Exhibit 99.1
State Street Corporation Achieves Record Revenue of $2.7 Billion in the Second Quarter, Up 39% From A Year Ago
Earnings Per Share of $1.35 up 26%, Including $0.05 in Merger and Integration Costs
Outlook Raised for 2008 Due to Momentum from Strong Year-Over-Year and Sequential Quarter Performance
BOSTON--(BUSINESS WIRE)--State Street Corporation announced today second-quarter 2008 earnings per share of $1.35 compared to $1.07 per share for the second quarter of 2007. Earnings per share in the second quarter of 2008 includes $22 million of after-tax merger and integration costs associated with the July 2007 acquisition of Investors Financial Services Corp. (“Investors Financial”), or $0.05 per share. Excluding these costs, operating earnings per share of $1.40 would have been up 31% compared to $1.07 in the second quarter of 2007. Revenue of $2.672 billion in the second quarter of 2008 represented a State Street record and is up 39.1%, compared to $1.921 billion in the year-ago quarter. Total expenses in the second quarter of 2008 of $1.841 billion are up 35.6%, compared to $1.358 billion in the year-ago quarter and, excluding the merger and integration costs, would be $1.809 billion, up 33.2%. Total revenue on a fully taxable-equivalent basis is $2.700 billion, up 39.7% from $1.933 billion a year ago. As a result, on an operating basis, State Street generated about 650 basis points of positive operating leverage. Excluding the results of Investors Financial and the merger and integration costs, revenue would be up 27% and expenses would be up 22%. For the second quarter of 2008, return on shareholders’ equity is 18.6%, and is 19.3%, excluding the merger and integration costs, compared to 19.2% in the second quarter of 2007.
Ronald E. Logue, State Street's chairman and chief executive officer, said, “Our strong performance in the second quarter following outstanding performance in the first quarter demonstrates our core business strength and our ability to sustain strong momentum globally. Additionally, the performance of the acquired Investors Financial business continues to meet or exceed the financial targets we established with more than 90% of the customer revenue now retained. Our year-over-year and sequential quarterly growth in servicing fees is fueled by new business wins and increased cross selling. On the investment management side, I am pleased with SSgA’s financial performance amid market disruption.”
Logue added, “In these markets, we continue to experience strong year-over-year results in securities finance and trading, as well as net interest revenue. We are pleased to achieve positive operating leverage on both a quarter-to-quarter and on a year-over-year basis, the fifteenth consecutive quarter as measured on a year-over-year basis.”
Logue concluded, “Our strong results of the quarter, plus the benefit of the $2.8 billion in equity capital that we issued in early June, enhanced the Corporation’s solid capital position. Given the strength of the first half of the year, we now expect both growth in operating earnings per share to approach the high end of the 10 to 15 percent range and achievement of operating return on equity to approach the high end of the 14 percent to 17 percent range in 2008. We are also increasing our outlook for growth in revenue, expecting to exceed the high end of the 14 percent to 17 percent range in 2008. We continue to be focused on achieving positive operating leverage on an annual basis.”
In reporting its financial results for the second quarter of 2008, State Street has prepared information in four categories:
- “Baseline” results are results on an operating basis excluding the “Investors Financial” results described below and are presented on a fully taxable-equivalent basis.
- “Investors Financial” results are the revenue and expenses, including financing costs and amortization of intangibles, attributable to the Investors Financial business acquired on July 2, 2007, but excluding merger and integration costs, all presented on a fully taxable-equivalent basis. Per-share amounts reflect the effect of the acquisition on outstanding shares.
- “Operating-basis” results are “reported” results excluding the merger and integration costs. They are presented on a fully taxable-equivalent basis.
- “Reported” results are in accordance with U.S. generally accepted accounting principles (GAAP).
Management believes that providing separate Investors Financial results and baseline financial information further assists investors and analysts in understanding the effect of that acquisition. Management presents results on an operating basis in order to provide financial information that is comparable from period to period and to present comparable financial trends with respect to our ongoing business operations. Management believes such presentation facilitates an investor’s understanding and analysis of our underlying performance and trends in addition to financial information prepared in accordance with GAAP.
$ in millions except per share data |
For the three months ended |
| June 30, 2008 |
| | | Baseline (a) | | Investors
Financial | | Operating | | Reported |
Fee Revenue | | $1,802 | | $204 | | $2,006 | | $2,006 |
All other revenue | | 645 | | 49 | | 694 | | 666 |
Total revenue | | 2,447 | | 253 | | 2,700 | | 2,672 |
Total expenses | | 1,651 | | 158 | | 1,809 | | 1,841 |
Income taxes | | 279 | | 42 | | 321 | | 283 |
Net income | | $517 | | $53 | | $570 | | $548 |
Diluted EPS | | $1.38 | | $0.02 | | $1.40 | | $1.35 |
(a) represents State Street results on an “operating basis,” further adjusted to exclude the “ Investors Financial” results described in the adjoining column, all presented on a fully taxable-equivalent basis.
SECOND QUARTER RESULTS VS. YEAR-AGO QUARTER
Total revenue increased 39.1% to $2.7 billion in the second quarter of 2008 compared to the second quarter of 2007, and total expenses grew 35.6% to $1.8 billion over the same period.
Servicing fees are up 28%, to $977 million from $766 million in last year’s second quarter. The increase is attributable to the impact of the acquisition of Investors Financial as well as to business from existing and new customers in 2008, offset partially by lower average daily equity market valuations. Total assets under custody are $15.26 trillion at June 30, 2008, up 17%, compared with $13.04 trillion a year ago. Daily average values for the S&P 500 Index are down 8%, for the MSCI® EAFE IndexSM are down 6%, and for the NASDAQ are down 5%, during the second quarter 2008 from the year-ago quarter.
Investment management fees, generated by State Street Global Advisors, are $280 million, down $4 million, or 1%, from $284 million in the second quarter of 2007, a period which preceded the disruption in the fixed-income markets. The decline is primarily due to lower performance fees and a 10% decrease in average month-end equity valuations, offset partially by new business. Total assets under management are $1.89 trillion at June 30, 2008, down 2%, compared to $1.93 trillion the previous year.
Trading services revenue, which includes foreign exchange trading revenue and brokerage and other fees, is $320 million for the quarter, up 23% from $260 million a year ago. The improvement was due primarily to increased volatility and higher volumes in foreign exchange.
Securities finance revenue is $352 million in the quarter, up 117% compared to $162 million in the year-ago quarter, primarily reflecting an increase in spreads. Both quarters’ results represent seasonally high activity.
