QuickLinksUNITED STATES

-- Click here to rapidly navigate through this documentSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities

Exchange Act of 1934 (Amendment No.                 )

Filed by the Registrantx

Filed by a Party other than the Registrant¨

Check the appropriate box:

Investors Financial Services Corp.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

200 Clarendon Street
Boston, MA 02116

March 7, 2005

Dear Stockholder:

        We cordially invite you to attend the 2005 Annual Meeting of Stockholders ofOn February 4, 2007, Investors Financial Services Corp. The meetingentered into an agreement and plan of merger with State Street Corporation pursuant to which Investors Financial will be heldmerge with and into State Street, with State Street as the surviving corporation in the Board Roommerger. You are invited to attend a special meeting of the stockholders of Investors Financial on the 17^th FloorJune 20, 2007 at 10:00 a.m., local time, at 200 Clarendon Street, Boston, Massachusetts 02116, which will be held for the purposes of voting on Thursday, April 14, 2005, at 11:00 a.m.the adoption of the merger agreement, as amended, which is referred to in this document as the merger agreement. The Investors Financial board of directors unanimously recommends that Investors Financial stockholders vote “FOR” adoption of the merger agreement.

        Details regarding admissionIf the merger is completed, Investors Financial stockholders will receive State Street common stock in exchange for their Investors Financial common stock. Each share of Investors Financial common stock will be converted into the right to the meeting and the businessreceive 0.906 of a share of State Street common stock. An aggregate of up to approximately 65.6 million shares of State Street common stock may be conducted are more fully describedissued in the accompanying Noticemerger. The value of 2005 Annual Meetingthe merger consideration will fluctuate with the market price of StockholdersState Street common stock. The following table shows the closing sale prices of State Street common stock as reported on the New York Stock Exchange and Proxy Statement.of Investors Financial common stock as reported on the NASDAQ on February 2, 2007, the last trading day before we announced the merger, and on May 18, 2007, the last practicable trading day for which such information was available before the distribution of this document. This table also shows the implied value of the merger consideration proposed for each share of Investors Financial common stock, which we calculated by multiplying the closing price of State Street common stock on those dates by 0.906, the exchange ratio.

The market prices of both State Street common stock and Investors Financial common stock will fluctuate before the merger. You should obtain current stock price quotations for State Street common stock and Investors Financial common stock. State Street common stock is listed on the NYSE under the symbol “STT.” Investors Financial common stock is quoted on the NASDAQ under the symbol “IFIN.”

We expect that the merger will, for U.S. income tax purposes, generally be tax-free to you as to shares of State Street common stock you receive in the merger.

Your vote is very important. Whether or not We cannot complete the merger unless Investors Financial’s common stockholders adopt the merger agreement. In order for the merger agreement to be adopted, the holders of a majority of Investors Financial’s outstanding shares must vote in favor of the merger. Regardless of whether you plan to attend the special stockholders’ meeting, the details of which are described on the following pages, please carefully reviewtake the enclosed proxy statement. Then complete, sign, date and mail promptly the accompanyingtime to submit your proxy in accordance with the enclosed return envelope.instructions contained in this document. Failing to vote will have the same effect as voting against the merger.

This document describes the special meeting, the merger, the documents related to the merger and other related matters. Please carefully read this entire document, including “Risk Factors” beginning on page 12, for a discussion of the risks relating to the proposed merger. You also havecan obtain information about State Street and Investors Financial from documents that each of us has filed with the optionSecurities and Exchange Commission.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the State Street common stock to be issued under this document or determined if this document is accurate or adequate. Any representation to the contrary is a criminal offense.

The date of votingthis document is May 21, 2007, and it is first being mailed or otherwise delivered to Investors Financial stockholders on or about May 22, 2007.

INVESTORS FINANCIAL SERVICES CORP.

200 Clarendon Street

Boston, Massachusetts 02116

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

Investors Financial Services Corp. will hold a special meeting of stockholders at 200 Clarendon Street, Boston, Massachusetts 02116, at 10:00 a.m., local time, on June 20, 2007 to consider and vote upon the following proposals:

The Investors Financial board of directors has fixed the close of business on May 15, 2007 as the record date for the special meeting. Only Investors Financial stockholders of record at public facilitiesthat time are entitled to notice of, and to vote at, the special meeting, or any adjournment or postponement of the special meeting.

In order for the merger agreement to be adopted, the holders of a majority of the Investors Financial shares outstanding and entitled to vote thereon must vote in Boston. Iffavor of the adoption of the merger agreement.

Regardless of whether you plan to attend the special meeting, please allow additionalsubmit your proxy with voting instructions. Please submit your proxy as soon as possible. If you hold stock in your name as a stockholder of record, please complete, sign, date and return the accompanying proxy card in the enclosed self-addressed, stamped envelope. You may also submit your proxy by either visiting the website or calling the toll-free number shown on your proxy card. If you hold your stock in “street name” through a bank or broker, please direct your bank or broker to vote in accordance with the instructions you have received from your bank or broker. Submitting your proxy will not prevent you from attending the special meeting and voting in person, but it will help to secure a quorum and avoid added solicitation costs. If you attend the special meeting you may withdraw your proxy and vote in person, thereby canceling any previous proxy. In any event, any proxy may be revoked in writing at any time for registrationbefore its exercise at the special meeting in the manner described in the accompanying document.

The Investors Financial board of directors has approved and security clearance. adopted the merger agreement and unanimously recommends that Investors Financial stockholders vote “FOR” adoption of the merger agreement.

YOUR VOTE IS IMPORTANT. PLEASE SUBMIT YOUR PROXY PROMPTLY, REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE SPECIAL MEETING. YOU CAN FIND INSTRUCTIONS FOR SUBMITTING YOUR PROXY ON THE ENCLOSED PROXY CARD.

