Boston, MA - April 19, 2005 State Street Corporation announced today first-quarter earnings per share of $0.67, up 6% from $0.63 in last year's first quarter which included $0.04 per share for merger and integration costs associated with the acquisition of a substantial portion of Deutsche Bank's Global Securities Services (GSS) business. Revenue of $1.3 billion in the first quarter of 2005 is up 7%, or $89 million, compared to $1.2 billion in the year-ago quarter. Total expenses in the first quarter of 2005 of $966 million are up 6%, or $58 million, compared to $908 million in the year-ago quarter. Net income of $226 million was up $9 million, or 4% from $217 million a year ago. For the first quarter of 2005, return on stockholders' equity was 15.0% compared to 14.8% in the first quarter of 2004.

Ronald E. Logue, State Street's chairman and chief executive officer, said, "I am pleased with our overall results. We're making progress in some key areas, most notably expense controls, which has resulted in positive operating leverage in the first quarter on a consecutive quarter basis. We continue to see significant increases in fee revenue, both on a year-over-year and on a consecutive quarter basis. We are still dealing with some issues that will temper our results for the remainder of the year, particularly rising interest rates and the ongoing repositioning of our real estate.

"Looking to the rest of the year, we are focused on achieving our operating goals for revenue and earnings per share growth, as well as return on equity, and continue to expect that they will fall toward the lower end of the previously announced ranges."

FIRST QUARTER RESULTS VS. YEAR-AGO QUARTER

Servicing fees were up 8%, to $599 million from $555 million in last year's first quarter. The increase was attributable to new business from existing and new clients in 2005 and higher equity market valuations. Total assets under custody were $9.5 trillion, up 1%, compared with $9.4 trillion in the year-ago quarter. Daily average values for the S&P 500 Index were up 5% from the first quarter of 2004; daily average values for the MSCI ® EAFE Index sm were up 14%.

Investment management fees, generated by State Street Global Advisors, were $177 million, up 20% from $147 million a year ago. Management fees reflected continued new business and an increase in average month-end equity valuations. Total assets under management were $1.4 trillion, up 11%, compared to $1.2 trillion the previous year.

Securities lending revenue was $70 million in the quarter, up 9% compared to $64 million in the year-ago quarter, reflecting an increase in the volume of securities lent.

Trading services revenue, which includes foreign exchange trading revenue and brokerage and other fees, was $167 million for the quarter, flat with a year ago. The increase in brokerage fees and other revenue, driven by strong transition management business, was offset by lower foreign exchange trading revenue, attributable to lower volatilities.

Net interest revenue on a fully taxable-equivalent basis was $223 million, an increase of $9 million from $214 million a year ago. Net interest revenue from leveraged leases in the first quarter of 2004 included a $19 million reduction in interest revenue due to a change in the applicable state tax rate. Excluding this reduction from last year's results, net interest income would have declined due to the rising rate environment driven by the seven rate increases over the past fifteen months.

Expenses increased from $908 million to $966 million, up $58 million, or 6%. Salaries and benefits expenses were up 13% to $524 million, primarily due to the significant new business wins in the second half of 2004 and the impact of merit adjustments and benefits expense, net of the effect of the reduction in force in the fourth quarter. Expenses for information systems & communications declined $13 million, or 9%, to $126 million due to reductions related to the conversion of the Deutsche Bank's Global Securities Services business, partially offset by increases due to the new data center coming fully on line in the fourth quarter of 2004. The increase in expenses also included higher transaction processing services, up 13% to $108 million, due to higher volumes in the investment servicing business. Other expenses rose 13%, or $13 million to $116 million due to increases in professional services related to growth initiatives .

The effective tax rate in the first quarter of 2005 was 34.0%, compared to 30.4% in the first quarter of 2004. The lower effective tax rate in the prior year's first quarter was due to an $18 million benefit related to a cumulative state tax rate adjustment for leveraged leases.

State Street purchased approximately 2.9 million shares of its common stock during the first quarter at an average price of $45.35 per share. The remaining authorization to purchase shares is 15 million shares.

FIRST-QUARTER RESULTS VS. FOURTH QUARTER

First-quarter net income per share of $0.67 compares to net income per share of $0.55 in the fourth quarter, an increase of 22%, driven by positive operating leverage. Included in the fourth quarter results is a $12 million charge, or $0.02 per share, for merger and integration costs associated with the GSS business. Total revenue in the first quarter of $1.31 billion is up 3% versus $1.27 billion in the fourth quarter which included gains of $7 million in securities sales and $18 million from a reduction in the loan loss provision. Total expenses were $966 million, down 3% versus $992 in the fourth quarter. Return on stockholders equity of 15.0% in the first quarter compared with 11.9% in the fourth quarter.

Servicing fees were up 5% to $599 million and management fees were up 6% to $177 million primarily due to new business . Securities lending revenue increased 21%, from $58 million to $70 million, due to increased volumes and improved spreads. Trading services revenue was up from $161 million to $167 million . Processing fees and other were up $11 million, or 15%, from $73 million to $84 million.

Salaries and employee benefits totaled $524 million, an increase of $13 million, or 3%, from $511 million. In addition, the results of the fourth quarter of 2004 included a $21 million cost of a reduction in force . Other expenses were up $4 million from $112 million to $116 million. Occupancy expense decreased to $92 million from $101 million (which included a $16 million loss on a sub-tenant agreement).

ADDITIONAL INFORMATION

The Company continues to implement plans to reduce its real estate portfolio and expects to sublease on a long-term basis approximately 150,000 square feet in its headquarters building. During the second quarter, it anticipates recognizing a pretax charge of $23 to $25 million due to this transaction.

All per share amounts represent fully diluted earnings per share.

INVESTOR CONFERENCE CALL

State Street will webcast an investor conference call today, Tuesday, April 19, 2005, at 9:30 a.m. edt, available at www.statestreet.com/stockholder. The conference call will also be available via telephone, at +1 719/457-2617 (confirmation code 859081). Recorded replays of the conference call will be available on the web site, and by telephone at +1 402/220-4230, beginning at 2:00 PM today. This press release and additional financial information is available on State Street's website, at www.statestreet.com/stockholder, under "Financial Reports".

State Street Corporation (NYSE: STT) is the world's leading specialist in providing institutional investors with investment servicing, investment management and investment research and trading. With $9.5 trillion in assets under custody and $1.4 trillion in assets under management, State Street operates in 25 countries and more than 100 markets worldwide and employs 19,850 people worldwide. For more information, visit State Street's web site at www.statestreet.com or call 877/639-7788 [NEWS STT] toll-free in the United States and Canada , or +1 202/266-3340 outside those countries.

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those related to the pace at which State Street adds new clients or at which existing clients use additional services, the value of global and regional financial markets, the pace of cross-border investment activity, changes in interest rates, the pace of worldwide economic growth and rates of inflation, the extent of volatility in currency markets, consolidations among clients and competitors, State Street's business mix, the dynamics of markets State Street serves, and State Street's success at integrating and converting acquisitions into its business. Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in State Street's 2004 annual report on Form 10-K and subsequent SEC filings. State Street encourages investors to read the Corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, April 19, 2005 , and the Corporation will not undertake efforts to revise those forward-looking statements to reflect events after this date.