Processing fees and other revenue are up 18% at $77 million, compared to $65 million due to revenue associated with Investors Financial. Total assets in our asset-backed commercial paper program at June 30, 2008, are $28.4 billion, which are not recorded on our consolidated balance sheet. The unrealized after-tax mark-to-market loss on the investment securities in our asset-backed commercial paper program at June 30, 2008, increased about $130 million to $1.6 billion from $1.5 billion at March 31, 2008, due to continued disruption in the fixed-income markets.
Net interest revenue on a fully taxable-equivalent basis is $685 million, an increase of $288 million, or 73%, from $397 million a year ago. The increase in net interest revenue is due to improved spreads and a favorable mix of deposits. Net interest margin increased to 2.31% from 1.64% a year ago. The balance sheet increased 30% to $146.2 billion at June 30, 2008 from June 30, 2007. The unrealized after-tax mark-to-market loss on the investment portfolio increased $72 million, or 4%, to $2.012 billion at June 30, 2008 compared to $1.940 billion at March 31, 2008, due to increases in fixed-income rates, offset partially by tighter credit spreads.
Expenses increased to $1.841 billion, up 35.6% from $1.358 billion a year ago, partially due to the acquisition of Investors Financial. Excluding $158 million in operating costs associated with Investors Financial and $32 million in merger and integration costs, expenses are up 21.6% to $1.651 billion. Salaries and benefits expenses are up 31% to $1.060 billion, primarily attributable to the additional expense from the Investors Financial acquisition and increased staffing to support new business, as well as higher benefits expense. The increase in expenses includes higher transaction processing services, up 22% to $172 million, due to the impact of Investors Financial and higher volumes. Expenses for information systems & communications increased $36 million, to $164 million, primarily due to the impact of Investors Financial and costs to support growth in Europe. Occupancy expense increased 17%, or $17 million, to $115 million. Other expenses increased 63% to $298 million from $183 million due to costs associated with professional fees and our acquisition of Investors Financial, as well as higher securities processing expenses.
SECOND-QUARTER 2008 RESULTS VS. FIRST QUARTER 2008
Second-quarter earnings per share of $1.35 is flat, compared to the first quarter, but excluding merger and integration costs of $0.05 per share in the second quarter of 2008 and of $0.04 per share in the first quarter of 2008, is up 1% from $1.39 to $1.40. Total revenue in the second quarter of $2.672 billion is up 3.7% versus $2.577 billion in the first quarter. Total expenses are $1.841 billion, up 3.8% versus $1.774 billion in the first quarter. Excluding merger and integration costs of $32 million in the second quarter and $26 million in the first quarter, operating expenses would be up 3.5%. Total revenue on a fully taxable-equivalent basis is $2.700 billion, up 3.8% from $2.600 billion in the first quarter of 2008. As a result, on an operating basis, State Street generated about 30 basis points of positive operating leverage. For the second quarter of 2008, return on shareholders’ equity is 18.6% and 19.3% excluding the merger and integration costs, compared with 18.7% and 19.4% excluding the merger and integration costs in the first quarter.
Servicing fees are up 2% to $977 million due to business from new and existing customers and slightly higher daily equity valuations. Management fees are up slightly at $280 million, primarily due to favorable equity markets, offset partially by lower performance fees. Trading services decreased 13% to $320 million due principally to lower revenue in foreign exchange. Securities finance revenue increased 16%, from $303 million to $352 million, due to seasonally high volumes and improved spreads. Processing fees and other revenue are up from $54 million to $77 million. Net interest revenue on a fully taxable-equivalent basis increased $37 million, or 6%, to $685 million, compared to $648 million in the first quarter due primarily to improved spreads.
Salaries and employee benefits total $1.060 billion, down slightly from $1.062 billion. Transaction processing services increased $10 million, or 6%, to $172 million. Information systems and communications expense is up 6%, or $9 million, to $164 million primarily due to infrastructure expenses for investment management, trading services, and hedge fund servicing. Occupancy increased $5 million or 5% to $115 million. Other expenses are up $39 million, or 15%, from $259 million to $298 million primarily as a result of costs associated with professional fees and globalization efforts.
The effective tax rate for the second quarter is 34.0%, flat with the first quarter. We completed the divestiture of our 50% interest in CitiStreet in early July, resulting in a gain of about $0.47 per share. Taking into account the effect of the CitiStreet divestiture, the expected effective tax rate for 2008 is 34.6%. Excluding the impact of the divestiture, the expected effective tax rate for 2008 is 34.0%.
ADDITIONAL INFORMATION
All per share amounts represent diluted earnings per share.
INVESTOR CONFERENCE CALL
State Street will webcast an investor conference call today, Tuesday, July 15, 2008, at 9:30 a.m. EDT, available at www.statestreet.com/stockholder. The conference call will also be available via telephone, at +1 706/679-5594 (Conference ID# 52518194). Recorded replays of the conference call will be available on the web site, and by telephone at +1 706/645-9291(Conference ID# 52518194), beginning approximately two hours after the call’s completion. The telephone replay will be available for two weeks following the conference call. This press release, presentation materials to be referred to on the conference call, and additional financial information is available on State Street’s website, at www.statestreet.com/stockholder, under “Financial Reports.”
State Street Corporation (NYSE: STT) is the world's leading provider of financial services to institutional investors, including investment servicing, investment management and investment research and trading. With $15.257 trillion in assets under custody and $1.894 trillion in assets under management at June 30, 2008, State Street operates in 26 countries and more than 100 geographic markets worldwide and employs 28,700 worldwide. For more information, visit State Street’s web site at www.statestreet.com or call 877/639-7788 [NEWS STT] toll-free in the United States and Canada, or +1 202/266-3340 outside those countries.
FORWARD-LOOKING STATEMENTS
This news announcement contains forward-looking statements as defined by United States securities laws, including statements about State Street’s goals and expectations, the financial outlook and business environment. These statements are not guarantees of future performance, are inherently uncertain, are based on current assumptions that are difficult to predict and involve a number of risks and uncertainties. Therefore, actual outcomes and results may differ materially from what is expressed in those statements, and those statements should not be relied upon as representing State Street's expectations or beliefs as of any date subsequent to the date of this release.