REFERENCES TO ADDITIONAL INFORMATION

This document incorporates important business and financial information about State Street and Investors Financial from documents that are not included in or delivered with this document. You can obtain documents incorporated by reference in this document, other than certain exhibits to those documents, by requesting them in writing or by telephone from the appropriate company at the following addresses:

You will not be askedcharged for any of these documents that you request. Investors Financial stockholders requesting documents should do so by June 12, 2007 in order to present a valid, picture identification such as a driver's license. receive them before the special meeting.

See “Where You Can Find More Information” on page 63.

SUBMITTING PROXIES BY MAIL, TELEPHONE OR INTERNET

If you ownare an Investors Financial stockholder of record you may submit your proxy:

If you are a beneficial owner (but not the holder of record) of shares through a brokerage accountof Investors Financial, please refer to your proxy card or the information forwarded by your bank, broker or other nominee, you must bring proofholder of ownership (for details,record to see Meeting Admission in the Notice of 2005 Annual Meeting of Stockholders). Public parking iswhich options are available nearby, including in the Garage at 100 Clarendon, which is one block further up Clarendon Street from our building on your right.to you.

TABLE OF CONTENTS

i

ii

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

200 Clarendon Street
Boston, MA 02116The questions and answers below highlight only selected procedural information from this document. They do not contain all of the information that may be important to you. You should read carefully the entire document and the additional documents incorporated by reference into this document because they contain important information.

NOTICE OF 2005 ANNUAL MEETING OF STOCKHOLDERS

agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Investors Financial common stock, ona failure to provide your broker with instructions will have the same effect as a vote against the merger.

By OrderAny stockholder entitled to vote in person at the special meeting may vote in person regardless of whether a proxy has been previously submitted, and such vote will revoke any previous proxy, but the mere presence (without notifying the Secretary of Investors Financial) of a stockholder at the special meeting will not constitute revocation of a previously given proxy.

Q:	If I am an Investors Financial stockholder, should I send in my Investors Financial stock certificates now?

A:

No. You should not send in your Investors Financial stock certificates at this time. After the merger, you will be sent instructions for exchanging Investors Financial stock certificates for the merger consideration. Unless Investors Financial stockholders specifically request to receive State Street stock certificates, the shares of State Street stock they receive in the merger will be issued in book-entry form.

Q:	Are there risks associated with the proposed transaction that I, as an Investors Financial stockholder, should consider in deciding how to vote?

A:	Yes. In evaluating the merger, you should carefully read this document, including the factors discussed in the section entitled “Risk Factors” beginning on page 12.

Q:	When do you expect to complete the merger?

A:

We hope to complete the merger as soon as reasonably practicable. We are working to complete the merger in the middle of 2007. However, we cannot assure you when or if the merger will occur. Among other things, we must first obtain the adoption of the merger agreement by Investors Financial stockholders at the special meeting and the necessary regulatory approvals. See “The Merger Agreement—Closing and Effective Time of the Merger” beginning on page 37.

Q:	Whom should I call with questions?

A:	Investors Financial stockholders should call Innisfree M&A Incorporated, Investors Financial’s proxy solicitor, at (212) 750-5833, with any questions about the merger and related transactions.

SUMMARY

This summary highlights the material information from this document and may not contain all the information that is important to you. To understand the merger fully and for a more complete description of the legal terms of the merger, we urge you to carefully read this entire document and the other documents to which we refer you. See also “Where You Can Find More Information” on page 63. We have included page references parenthetically to direct you to a more complete description of the topics presented in this summary.

General

The Merger and the Merger Consideration (page 36)

We are proposing the merger of Investors Financial with and into State Street. State Street will survive the merger. If the merger is completed, you will have the right to receive 0.906 of a share of State Street common stock for each share of Investors Financial common stock you hold immediately prior to the merger. State Street will not issue any fractional shares of State Street common stock in the merger. Investors Financial stockholders who would otherwise be entitled to a fractional share of State Street common stock will instead receive an additional amount in cash based on the average closing sale prices of State Street common stock for the five trading days immediately prior to the date on which the merger is completed.

Example: If you currently own 100 shares of Investors Financial common stock, upon completion of the merger you would be entitled to receive 90 shares of State Street common stock and a cash payment for the market value of 0.60 shares, calculated based on the average of the closing sale prices of State Street common stock for the five trading days immediately preceding the date of completion of the merger.

The merger agreement is attached asAnnex A to this document. We encourage you to read the merger agreement carefully and fully, as it is the legal document that governs the merger.

What Holders of Investors Financial Stock Options and Restricted Shares Will Receive; Treatment of Investors Financial Employee Stock Purchase Plan (page 36)

Upon completion of the merger, each option to purchase shares of Investors Financial common stock outstanding under any of Investors Financial’s stock compensation plans, whether or not vested, will be canceled in exchange for the right to receive a lump sum cash payment equal to the product of (i) the number of shares of Investors Financial common stock subject to the outstanding portion of the option and (ii) the excess of the cash equivalent value of the merger consideration over the exercise price per share of the option. The cash equivalent value of the merger consideration will equal the product of 0.906 multiplied by the average of the closing sale prices of State Street common stock for the five trading days immediately preceding the date of completion of the merger.

Upon completion of the merger, each restricted share of Investors Financial common stock outstanding under any of Investors Financial’s stock compensation plans will be converted into the right to receive 0.906 restricted shares of State Street common stock. The restricted shares of State Street common stock will vest on the same schedule as the corresponding Investors Financial restricted shares would have vested or in equal amounts on each of the first three anniversaries of the applicable date of grant, if such vesting schedule would result in earlier vesting of the restricted shares. If a restricted stockholder’s employment is terminated by State Street without “cause” or as a result of the stockholder’s resignation for “good reason” (as such terms are defined in the merger agreement), the stockholder’s restricted stock will vest in full upon the termination.

