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:

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.

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 Index^SM 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 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%.

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.

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.

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)	June 30, 2008⁽¹⁾		June 30, 2007			% Change			June 30, 2008⁽¹⁾		June 30, 2007		% 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		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)	June 30, 2008		March 31, 2008			% 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		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)	June 30, 2008			June 30, 2007			% Change		June 30, 2008			June 30, 2007			% 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)	June 30, 2008				March 31, 2008		% 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

Adjustments

Results

Fee Revenue:

Servicing fees

977

1,937

Management fees

280

558

Trading services

320

686

Securities finance

352

655

Processing fees and other

131

Total fee revenue

2,006

3,967

Net Interest Revenue:

Interest revenue

1,137

⁽¹⁾

1,165

2,425

⁽¹⁾

2,476

Interest expense

480

1,143

Net interest revenue

657

685

1,282

1,333

Provision for loan losses

Net interest revenue after provision for loan losses

657

685

1,282

1,333

Gains (Losses) related to investment securities, net

Total revenue

2,672

2,700

5,249

5,300

Operating Expenses:

Salaries and employee benefits

1,060

2,122

Information systems and communications

164

319

Transaction processing services

172

334

Occupancy

115

225

Merger and integration costs

(32)

⁽²⁾

(58)

⁽²⁾

Other

298

557

Total operating expenses

1,841

(32)

1,809

3,615

(58)

3,557

Income before income taxes

831

891

1,634

109

1,743

Income taxes

283

293

556

575

Taxable-equivalent adjustment

⁽¹⁾

Net income

548

570

1,078

1,117

Diluted earnings per share

1.35

.05

1.40

2.70

.09

2.79

Average diluted shares outstanding (in thousands)

406,964

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