Important factors that may affect future results and outcomes include:
- State Street's ability to integrate acquisitions into its business, including the acquisition of Investors Financial Services Corp.;
- the level and volatility of interest rates, particularly in the U.S., Europe and the Asia/Pacific region; the performance and volatility of securities, currency and other markets in the U.S. and internationally; and economic conditions and monetary and other governmental actions designed to address those conditions;
- the liquidity of the U.S. and International securities markets, particularly the markets for fixed-income securities, including asset-backed commercial paper; and the liquidity requirements of State Street’s customers;
- State Street’s ability to measure the fair value of securities in its investment securities portfolio, particularly given current market conditions for many of those securities;
- the credit quality and credit agency ratings of the securities in State Street’s investment securities portfolio, a deterioration or downgrade of which could lead to other-than-temporary impairment of the respective securities and the recognition of an impairment loss;
- State Street's ability to attract non-interest bearing deposits and other low-cost funds;
- the possibility that changes in market conditions, asset performance or accounting standards may require any off-balance sheet activities, including State Street’s asset-backed commercial paper conduits, to be consolidated into State Street’s financial statements, requiring recognition of associated losses, if any;
- the results of litigation and similar disputes and, in particular, the effect that current or potential litigation may have on its reputation and that of State Street Global Advisors (SSgA) and State Street’s ability to attract and retain customers; and the possibility that the ultimate costs of the legal exposure associated with certain of SSgA’s actively managed fixed-income strategies may exceed or be below the level of the related reserve, in view of the uncertainties of the timing and outcome of litigation, and the amounts involved;
- the possibility of further developments of the nature that previously gave rise to the legal exposure associated with certain of SSgA’s actively managed fixed-income and other investment strategies;
- the performance and demand for the investment products State Street offers;
- the competitive environment in which State Street operates;
- the enactment of legislation and changes in regulation and enforcement that impact State Street and its customers, as well as the effects of legal and regulatory proceedings, including litigation;
- State Street's ability to continue to grow revenue, control expenses and attract the capital necessary to achieve its business goals and comply with regulatory requirements;
- State Street's ability to manage systemic risks and control operating risks;
- State Street’s ability to obtain quality and timely services from third parties with which it contracts;
- trends in the globalization of investment activity and the growth on a worldwide basis in financial assets;
- trends in governmental and corporate pension plans and savings rates;
- changes in accounting standards and practices, including changes in the interpretation of existing standards, that impact State Street's consolidated financial statements; and
- changes in tax legislation and in the interpretation of existing tax laws by U.S. and non-U.S. tax authorities that impact the amount of taxes due.
Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in State Street's 2007 Annual Report on Form 10-K and its subsequent SEC filings, including, in particular, its Current Report on Form 8-K dated June 2, 2008. State Street encourages investors to read these filings, particularly the sections on Risk Factors, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, July 15, 2008, and State Street does not undertake efforts to revise those forward-looking statements to reflect events after this date.
| STATE STREET CORPORATION |
| Earnings Press Release Addendum |
| | | | | | | | | | | | | | | | | |
| Financial Highlights |
| June 30, 2008 |
| | | | | | | | | | | | | | | | | |
| | Quarters Ended | | | % Change |
| | | June 30,
2008 (1) | | | March 31,
2008 (1) | | | | June 30,
2007 | | | Q2 2008
vs.
Q1 2008 | | Q2 2008
vs.
Q2 2007 |
(Dollars in millions, except per share amounts or where otherwise noted) | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Total Revenue | | $ | 2,672 | | $ | 2,577 | | | $ | 1,921 | | | 4 | % | | 39 | % |
| Total Expenses (2) | | | 1,841 | | | 1,774 | | | | 1,358 | | | 4 | | | 36 | |
| Net Income | | | 548 | | | 530 | | | | 366 | | | 3 | | | 50 | |
| | | | | | | | | | | | | | | | | |
| Diluted Earnings Per Share (3) (4) | | $ | 1.35 | | $ | 1.35 | | | $ | 1.07 | | | - | | | 26 | |
| | | | | | | | | | | | | | | | | |
| Cash Dividends Declared Per Share | | $ | .24 | | $ | .23 | | | $ | .22 | | | | | | | |
| Closing Price Per Share of Common Stock (at quarter end) | | | 63.99 | | | 79.00 | | | | 68.40 | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Return on Equity | | | 18.6 | % | | 18.7 | % | | | 19.2 | % | | | | | | |
| | | | | | | | | | | | | | | | | |
| At Quarter End: | | | | | | | | | | | | | | | | | |
| Assets Under Custody (AUC) (in trillions) | | $ | 15.26 | | $ | 14.90 | | | $ | 13.04 | | | | | | | |
| Assets Under Management (AUM) (in trillions) | | | 1.89 | | | 1.96 | | | | 1.93 | | | | | | | |
| | Six Months Ended | | % Change | |
| | June 30,
2008 (5) | | | June 30,
2007 | | 2008
vs.
2007 |
| | | | |
| (Dollars in millions, except per share amounts) | | | | |
| | | | | | | | |
| Total Revenue | | $ | 5,249 | | $ | 3,617 | | 45 | % |