If the merger is completed prior to June 30, 2007, then each participant’s outstanding option under Investors Financial’s employee stock purchase plan will, at the time of the merger, be canceled in exchange for a cash payment equal to the product of (1) the excess of the cash equivalent value of the

merger consideration over the per share option price and (2) the number of shares of Investors Financial common stock that may be purchased at the per share option price with such participant’s accumulated payroll deductions. In the alternative, at State Street’s discretion, each participant’s outstanding option under the employee stock purchase plan will be exercised, and the shares acquired pursuant to such exercise will be converted into the right to receive the merger consideration. If the effective time of the merger has not occurred by June 30, 2007, each participant’s outstanding options under the employee stock purchase plan will be used to purchase shares of Investors Financial’s common stock on such date and, at the effective time of the merger, such shares will be converted into the right to receive the merger consideration. However, State Street may direct Investors Financial to instead pay each participant a cash payment equal to the product of (i) the excess of the fair market value per share of Investors Financial common stock on such date over the per share option price and (ii) the number of shares of Investors Financial common stock that may be purchased at the per share option price with such participant’s accumulated payroll deductions. Investors Financial’s employee stock purchase plan will terminate immediately following the earlier of June 30, 2007 and the effective time of the merger.

Material United States Federal Income Tax Consequences of the Merger (page 48)

State Street and Investors Financial intend for the merger to qualify as a reorganization for United States federal income tax purposes, and it is a condition to their obligations to complete the merger that each of State Street and Investors Financial receive a legal opinion to that effect. Assuming the merger will so qualify, the merger will generally be tax-free to U.S. holders, except for any gain or loss that may result from the receipt by U.S. holders of cash instead of a fractional share of State Street common stock.

The United States federal income tax consequences described above may not apply to all holders of Investors Financial common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.

Opinion of Investors Financial’s Financial Advisor (page 21)

Goldman, Sachs & Co. delivered its opinion to Investors Financial’s board of directors that, as of February 4, 2007 and based upon and subject to the factors and assumptions set forth in its opinion, the exchange ratio of 0.906 shares of State Street common stock to be received for each share of Investors Financial common stock pursuant to the merger agreement was fair from a financial point of view to the holders of Investors Financial common stock.

The full text of the written opinion of Goldman Sachs, dated February 4, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached asAnnex B to this document. Investors Financial’s shareholders should read the opinion in its entirety. Goldman Sachs provided its opinion for the information and assistance of Investors Financial’s board of directors in connection with its consideration of the transaction. The Goldman Sachs opinion is not a recommendation as to how any holder of Investors Financial’s common stock should vote with respect to the transaction. Pursuant to an engagement letter between Investors Financial and Goldman Sachs, Investors Financial has agreed to pay Goldman Sachs a transaction fee of 0.70% of the aggregate consideration paid in the merger, all of which is payable upon the consummation of the transaction.

Recommendation to Stockholders of Investors Financial (page 17)

The Investors Financial board of directors believes that the merger, the merger agreement and the transactions contemplated by the merger agreement are fair to, advisable and in the best interests of Investors Financial and its stockholders and has directed that the merger be submitted to Investors Financial’s stockholders for consideration and adoption. The Investors Financial board of directors unanimously recommends that Investors Financial stockholders vote “FOR” adoption of the merger agreement.

Financial Interests of Some of Investors Financial’s Directors and its Executive Officers in the Merger (page 31)

In considering the information contained in this document, you should be aware that some of Investors Financial’s directors and its executive officers have financial interests in the merger that may be different from, or in addition to, the interests of Investors Financial stockholders. These additional interests of some of Investors Financial’s directors and its executive officers may create potential conflicts of interest and cause some of these persons to view the proposed transaction differently than you may view it as a stockholder. These interests exist because of rights the directors and executive officers have in respect of their stock options to acquire Investors Financial common stock, which will be canceled for a cash payment upon completion of the merger, rights the executive officers have to payments under change of control employment agreements previously entered into with Investors Financial and benefits under a supplemental executive retirement plan. In addition, in connection with the merger, Kevin J. Sheehan and State Street agreed to a term sheet that provides Mr. Sheehan with consulting fees following the merger. In addition, certain other executive officers have entered into term sheets relating to employment arrangements to facilitate the transition. State Street will also indemnify the executive officers and directors of Investors Financial for certain events occurring before the merger.

Based on an assumed cash-out price of $63.12 (0.906 times the average of the closing sale prices of State Street common stock on the New York Stock Exchange for the five trading days prior to May 9, 2007) and assuming the effective time occurs on July 2, 2007, the aggregate cash payment to the six executive officers in respect of their unvested stock options is estimated to be approximately $10.91 million and in respect of their vested stock options is estimated to be approximately $111.08 million, and the aggregate cash payment to the six non-employee directors as a group in respect of their unvested stock options is estimated to be approximately $0.35 million and in respect of their vested stock options is estimated to be approximately $2.71 million. Assuming the effective time occurs on July 2, 2007, the aggregate lump-sum present value of the benefits accrued under the supplemental executive retirement plan through such date that will be payable to the six executive officers as a group is approximately $22.51 million (approximately $10.79 million of which is payable to Mr. Sheehan and $5.56 million of which is payable to Mr. Rogers), and the aggregate cash severance amount payable to the six executive officers as a group under their change of control agreements is approximately $65.13 million (approximately $19.98 million of which is payable to Mr. Sheehan and $17.42 million of which is payable to Mr. Rogers).

Pursuant to Mr. Sheehan’s consulting arrangement, he will receive an aggregate of $2 million as compensation for providing services to State Street for 18 months following the completion of the merger. Mr. Rogers’s term sheet provides that his base salary will be $910,000 per year, and he will be entitled to a $1,740,000 bonus for the 2007 calendar year, pro-rated for the period between the closing of the merger and December 31, 2007. If Mr. Rogers remains employed by State Street through August 2007, he will become entitled to receive certain equity awards with an initial value of $2,350,000 that vest subject to performance or time-based conditions. Mr. Maroney’s term sheet provides that his base salary will be $625,000 per year, and he will be entitled to a $1,200,000 bonus for the 2007 calendar year, pro-rated for the period between the closing of the merger and December 31, 2007. If Mr. Maroney remains employed by State Street through February 2008, he will become entitled to certain equity awards with an initial value of $800,000 that vest subject to performance or time-based conditions. Mr. Spinney and Mr. Henry also have agreed to employment arrangements with State Street.

