SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: October 1, 1999
State Street Corporation
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(Exact name of registrant as specified in its charter)
Massachusetts 0-5108 04-2456637
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification
Number)
225 Franklin Street, Boston, Massachusetts 02110
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617)786-3000
Item 5. Other Events.
On October 4, 1999, Registrant announced that it had completed the sale
on October 1, 1999 of its commercial banking business and its associated four
branches, to Citizens Financial Group, a financial services group owned by the
Royal Bank of Scotland. Registrant's commercial banking business loans total
approximately $2.4 billion, and Registrant will report a gain, after tax and
net of exit and associated costs, of approximately $164 million in the fourth
quarter of 1999 from the sale.
The press release issued by Registrant in connection with the
announcement is filed herewith as Exhibit 99 and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99 Form of press release dated October 4, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STATE STREET CORPORATION
By: /s/Rex S. Schuette
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Name: Rex S. Schuette
Title: Senior Vice President and
Chief Accounting Officer
Dated: October 4, 1999
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EXHIBIT INDEX
EXHIBIT
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99 Form of press release dated October 4, 1999.
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Exhibit 99
IMMEDIATELY
Ronald L. O'Kelley
(617) 664-1110
Investors & Analysts: Media:
Karen A. Warren Hannah Grove
(617) 664-3477 (617) 664-3377
STATE STREET COMPLETES SALE
OF COMMERCIAL BANKING BUSINESS
UNDERSCORES COMPANY'S FOCUS ON
SERVING INSTITUTIONAL INVESTORS WORLDWIDE
Boston, MA, October 4, 1999 - State Street Corporation (State Street),
one of the world's leading specialists in serving institutional investors,
today announced that it completed the sale on October 1, 1999, of its
commercial banking business and its associated four branches in Quincy and
Boston to Citizens Financial Group (Citizens), a Rhode Island-based financial
services group owned by the Royal Bank of Scotland. The after-tax gain, net
of exit and other associated costs, on the sale totaled approximately $164
million, or $1.00 in earnings per share, and will be recorded in the fourth
quarter of 1999. The premium received on the sale was $350 million; exit and
other associated costs were $68 million.
"Citizens will provide our customers with excellent service," said
Marshall N. Carter, chairman and chief executive officer of State Street
Corporation. "Their focus on commercial and retail banking and extensive
product offerings has fueled their growth as one of New England's largest
commercial banks."
The commercial banking business, consisting of a $2.4 billion loan
portfolio, a $36 million allowance for loan losses, and $1.1 billion in
deposits, includes commercial lending, deposits and other banking services for
New England regional middle-market companies and companies in selected
industries nationwide. Approximately 300 State Street employees join Citizens
as a result of the sale.
"We made a strategic decision to divest our commercial banking business
in order to further State Street's continued focus on the needs of
institutional investors worldwide," added Carter. "Our global market success
and customer loyalty demonstrate the value of this strategy for State Street's
stockholders. Focusing on our core business will help State Street continue
to deliver on our long-term financial goals."
State Street's commercial banking business loans averaged $2.3 billion
for the first six months of 1999, and deposits averaged $1.1 billion for the
same period. Based on pro-forma financials for the first six months of 1999,
management anticipates a revenue reduction of approximately 3% and earnings
per share dilution of approximately 6%. State Street intends to offset
dilution resulting from the sale within the next three years through
acquisitions, internal growth programs, and the corporate stock purchase
program.
Since announcing the agreement in May, State Street has acted upon a
number of key global initiatives that further the long-term strategic goals of
the company. In the United Kingdom, State Street forged an agreement with
Lloyds TSB regarding the transfer of their securities services clients thereby
expanding State Street's unit trust, custody and fund administration customer
base in the U.K. and continental Europe. State Street also announced an
alliance with the Development Bank of Singapore to provide trustee, custody
and fund administration to the unit trust market in Singapore.
In September, State Street announced the acquisition of Wachovia's
Institutional Trust and Custody business, which will increase its share of the
fast growing middle market and expand its presence in the southeastern United
States. These initiatives are consistent with the company's stated policy to
explore and engage in acquisitions, alliances and joint ventures to enhance
established capabilities by adding new products or services, expanding
geographic reach, or selectively increasing market share. State Street
continues to grow its business through internal initiatives to provide leading
edge products and services to its customers.
"Further," concluded Carter, "State Street will remain one of the
largest private employers in Massachusetts with over 12,000 employees in the
state. Our ongoing commitment to the community is augmented by active
participation from our employees across all levels of the organization, and,
in 1998, included more than $4 million in grants to nonprofit organizations in
the greater Boston area of a total of $6.5 million globally."
With $5.3 trillion in assets under custody and $574 billion under
management, State Street Corporation is one of the world's leading specialists
in serving institutional investors. Offices are located in the United States,
Canada, Chile, Cayman Islands, Netherlands Antilles, Ireland, United Kingdom,
Netherlands, France, Belgium, Luxembourg, Switzerland, Germany, Czech
Republic, Austria, United Arab Emirates, Russia, Peoples Republic of China,
Taiwan, South Korea, Japan, Singapore, Australia, and New Zealand. State
Street Corporation's common stock is traded on the New York Stock Exchange
under the symbol STT. For more information, visit State Street's web site at
www.statestreet.com.
This news release contains forward-looking statements as defined by
federal securities laws. Important factors that could cause actual results to
differ materially from those indicated by any such forward-looking statements
are set forth in the company's 1998 annual report and subsequent SEC filings.
These include risks and uncertainties relating to: the value of worldwide
financial markets, dynamics of markets served, volatility of currency markets,
pace of new business, business mix, rate of technological change, and the
potential impact of the year 2000 on processing date-sensitive information.
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