| Total Expenses (6) | | | 3,615 | | | 2,571 | | 41 | |
| Income Tax Expense | | | 556 | | | 366 | | 52 | |
| Net Income | | | 1,078 | | | 680 | | 59 | |
| | | | | | | | |
| Diluted Earnings Per Share (4) | | | 2.70 | | | 2.00 | | 35 | |
| | | | | | | | |
| Cash Dividends Declared Per Share | | | .47 | | | .43 | | 9 | |
| | | | | | | | |
| Return on Equity | | | 18.6 | | | 18.4 | | |
| | | | | | | | |
| (1) Quarters ended June 30, 2008 and March 31, 2008 include financial results of Investors Financial, which State Street acquired on July 2, 2007. |
| |
| (2) Total expenses for the quarters ended June 30, 2008 and March 31, 2008 include merger and integration costs of $32 million and and $26 million, respectively, or $22 million and $17 million after-tax, respectively, recorded in connection with the acquisition of Investors Financial. |
| |
| (3) Diluted earnings per share for the quarters ended June 30, 2008 and March 31, 2008 reflect the issuance of 60.8 million shares of common stock on July 2, 2007 in connection with the acquisition of Investors Financial. |
| |
| (4) Diluted earnings per share for the quarter and six months ended June 30, 2008 reflect the issuance of 40.5 million shares of common stock on June 3, 2008. |
| |
| (5) Six months ended June 30, 2008 includes financial results of Investors Financial, which State Street acquired on July 2, 2007. |
| |
| (6) Total expenses for the six months ended June 30, 2008 include merger and integration costs of $58 million, or $39 million after-tax, recorded in connection with the acquisition of Investors Financial. |
| STATE STREET CORPORATION |
| Earnings Press Release Addendum |
| | | | | | | | | | | | | | | | | |
| SELECTED FINANCIAL INFORMATION |
| Quarters and Six Months Ended June 30, 2008 and June 30, 2007 |
| | | | | | | | | | | | | | | | | |
| | Quarters Ended | | | Six Months Ended |
| | June 30,
2008 (1) | | June 30,
2007 | | % Change | | | | June 30,
2008 (1) | | June 30,
2007 | | % Change | |
| (Dollars in millions, except per share amounts) | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Fee Revenue: | | | | | | | | | | | | | | | | | |
| Servicing fees | | $ | 977 | | $ | 766 | | | 28 | | % | | $ | 1,937 | | $ | 1,484 | | 31 | % |
| Management fees | | | 280 | | | 284 | | | (1 | ) | | | | 558 | | | 545 | | 2 | |
| Trading services | | | 320 | | | 260 | | | 23 | | | | | 686 | | | 480 | | 43 | |
| Securities finance | | | 352 | | | 162 | | | 117 | | | | | 655 | | | 260 | | 152 | |
| Processing fees and other | | | 77 | | | 65 | | | 18 | | | | | 131 | | | 138 | | (5 | ) |
| Total fee revenue | | | 2,006 | | | 1,537 | | | 31 | | | | | 3,967 | | | 2,907 | | 36 | |
| | | | | | | | | | | | | | | | | |
| Net Interest Revenue: | | | | | | | | | | | | | | | | | |
| Interest revenue | | | 1,137 | | | 1,203 | | | (5 | ) | | | | 2,425 | | | 2,375 | | 2 | |
| Interest expense | | | 480 | | | 818 | | | (41 | ) | | | | 1,143 | | | 1,665 | | (31 | ) |
| Net interest revenue (2) | | | 657 | | | 385 | | | 71 | | | | | 1,282 | | | 710 | | 81 | |
| Provision for loan losses | | | - | | | - | | | | | | | - | | | - | | |
| Net interest revenue after provision for loan losses | | | 657 | | | 385 | | | 71 | | | | | 1,282 | | | 710 | | 81 | |
| | | | | | | | | | | | | | | | | |
Gains (Losses) related to investment securities, net | | | 9 | | | (1 | ) | | | | | | - | | | - | | |
| Total revenue | | | 2,672 | | | 1,921 | | | 39.1 | | | | | 5,249 | | | 3,617 | | 45.1 | |
| | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 1,060 | | | 808 | | | 31 | | | | | 2,122 | | | 1,547 | | 37 | |
| Information systems and communications | | | 164 | | | 128 | | | 28 | | | | | 319 | | | 253 | | 26 | |
| Transaction processing services | | | 172 | | | 141 | | | 22 | | | | | 334 | | | 270 | | 24 | |
| Occupancy | | | 115 | | | 98 | | | 17 | | | | | 225 | | | 192 | | 17 | |
| Merger and integration costs | | | 32 | | | - | | | - | | | | | 58 | | | - | | - | |
| Other | | | 298 | | | 183 | | | 63 | | | | | 557 | | | 309 | | 80 | |
| Total operating expenses | | | 1,841 | | | 1,358 | | | 35.6 | | | | | 3,615 | | | 2,571 | | 40.6 | |
| Income before income tax expense | | | 831 | | | 563 | | | 48 | | | | | 1,634 | | | 1,046 | | 56 | |
| Income tax expense | | | 283 | | | 197 | | | | | | | 556 | | | 366 | | |
| Net income | | $ | 548 | | $ | 366 | | | 50 | | | | $ | 1,078 | | $ | 680 | | 59 | |
| | | | | | | | | | | | | | | | | |
| Earnings Per Share: | | | | | | | | | | | | | | | | | |
| Basic | | $ | 1.36 | | $ | 1.09 | | | 25 | | | | $ | 2.73 | | $ | 2.03 | | 34 | |
| Diluted | | | 1.35 | | | 1.07 | | | 26 | | | | | 2.70 | | | 2.00 | | 35 | |
| | | | | | | | | | | | | | | | | |
| Average Shares Outstanding (in thousands): | | | | | | | | | | | | | | | | | |
| Basic | | | 402,482 | | | 335,769 | | | | | | | 395,212 | | | 334,908 | | |
| Diluted | | | 406,964 | | | 341,101 | | | | | | | 399,684 | | | 339,338 | | |
| | | | | | | | | | | | | | | | | |
| Consolidated Selected Financial Information presented above was prepared in accordance with accounting principles generally accepted in the United States. |
| | | | | | | | | | | | | | | | | |
| (1) Quarter and six months ended June 30, 2008 includes financial results of Investors Financial, which State Street acquired on July 2, 2007. |
| |
| (2) Net interest revenue on a fully taxable-equivalent basis was $685 million and $397 million for the quarters ended June 30, 2008 and 2007, respectively, and $1.33 billion and $734 million for the six months ended June 30, 2008 and 2007, respectively. These amounts include taxable-equivalent adjustments of $28 million and $12 million for the quarters ended June 30, 2008 and 2007, respectively, and $51 million and $24 million for the six months ended June 30, 2008 and 2007, respectively. |