Investors Financial’s board of directors was aware of these interests, including the general nature of interests arranged subsequently, and took them into account in its decision to adopt the merger agreement. For information concerning these interests, please see the discussion under the caption “Some of Investors Financial’s Directors and its Executive Officers Have Financial Interests in the Merger.

Appraisal Rights (page 29)

Neither the holders of Investors Financial common stock nor the holders of State Street common stock will have any right to an appraisal of value of their shares in connection with the merger.

The Merger Agreement (page 36)

Conditions to Completion of the Merger (page 45)

Currently, we expect to complete the merger in the middle of 2007. As more fully described in this document and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others, adoption by Investors Financial stockholders of the merger agreement, the receipt of all required regulatory approvals (including approval by the Board of Directors,



Secretary

March 7, 2005

200 Clarendon Street
Boston, MA 02116

PROXY STATEMENT

GENERAL INFORMATION

When was this proxy statementGovernors of the Federal Reserve System, the Massachusetts Board of Bank Incorporation and the accompanying proxy scheduledMassachusetts Commissioner of Banks) and other regulatory approvals which if not obtained, would result in a material adverse effect on State Street (measured relative to Investors Financial and its subsidiaries as a whole), accuracy of each party’s representations and warranties, except for, in most cases, inaccuracies that would not be sentreasonably likely to stockholders?have a material adverse effect on such party and the receipt of legal opinions from each company regarding the tax treatment of the merger.

We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.

Termination of the Merger Agreement (page 46)

This proxy statementWe may mutually agree to terminate the merger agreement before completing the merger, even after adoption by Investors Financial stockholders of the merger agreement, as long as the termination is approved by each of our boards of directors. In addition, either of us may decide to terminate the merger agreement, even after the stockholders adopt the merger agreement, if a governmental entity issues a nonappealable final order prohibiting the merger, if a governmental entity which must grant a required regulatory approval denies such required approval and accompanying proxy were scheduledsuch denial has become final and nonappealable, or if the other party breaches the merger agreement in a way that would result in the failure to be sentsatisfy a condition to stockholders beginning onthe merger set forth in the merger agreement, subject to the right of the breaching party to cure the breach within 45 days following written notice (unless it is not possible due to the nature or about March 7, 2005.

Who is soliciting my vote?

The Boardtiming of Directorsthe breach for the breaching party to cure the breach). Either of us may terminate the merger agreement if the stockholders of Investors Financial Services Corp. ("fail to adopt the merger agreement or if the merger has not been completed by February 4, 2008, unless the reason the merger has not been completed by that date is a breach of the merger agreement by the company seeking to terminate the merger agreement.

State Street may terminate the merger agreement if the Investors Financial"Financial board of directors (1) fails to recommend that Investors Financial stockholders adopt the merger agreement, (2) withdraws, modifies, qualifies or conditions its recommendation (or publicly proposes to do so) in a manner adverse to State Street, (3) approves or recommends an alternative proposal or (4) resolves to do (2) or (3). State Street may also terminate the "Company") is soliciting your vote formerger agreement if Investors Financial intentionally breaches its obligation to call and hold a stockholder meeting to consider the 2005 Annual Meeting of Stockholders.merger or its obligation to not solicit alternative proposals.

How many votes canTermination Fee (page 46)

In the event that State Street terminates the merger agreement because:

RISK FACTORS

In addition to begeneral investment risks and the other information contained in or incorporated by reference into this document, including the matters under the caption “Cautionary Statement Regarding Forward-Looking Statements” and the matters discussed under the caption “Risk Factors” included in the Annual Reports on Form 10-K filed by each of State Street and Investors Financial for the years ended December 31, 2006, as updated by any subsequently filed Forms 10-Q and 8-K, you should carefully consider the following factors in deciding whether to vote for adoption of the merger agreement.

Because the Market Price of State Street Common Stock Will Fluctuate, Investors Financial Stockholders Cannot Be Sure of the Trading Price of the Merger Consideration They Will Receive.

Upon completion of the merger, each share of Investors Financial common stock will be converted into 0.906 of a share of State Street common stock. The market value of the merger consideration will vary from the closing price of State Street common stock on the date we announced the merger, on the date we mailed this document to Investors Financial stockholders, on the date of the special meeting of the Investors Financial stockholders and thereafter. Any change in the market value of State Street common stock prior to completion of the merger will affect the market value of the consideration that Investors Financial stockholders will receive upon completion of the merger. Accordingly, at the time of the special meeting, Investors Financial stockholders will not know or be able to calculate the market value of the merger consideration they would receive upon completion of the merger. Neither company is permitted to terminate the merger agreement solely because of changes in the market prices of either company’s stock. There will be no adjustment to the merger consideration for changes in the market price of either shares of State Street common stock or shares of Investors Financial common stock. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations. Many of these factors are beyond our control. You should obtain current market quotations for shares of State Street common stock and for shares of Investors Financial common stock.

We May Fail to Realize All of the Anticipated Benefits of the Merger.

State Street and Investors Financial entered into the merger agreement with the expectation that the merger would result in various benefits, including, among other things, synergies, revenue growth, cost savings, expanded client base, additional cross-selling opportunities and operating efficiencies. The success of the merger will depend, in part, on our ability to realize such anticipated benefits and cost savings from combining the businesses of State Street and Investors Financial. However, to realize these anticipated benefits and cost savings, we must successfully combine the businesses of State Street and Investors Financial. If we are not able to achieve these objectives, the anticipated benefits and cost savings of the merger may not be realized fully or at all or may take longer to realize than expected.

