities and Exchange Commission as Exhibit 4 to the Registrant's Current Report on Form 8-K dated October 8, 19931994 and incorporated by reference) EXHIBIT 10. MATERIAL CONTRACTS Executive Compensation Plans and Agreements: 10.1 State Street Boston Corporation Long-Term Common Stock Incentive Program, as amended (filed with the Securities and Exchange Commission as Exhibit 10.1 to Registrant's Annual Report on Form 10- K10-K for the year ended December 31, 1981 and incorporated by reference) 10.2 State Street Boston Corporation 1981 Stock Option and Performance Share Plan, as amended (filed with the Securities and Exchange Commission as Exhibit 10.2 to Registrant's Annual Report on Form 10- K10-K for the year ended December 31, 1981 and incorporated by reference) 10.3 State Street Boston Corporation 1984 Stock Option Plan (filed with the Securities and Exchange Commission as Exhibit 4(a) to Registrant's Registration Statement on Form S-8 (File No. 2-93157) and incorporated by reference) 10.4 State Street Boston Corporation 1985 Stock Option and Performance Share Plan (filed with the Securities and Exchange Commission as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1985 and incorporated by reference) 10.5 Revised Forms of Termination Agreement with Executive Officers (filed with the Securities and Exchange Commission as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated by reference) 10.6 State Street Boston Corporation 1989 Stock Option Plan (filed with the Securities and Exchange Commission as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated by reference) 10.7 State Street Boston Corporation 1990 Stock Option and Performance Share Plan (filed with the Securities and Exchange Commission as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1990 and incorporated by reference) 10.8 State Street Boston Corporation Supplemental Executive Retirement Plan, together with individual benefit agreements (filed with the Securities and Exchange Commission as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 19911992 and incorporated by reference) 10.9 Individual Pension Agreement with Marshall N. Carter (filed with the Securities and Exchange Commission as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 19911992 and incorporated by reference) 10.10 Individual Pension Agreement with A. Edward Allinson (filed with the Securities and Exchange Commission as Exhibit 10.1 to Registrant's Annual Report on Form 10-K for the year ended December 31, 19911992 and incorporated by reference) 10.11 Supplemental Retirement Agreement with Norton Q. Sloan (filed with the Securities and Exchange Commission as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated by reference) 10.12 Individual Pension Agreement with Albert E. Petersen (filed with the Securities and Exchange Commission as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated by reference) 10.13 Termination Benefits Arrangement with Marshall N. Carter (filed with the Securities and Exchange Commission as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated by reference) 10.14 State Street Global Advisor'sAdvisors Incentive Plan for 1993 (filed with the Securities and Exchange Commission as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated by reference) 10.15 State Street Global Advisor'sAdvisors Incentive Plan for 1994 (filed with the Securities and Exchange Commission as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated by reference) 10.16 Senior Executives Annual Incentive Plan (filed with the Securities and Exchange Commission as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated by reference) 10.17 1994 Stock Option and Performance Unit Plan (filed with the Securities and Exchange Commission as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated by reference) 10.18 Compensation agreement with J.R. Towers dated September 30, 1994 (filed with the Securities and Exchange Commission as Exhibit 10 to Registrant's Annual Report on Form 10-Q for the year ended September 30, 1994 and incorporated by reference) 10.19 1995 Annual Incentive Plan for Senior Executive Officers 10.20 State Street Global Advisors Incentive Plan for 1995 10.21 Supplemental Defined Benefit Pension Plan for Senior Executive Officers 10.22 Nonemployee Director Retirement Plan EXHIBIT 11. STATEMENT RE COMPUTATION OF PER SHARE EARNINGS 11.1 State Street Boston Corporation Computation of Earnings Per Share EXHIBIT 12. STATEMENT RE COMPUTATION OF RATIOS 12.1 Statement of ratio of earnings to fixed charges. EXHIBIT 13. PORTIONS OF ANNUAL REPORT TO STOCKHOLDERS 13.1 Five Year Selected Financial Data. 13.2 Management's Discussion and Analysis of Financial Condition and Results of Operations for the Three Years Ended December 31, 19931994 (not covered by the Report of Independent Public Accountants). 13.3 Letter to Stockholders. 13.4 State Street Boston Corporation Consolidated Financial Statements and Schedules. EXHIBIT 21. SUBSIDIARIES 21.1 Subsidiaries of State Street Boston Corporation EXHIBIT 23. CONSENTS OF EXPERTS AND COUNSEL 23.1 Consent of Independent Auditors