| STATE STREET CORPORATION |
| Earnings Press Release Addendum |
| | | | | | |
| SELECTED FINANCIAL INFORMATION |
| Quarters Ended June 30, 2008 and March 31, 2008 |
| | | | | | |
| | | | | | |
| | Quarters Ended |
| | June 30,
2008 | | March 31,
2008 | | % Change | |
| (Dollars in millions, except per share amounts) | | | |
| | | | | | |
| Fee Revenue: | | | | | | |
| Servicing fees | | $ | 977 | | $ | 960 | | | 2 | % |
| Management fees | | | 280 | | | 278 | | | 1 | |
| Trading services | | | 320 | | | 366 | | | (13 | ) |
| Securities finance | | | 352 | | | 303 | | | 16 | |
| Processing fees and other | | | 77 | | | 54 | | | 43 | |
| Total fee revenue | | | 2,006 | | | 1,961 | | | 2 | |
| | | | | | |
| Net Interest Revenue: | | | | | | |
| Interest revenue | | | 1,137 | | | 1,288 | | | (12 | ) |
| Interest expense | | | 480 | | | 663 | | | (28 | ) |
| Net interest revenue (1) | | | 657 | | | 625 | | | 5 | |
| Provision for loan losses | | | - | | | - | | | |
| Net interest revenue after provision for loan losses | | | 657 | | | 625 | | | 5 | |
| | | | | | |
Gains (Losses) related to investment securities, net | | | 9 | | | (9 | ) | | |
| Total revenue | | | 2,672 | | | 2,577 | | | 3.7 | |
| | | | | | |
| Operating Expenses: | | | | | | |
| Salaries and employee benefits | | | 1,060 | | | 1,062 | | | - | |
| Information systems and communications | | | 164 | | | 155 | | | 6 | |
| Transaction processing services | | | 172 | | | 162 | | | 6 | |
| Occupancy | | | 115 | | | 110 | | | 5 | |
| Merger and integration costs | | | 32 | | | 26 | | | 23 | |
| Other | | | 298 | | | 259 | | | 15 | |
| Total operating expenses | | | 1,841 | | | 1,774 | | | 3.8 | |
| Income before income tax expense | | | 831 | | | 803 | | | 3 | |
| Income tax expense | | | 283 | | | 273 | | | |
| Net income | | $ | 548 | | $ | 530 | | | 3 | |
| | | | | | |
| Earnings Per Share: | | | | | | |
| Basic | | $ | 1.36 | | $ | 1.37 | | | (1 | ) |
| Diluted | | | 1.35 | | | 1.35 | | | - | |
| | | | | | |
| Average Shares Outstanding (in thousands): | | | | | | |
| Basic | | | 402,482 | | | 387,942 | | | |
| Diluted | | | 406,964 | | | 393,647 | | | |
| | | | | | |
| Consolidated Selected Financial Information presented above was prepared in accordance with accounting principles generally accepted in the United States. |
| | | | | | |
| (1) Net interest revenue on a fully taxable-equivalent basis was $685 million and $648 million for the quarters ended June 30, 2008 and March 31, 2008, respectively. These amounts include taxable-equivalent adjustments of $28 million and $23 million. |
| STATE STREET CORPORATION |
| Earnings Press Release Addendum |
| | | | | | | | | | | | | | | | | |
| SELECTED OPERATING-BASIS FINANCIAL INFORMATION |
| Quarters and Six Months Ended June 30, 2008 and June 30, 2007 |
| | | | | | | | | | | | | | | | | |
| | | Quarters Ended (1) | | Six Months Ended (1) |
| | | June 30,
2008 | | June 30,
2007 | | | | June 30,
2008 | | June 30,
2007 | | |
| (Dollars in millions, except per share amounts) | | | | | % Change | | | | | % Change | |
| | | | | | | | | | | | | | | | | |
| Fee Revenue: | | | | | | | | | | | | | | | | | |
| Servicing fees | | | $ | 977 | | | $ | 766 | | | 28 | % | | $ | 1,937 | | $ | 1,484 | | 31 | % |
| Management fees | | | | 280 | | | | 284 | | | (1 | ) | | | 558 | | | 545 | | 2 | |
| Trading services | | | | 320 | | | | 260 | | | 23 | | | | 686 | | | 480 | | 43 | |
| Securities finance | | | | 352 | | | | 162 | | | 117 | | | | 655 | | | 260 | | 152 | |
| Processing fees and other | | | | 77 | | | | 65 | | | 18 | | | | 131 | | | 138 | | (5 | ) |
| Total fee revenue | | | | 2,006 | | | | 1,537 | | | 31 | | | | 3,967 | | | 2,907 | | 36 | |
| | | | | | | | | | | | | | | | | |
| Net Interest Revenue: | | | | | | | | | | | | | | | | | |
| Interest revenue, operating basis | | | | 1,165 | | | | 1,215 | | | (4 | ) | | | 2,476 | | | 2,399 | | 3 | |
| Interest expense | | | | 480 | | | | 818 | | | (41 | ) | | | 1,143 | | | 1,665 | | (31 | ) |
| Net interest revenue, operating basis | | | | 685 | | | | 397 | | | 73 | | | | 1,333 | | | 734 | | 82 | |
| Provision for loan losses | | | | - | | | | - | | | | | | - | | | - | | |
| Net interest revenue after provision for loan losses, operating basis | | | | 685 | | | | 397 | | | 73 | | | | 1,333 | | | 734 | | 82 | |
| | | | | | | | | | | | | | | | | |
| Gains (Losses) related to investment securities, net | | | | 9 | | | | (1 | ) | | | | | - | | | - | | |
| Total revenue, operating basis (2)(3) | | | | 2,700 | | | | 1,933 | | | 39.7 | | | | 5,300 | | | 3,641 | | 45.6 | |
| | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | | 1,060 | | | | 808 | | | 31 | | | | 2,122 | | | 1,547 | | 37 | |
| Information systems and communications | | | | 164 | | | | 128 | | | 28 | | | | 319 | | | 253 | | 26 | |
| Transaction processing services | | | | 172 | | | | 141 | | | 22 | | | | 334 | | | 270 | | 24 | |
| Occupancy | | | | 115 | | | | 98 | | | 17 | | | | 225 | | | 192 | | 17 | |
| Other | | | | 298 | | | | 183 | | | 63 | | | | 557 | | | 309 | | 80 | |
| Total operating expenses, operating basis (2)(3) | | | | 1,809 | | | | 1,358 | | | 33.2 | | | | 3,557 | | | 2,571 | | 38.4 | |
| Income before income tax expense, operating basis | | | | 891 | | | | 575 | | | 55 | | | | 1,743 | | | 1,070 | | 63 | |
| Income taxes, operating basis | | | | 293 | | | | 197 | | | | | | 575 | | | 366 | | |
| Taxable-equivalent adjustment | | | | 28 | | | | 12 | | | | | | 51 | | | 24 | | |
| Net income, operating basis | | | $ | 570 | | | $ | 366 | | | 56 | | | $ | 1,117 | | $ | 680 | | 64 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings per share, operating basis | | | $ | 1.40 | | | $ | 1.07 | | | 31 | | | $ | 2.79 | | $ | 2.00 | | 40 | |
| | | | | | | | | | | | | | | | | |