State Street and Investors Financial have operated and, until the completion of the merger, will continue to operate independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with clients, customers and employees or to achieve the anticipated benefits of the merger. Integration of the businesses entails information technology systems conversions, which involve operational risks and may result in customer dissatisfaction and defection. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of Investors Financial and State Street during the transition period. The integration may take longer than anticipated and may have unanticipated adverse results relating to Investors Financial’s or State Street’s existing business. Additionally, State Street may not be able to effectively assimilate services, technologies or Investors Financial’s key personnel. Failure to achieve anticipated benefits could result in increased costs and decreases in the amounts of expected revenues of the combined company.

State Street is a Competitor of Certain Investors Financial Customers and as a Result of the Merger, Some Customers May Seek Alternative Providers.

Certain Investors Financial customers are competitors of State Street’s non-custody businesses, including Investors Financial’s largest customer by revenue, Barclays Global Investors, N.A., which like State Street Global Advisers is an institutional investment adviser. The loss of some of these Investors Financial customers, or a significant reduction in revenues generated from such customers, for competitive reasons or otherwise, would adversely affect the anticipated benefits of the merger.

The Market Price of State Street Common Stock after the Merger May Be Affected by Factors Different from Those Affecting the Shares of Investors Financial or State Street Currently.

The businesses of State Street and Investors Financial differ and, accordingly, the results of operations of the combined company and the market price of the combined company’s shares of common stock may be affected by factors different from those currently affecting the independent results of operations of Investors Financial. For a discussion of the businesses of State Street and Investors Financial and of certain factors to consider in connection with those businesses, see the documents incorporated by reference in this document and referred to under “Where You Can Find More Information.”

The Merger is Subject to the Receipt of Consents and Approvals from Government Entities that May Impose Conditions that Could Have an Adverse Effect on State Street.

Before the merger can be completed, various approvals or consents must be obtained from the Federal Reserve Board, the Massachusetts Board of Bank Incorporation and various domestic and foreign bank regulatory, antitrust, insurance and other authorities. These governmental entities, including the Federal Reserve Board, may impose conditions on the completion of the merger or require changes to the terms of the merger. Investors Financial and State Street have not yet obtained all regulatory approvals required to complete the merger. Although State Street and Investors Financial do not currently expect that any such conditions or changes will be imposed, such conditions or changes could have the effect of delaying completion of the merger or imposing additional costs on or limiting the revenues of State Street following the merger, any of which might have an adverse effect on State Street following the merger.

Investors Financial Executive Officers and Directors Have Financial Interests in the Merger that May Be Different from, or in Addition to, the Interests of Investors Financial Stockholders.

Some of Investors Financial’s directors and its executive officers have financial interests in the merger that may be different from, or in addition to, the interests of Investors Financial stockholders. For example, certain executive officers of Investors Financial will receive payments pursuant to their change of control employment agreements, accelerated payouts of their supplemental executive retirement plan accounts and payments with respect to their outstanding stock options to acquire Investors Financial common stock in connection with the merger.

Investors Financial’s board of directors was aware of these interests and took them into account in its decision to adopt the merger agreement. For information concerning these interests, please see the discussion under the caption “Some of Investors Financial’s Directors and its Executive Officers Have Financial Interests in the Merger.”

The Shares of State Street Common Stock to be Received by Investors Financial Stockholders as a Result of the Merger Will Have Different Rights from the Shares of Investors Financial Common Stock.

Upon completion of the merger, Investors Financial stockholders will become State Street stockholders and their rights as stockholders will be governed by the articles of organization and by-laws of State Street and Massachusetts corporate law. The rights associated with Investors Financial common stock are different from the rights associated with State Street common stock. See the section of this proxy statement/prospectus titled “Comparison of Stockholders’ Rights” beginning on page 52 for a discussion of the different rights associated with State Street common stock.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This document contains or incorporates by reference a number of forward-looking statements, including statements about the financial conditions, results of operations, earnings outlook and prospects of State Street, Investors Financial and the potential combined company and may include statements for the period following the completion of the merger. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project” and other similar words and expressions.

The forward-looking statements involve certain risks and uncertainties. The ability of either State Street or Investors Financial to predict results or the actual effects of its plans and strategies, or those of the combined company, is subject to inherent uncertainty. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include those set forth below under “Risk Factors,” as well as, among others, the following:

Because these forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this document or the date of any document incorporated by reference in this document.

All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this document and attributable to State Street or Investors Financial or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this document. Except to the extent required by applicable law or regulation, State Street and Investors Financial undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

THE INVESTORS FINANCIAL SPECIAL MEETING

This section contains information about the special meeting of Investors Financial stockholders that has been called to consider and adopt the merger agreement which provides for the merger of Investors Financial with and into State Street, with State Street as the surviving corporation in the merger.

Together with this document, we are also sending you a notice of the special meeting and a form of proxy that is solicited by the Investors Financial board of directors. The special meeting will be held on June 20, 2007, at 10:00 a.m. local time, at 200 Clarendon Street, Boston, Massachusetts 02116, subject to any adjournments or postponements.

Matters To Be Considered

The purpose of the special meeting is to vote on a proposal for adoption of the merger agreement.

You also will be asked to vote upon a proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

Proxies

Each copy of this document mailed to holders of Investors Financial common stock is accompanied by a form of proxy with instructions for submitting a proxy. If you hold stock in your name as a stockholder of record, you should complete, sign, date and return the proxy card accompanying this document to ensure that your shares are voted at the special meeting, or at any adjournment or postponement of the special meeting, regardless of whether you plan to attend the special meeting. You may also submit your proxy by telephone or through the Internet as instructed on the proxy card.

If you hold your stock in “street name” through a bank or broker, you must direct your bank or broker to vote in accordance with the instructions you have received from your bank or broker.

If you hold stock in your name as a stockholder of record, you may revoke any proxy at any time before your shares are voted by (1) signing and returning a proxy card with a later date or submitting another proxy via the Internet or by telephone, (2) delivering a written revocation letter to Investors Financial’s Secretary or (3) attending the special meeting in person and voting your shares in person by ballot at the special meeting (however, the mere presence, without notifying Investors Financial’s Secretary will not constitute revocation of a previously given proxy). If you hold your stock in “street name” through a bank or broker, you must follow your bank’s or broker’s instructions to revoke your proxy.

Written notices of revocation and other communications about revoking your proxy should be addressed to:

Investors Financial Services Corp.

200 Clarendon Street

Boston, Massachusetts 02116

Attention: Secretary

All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted “FOR” adoption of the merger agreement and “FOR” adoption of the proposal to adjourn the special meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to adopt the merger agreement. According to the Investors Financial by-laws, business to be conducted

at a special meeting of stockholders will be limited to matters relating to the purpose or purposes stated in the notice of meeting. Accordingly, no matters other than the matters described in this document will be presented for action at the special meeting or at any adjournment or postponement of the special meeting.

Investors Financial stockholders should not send Investors Financial stock certificates with their proxy cards. After the merger is completed, holders of Investors Financial common stock will be mailed a transmittal form with instructions on how to exchange their Investors Financial stock certificates for shares of State Street common stock and cash instead of fractional shares of State Street common stock, if applicable.

Solicitation of Proxies

Investors Financial will bear the entire cost of soliciting proxies from you. In addition to solicitation of proxies by mail, Investors Financial will request that banks, brokers and other record holders send proxies and proxy material to the beneficial owners of Investors Financial common stock and secure their voting instructions. Investors Financial will reimburse the record holders for their reasonable expenses in taking those actions. Investors Financial has also made arrangements with Innisfree M&A Incorporated to assist in soliciting proxies and have agreed to pay them $10,000 plus reasonable expenses for these services. If necessary, Investors Financial may use several of its regular employees, who will not be specially compensated, to solicit proxies from Investors Financial stockholders, either personally or by telephone, facsimile, letter or other electronic means.

The costs and expenses of printing and mailing this document, and all filing and other fees paid to the SEC in connection with the merger, shall be borne equally by Investors Financial and State Street.

Record Date

The close of business on May 15, 2007 has been fixed as the record date for determining the Investors Financial stockholders entitled to receive notice of and to vote at the special meeting. At that time, approximately 67,150,609 shares of Investors Financial common stock were outstanding, held by approximately 717 holders of record.

Voting Rights and Vote Required

The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of Investors Financial common stock entitled to vote is necessary to constitute a quorum at the special meeting. Abstentions will be counted for the purpose of determining whether a quorum is present.

Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Investors Financial common stock entitled to vote at the special meeting. You are entitled to one vote for each share of Investors Financial common stock you held as of the record date. The failure to vote by proxy or in person will have the same effect as a vote against the merger.

The Investors Financial board of directors urges you to promptly complete, date and sign the accompanying proxy card and to return it promptly in the enclosed postage-paid envelope or to submit your proxy by telephone or through the Internet, or, if you hold your stock in “street name” through a bank or broker, by following the voting instructions of your bank or broker.

As of the record date:

Recommendation of the Investors Financial Board of Directors

The Investors Financial board of directors believes that the merger, the merger agreement and the transactions contemplated by the merger agreement are fair to, advisable and in the best interests of Investors Financial and its stockholders and has directed that the merger be submitted to Investors Financial’s stockholders for consideration and adoption. The Investors Financial board of directors unanimously recommends that Investors Financial stockholders vote “FOR” adoption of the merger agreement. See “The Merger—Investors Financial’s Reasons for the Merger; Recommendation of the Investors Financial Board of Directors” for a more detailed discussion of the Investors Financial board of directors’ recommendation.

Attending the Meeting

All holders of Investors Financial common stock, including stockholders of record and stockholders who hold their shares through banks, brokers, nominees or any other holder of record, are invited to attend the special meeting in person. Stockholders of record can vote in person at the special meeting. If you are not a stockholder of record, you must obtain a proxy executed in your favor from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote in person at the special meeting. If you plan to attend the special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership and you must bring a form of personal photo identification with you in order to be admitted. We reserve the right to refuse admittance to anyone without both proper proof of share ownership (such as a copy of a bank or brokerage statement) and proper photo identification.

THE MERGER

Background of the Merger

The board of directors of Investors Financial, together with the senior management, has from time to time reviewed and considered strategic developments and various strategic options potentially available to Investors Financial. These discussions have included management presentations concerning possible transactions, investments and other business initiatives intended to create or enhance stockholder value.

Ronald Logue, Chairman and Chief Executive Officer of State Street, and Kevin Sheehan, Chairman and Chief Executive Officer of Investors Financial have previously discussed the possibility of a strategic combination between Investors Financial and State Street. These prior discussions did not result in any sharing of diligence materials or in either party making a proposal for a potential combination.