| Average diluted shares outstanding (in thousands) | | | | 406,964 | | | | 341,101 | | | | | | 399,684 | | | 339,338 | | |
| | | | | | | | | | | | | | | | | |
| Return on equity, operating basis | | | | 19.3 | % | | | 19.2 | % | | | | | 19.3 | % | | 18.4 | % | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| (1) Refer to the accompanying reconciliation of reported results to operating-basis results. |
| |
| (2) For the quarter ended June 30, 2008, positive operating leverage in the year-over-year comparison was 650 basis points, based on growth in total operating-basis revenue of 39.7% and growth in total operating-basis expenses of 33.2%. |
| |
| (3) For the six months ended June 30, 2008, positive operating leverage in the year-over-year comparison was 720 basis points, based on growth in total operating-basis revenue of 45.6% and growth in total operating-basis expenses of 38.4%. |
| STATE STREET CORPORATION |
| Earnings Press Release Addendum |
| | | | | | | | |
| SELECTED OPERATING-BASIS FINANCIAL INFORMATION |
| Quarters Ended June 30, 2008 and March 31, 2008 |
| | | | | | | | |
| | | | | | | | |
| | Quarters Ended (1) |
| | June 30,
2008 | | | March 31,
2008 | | |
| (Dollars in millions, except per share amounts) | | | | | % Change |
| | | | | | | | |
| Fee Revenue: | | | | | | | | |
| Servicing fees | | $ | 977 | | | $ | 960 | | | 2 | % |
| Management fees | | | 280 | | | | 278 | | | 1 | |
| Trading services | | | 320 | | | | 366 | | | (13 | ) |
| Securities finance | | | 352 | | | | 303 | | | 16 | |
| Processing fees and other | | | 77 | | | | 54 | | | 43 | |
| Total fee revenue | | | 2,006 | | | | 1,961 | | | 2 | |
| | | | | | | | |
| Net Interest Revenue: | | | | | | | | |
| Interest revenue, operating basis | | | 1,165 | | | | 1,311 | | | (11 | ) |
| Interest expense | | | 480 | | | | 663 | | | (28 | ) |
| Net interest revenue, operating basis | | | 685 | | | | 648 | | | 6 | |
| Provision for loan losses | | | - | | | | - | | | |
| Net interest revenue after provision for loan losses, operating basis | | | 685 | | | | 648 | | | 6 | |
| | | | | | | | |
Gains (Losses) related to investment securities, net | | | 9 | | | | (9 | ) | | |
| Total revenue, operating basis (2) | | | 2,700 | | | | 2,600 | | | 3.8 | |
| | | | | | | | |
| Operating Expenses: | | | | | | | | |
| Salaries and employee benefits, operating basis | | | 1,060 | | | | 1,062 | | | - | |
| Information systems and communications | | | 164 | | | | 155 | | | 6 | |
| Transaction processing services | | | 172 | | | | 162 | | | 6 | |
| Occupancy | | | 115 | | | | 110 | | | 5 | |
| Other, operating basis | | | 298 | | | | 259 | | | 15 | |
| Total operating expenses, operating basis (2) | | | 1,809 | | | | 1,748 | | | 3.5 | |
| Income before income tax expense, operating basis | | | 891 | | | | 852 | | | 5 | |
| Income taxes | | | 293 | | | | 282 | | | |
| Taxable-equivalent adjustment | | | 28 | | | | 23 | | | |
| Net income, operating basis | | $ | 570 | | | $ | 547 | | | 4 | |
| | | | | | | | |
| | | | | | | | |
| Diluted earnings per share, operating basis | | $ | 1.40 | | | $ | 1.39 | | | 1 | |
| | | | | | | | |
| Average diluted shares outstanding (in thousands) | | | 406,964 | | | | 393,647 | | | |
| | | | | | | | |
| Return on equity, operating basis | | | 19.3 | % | | | 19.4 | % | | |
| | | | | | | | |
| | | | | | | | |
| (1) Refer to the accompanying reconciliation of reported results to operating-basis results. |
| |
| (2) For the quarter ended June 30, 2008, positive operating leverage in the quarter-over-quarter comparison was 30 basis points, based on growth in total operating-basis revenue of 3.8% and growth in total operating-basis expenses of 3.5%. |
| STATE STREET CORPORATION |
| Earnings Press Release Addendum |
| | | | | | | | | | | | | | | | | | | | |
| RECONCILIATION OF REPORTED RESULTS TO OPERATING-BASIS RESULTS |
| Quarter and Six Months Ended June 30, 2008 |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| (Dollars in millions, except per share amounts) | | | Quarter Ended June 30, 2008 | | | Six Months Ended June 30, 2008 |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | Reported | | | | | Operating | | | Reported | | | | | Operating |
| | | Results | | Adjustments | | Results | | | Results | | Adjustments | | Results |
| Fee Revenue: | | | | | | | | | | | | | | | | | | | | |
| Servicing fees | | | $ | 977 | | | | | $ | 977 | | | $ | 1,937 | | | | $ | 1,937 | |
| Management fees | | | | 280 | | | | | | 280 | | | | 558 | | | | | 558 | |
| Trading services | | | | 320 | | | | | | 320 | | | | 686 | | | | | 686 | |
| Securities finance | | | | 352 | | | | | | 352 | | | | 655 | | | | | 655 | |
| Processing fees and other | | | | 77 | | | | | | 77 | | | | 131 | | | | | 131 | |
| Total fee revenue | | | | 2,006 | | | | | | 2,006 | | | | 3,967 | | | | | 3,967 | |
| | | | | | | | | | | | | | | | | | | | |
| Net Interest Revenue: | | | | | | | | | | | | | | | | | | | | |
| Interest revenue | | | | 1,137 | | $ | 28 | (1) | | 1,165 | | | | 2,425 | | $ | 51 | (1) | 2,476 | |
| Interest expense | | | | 480 | | | - | | | 480 | | | | 1,143 | | | - | | 1,143 | |
| Net interest revenue | | | | 657 | | | 28 | | | 685 | | | | 1,282 | | | 51 | | 1,333 | |
| Provision for loan losses | | | | - | | | - | | | - | | | | - | | | - | | - | |
| Net interest revenue after provision for loan losses | | | | 657 | | | 28 | | | 685 | | | | 1,282 | | | 51 | | 1,333 | |
| | | | | | | | | | | | | | | | | | | | |
Gains (Losses) related to investment securities, net | | | | 9 | | | - | | | 9 | | | | - | | | - | | - | |
| Total revenue | | | | 2,672 | | | 28 | | | 2,700 | | | | 5,249 | | | 51 | | 5,300 | |
| | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | | 1,060 | | | - | | | 1,060 | | | | 2,122 | | | - | | 2,122 | |
| Information systems and communications | | | | 164 | | | - | | | 164 | | | | 319 | | | - | | 319 | |
| Transaction processing services | | | | 172 | | | - | | | 172 | | | | 334 | | | - | | 334 | |
| Occupancy | | | | 115 | | | - | | | 115 | | | | 225 | | | - | | 225 | |
| Merger and integration costs | | | | 32 | | | (32) | (2) | | - | | | | 58 | | | (58) | (2) | - | |
| Other | | | | 298 | | | - | | | 298 | | | | 557 | | | - | | 557 | |
| Total operating expenses | | | | 1,841 | | | (32) | | | 1,809 | | | | 3,615 | | | (58) | | 3,557 | |
| Income before income taxes | | | | 831 | | | 60 | | | 891 | | | | 1,634 | | | 109 | | 1,743 | |
| Income taxes | | | | 283 | | | 10 | | | 293 | | | | 556 | | | 19 | | 575 | |
| Taxable-equivalent adjustment | | | | - | | | 28 | (1) | | 28 | | | | - | | | 51 | (1) | 51 | |
| Net income | | | $ | 548 | | $ | 22 | | $ | 570 | | | $ | 1,078 | | $ | 39 | $ | 1,117 | |
| | | | | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | | $ | 1.35 | | $ | .05 | | $ | 1.40 | | | $ | 2.70 | | $ | .09 | $ | 2.79 | |
| | | | | | | | | | | | | | | | | | | | |
| Average diluted shares outstanding (in thousands) | | | | 406,964 | | | 406,964 | | | 406,964 | | | | 399,684 | | | 399,684 | | 399,684 | |
| | | | | | | | | | | | | | | | | | | | |
| Return on equity | | | | 18.6 | % | | 0.7 | % | | 19.3 | % | | | 18.6 | % | | 0.7 | % | 19.3 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Reported results reflect State Street's Consolidated Statement of Income prepared in accordance with accounting principles generally accepted in the United States. |
| |
| (1) Represents taxable-equivalent adjustment, which is not included in reported results. |
| |
| (2) Represents merger and integration costs recorded in connection with the acquisition of Investors Financial, which are direct and incremental costs associated with the acquisition and do not include ongoing expenses of the combined organization. |
| STATE STREET CORPORATION |
| Earnings Press Release Addendum |
| | | | | | | | | | | | | | | | | | | |
| RECONCILIATION OF REPORTED RESULTS TO OPERATING-BASIS RESULTS |
| Quarter and Six Months Ended June 30, 2007 |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| (Dollars in millions, except per share amounts) | | Quarter Ended June 30, 2007 | | Six Months Ended June 30, 2007 |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | Reported | | | | | | Operating | | Reported | | | | | Operating |
| | Results | | Adjustments | | | Results | | Results | | Adjustments | | Results |
| Fee Revenue: | | | | | | | | | | | | | | | | | | | |
| Servicing fees | | $ | 766 | | | | | $ | 766 | | | $ | 1,484 | | | | $ | 1,484 | |
| Management fees | | | 284 | | | | | | 284 | | | | 545 | | | | | 545 | |
| Trading services | | | 260 | | | | | | 260 | | | | 480 | | | | | 480 | |
| Securities finance | | | 162 | | | | | | 162 | | | | 260 | | | | | 260 | |
| Processing fees and other | | | 65 | | | | | | 65 | | | | 138 | | | | | 138 | |
| Total fee revenue | | | 1,537 | | | | | | 1,537 | | | | 2,907 | | | | | 2,907 | |
| | | | | | | | | | | | | | | | | | | |
| Net Interest Revenue: | | | | | | | | | | | | | | | | | | | |
| Interest revenue | | | 1,203 | | $ | 12 | (1) | | 1,215 | | | | 2,375 | | $ | 24 | (1) | 2,399 | |
| Interest expense | | | 818 | | | - | | | 818 | | | | 1,665 | | | - | | 1,665 | |
| Net interest revenue | | | 385 | | | 12 | | | 397 | | | | 710 | | | 24 | | 734 | |
| Provision for loan losses | | | - | | | - | | | - | | | | - | | | - | | - | |
| Net interest revenue after provision for loan losses | | | 385 | | | 12 | | | 397 | | | | 710 | | | 24 | | 734 | |
| | | | | | | | | | | | | | | | | | | |
Gains (Losses) related to investment securities, net | | | (1) | | | - | | | (1) | | | | - | | | - | | - | |
| Total revenue | | | 1,921 | | | 12 | | | 1,933 | | | | 3,617 | | | 24 | | 3,641 | |
| | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 808 | | | - | | | 808 | | | | 1,547 | | | - | | 1,547 | |
| Information systems and communications | | | 128 | | | - | | | 128 | | | | 253 | | | - | | 253 | |
| Transaction processing services | | | 141 | | | - | | | 141 | | | | 270 | | | - | | 270 | |
| Occupancy | | | 98 | | | - | | | 98 | | | | 192 | | | - | | 192 | |
| Other | | | 183 | | | - | | | 183 | | | | 309 | | | - | | 309 | |
| Total operating expenses | | | 1,358 | | | - | | | 1,358 | | | | 2,571 | | | - | | 2,571 | |
| Income before income taxes | | | 563 | | | 12 | | | 575 | | | | 1,046 | | | 24 | | 1,070 | |
| Income taxes | | | 197 | | | - | | | 197 | | | | 366 | | | - | | 366 | |
| Taxable-equivalent adjustment | | | - | | | 12 | (1) | | 12 | | | | - | | | 24 | (1) | 24 | |
| Net income | | $ | 366 | | $ | - | | $ | 366 | | | $ | 680 | | $ | - | $ | 680 | |
| | | | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 1.07 | | $ | - | | $ | 1.07 | | | $ | 2.00 | | $ | - | $ | 2.00 | |
| | | | | | | | | | | | | | | | | | | |
| Average diluted shares outstanding (in thousands) | | | 341,101 | | | - | | | 341,101 | | | | 339,338 | | | - | | 339,338 | |
| | | | | | | | | | | | | | | | | | | |
| Return on equity | | | 19.2 | % | | - | % | | 19.2 | % | | | 18.4 | % | | - | % | 18.4 | % |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Reported results reflect State Street's Consolidated Statement of Income prepared in accordance with accounting principles generally accepted in the United States. |
| |
| (1) Represents taxable-equivalent adjustment, which is not included in reported results. |
| STATE STREET CORPORATION |
| Earnings Press Release Addendum |
| | | | | | | | | | |
| RECONCILIATION OF REPORTED RESULTS TO OPERATING-BASIS RESULTS |
| Quarter Ended March 31, 2008 |
| | | | | | | | | | |
| | | | | | | | | | |
| (Dollars in millions, except per share amounts) | | Quarter Ended March 31, 2008 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | Reported | | | | | | Operating | |
| | | Results | | Adjustments | | | Results | |
| Fee Revenue: | | | | | | | | | | |
| Servicing fees | | $ | 960 | | | | | $ | 960 | |
| Management fees | | | 278 | | | | | | 278 | |
| Trading services | | | 366 | | | | | | 366 | |
| Securities finance | | | 303 | | | | | | 303 | |
| Processing fees and other | | | 54 | | | | | | 54 | |
| Total fee revenue | | | 1,961 | | | | | | 1,961 | |
| | | | | | | | | | |
| Net Interest Revenue: | | | | | | | | | | |
| Interest revenue | | | 1,288 | | $ | 23 | (1) | | 1,311 | |
| Interest expense | | | 663 | | | - | | | 663 | |
| Net interest revenue | | | 625 | | | 23 | | | 648 | |
| Provision for loan losses | | | - | | | - | | | - | |
| Net interest revenue after provision for loan losses | | | 625 | | | 23 | | | 648 | |
| | | | | | | | | | |
Gains (Losses) related to investment securities, net | | | (9) | | | - | | | (9) | |
| Total revenue | | | 2,577 | | | 23 | | | 2,600 | |
| | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | |
| Salaries and employee benefits | | | 1,062 | | | - | | | 1,062 | |
| Information systems and communications | | | 155 | | | - | | | 155 | |
| Transaction processing services | | | 162 | | | - | | | 162 | |
| Occupancy | | | 110 | | | - | | | 110 | |
| Merger and integration costs | | | 26 | | | (26) | (2) | | - | |
| Other | | | 259 | | | - | | | 259 | |
| Total operating expenses | | | 1,774 | | | (26) | | | 1,748 | |
| Income before income taxes | | | 803 | | | 49 | | | 852 | |
| Income taxes | | | 273 | | | 9 | | | 282 | |
| Taxable-equivalent adjustment | | | - | | | 23 | (1) | | 23 | |
| Net income | | $ | 530 | | $ | 17 | | $ | 547 | |
| | | | | | | | | | |
| Diluted earnings per share | | $ | 1.35 | | $ | .04 | | $ | 1.39 | |
| | | | | | | | | | |
| Average diluted shares outstanding (in thousands) | | | 393,647 | | | 393,647 | | | 393,647 | |
| | | | | | | | | | |
| Return on equity | | | 18.7 | % | | 0.7 | % | | 19.4 | % |
| | | | | | | | | | |
| | | | | | | | | | |
| Reported results reflect State Street's Consolidated Statement of Income prepared in accordance with accounting principles generally accepted in the United States. |
| |
| (1) Represents taxable-equivalent adjustment, which is not included in reported results. |
| |
| (2) Represents merger and integration costs recorded in connection with the acquisition of Investors Financial, which are direct and incremental costs associated with the acquisition and do not include ongoing expenses of the combined organization. |
| STATE STREET CORPORATION |
| Press Release Addendum |
| | | | | | | | | |
| CONSOLIDATED STATEMENT OF CONDITION |
| | | | | | | | | | |
| | June 30, | | December 31, | | June 30, |
| (Dollars in millions, except per share amounts) | | 2008 | | | 2007 | | | 2007 | |
| | | | | | | | | |
| Assets | | | | | | | | | |
| Cash and due from banks | | $ | 4,587 | | | $ | 4,733 | | | $ | 4,851 | |
| Interest-bearing deposits with banks | | | 20,636 | | | | 5,579 | | | | 4,616 | |
| Securities purchased under resale agreements | | | 10,697 | | | | 19,133 | | | | 10,772 | |
| Federal funds sold | | | 5,024 | | | | 4,540 | | | | - | |
| Trading account assets | | | 311 | | | | 589 | | | | 849 | |
| Investment securities available for sale | | | 67,607 | | | | 70,326 | | | | 62,748 | |
| Investment securities held to maturity | | | 4,103 | | | | 4,233 | | | | 4,308 | |
| Loans and leases (net of allowance of $18) | | | 14,666 | | | | 15,784 | | | | 12,050 | |
| Premises and equipment | | | 1,992 | | | | 1,894 | | | | 1,725 | |
| Accrued income receivable | | | 2,076 | | | | 2,096 | | | | 1,671 | |
| Goodwill | | | 4,549 | | | | 4,567 | | | | 1,853 | |
| Other intangible assets | | | 1,941 | | | | 1,990 | | | | 593 | |
| Other assets | | | 8,032 | | | | 7,079 | | | | 6,232 | |
| Total assets | | $ | 146,221 | | | $ | 142,543 | | | $ | 112,268 | |
| | | | | | | | | |
| Liabilities | | | | | | | | | |
| Deposits: | | | | | | | | | |
| Noninterest-bearing | | $ | 14,896 | | | $ | 15,039 | | | $ | 12,735 | |
| Interest-bearing -- U.S. | | | 9,670 | | | | 14,790 | | | | 1,091 | |
| Interest-bearing -- Non-U.S. | | | 72,681 | | | | 65,960 | | | | 59,210 | |
| Total deposits | | | 97,247 | | | | 95,789 | | | | 73,036 | |
| | | | | | | | | |
| Securities sold under repurchase agreements | | | 15,266 | | | | 14,646 | | | | 13,089 | |
| Federal funds purchased | | | 1,809 | | | | 425 | | | | 2,741 | |
| Other short-term borrowings | | | 4,306 | | | | 5,557 | | | | 3,500 | |
| Accrued taxes and other expenses | | | 2,877 | | | | 4,392 | | | | 3,204 | |
| Other liabilities | | | 6,550 | | | | 6,799 | | | | 4,860 | |
| Long-term debt | | | 4,127 | | | | 3,636 | | | | 4,090 | |
| Total liabilities | | | 132,182 | | | | 131,244 | | | | 104,520 | |
| | | | | | | | | |
| Shareholders' Equity | | | | | | | | | |
| Preferred stock, no par: authorized 3,500,000; issued none | | | | | | | | | |
Common stock, $1 par: authorized 750,000,000 shares; issued 431,678,000, 398,366,000 and 337,126,000 shares | | | 432 | | | | 398 | | | | 337 | |
| Surplus | | | 6,712 | | | | 4,630 | | | | 365 | |
| Retained earnings | | | 8,629 | | | | 7,745 | | | | 7,339 | |
| Accumulated other comprehensive loss | | | (1,716 | ) | | | (575 | ) | | | (276 | ) |
| Treasury stock (at cost 406,000, 12,082,000 and 408,000 shares) | | | (18 | ) | | | (899 | ) | | | (17 | ) |
| Total shareholders' equity | | | 14,039 | | | | 11,299 | | | | 7,748 | |
| Total liabilities and shareholders' equity | | $ | 146,221 | | | $ | 142,543 | | | $ | 112,268 | |
CONTACT:
State Street Corporation
Edward J. Resch, +1 617-664-1110
or
Investors:
Kelley MacDonald, +1 617-664-3477
or
Media:
Hannah Grove, +1 617-664-3377