In mid-January 2007, Mr. Logue approached Mr. Sheehan and arranged for a meeting. At this meeting, Messrs. Logue and Sheehan discussed their respective companies, industry trends and the possibility of a strategic combination involving the two companies. In light of the strong complementary business fit between the two companies and recent market and business developments, at the conclusion of the meeting, Messrs. Logue and Sheehan decided to instruct their senior management teams to explore further the possibility of a combination. In addition, they agreed to share some preliminary due diligence materials concerning their respective companies and discuss with their respective boards the possibility of proceeding forward with a potential business combination transaction. Mr. Sheehan also indicated that it would be helpful if State Street could provide Investors Financial with an indication of the range of financial terms and other conditions that would apply in the context of such a potential business combination. Following this meeting, Investors Financial entered into a confidentiality agreement with State Street and then senior management and the financial advisors of both State Street and Investors Financial held a number of meetings to review preliminary financial information regarding a potential combination. Also during such time, Mr. Sheehan and Mr. Logue had preliminary conversations regarding State Street’s initial thoughts on a valuation for Investors Financial common stock. Mr. Logue communicated a preliminary range of $57 to $58 per share of Investors Financial common stock, which Mr. Sheehan indicated was below what Investors Financial would consider appropriate for a transaction. However, Mr. Sheehan indicated that he would be interested in having further conversations with Mr. Logue around a higher valuation. In addition, shortly after the initial meeting between Messrs. Logue and Sheehan, another company in the financial services industry, representatives of which, from time to time in the past, had preliminary contact with representatives of Investors Financial regarding a potential business transaction, contacted Mr. Sheehan to express its interest in discussing a potential strategic combination with Investors Financial. Investors Financial entered into a confidentiality agreement with the other company and Mr. Sheehan updated the Investors Financial board on developments with State Street and the other company. Once updated, the Investors Financial board asked its financial advisor to request that each party deliver a firm proposal representing its best and final offer for a strategic combination with Investors Financial by February 2, 2007.

During the week of January 29, both State Street and the other company engaged in detailed due diligence investigations of Investors Financial, and conducted meetings with the Investors Financial management team. Also during this period, Investors Financial delivered draft transaction documentation to State Street and the other company.

On February 2, 2007, State Street submitted a firm proposal to acquire Investors Financial in an all-stock merger for consideration of 0.906 shares of State Street common stock for each share of Investors Financial common stock. State Street’s proposal also included a revised version of the draft transaction documentation reflecting State Street’s comments. The other company declined to submit a firm proposal without the opportunity for further consideration of various due diligence and other business issues. On February 2, 2007, management updated the Investors Financial board. After consideration of all aspects of State Street’s proposal, including its

financial terms, the board authorized management to seek to finalize the terms of a definitive agreement with State Street. Over the next two days, counsel to Investors Financial and State Street, working with the companies, negotiated the representations, termination fee and operating covenants in the merger agreement and then proceeded to finalize the definitive transaction documentation. During this period, State Street conducted further due diligence of Investors Financial, and Investors Financial management and their advisors also conducted a due diligence investigation of State Street.

On February 4, 2007, the board of directors of Investors Financial met with senior management and their outside legal and financial advisors. Management reviewed for the Investors Financial board of directors the background of discussions with State Street and the progress of negotiations, and reported on Investors Financial’s due diligence investigations of State Street. Goldman, Sachs & Co. reviewed with the Investors Financial board of directors the structure and other terms of the proposed transaction, and financial information regarding State Street, Investors Financial and the transaction, as well as information regarding peer companies and comparable transactions. In connection with the deliberation by the Investors Financial board of directors, Goldman, Sachs & Co. rendered to the Investors Financial board of directors its oral opinion (subsequently confirmed in writing), as described under “—Opinion of Investors Financial’s Financial Advisor,” that, as of the date of its opinion, and subject to and based on the qualifications and assumptions set forth in its opinion, the exchange ratio of 0.906 shares of State Street common stock for each share of Investors Financial common stock was fair, from a financial point of view, to the stockholders of Investors Financial.

Representatives of Wachtell, Lipton, Rosen & Katz discussed with the Investors Financial board of directors the legal standards applicable to its decisions and actions with respect to its consideration of the proposed transaction, and reviewed the legal terms of the proposed transaction agreements. Representatives of Wachtell, Lipton, Rosen & Katz also discussed with the Investors Financial board of directors the stockholder and regulatory approvals that would be required to complete the proposed merger, the likely process and timetable of the merger, including expected timing for obtaining the required stockholder and regulatory approvals. Wachtell, Lipton, Rosen & Katz also discussed compensation and benefits issues in connection with the merger and reviewed for the Investors Financial board of directors a set of draft resolutions relating to the proposed merger.

Following these discussions, and discussions among the members of the Investors Financial board of directors, management and Investors Financial’s advisors, including consideration of the factors described under “—Investors Financial’s Reasons for the Merger; Recommendation of the Investors Financial Board of Directors,” the Investors Financial board of directors unanimously determined that the transactions contemplated by the merger agreement and the related transactions and agreements are fair to, advisable and in the best interests of Investors Financial and its stockholders, and the directors voted unanimously to approve the merger with State Street, to approve and adopt the merger agreement and to approve the related transactions and agreements.

On February 4, 2007, the board of directors of State Street held a special meeting by teleconference at which members of State Street’s senior management and its legal and financial advisors made various presentations about, and the board discussed, the potential merger. At this meeting, State Street’s board of directors approved the merger agreement and the transactions contemplated by the merger agreement.

Following approval of each board of directors, the parties executed the merger agreement and on February 5, 2007 the transaction was announced in a joint press release.

Investors Financial’s Reasons for the Merger; Recommendation of the Investors Financial Board of Directors

The Investors Financial board of directors determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are fair to, advisable and in the best interests of Investors Financial and its stockholders. Accordingly, the Investors Financial board of directors unanimously approved the merger agreement and unanimously recommends that Investors Financial stockholders vote “FOR” the adoption of the merger agreement.

In reaching its decision to approve the merger agreement and recommend the merger to its stockholders, the Investors Financial board of directors consulted with Investors Financial’s management, as well as its legal and financial advisors, and considered a number of factors, including the following factors which the Investors Financial board of directors viewed as generally supporting its decision to approve the merger agreement and recommend the merger to Investors Financial stockholders:

The board of directors also considered potentially adverse factors and risks in reaching its conclusion, including:

The foregoing discussion of the factors considered by the Investors Financial board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by the Investors Financial board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Investors Financial board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The Investors Financial board of directors considered all these factors as a whole, including discussions with, and questioning of, Investors Financial management and Investors Financial’s financial and legal advisors, and overall considered the factors to be favorable to, and to support, its determination. The Investors Financial board of directors also relied on the experience of Goldman, Sachs & Co., its financial advisor, for analyses of the financial terms of the merger and for its opinion as to the fairness of the exchange ratio to Investors Financial’s stockholders.

For the reasons set forth above, the Investors Financial board of directors unanimously determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are fair to, advisable and in the best interests of Investors Financial and its stockholders, and unanimously approved and adopted the merger agreement. The Investors Financial board of directors unanimously recommends that the Investors Financial stockholders vote “FOR” adoption of the merger agreement.

Opinion of Investors Financial’s Financial Advisor

Goldman Sachs rendered its opinion to Investors Financial’s board of directors that as of February 4, 2007 and based upon and subject to the factors and assumptions set forth in its opinion, the exchange ratio of 0.906 shares of State Street common stock to be received for each share of Investors Financial common stock pursuant to the merger agreement was fair from a financial point of view to the holders of Investors Financial common stock.

The full text of the written opinion of Goldman Sachs, dated February 4, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached asAnnex B to this document. Investors Financial’s shareholders should read the opinion in its entirety. Goldman Sachs provided its opinion for the information and assistance of Investors Financial’s board of directors in connection with its consideration of the transaction. The Goldman Sachs opinion is not a recommendation as to how any holder of Investors Financial’s common stock should vote with respect to the transaction.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

Goldman Sachs also held discussions with members of the senior management of Investors Financial and State Street regarding their assessment of the strategic rationale for, and the potential benefits of, the transaction and the past and current business operations, financial condition, and future prospects of their respective companies.

In addition, Goldman Sachs:

Goldman Sachs relied upon the accuracy and completeness of all of the financial, accounting, legal, tax and other information discussed with or reviewed by it and assumed such accuracy and completeness for purposes of rendering the opinion described above. In that regard, Goldman Sachs assumed with the consent of Investors Financial’s board of directors that the internal financial analyses and forecasts for Investors Financial and the cost savings and operating synergies projected by Investors Financial and State Street were reasonably prepared on a basis reflecting the best currently available estimates and judgments of Investors Financial and, with respect to the cost savings and operating synergies, State Street. Goldman Sachs is not an expert in the evaluation of loan portfolios for purposes of assessing the adequacy of the allowance for loan losses, and, accordingly, Goldman Sachs assumed that such allowances for losses were in the aggregate adequate to cover such losses. In addition, Goldman Sachs did not review individual credit files and did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of

Investors Financial or State Street or any of their respective subsidiaries. No evaluation or appraisal of the assets or liabilities of Investors Financial or State Street or any of their respective subsidiaries was furnished to Goldman Sachs. Goldman Sachs also assumed that all governmental, regulatory or other consents and approvals necessary for the completion of the merger would be obtained without any adverse effect on Investors Financial or State Street or on the expected benefits of the merger in any way meaningful to its analysis.

The following is a summary of the material financial analyses used by Goldman Sachs in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs. The order of analyses described does not represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before February 2, 2007 and is not necessarily indicative of current market conditions.

Transaction Overview and Transaction Multiples Analysis. Goldman Sachs reviewed with the Investors Financial board of directors the basic terms of the merger, including the following:

Goldman Sachs calculated for the Investors Financial board of directors various multiples and premiums resulting from the transaction. These calculations were based on historical information, estimates from Institutional Brokerage Estimate Systems, or IBES (a data service that compiles estimates issued by securities analysts) and certain financial analyses and forecasts for Investors Financial prepared by its management.

Goldman Sachs calculated that the implied consideration of $65.01 per share of Investors Financial’s common stock, represented a 38.5% premium to the closing price per share of Investors Financial common stock on February 2, 2007 (the last trading day prior to the presentation made by Goldman Sachs to the Investors Financial board of directors) and a 40.2% and 42.1% premium to the average closing price per share for the 5 and 15 trading days, respectively, prior to the presentation made by Goldman Sachs to the Investors Financial board of directors.

Using the implied consideration, Goldman Sachs also calculated the following multiples and premiums:

Selected Companies Analysis. Goldman Sachs reviewed and compared certain financial information for Investors Financial to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the banking industry:

Although none of the selected companies is directly comparable to Investors Financial, the companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of Investors Financial.

The multiples and ratios of Investors Financial and the selected companies were based on the latest publicly available financial data, market data as of February 2, 2007 and IBES estimates (or, with respect to the EPS estimate for Investors Financial, internal forecasts prepared by its management). With respect to the selected companies, Goldman Sachs calculated:

Investors Financial

Custodians

Financial Processors

Securities Processors

Range

Median

Range

Median

Range

Median

Closing share price as a percentage of the 52-week high share price

92

%

97%–100%

100

%

85%– 100%

96

%

82%– 100%

95

%

Closing share price as a multiple of:

Estimated 2007 EPS2

20.8

x

17.4x–18.4x

17.8

x

18.5x–25.8x

20.0

x

19.0x–63.7x

21.9

x

Estimated 2008 EPS3

17.7

x

15.3x–16.5x

16.2

x

16.2–23.0x

18.0

x

17.7x–40.0x

19.7

x

IBES long-term growth rate estimate

13.3

%

12.0%–12.0%

12.0

%

13.0%–15.0%

15.0

%

10.0%–17.5%

13.5

%

Ratio of the 2007 P/E multiple to IBES long-term earnings growth rate estimate

1.6

x

1.5x–1.5x

1.5

x

1.2x–2.0x

1.3

x

1.6x–3.6x

1.8

x

Ratio of market capitalization to tangible book value

3.6

x

3.9x–6.1x

4.6

x

NM

NM

NM

NM

Goldman Sachs compared the historical total return, calculated as the change in stock price plus the reinvested proceeds from dividends, for certain periods ended February 2, 2007 for Investors Financial, to the average historical total return for the following Investors Financial peers: Bank of New York, Mellon Financial and Northern Trust. The following table represents the results of this analysis: