Drmicrocap
11年前
Northern Trust Corporation Reports Second Quarter Net Income of $269.2 Million, Earnings Per Common Share of $1.10
Increased Quarterly Cash Dividend 9% to $0.36 Per Common Share
Returned $182.0 Million in Capital to Common Stockholders
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Business Wire
Northern Trust Corporation
July 22, 2015 7:30 AM
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CHICAGO--(BUSINESS WIRE)--
Northern Trust Corporation today reported second quarter net income per diluted common share of $1.10, compared to $0.75 in the second quarter of 2014 and $0.94 in the first quarter of 2015. Net income was $269.2 million, compared to $181.9 million in the prior-year quarter and $230.7 million in the prior quarter. Return on average common equity was 12.8%, compared to 9.2% in the prior-year quarter and 11.3% in the prior quarter.
The current quarter includes a pre-tax gain on the sale of 1.0 million Visa Inc. Class B common shares totaling $99.9 million ($62.1 million after tax, or $0.26 per diluted common share); voluntary cash contributions to certain constant dollar net-asset-value (NAV) funds of $45.8 million ($28.6 million after tax, or $0.12 per diluted common share); and the impairment of the residual value of certain aircraft under leveraged lease agreements of $17.8 million ($11.1 million after tax, or $0.05 per diluted common share). Excluding these items, net income per diluted common share, net income, and return on average common equity were $1.01, $246.7 million and 11.8%, respectively.
The prior-year quarter included pre-tax charges of $32.8 million for severance and related costs and for the realignment of the Corporation’s real estate portfolio and $9.5 million of software write-offs. Excluding these charges and write-offs, net income per diluted common share, net income, and return on average common equity were $0.87, $209.8 million, and 10.6%, respectively.
“Northern Trust continues to perform well. In the second quarter, net income and earnings per share improved both year over year and sequentially. Trust, investment and other servicing fees, the largest component of our revenues, increased 7% year over year due to new business and higher equity markets, while expense growth of 5% reflected continued investments in our business as well as ongoing support of technology initiatives and regulatory requirements.
We increased our quarterly cash dividend by 9% to $0.36 per common share and returned $182.0 million to common stockholders through dividends and stock repurchases, demonstrating our commitment to returning capital to our common stockholders,” said Frederick H. Waddell, Chairman and Chief Executive Officer.
SECOND QUARTER 2015 PERFORMANCE VS. SECOND QUARTER 2014
Net income per diluted common share was $1.10 in the second quarter of 2015, up from $0.75 in the second quarter of 2014. Net income was $269.2 million, compared to $181.9 million in the prior-year quarter.
Revenue of $1.26 billion was up $174.2 million, or 16%, from $1.08 billion in the prior-year quarter, primarily reflecting higher other operating income, trust, investment and other servicing fees and foreign exchange trading income.
Trust, investment and other servicing fees were $756.8 million, up $49.9 million, or 7%, from $706.9 million in the prior-year quarter. The increase primarily reflected new business and higher equity markets, partially offset by the unfavorable impact of movements in foreign exchange rates.
Assets under custody and assets under management are the primary drivers of the Corporation’s trust, investment and other servicing fees. The following table presents the Corporation’s assets under custody and assets under management by reporting segment.
June 30, March 31, June 30, % Change % Change
($ In Billions) 2015 2015 2014 Q2-15/Q1-15 Q2-15/Q2-14
Assets Under Custody
Corporate & Institutional $ 5,652.6 $ 5,566.2 $ 5,488.0 2 % 3 %
Wealth Management 524.4 524.6 516.6 - 2
Total Assets Under Custody $ 6,177.0 $ 6,090.8 $ 6,004.6 1 % 3 %
Assets Under Management
Corporate & Institutional $ 713.6 $ 727.0 $ 701.5 (2) % 2 %
Wealth Management 232.0 233.1 222.9 - 4
Total Assets Under Management $ 945.6 $ 960.1 $ 924.4 (2) % 2 %
Corporate & Institutional Services (C&IS) trust, investment and other servicing fees increased $36.6 million, or 9%, to $432.0 million from the prior-year quarter’s $395.4 million.
Q2 Q2
Change Q2 2015
($ In Millions) 2015 2014
from Q2 2014
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 293.6 $ 261.1 $ 32.5 12 %
Investment Management 80.6 77.7 2.9 4
Securities Lending 26.8 30.0 (3.2) (11)
Other 31.0 26.6 4.4 17
Total $ 432.0 $ 395.4 $ 36.6 9 %
Custody and fund administration fees, the largest component of C&IS fees, increased 12%, driven by new business and higher equity markets, partially offset by the unfavorable impact of movements in foreign exchange rates. Investment management fees increased 4% due to new business, lower money market mutual fund fee waivers and higher equity markets. Money market mutual fund fee waivers in C&IS totaled $13.6 million in the current quarter compared to $14.8 million in the prior-year quarter. Securities lending decreased 11% due to changes in fee arrangements.
Wealth Management trust, investment and other servicing fees totaled $324.8 million, increasing $13.3 million, or 4%, from $311.5 million in the prior-year quarter.
Q2 Q2
Change Q2 2015
($ In Millions) 2015 2014
from Q2 2014
Wealth Management Trust, Investment and
Other Servicing Fees
Central $ 128.2 $ 126.2 $ 2.0 2 %
East 85.9 83.0 2.9 3
West 68.5 65.0 3.5 5
Global Family Office 42.2 37.3 4.9 13
Total $ 324.8 $ 311.5 $ 13.3 4 %
The increased Wealth Management fees across regions and Global Family Office were primarily attributable to higher equity markets and new business. Money market mutual fund fee waivers in Wealth Management totaled $14.6 million in the current quarter compared to $15.9 million in the prior-year quarter.
Foreign exchange trading income totaled $74.8 million, up $21.9 million, or 41%, compared with $52.9 million in the prior-year quarter. The increase was primarily attributable to higher currency volatility and client volumes as compared to the prior-year quarter.
Security commissions and trading income totaled $20.0 million, up 12%, compared with $17.8 million in the prior-year quarter. The increase was attributable to higher referral fees and higher income from interest rate protection products sold to clients.
Other operating income totaled $137.4 million, up $96.9 million, compared to $40.5 million in the prior-year quarter. The current quarter includes a $99.9 million gain on the sale of a portion of the Visa Inc. Class B common shares issued to the Corporation in conjunction with the 2007 restructuring of Visa U.S.A. and its affiliates. Excluding the gain, other operating income totaled $37.5 million, down 7%, from the prior-year quarter, reflecting decreases in various miscellaneous income categories.
Net interest income on an FTE basis totaled $257.6 million, up 2%, compared to $253.4 million in the prior-year quarter. The increase was primarily the result of growth in earning assets, offset by a $17.8 million impairment of the residual value of certain aircraft under leveraged lease agreements and a lower net interest margin. Earning assets for the quarter averaged $103.8 billion, up $8.3 billion, or 9%, from $95.5 billion in the prior-year quarter, resulting from higher levels of securities, reflecting demand deposit growth, combined with increased loan volume. The net interest margin declined to 1.00% from 1.06% in the prior-year quarter. Excluding the impairment, the net interest margin was 1.06%, unchanged from the prior-year quarter, as higher securities yields and lower cost of interest-related funds were offset by lower loan and short-term interest-bearing deposit yields.
The provision for credit losses was a credit of $10.0 million in the current quarter, reflecting improved credit quality. There was no provision for credit losses recorded in the prior-year quarter. Net charge-offs in the current quarter were $2.6 million, resulting from charge-offs of $6.1 million and recoveries of $3.5 million. The prior-year quarter included $5.9 million of net charge-offs, resulting from $7.8 million of charge-offs and $1.9 million of recoveries. Nonperforming assets decreased 10% from the prior-year quarter. Residential real estate loans and commercial real estate loans accounted for 76% and 12%, respectively, of total nonperforming loans and leases at June 30, 2015.
The table below provides information regarding nonperforming assets, the allowance for credit losses, and associated ratios.
June 30, March 31, June 30,
($ In Millions) 2015 2015 2014
Nonperforming Assets
Nonperforming Loans and Leases $ 208.7 $ 219.6 $ 229.3
Other Real Estate Owned 10.1 8.5 12.6
Total Nonperforming Assets 218.8 228.1 241.9
Allowance for Credit Losses
Allowance for Credit Losses Assigned to:
Loans and Leases 257.3 259.0 275.2
Undrawn Loan Commitments and Standby Letters of Credit
16.9 27.7 28.3
Total Allowance for Credit Losses $ 274.2 $ 286.7 $ 303.5
Ratios
Nonperforming Loans and Leases to Total Loans
and Leases 0.63% 0.67% 0.75%
Allowance for Credit Losses Assigned to Loans
and Leases to Total Loans and Leases 0.78% 0.79% 0.90%
Allowance for Credit Losses Assigned to Loans and
Leases to Nonperforming Loans and Leases
1.2x
1.2x
1.2x
Noninterest expense totaled $854.5 million in the current quarter, up $43.5 million, or 5%, from $811.0 million in the prior-year quarter. The current quarter includes a $45.8 million charge related to voluntary cash contributions to certain constant dollar NAV funds. The prior-year quarter included charges of $32.8 million for severance and related costs and for the realignment of the Corporation’s real estate portfolio and $9.5 million of software write-offs. Excluding the current and prior-year quarter charges and write-offs, noninterest expense increased $40.0 million, or 5%, primarily attributable to higher compensation, equipment and software, other operating and employee benefits expense.
Compensation expense, the largest component of noninterest expense, equaled $361.9 million in the current quarter, down $10.5 million, or 3%, from $372.4 million in the prior-year quarter. The prior-year quarter included severance-related charges of $25.5 million. Excluding the severance-related charges, compensation expense increased $15.0 million, or 4%, reflecting higher performance-based compensation, staff levels and base pay adjustments, partially offset by the favorable impact in foreign exchange rates. Staff on a full-time equivalent basis at June 30, 2015, totaled approximately 15,800, up 4% from a year ago.
Employee benefit expense totaled $73.2 million in the current quarter, up 7%, from $68.5 million in the prior-year quarter. The prior-year quarter included $1.9 million of severance-related charges. Excluding these charges, employee benefit expense increased $6.6 million, or 10%, attributable to higher pension and employee medical expense.
Expense associated with outside services totaled $147.2 million in the current quarter, up 2%, from $144.6 million in the prior-year quarter. The prior-year quarter included $1.1 million of severance-related charges. Excluding these charges, outside services expense increased 3%, reflecting higher technical services.
Equipment and software expense totaled $114.4 million in the current quarter, down 2%, from $116.1 million in the prior-year quarter. The prior-year quarter included $9.5 million of write-offs of replaced or eliminated software. Excluding these write-offs, equipment and software expense increased $7.8 million, or 7%, reflecting higher software amortization.
Occupancy expense equaled $43.0 million, down 9%, from $47.2 million in the prior-year quarter. The prior-year quarter included charges totaling $4.3 million in connection with reductions in office space. Excluding these charges, occupancy expense was relatively unchanged from the prior-year quarter.
Other operating expense totaled $114.8 million in the current quarter, up $52.6 million, or 85%, from $62.2 million in the prior-year quarter. The current quarter includes a charge related to voluntary cash contributions to certain constant dollar NAV funds totaling $45.8 million. Excluding the current-quarter charge, other operating expense increased $6.8 million, or 11%, primarily reflecting higher charitable contributions and charges associated with account servicing activities.
The provision for income taxes was $142.2 million in the current quarter, representing an effective tax rate of 34.6%. The provision for income taxes in the prior-year quarter was $88.8 million, representing an effective tax rate of 32.8%.
SECOND QUARTER 2015 PERFORMANCE VS. FIRST QUARTER 2015
Net income per diluted common share was $1.10 in the current quarter, compared to $0.94 in the first quarter of 2015. Net income totaled $269.2 million, compared to $230.7 million in the prior quarter.
Revenue was $1.26 billion in the current quarter compared to $1.13 billion in the prior quarter. The current quarter includes a $99.9 million gain on the sale of a portion of the Visa Inc. Class B common shares held by the Corporation. Noninterest income totaled $1.00 billion in the current quarter, up $130.8 million, or 15%, from $873.9 million in the prior quarter, primarily reflecting higher trust, investment and other servicing fees and other operating income. Net interest income on an FTE basis of $257.6 million was down $9.2 million, or 3%, from $266.8 million.
Trust, investment and other servicing fees totaled $756.8 million in the current quarter, up $29.3 million, or 4%, from $727.5 million in the prior quarter, primarily attributable to new business, higher securities lending fees, favorable equity markets and lower money market mutual fund fee waivers.
C&IS trust, investment and other servicing fees totaled $432.0 million in the current quarter, up $24.7 million, or 6%, from $407.3 million in the prior quarter.
Q2 Q1
Change Q2 2015
($ In Millions) 2015 2015
from Q1 2015
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 293.6 $ 277.1 $ 16.5 6 %
Investment Management 80.6 76.4 4.2 5
Securities Lending 26.8 21.6 5.2 24
Other 31.0 32.2 (1.2) (4)
Total $ 432.0 $ 407.3 $ 24.7 6 %
C&IS custody and fund administration fees increased 6%, driven by new business, higher equity markets and higher transaction volumes. Investment management fees increased 5% in the current quarter attributable to new business and lower money market mutual fund fee waivers. Money market mutual fund fee waivers in C&IS totaled $13.6 million in the current quarter compared with $15.2 million in the prior quarter. Securities lending increased 24%, reflecting higher spreads in the current quarter.
Wealth Management trust, investment and other servicing fees were $324.8 million, up slightly from $320.2 million in the prior quarter.
Q2 Q1
Change Q2 2015
($ In Millions) 2015 2015
from Q1 2015
Wealth Management Trust, Investment and
Other Servicing Fees
Central $ 128.2 $ 130.8 $ (2.6) (2) %
East 85.9 82.4 3.5 4
West 68.5 66.8 1.7 3
Global Family Office 42.2 40.2 2.0 5
Total $ 324.8 $ 320.2 $ 4.6 1 %
The slightly increased Wealth Management fees were primarily due to higher equity markets and lower waived fees in money market mutual funds. Money market mutual fund fee waivers in Wealth Management totaled $14.6 million, compared to $17.7 million in the prior quarter.
Foreign exchange trading income in the current quarter increased 5%, to $74.8 million compared to $71.6 million in the prior quarter.
Other operating income totaled $137.4 million, up $98.8 million from $38.6 million in the prior quarter. The current quarter includes a $99.9 million gain on the sale of a portion of the Visa Inc. Class B common shares held by the Corporation. Excluding the gain, other operating income totaled $37.5 million, down 3% from the prior quarter, reflecting decreases in various miscellaneous income categories.
Net interest income on an FTE basis totaled $257.6 million in the current quarter, down $9.2 million, or 3%, from $266.8 million in the prior quarter. The decrease was primarily driven by a $17.8 million impairment of the residual value of certain aircraft under leveraged lease agreements, offset by growth in earning assets. Earning assets averaged $103.8 billion, up $5.1 billion, or 5%, from $98.7 billion in the prior quarter. The net interest margin decreased to 1.00% from 1.10% in the prior quarter. Excluding the impairment, the net interest margin was 1.06% in the current quarter, primarily reflecting lower yields on loan portfolio, partially offset by lower cost of interest-related funds.
The provision for credit losses was a credit of $10.0 million in the current quarter, compared to a credit of $4.5 million in the prior quarter, reflecting improved credit quality. Net charge-offs in the current quarter totaled $2.6 million resulting from $6.1 million of charge-offs and $3.5 million of recoveries, compared to $4.6 million of net charge-offs in the prior quarter resulting from $7.5 million of charge-offs and $2.9 million of recoveries. Nonperforming assets decreased 4% as compared to the prior quarter.
Noninterest expense totaled $854.5 million in the current quarter, up $65.5 million, or 8%, from $789.0 million in the prior quarter. The current quarter includes a $45.8 million charge related to voluntary cash contributions to certain constant dollar NAV funds. Excluding this charge, noninterest expense increased $19.7 million, or 2%, primarily attributable to higher outside services, compensation and equipment and software expense, partially offset by lower other operating expense.
Compensation expense in the current quarter totaled $361.9 million, up $7.6 million, or 2%, from $354.3 million in the prior quarter, due to base pay adjustments and higher performance-based compensation.
Expense for outside services totaled $147.2 million in the current quarter, an increase of $12.1 million, or 9%, from $135.1 million in the prior quarter, primarily reflecting higher consulting, sub-custodian and legal expenses.
Equipment and software expense in the current quarter was $114.4 million, up 4%, from $110.3 million in the prior quarter, due to higher software amortization and related software support costs.
Other operating expense totaled $114.8 million for the current quarter, up $41.4 million or 57%, from $73.4 million in the prior quarter. The current quarter includes a charge of $45.8 million related to voluntary cash contributions to certain constant dollar NAV funds. Excluding this charge, other operating expense decreased $4.4 million, or 6%, due to the timing of Northern Trust Open related expenses, partially offset by higher charitable contributions and charges associated with account servicing activities.
The provision for income taxes in the current quarter totaled $142.2 million, representing an effective tax rate of 34.6%. The provision for income taxes in the prior quarter totaled $119.3 million, representing an effective tax rate of 34.1%.
STOCKHOLDERS’ EQUITY
Total stockholders’ equity averaged $8.6 billion, up $660.7 million, or 8% from the prior-year quarter’s average of $7.9 billion. The increase was primarily attributable to earnings and the issuance of preferred stock in August 2014, partially offset by dividend declarations and the repurchase of common stock pursuant to the Corporation’s share repurchase program. During the current quarter, the Corporation declared cash dividends totaling $5.8 million to preferred stockholders, and cash dividends totaling $85.3 million to common stockholders. During the three and six months ended June 30, 2015, the Corporation repurchased 1,295,263 shares of common stock at a cost of $96.7 million ($74.64 average price per share) and 2,851,133 shares of common stock at a cost of $203.9 million ($71.52 average price per share), respectively.
CAPITAL RATIOS
The capital ratios of Northern Trust and its principal subsidiary bank, The Northern Trust Company, remained strong at June 30, 2015, with all ratios applicable to classification as “well capitalized” under U.S. regulatory requirements having been exceeded.
The table below provides capital ratios for Northern Trust Corporation and The Northern Trust Company determined by Basel III phased in requirements.
Capital Ratios -
Northern Trust Corporation June 30, 2015 March 31, 2015 June 30, 2014
Advanced Standardized Advanced Standardized Advanced Standardized
Approach Approach Approach Approach Approach Approach
(a) (a) (a)
Common Equity Tier 1 12.0% 10.7% 11.8% 10.5% 12.7% 12.7%
Tier 1 12.6% 11.2% 12.4% 11.1% 12.9% 12.9%
Total 14.4% 13.2% 14.2% 13.1% 14.9% 15.4%
Tier 1 Leverage 7.6% 7.6% 7.8% 7.8% n/a 7.6%
Supplementary Leverage (b) 6.3% n/a 6.4% n/a n/a n/a
Capital Ratios -
The Northern Trust Company June 30, 2015 March 31, 2015 June 30, 2014
Advanced Standardized Advanced Standardized Advanced Standardized
Approach Approach Approach Approach Approach Approach
(a) (a) (a)
Common Equity Tier 1 11.6% 10.1% 11.3% 10.0% 11.7% 11.4%
Tier 1 11.6% 10.1% 11.3% 10.0% 11.6% 11.4%
Total 13.2% 11.9% 13.0% 11.8% 13.7% 14.0%
Tier 1 Leverage 6.8% 6.8% 6.9% 6.9% n/a 6.7%
Supplementary Leverage (b) 5.6% n/a 5.7% n/a n/a n/a
(a) In 2014, Standardized Approach risk-weighted assets were determined by Basel I requirements. Effective with the first quarter of 2015, risk-weighted assets are calculated in accordance with the Basel III Standardized Approach final rules.
(b) Effective January 1, 2018, advanced approaches institutions, such as the Corporation, will be subject to a minimum supplementary leverage ratio of 3 percent.
RECONCILIATION OF REPORTED NET INTEREST INCOME TO FULLY TAXABLE EQUIVALENT
Net interest income stated on an FTE basis is a non-GAAP financial measure that facilitates the analysis of asset yields. Management believes an FTE presentation provides a clearer indication of net interest margins for comparative purposes. When adjusted to an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. The table below presents a reconciliation of interest income and net interest income prepared in accordance with GAAP to interest income and net interest income on an FTE basis.
Three Months Ended
June 30, 2015 March 31, 2015 June 30, 2014
($ In Millions) Reported FTE Adj. FTE Reported FTE Adj. FTE Reported FTE Adj. FTE
Net Interest Income
Interest Income $ 288.8 $ 6.4 $ 295.2 $ 298.8 $ 6.2 $ 305.0 $ 293.8 $ 6.8 $ 300.6
Interest Expense 37.6 – 37.6 38.2 – 38.2 47.2 – 47.2
Net Interest Income $ 251.2 $ 6.4 $ 257.6 $ 260.6 $ 6.2 $ 266.8 $ 246.6 $ 6.8 $ 253.4
Net Interest Margin 0.97% 1.00% 1.07% 1.10% 1.04% 1.06%
FORWARD-LOOKING STATEMENTS
This release may include forward-looking statements concerning Northern Trust’s financial results and outlook, capital adequacy, dividend policy, anticipated expense levels and technology spending, risk management policies, contingent liabilities, strategic initiatives, industry trends, and expectations regarding the impact of recent legislation. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “likely,” “plan,” “goal,” “target,” “strategy,” and similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are Northern Trust’s current estimates or expectations of future events or future results, and involve risks and uncertainties that are difficult to predict. These statements are based on assumptions about many important factors, including the factors discussed in Northern Trust’s most recent annual report on Form 10-K and other filings with the U.S. Securities and Exchange Commission, all of which are available on Northern Trust’s website. We caution you not to place undue reliance on any forward-looking statement as actual results may differ materially from those expressed or implied by forward-looking statements. Northern Trust assumes no obligation to update its forward-looking statements.
WEBCAST OF SECOND QUARTER EARNINGS CONFERENCE CALL
Northern Trust’s second quarter earnings conference call will be webcast on July 22, 2015. The live call will be conducted at 11:00 a.m. CT and is accessible on Northern Trust’s website at:
https://www.northerntrust.com/financialreleases
The rebroadcast of the live call will be available on Northern Trust’s website from 2:00 p.m. CT on July 22, 2015, for approximately four weeks. Participants will need Windows Mediatm or Adobe Flash software. This earnings release can also be accessed at Northern Trust’s website.
To download our investor relations mobile app, which offers access to SEC filings, press releases, stock quotes, and upcoming events, please visit Apple’s iTunes App Store for your iPad. You may find the app by searching Northern Trust Investor Relations or by clicking on https://appsto.re/us/MtHH3.i from your iPad.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
SECOND QUARTER
2015 2014 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 756.8 $ 706.9 7 %
Foreign Exchange Trading Income 74.8 52.9 41
Treasury Management Fees 16.1 16.6 (3 )
Security Commissions and Trading Income 20.0 17.8 12
Other Operating Income 137.4 40.5 N/M
Investment Security Gains (Losses), net (0.4 ) 0.4 N/M
Total Noninterest Income 1,004.7 835.1 20
Net Interest Income
Interest Income 288.8 293.8 (2 )
Interest Expense 37.6 47.2 (20 )
Net Interest Income 251.2 246.6 2
Total Revenue 1,255.9 1,081.7 16
Provision for Credit Losses (10.0 ) - N/M
Noninterest Expense
Compensation 361.9 372.4 (3 )
Employee Benefits 73.2 68.5 7
Outside Services 147.2 144.6 2
Equipment and Software 114.4 116.1 (2 )
Occupancy 43.0 47.2 (9 )
Other Operating Expense 114.8 62.2 85
Total Noninterest Expense 854.5 811.0 5
Income before Income Taxes 411.4 270.7 52
Provision for Income Taxes 142.2 88.8 60
NET INCOME $ 269.2 $ 181.9 48 %
Dividends on Preferred Stock $ 5.8 $ - N/M %
Earnings Allocated to Participating Securities 4.1 3.1 32
Earnings Allocated to Common and Potential Common Shares 259.3 178.8 45
Per Common Share
Net Income
Basic $ 1.11 $ 0.76 46 %
Diluted 1.10 0.75 47
Average Common Equity $ 8,219.4 $ 7,947.2 3 %
Return on Average Common Equity 12.85 % 9.18 % 40
Return on Average Assets 0.97 % 0.71 % 36
Cash Dividends Declared per Common Share $ 0.36 $ 0.33 9 %
Average Common Shares Outstanding (000s)
Basic 233,149 236,013
Diluted 235,233 237,754
Common Shares Outstanding (EOP) (000s) 232,853 235,585
(*)
Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
SECOND FIRST
($ In Millions Except Per Share Data)
QUARTER QUARTER
2015 2015 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 756.8 $ 727.5 4 %
Foreign Exchange Trading Income 74.8 71.6 5
Treasury Management Fees 16.1 16.3 (2 )
Security Commissions and Trading Income 20.0 19.8 2
Other Operating Income 137.4 38.6 N/M
Investment Security Gains (Losses), net (0.4 ) 0.1 N/M
Total Noninterest Income 1,004.7 873.9 15
Net Interest Income
Interest Income 288.8 298.8 (3 )
Interest Expense 37.6 38.2 (2 )
Net Interest Income 251.2 260.6 (4 )
Total Revenue 1,255.9 1,134.5 11
Provision for Credit Losses (10.0 ) (4.5 ) 122
Noninterest Expense
Compensation 361.9 354.3 2
Employee Benefits 73.2 72.9 -
Outside Services 147.2 135.1 9
Equipment and Software 114.4 110.3 4
Occupancy 43.0 43.0 -
Other Operating Expense 114.8 73.4 57
Total Noninterest Expense 854.5 789.0 8
Income before Income Taxes 411.4 350.0 18
Provision for Income Taxes 142.2 119.3 19
NET INCOME $ 269.2 $ 230.7 17 %
Dividends on Preferred Stock $ 5.8 $ 5.9 (2 ) %
Earnings Allocated to Participating Securities 4.1 3.7 11
Earnings Allocated to Common and Potential Common Shares 259.3 221.1 17
Per Common Share
Net Income
Basic $ 1.11 $ 0.95 17 %
Diluted 1.10 0.94 17
Average Common Equity $ 8,219.4 $ 8,084.2 2 %
Return on Average Common Equity 12.85 % 11.28 % 14
Return on Average Assets 0.97 % 0.87 % 11
Cash Dividends Declared per Common Share $ 0.36 $ 0.33 9 %
Average Common Shares Outstanding (000s)
Basic 233,149 233,381
Diluted 235,233 235,289
Common Shares Outstanding (EOP) (000s) 232,853 233,369
(*)
Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
SIX MONTHS
2015 2014 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 1,484.3 $ 1,386.4 7 %
Foreign Exchange Trading Income 146.4 103.0 42
Treasury Management Fees 32.4 33.4 (3 )
Security Commissions and Trading Income 39.8 32.5 22
Other Operating Income 176.0 78.2 125
Investment Security Losses, net (0.3 ) (3.6 ) (92 )
Total Noninterest Income 1,878.6 1,629.9 15
Net Interest Income
Interest Income 587.6 589.2 -
Interest Expense 75.8 96.9 (22 )
Net Interest Income 511.8 492.3 4
Total Revenue 2,390.4 2,122.2 13
Provision for Credit Losses (14.5 ) 3.0 N/M
Noninterest Expense
Compensation 716.2 714.2 -
Employee Benefits 146.1 135.4 8
Outside Services 282.3 289.0 (2 )
Equipment and Software 224.7 217.4 3
Occupancy 86.0 91.4 (6 )
Other Operating Expense 188.2 131.6 43
Total Noninterest Expense 1,643.5 1,579.0 4
Income before Income Taxes 761.4 540.2 41
Provision for Income Taxes 261.5 176.9 48
NET INCOME $ 499.9 $ 363.3 38 %
Dividends on Preferred Stock $ 11.7 $ - N/M %
Earnings Allocated to Participating Securities 7.8 6.0 30
Earnings Allocated to Common and Potential Common Shares 480.4 357.3 34
Per Common Share
Net Income
Basic $ 2.06 $ 1.51 36 %
Diluted 2.04 1.50 36
Average Common Equity $ 8,152.2 $ 7,936.8 3 %
Return on Average Common Equity 12.08 % 9.23 % 31
Return on Average Assets 0.92 % 0.72 % 28
Cash Dividends Declared per Common Share $ 0.69 $ 0.64 8 %
Average Common Shares Outstanding (000s)
Basic 233,264 236,607
Diluted 235,260 238,399
Common Shares Outstanding (EOP) (000s) 232,853 235,585
(*)
Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) JUNE 30
2015 2014 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 1,020.0 $ 579.5 76 %
Interest-Bearing Due from and Deposits with Banks (**) 18,909.6 17,059.8 11
Federal Reserve Deposits 17,488.7 13,338.5 31
Securities
U.S. Government 5,018.8 2,417.7 108
Obligations of States and Political Subdivisions 107.9 161.6 (33 )
Government Sponsored Agency 16,776.9 18,196.6 (8 )
Other (***) 17,289.6 13,599.6 27
Total Securities 39,193.2 34,375.5 14
Loans and Leases 32,953.8 30,697.6 7
Total Earning Assets 109,565.3 96,050.9 14
Allowance for Credit Losses Assigned to Loans and Leases (257.3 ) (275.2 ) (7 )
Cash and Due from Banks 3,893.6 3,945.2 (1 )
Buildings and Equipment 436.5 441.9 (1 )
Client Security Settlement Receivables 2,034.2 1,596.4 27
Goodwill 534.3 544.6 (2 )
Other Assets 3,736.3 3,457.4 8
Total Assets $ 119,942.9 $ 105,761.2 13 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 15,782.4 $ 14,394.6 10 %
Savings Certificates and Other Time 1,540.5 1,967.4 (22 )
Non-U.S. Offices - Interest-Bearing 52,909.9 49,457.7 7
Total Interest-Bearing Deposits 70,232.8 65,819.7 7
Short-Term Borrowings 3,704.0 2,039.8 82
Senior Notes 1,497.2 1,496.8 -
Long-Term Debt 1,362.3 1,653.4 (18 )
Floating Rate Capital Debt 277.3 277.2 -
Total Interest-Related Funds 77,073.6 71,286.9 8
Demand and Other Noninterest-Bearing Deposits 30,455.1 23,042.8 32
Other Liabilities 3,664.9 3,388.9 8
Total Liabilities 111,193.6 97,718.6 14
Common Equity 8,360.8 8,042.6 4
Preferred Equity 388.5 - N/M
Total Equity 8,749.3 8,042.6 9
Total Liabilities and Stockholders' Equity $ 119,942.9 $ 105,761.2 13 %
(*)
Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**)
Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheet in our periodic filings with the SEC.
(***)
Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are presented in other assets on the consolidated balance sheet in our periodic filings with the SEC.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) JUNE 30 MARCH 31
2015 2015 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 1,020.0 $ 1,113.9 (8 ) %
Interest-Bearing Due from and Deposits with Banks (**) 18,909.6 17,646.9 7
Federal Reserve Deposits 17,488.7 8,804.2 99
Securities
U.S. Government 5,018.8 4,627.4 8
Obligations of States and Political Subdivisions 107.9 117.1 (8 )
Government Sponsored Agency 16,776.9 16,649.7 1
Other (***) 17,289.6 15,614.5 11
Total Securities 39,193.2 37,008.7 6
Loans and Leases 32,953.8 32,630.2 1
Total Earning Assets 109,565.3 97,203.9 13
Allowance for Credit Losses Assigned to Loans and Leases (257.3 ) (259.0 ) (1 )
Cash and Due from Banks 3,893.6 1,860.2 109
Buildings and Equipment 436.5 442.4 (1 )
Client Security Settlement Receivables 2,034.2 2,219.3 (8 )
Goodwill 534.3 527.3 1
Other Assets 3,736.3 4,957.9 (25 )
Total Assets $ 119,942.9 $ 106,952.0 12 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 15,782.4 $ 15,892.2 (1 ) %
Savings Certificates and Other Time 1,540.5 1,777.9 (13 )
Non-U.S. Offices - Interest-Bearing 52,909.9 45,942.2 15
Total Interest-Bearing Deposits 70,232.8 63,612.3 10
Short-Term Borrowings 3,704.0 3,898.0 (5 )
Senior Notes 1,497.2 1,497.1 -
Long-Term Debt 1,362.3 1,399.1 (3 )
Floating Rate Capital Debt 277.3 277.2 -
Total Interest-Related Funds 77,073.6 70,683.7 9
Demand and Other Noninterest-Bearing Deposits 30,455.1 23,124.2 32
Other Liabilities 3,664.9 4,536.5 (19 )
Total Liabilities 111,193.6 98,344.4 13
Common Equity 8,360.8 8,219.1 2
Preferred Equity 388.5 388.5 -
Total Equity 8,749.3 8,607.6 2
Total Liabilities and Stockholders' Equity $ 119,942.9 $ 106,952.0 12 %
(*)
Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**)
Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheet in our periodic filings with the SEC.
(***)
Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are presented in other assets on the consolidated balance sheet in our periodic filings with the SEC.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
($ In Millions) SECOND QUARTER
2015 2014 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 1,041.9 $ 554.1 88 %
Interest-Bearing Due from and Deposits with Banks (**) 16,920.6 17,294.6 (2 )
Federal Reserve Deposits 14,992.1 13,266.4 13
Securities
U.S. Government 4,789.1 2,368.7 102
Obligations of States and Political Subdivisions 112.2 168.4 (33 )
Government Sponsored Agency 16,821.7 18,359.8 (8 )
Other (***) 16,207.0 13,407.8 21
Total Securities 37,930.0 34,304.7 11
Loans and Leases 32,921.4 30,052.9 10
Total Earning Assets 103,806.0 95,472.7 9
Allowance for Credit Losses Assigned to Loans and Leases (260.0 ) (276.8 ) (6 )
Cash and Due from Banks 2,142.9 2,838.4 (25 )
Buildings and Equipment 446.5 450.7 (1 )
Client Security Settlement Receivables 945.0 781.0 21
Goodwill 531.1 543.0 (2 )
Other Assets 4,079.6 3,515.1 16
Total Assets $ 111,691.1 $ 103,324.1 8 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 15,705.4 $ 14,828.6 6 %
Savings Certificates and Other Time 1,779.5 1,996.2 (11 )
Non-U.S. Offices - Interest-Bearing 49,291.8 48,988.1 1
Total Interest-Bearing Deposits 66,776.7 65,812.9 1
Short-Term Borrowings 4,404.8 4,217.8 4
Senior Notes 1,497.1 1,661.6 (10 )
Long-Term Debt 1,380.2 1,642.4 (16 )
Floating Rate Capital Debt 277.3 277.2 -
Total Interest-Related Funds 74,336.1 73,611.9 1
Demand and Other Noninterest-Bearing Deposits 25,558.4 18,832.3 36
Other Liabilities 3,188.7 2,932.7 9
Total Liabilities 103,083.2 95,376.9 8
Common Equity 8,219.4 7,947.2 3
Preferred Equity 388.5 - N/M
Total Equity 8,607.9 7,947.2 8
Total Liabilities and Stockholders' Equity $ 111,691.1 $ 103,324.1 8 %
(*)
Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**)
Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheet in our periodic filings with the SEC.
(***)
Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are presented in other assets on the consolidated balance sheet in our periodic filings with the SEC.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
SECOND FIRST
($ In Millions) QUARTER QUARTER
2015 2015 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 1,041.9 $ 1,033.7 1 %
Interest-Bearing Due from and Deposits with Banks (**) 16,920.6 15,263.1 11
Federal Reserve Deposits 14,992.1 14,504.0 3
Securities
U.S. Government 4,789.1 4,580.0 5
Obligations of States and Political Subdivisions 112.2 121.6 (8 )
Government Sponsored Agency 16,821.7 16,511.9 2
Other (***) 16,207.0 14,579.0 11
Total Securities 37,930.0 35,792.5 6
Loans and Leases 32,921.4 32,099.8 3
Total Earning Assets 103,806.0 98,693.1 5
Allowance for Credit Losses Assigned to Loans and Leases (260.0 ) (265.9 ) (2 )
Cash and Due from Banks 2,142.9 1,573.4 36
Buildings and Equipment 446.5 446.9 -
Client Security Settlement Receivables 945.0 959.7 (2 )
Goodwill 531.1 529.7 -
Other Assets 4,079.6 5,576.3 (27 )
Total Assets $ 111,691.1 $ 107,513.2 4 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 15,705.4 $ 15,361.0 2 %
Savings Certificates and Other Time 1,779.5 1,741.7 2
Non-U.S. Offices - Interest-Bearing 49,291.8 47,399.8 4
Total Interest-Bearing Deposits 66,776.7 64,502.5 4
Short-Term Borrowings 4,404.8 5,187.4 (15 )
Senior Notes 1,497.1 1,497.0 -
Long-Term Debt 1,380.2 1,571.9 (12 )
Floating Rate Capital Debt 277.3 277.2 -
Total Interest-Related Funds 74,336.1 73,036.0 2
Demand and Other Noninterest-Bearing Deposits 25,558.4 22,023.6 16
Other Liabilities 3,188.7 3,980.9 (20 )
Total Liabilities 103,083.2 99,040.5 4
Common Equity 8,219.4 8,084.2 2
Preferred Equity 388.5 388.5 -
Total Equity 8,607.9 8,472.7 2
Total Liabilities and Stockholders' Equity $ 111,691.1 $ 107,513.2 4 %
(*)
Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**)
Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheet in our periodic filings with the SEC.
(***)
Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are presented in other assets on the consolidated balance sheet in our periodic filings with the SEC.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
QUARTERLY TREND DATA
2015 2014
($ In Millions Except Per Share Data)
QUARTERS QUARTERS
SECOND FIRST FOURTH THIRD SECOND
Net Income Summary
Trust, Investment and Other Servicing Fees $ 756.8 $ 727.5 $ 728.2 $ 718.2 $ 706.9
Other Noninterest Income 247.9 146.4 138.0 111.4 128.2
Net Interest Income 251.2 260.6 263.9 249.3 246.6
Total Revenue 1,255.9 1,134.5 1,130.1 1,078.9 1,081.7
Provision for Credit Losses (10.0 ) (4.5 ) 3.0 - -
Noninterest Expense 854.5 789.0 781.3 774.7 811.0
Income before Income Taxes 411.4 350.0 345.8 304.2 270.7
Provision for Income Taxes 142.2 119.3 101.8 99.7 88.8
Net Income $ 269.2 $ 230.7 $ 244.0 $ 204.5 $ 181.9
Per Common Share
Net Income - Basic $ 1.11 $ 0.95 $ 0.98 $ 0.85 $ 0.76
- Diluted 1.10 0.94 0.98 0.84 0.75
Cash Dividends Declared per Common Share 0.36 0.33 0.33 0.33 0.33
Book Value (EOP) 35.91 35.22 34.54 34.62 34.14
Market Value (EOP) 76.46 69.65 67.40 68.03 64.21
Financial Ratios
Return on Average Common Equity 12.85 % 11.28 % 11.47 % 10.09 % 9.18 %
Return on Average Assets 0.97 0.87 0.90 0.77 0.71
Net Interest Margin (GAAP) 0.97 1.07 1.05 1.02 1.04
Net Interest Margin (FTE) 1.00 1.10 1.08 1.05 1.06
Capital Ratios
Standardized Approach
Common Equity Tier 1 10.7 % 10.5 % 12.5 % 12.8 % 12.7 %
Tier 1 11.2 11.1 13.3 13.6 12.9
Total 13.2 13.1 15.5 16.0 15.4
Tier 1 Leverage 7.6 7.8 7.8 7.9 7.6
Advanced Approach
Common Equity Tier 1 12.0 % 11.8 % 12.4 % 12.7 % 12.7
Tier 1 12.6 12.4 13.2 13.4 12.9
Total 14.4 14.2 15.0 15.3 14.9
Tier 1 Leverage 7.6 7.8 n/a n/a n/a
Supplementary Leverage 6.3 6.4 n/a n/a n/a
Assets Under Custody ($ In Billions) - EOP
Corporate & Institutional Services $ 5,652.6 $ 5,566.2 $ 5,453.1 $ 5,403.1 $ 5,488.0
Wealth Management 524.4 524.6 515.7 507.2 516.6
Total Assets Under Custody $ 6,177.0 $ 6,090.8 $ 5,968.8 $ 5,910.3 $ 6,004.6
Assets Under Management ($ In Billions) - EOP
Corporate & Institutional Services $ 713.6 $ 727.0 $ 709.6 $ 702.9 $ 701.5
Wealth Management 232.0 233.1 224.5 220.4 222.9
Total Assets Under Management $ 945.6 $ 960.1 $ 934.1 $ 923.3 $ 924.4
Asset Quality ($ In Millions) - EOP
Nonperforming Loans and Leases $ 208.7 $ 219.6 $ 215.7 $ 220.5 $ 229.3
Other Real Estate Owned (OREO) 10.1 8.5 16.6 10.7 12.6
Total Nonperforming Assets $ 218.8 $ 228.1 $ 232.3 $ 231.2 $ 241.9
Nonperforming Assets / Loans and Leases and OREO 0.66 % 0.70 % 0.73 % 0.75 % 0.79 %
Gross Charge-offs $ 6.1 $ 7.5 $ 8.2 $ 8.6 $ 7.8
Less: Gross Recoveries 3.5 2.9 2.8 3.4 1.9
Net Charge-offs $ 2.6 $ 4.6 $ 5.4 $ 5.2 $ 5.9
Net Charge-offs (Annualized) to Average Loans and Leases 0.03 % 0.06 % 0.07 % 0.07 % 0.08 %
Allowance for Credit Losses Assigned to Loans and Leases $ 257.3 $ 259.0 $ 267.0 $ 269.4 $ 275.2
Allowance to Nonperforming Loans and Leases 1.2x 1.2x 1.2x 1.2x 1.2x
Allowance for Other Credit-Related Exposures $ 16.9 $ 27.7 $ 28.9 $ 28.9 $ 28.3
View source version on businesswire.com: http://www.businesswire.com/news/home/20150722005658/en/
Contact:
Northern Trust Corporation
Investor Contact:
Bev Fleming
(312) 444-7811
Beverly_Fleming@ntrs.com
or
Media Contact:
Doug Holt
(312) 557-1571
Doug_Holt@ntrs.com
Drmicrocap
12年前
Northern Trust Corporation Reports First Quarter Net Income of $181.4 Million, Earnings Per Common Share of $0.75
Business Wire Northern Trust Corporation
April 15, 2014 7:56 AM
CHICAGO--(BUSINESS WIRE)--
Northern Trust Corporation today reported first quarter net income per diluted common share of $0.75, up from $0.67 in the first quarter of 2013 and $0.70 in the fourth quarter of 2013. Net income was $181.4 million in the current quarter, up 11% from $164.0 million in the prior year first quarter, and up 7% from $169.7 million in the prior quarter. Return on average common equity was 9.3% in the current quarter, compared to 8.8% in the prior year quarter and 8.7% in the prior quarter.
Frederick H. Waddell, Chairman and Chief Executive Officer, said, “Our first quarter 2014 results improved compared to a year ago with trust, investment and other servicing fees increasing 8%, total revenue increasing 7% and net income and earnings per share increasing 11 and 12%, respectively. We also experienced strong growth in client assets under custody and under management of 15% and 13%, respectively.
We continue to focus on enhancing productivity and efficiency, while investing in people and technology to serve our growing businesses, expand our capabilities and continue to satisfy evolving regulatory requirements.
Northern Trust’s financial strength is evidenced in our capital ratios, and we are pleased that the Federal Reserve did not object to the proposed capital actions contained in our 2014 Capital Plan, which provides us with the flexibility to return more capital to our stockholders in the year ahead.”
FIRST QUARTER 2014 PERFORMANCE VS. FIRST QUARTER 2013
Net income per common share was $0.75 in the first quarter of 2014 compared to $0.67 in the first quarter of 2013. Net income for the current quarter was $181.4 million, up $17.4 million, or 11%, from $164.0 million in the prior year quarter. The prior year quarter included a $12.4 million pre-tax write-off of certain fee receivables resulting from the correction of an accrual methodology followed in prior years, as well as restructuring and integration related charges of $1.8 million. These prior year quarter items totaled $14.2 million ($8.9 million after tax, or $0.04 per common share).
Revenue of $1.04 billion in the current quarter was up $64.1 million, or 7%, from $976.4 million in the prior year quarter. Noninterest income, which represented 76% of revenue, increased $44.5 million, or 6%, to $794.8 million from the prior year quarter’s $750.3 million, primarily reflecting higher trust, investment and other servicing fees, partially offset by lower foreign exchange trading income as compared to the prior year quarter. Net interest income for the current quarter on a fully taxable equivalent (FTE) basis increased $20.7 million, or 9%, to $254.4 million compared to $233.7 million in the prior year quarter, due to higher levels of average earning assets, partially offset by a decrease in the net interest margin.
Trust, investment and other servicing fees were $679.5 million in the current quarter, up $48.8 million, or 8%, from $630.7 million in the prior year quarter. The increase primarily reflects new business and the favorable impact of equity markets, partially offset by higher waived fees in money market mutual funds.
Assets under custody and assets under management are the primary drivers of our trust, investment and other servicing fees. The following table provides the assets under custody and assets under management of Northern Trust’s Corporate & Institutional Services (C&IS) and Wealth Management business units.
March 31, December 31, March 31, % Change % Change
($ In Billions) 2014 2013 2013 Q1-14/Q4-13 Q1-14/Q1-13
Assets Under Custody
Corporate & Institutional $ 5,249.9 $ 5,079.7 $ 4,569.1 3 % 15 %
Wealth Management 503.6 496.0 455.3 2 11
Total Assets Under Custody $ 5,753.5 $ 5,575.7 $ 5,024.4 3 % 15 %
Assets Under Management
Corporate & Institutional $ 698.2 $ 662.7 $ 604.2 5 % 16 %
Wealth Management 217.2 221.8 206.0 (2) 5
Total Assets Under Management $ 915.4 $ 884.5 $ 810.2 3 % 13 %
C&IS trust, investment and other servicing fees increased $30.5 million, or 9%, to $379.2 million in the current quarter from the prior year quarter’s $348.7 million.
Q1 Q1
Change Q1 2014
($ In Millions) 2014 2013
from Q1 2013
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 252.2 $ 223.8 $ 28.4 13 %
Investment Management 75.0 75.5 (0.5 ) (1 )
Securities Lending 22.7 22.3 0.4 2
Other 29.3 27.1 2.2 8
Total $ 379.2 $ 348.7 $ 30.5 9 %
Custody and fund administration fees, the largest component of C&IS fees, increased 13%, primarily driven by new business and the favorable impact of equity markets. C&IS investment management fees decreased 1%, primarily reflecting higher waived fees in money market mutual funds, partially offset by higher equity markets and new business. Money market mutual fund fee waivers in C&IS, attributable to persistent low short-term interest rates, totaled $14.9 million in the current quarter, compared to waived fees of $8.8 million in the prior year quarter. Securities lending revenue increased 2%, primarily reflecting higher volumes in the current quarter.
Trust, investment and other servicing fees in Wealth Management totaled $300.3 million in the current quarter, increasing $18.3 million, or 6%, from $282.0 million in the prior year quarter. The increased fees in the current quarter are primarily due to higher equity markets and new business, partially offset by higher waived fees in money market mutual funds and the impact of fee reductions in certain of our mutual funds. Money market mutual fund fee waivers in Wealth Management totaled $17.6 million in the current quarter compared with $13.4 million in the prior year quarter.
Foreign exchange trading income totaled $50.1 million, down $9.4 million, or 16%, compared with $59.5 million in the prior year quarter. The decrease is attributable to lower currency market volatility as compared to the prior year quarter.
Other operating income totaled $37.7 million in the current quarter, up $12.9 million, or 53% from $24.8 million in the prior year quarter. The prior year quarter included the $12.4 million write-off of certain fee receivables.
Net investment security losses totaled $4.0 million in the current quarter, reflecting $3.9 million of charges relating to the other-than-temporary impairment of certain Community Reinvestment Act eligible securities.
Net interest income for the quarter on an FTE basis totaled $254.4 million, up $20.7 million, or 9%, compared to $233.7 million in the prior year quarter. The increase is the result of higher levels of average earning assets, partially offset by a decline in the net interest margin to 1.12% from 1.15% in the prior year quarter. Average earning assets for the quarter were $91.8 billion, up $9.6 billion, or 12%, from $82.2 billion in the prior year quarter, primarily reflecting higher levels of Federal Reserve deposits. The increase in Federal Reserve deposits as compared to the prior year quarter reflects higher levels of non-U.S. office client interest-bearing deposits and other short-term borrowings. The decline in the net interest margin primarily reflects lower yields on earning assets, partially offset by a lower cost of interest-related funds.
The provision for credit losses totaled $3.0 million in the current quarter compared to $5.0 million in the prior year quarter. The current quarter includes net charge-offs of $1.5 million, resulting from charge-offs of $11.5 million and recoveries of $10.0 million. The prior year quarter included $8.7 million of net charge-offs, resulting from $12.6 million of charge-offs and $3.9 million of recoveries. Nonperforming assets increased 3% from the prior year quarter. Residential real estate loans and commercial real estate loans accounted for 70% and 20%, respectively, of total nonperforming loans and leases at March 31, 2014.
The table below provides information regarding nonperforming assets, the allowance for credit losses, and associated ratios.
March 31, December 31, March 31,
($ In Millions) 2014 2013 2013
Nonperforming Assets
Nonperforming Loans and Leases $ 259.9 $ 262.8 $ 251.7
Other Real Estate Owned 9.8 11.9 10.5
Total Nonperforming Assets 269.7 274.7 262.2
Allowance for Credit Losses
Allowance for Credit Losses Assigned to:
Loans and Leases 279.2 278.1 294.1
Undrawn Loan Commitments and Standby Letters of Credit
30.2 29.8 29.7
Total Allowance for Credit Losses $ 309.4 $ 307.9 $ 323.8
Ratios
Nonperforming Loans and Leases to Total Loans and
Leases
0.88 % 0.89 % 0.87 %
Allowance for Credit Losses Assigned to Loans
and Leases to Total Loans and Leases 0.94 % 0.95 % 1.02 %
Allowance for Credit Losses Assigned to Loans and
Leases to Nonperforming Loans and Leases
1.1x 1.1x 1.2x
Noninterest expense totaled $768.0 million in the current quarter, up $39.1 million, or 5%, from $728.9 million in the prior year quarter, reflecting higher compensation, outside services, and equipment and software expense, partially offset by lower other operating expense.
Compensation expense, the largest component of noninterest expense, equaled $341.8 million, up $21.5 million, or 7%, from $320.3 million in the prior year quarter, primarily attributable to higher staff levels and base pay adjustments. Staff on a full-time equivalent basis at March 31, 2014 totaled approximately 14,900, up 5% from a year ago.
Employee benefit expense equaled $66.9 million, up 6% from $63.3 million in the prior year quarter, primarily reflecting higher payroll tax expense and expense associated with employee medical benefits, partially offset by lower pension expense.
Expense associated with outside services totaled $144.4 million, up $14.5 million, or 11%, from $129.9 million in the prior year quarter. The current quarter increase primarily reflects higher consulting expense, including costs associated with a growing set of regulatory and compliance requirements, as well as increased sub-custodian and technical services expense, as compared to the prior year quarter.
Equipment and software expense totaled $101.3 million, up $9.9 million, or 11%, from $91.4 million in the prior year quarter. The current quarter includes higher software amortization and related software support costs.
Occupancy expense equaled $44.2 million, up 2% from $43.2 million in the prior year quarter.
Other operating expense totaled $69.4 million, down $11.4 million, or 14%, from $80.8 million in the prior year quarter, primarily reflecting lower charges associated with account servicing activities.
Income tax expense was $88.1 million in the current quarter, representing an effective tax rate of 32.7%, and $78.5 million in the prior year quarter, representing an effective tax rate of 32.4%.
FIRST QUARTER 2014 PERFORMANCE VS. FOURTH QUARTER 2013
Net income per common share was $0.75 in the current quarter, compared to $0.70 in the fourth quarter of 2013. Net income for the current quarter totaled $181.4 million, up $11.7 million, or 7%, from $169.7 million in the prior quarter. The prior quarter included a $19.2 million pre-tax charge ($11.9 million after tax, or $0.05 per common share) in connection with an agreement to resolve certain long-standing class action litigation related to Northern Trust’s securities lending program.
Revenue was $1.04 billion in the current quarter compared to $1.05 billion in the prior quarter. Noninterest income in the current quarter decreased slightly to $794.8 million from the prior quarter’s $795.3 million. Net interest income for the current quarter on an FTE basis decreased 2%, to $254.4 million from $259.1 million in the prior quarter.
Trust, investment and other servicing fees totaled $679.5 million in the current quarter, up $5.7 million, or 1%, from $673.8 million in the prior quarter, primarily reflecting new business and higher equity markets in the current quarter.
C&IS trust, investment and other servicing fees totaled $379.2 million in the current quarter, up $8.1 million, or 2%, from $371.1 million in the prior quarter.
Q1 Q4
Change Q1 2014
($ In Millions) 2014 2013
from Q4 2013
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 252.2 $ 251.3 $ 0.9 - %
Investment Management 75.0 74.9 0.1 -
Securities Lending 22.7 21.8 0.9 4
Other 29.3 23.1 6.2 27
Total $ 379.2 $ 371.1 $ 8.1 2 %
C&IS custody and fund administration fees were relatively unchanged as compared to the prior quarter, as new business and higher equity markets were offset by lower sub-custody recoveries and other items. Investment management fees, which include waived fees in money market mutual funds attributable to the low short-term interest rates, were also relatively unchanged as compared to the prior quarter. Money market mutual fund fee waivers totaled $14.9 million in C&IS in the current quarter, compared to $14.7 million in the prior quarter. Securities lending revenue increased 4%, primarily reflecting increased volumes in the current quarter. Other C&IS trust, investment and other servicing fees increased 27%, primarily reflecting increased income attributable to benefit payment and investment risk and analytical services in the current quarter.
Wealth Management trust, investment and other servicing fees were $300.3 million, down 1% from $302.7 million in the prior quarter. While higher equity markets and new business benefitted fee growth, two fewer days in the quarter, higher money market fund fee waivers and the impact of fee reductions in certain of our mutual funds all detracted from sequential quarter fee growth. Money market mutual fund fee waivers in Wealth Management totaled $17.6 million in the current quarter, compared to $16.2 million in the prior quarter.
Foreign exchange trading income decreased 1% to $50.1 million compared to $50.8 million in the prior quarter, reflecting lower currency market volatility in the current quarter.
Other operating income in the current quarter totaled $37.7 million, down 1% from $38.2 million in the prior quarter.
Net investment security losses of $4.0 million in the current quarter reflect the $3.9 million charges relating to the other-than-temporary impairment of certain Community Reinvestment Act eligible securities.
Net interest income on an FTE basis in the current quarter totaled $254.4 million, down 2% compared to $259.1 million in the prior quarter. Average earning assets totaled $91.8 billion in the current quarter, up slightly from $91.6 billion in the prior quarter, and the net interest margin was 1.12% in both the current and prior quarter. The decrease in net interest income reflects two fewer days in the current quarter over which to accrue interest income as compared to the prior quarter.
The provision for credit losses was $3.0 million in the current quarter compared to $5.0 million in the prior quarter. Net charge-offs totaled $1.5 million for the current quarter resulting from $11.5 million of charge-offs and $10.0 million of recoveries, compared to $14.6 million of net charge-offs in the prior quarter resulting from $19.5 million of charge-offs and $4.9 million of recoveries. Nonperforming assets decreased 2% as compared to the prior quarter.
Noninterest expense totaled $768.0 million in the current quarter, down $26.5 million, or 3% from $794.5 million in the prior quarter. The prior quarter included the $19.2 million pre-tax charge in connection with the agreement to resolve certain long-standing class action litigation.
Excluding this charge, noninterest expense as compared to the prior quarter decreased $7.3 million, or 1%, primarily reflecting decreases within outside services expense and other operating expense, partially offset by higher compensation expense in the current quarter.
Compensation expense totaled $341.8 million for the current quarter, up $7.0 million, or 2%, from $334.8 million in the prior quarter, primarily reflecting higher share-based compensation expense as compared to the prior quarter. Employee benefit expense totaled $66.9 million for the current quarter, up 1% from $66.5 million in the prior quarter, primarily attributable to higher payroll tax expense, partially offset by lower pension expense.
Expense for outside services totaled $144.4 million, a decrease of $7.7 million, or 5%, compared to $152.1 million in the prior quarter, reflecting lower consulting and other outside services expense in the current quarter.
Equipment and software expense totaled $101.3 million in the current quarter, up 3% from $98.6 million in the prior quarter, primarily reflecting higher software amortization associated with the continued investment in technology related assets. Occupancy expense totaled $44.2 million, up 1% from $43.8 million in the prior quarter.
Other operating expense totaled $69.4 million, down $29.3 million, or 30%, from $98.7 million in the prior quarter. Excluding the prior quarter $19.2 million pre-tax charge, other operating expense as compared to the prior quarter decreased $10.1 million, or 13%, primarily reflecting lower charges associated with other account servicing activities, partially offset by increased business promotion expense.
Total income tax expense was $88.1 million for the current quarter, representing an effective tax rate of 32.7%. Income tax expense was $76.0 million in the prior quarter, representing an effective tax rate of 30.9%.
STOCKHOLDERS’ EQUITY
Total stockholders’ equity averaged $7.9 billion, up 5% from the prior year quarter’s average of $7.5 billion. The increase is primarily attributable to retained earnings, partially offset by dividend declarations and the repurchase of common stock pursuant to the Corporation’s share buyback program. During the three months ended March 31, 2014, the Corporation repurchased 2,624,715 shares at a cost of $163.0 million ($62.10 average price per share).
As reflected in the table below, the risk-based capital ratios of Northern Trust and its principal subsidiary bank, The Northern Trust Company, remained strong at March 31, 2014, with all ratios exceeding the U.S. regulatory requirements for classification as “well capitalized” institutions.
March 31, 2014 December 31, 2013 March 31, 2013
Tier 1 Total Leverage Tier 1 Total Leverage Tier 1 Total Leverage
Capital Capital Ratio Capital Capital Ratio Capital Capital Ratio
Northern Trust Corporation 13.0 % 15.5 % 7.8 % 13.4 % 15.8 % 7.9 % 13.3 % 14.7 % 8.4 %
The Northern Trust Company 11.7 % 14.2 % 6.9 % 11.5 % 14.3 % 6.8 % 12.2 % 14.0 % 7.7 %
Minimum to Qualify as
Well Capitalized
6.0 % 10.0 % 5.0 % 6.0 % 10.0 % 5.0 % 6.0 % 10.0 % 5.0 %
The following table provides the Corporation’s ratio of tier 1 capital and of common equity tier 1 capital to risk-weighted assets. Beginning January 1, 2014, common equity tier 1 capital is calculated in accordance with the Basel III risk-based capital guidelines, which requires the phasing out of tier 1 capital of 50% of trust preferred securities, and the inclusion in common equity tier 1 capital of certain additional capital items excluded from tier 1 capital.
March 31,
($ In Millions) 2014
Ratios
Tier 1 Capital 13.0 %
Common Equity Tier 1 Capital 12.8 %
Tier 1 Capital $ 7,761.3
Less: Floating Rate Capital Securities 134.4
Other adjustments 2.6
Common Equity Tier 1 Capital $ 7,629.5
RECONCILIATION OF REPORTED NET INTEREST INCOME TO FULLY TAXABLE EQUIVALENT
Net interest income stated on an FTE basis is a non-GAAP financial measure that facilitates the analysis of asset yields. Management believes an FTE presentation provides a clearer indication of net interest margins for comparative purposes. When adjusted to an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. The tables below present a reconciliation of interest income and net interest income prepared in accordance with GAAP to interest income and net interest income on an FTE basis.
Three Months Ended
March 31, 2014 December 31, 2013 March 31, 2013
($ In Millions) Reported FTE Adj. FTE Reported FTE Adj. FTE Reported FTE Adj. FTE
Net Interest Income
Interest Income $ 295.4 $ 8.7 $ 304.1 $ 302.4 $ 9.2 $ 311.6 $ 286.7 $ 7.6 $ 294.3
Interest Expense 49.7 – 49.7 52.5 – 52.5 60.6 – 60.6
Net Interest Income $ 245.7 $ 8.7 $ 254.4 $ 249.9 $ 9.2 $ 259.1 $ 226.1 $ 7.6 $ 233.7
Net Interest Margin 1.09 % 1.12 % 1.08 % 1.12 % 1.12 % 1.15 %
FORWARD-LOOKING STATEMENTS
This release may include forward-looking statements concerning Northern Trust’s financial results and outlook, capital adequacy, dividend policy, anticipated expense levels and technology spending, risk management policies, contingent liabilities, strategic initiatives, industry trends, and expectations regarding the impact of recent legislation. Forward-looking statements are typically identified by words or phrases such as “believe”, “expect”, “anticipate”, “intend”, “estimate”, “project”, “likely”, “may increase”, “plan”, “goal”, “target”, “strategy”, and similar expressions or future or conditional verbs such as “may”, “will”, “should”, “would”, and “could”. Forward-looking statements are Northern Trust’s current estimates or expectations of future events or future results, and involve risks and uncertainties that are difficult to predict. These statements are based on assumptions about many important factors, including the factors discussed in Northern Trust’s most recent annual report on Form 10-K and other filings with the U.S. Securities and Exchange Commission, all of which are available on Northern Trust’s website. We caution you not to place undue reliance on any forward-looking statement as actual results may differ materially from those expressed or implied by forward-looking statements. Northern Trust assumes no obligation to update its forward-looking statements.
WEBCAST OF FIRST QUARTER EARNINGS CONFERENCE CALL
Northern Trust’s first quarter earnings conference call will be webcast live on April 15, 2014. The live call will be conducted at 9:00 a.m. CT and is accessible on Northern Trust’s website at:
http://www.northerntrust.com/financialreleases
The rebroadcast of the live call will be available on Northern Trust’s website from 2:00 p.m. CT on April 15, 2014, for approximately four weeks. Participants will need Windows Mediatm or Adobe Flash software, which can be downloaded for free through Northern Trust’s website. This earnings release can also be accessed at the above web address.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
FIRST QUARTER
2014 2013 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 679.5 $ 630.7 8 %
Foreign Exchange Trading Income 50.1 59.5 (16 )
Treasury Management Fees 16.8 16.8 -
Security Commissions and Trading Income 14.7 18.3 (20 )
Other Operating Income 37.7 24.8 53
Investment Security Gains (Losses), net (4.0 ) 0.2 N/M
Total Noninterest Income 794.8 750.3 6
Net Interest Income
Interest Income 295.4 286.7 3
Interest Expense 49.7 60.6 (18 )
Net Interest Income 245.7 226.1 9
Total Revenue 1,040.5 976.4 7
Provision for Credit Losses 3.0 5.0 (40 )
Noninterest Expense
Compensation 341.8 320.3 7
Employee Benefits 66.9 63.3 6
Outside Services 144.4 129.9 11
Equipment and Software 101.3 91.4 11
Occupancy 44.2 43.2 2
Other Operating Expense 69.4 80.8 (14 )
Total Noninterest Expense 768.0 728.9 5
Income before Income Taxes 269.5 242.5 11
Provision for Income Taxes 88.1 78.5 12
NET INCOME $ 181.4 $ 164.0 11 %
Earnings Allocated to Participating Securities 2.9 2.5 16 %
Earnings Allocated to Common and Potential Common Shares 178.5 161.5 11
Per Common Share
Net Income
Basic $ 0.75 $ 0.68 10 %
Diluted 0.75 0.67 12
Average Common Equity $ 7,926.4 $ 7,543.2 5 %
Return on Average Common Equity 9.28 % 8.82 % 5
Return on Average Assets 0.73 % 0.73 % -
Cash Dividends Declared per Common Share $ 0.31 $ 0.30 3 %
Average Common Shares Outstanding (000s)
Basic 237,208 239,168
Diluted 239,051 240,176
Common Shares Outstanding (EOP) (000s) 236,481 239,240
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
FIRST
FOURTH
($ In Millions Except Per Share Data)
QUARTER QUARTER
2014 2013 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 679.5 $ 673.8 1 %
Foreign Exchange Trading Income 50.1 50.8 (1 )
Treasury Management Fees 16.8 17.5 (4 )
Security Commissions and Trading Income 14.7 14.6 -
Other Operating Income 37.7 38.2 (1 )
Investment Security Gains (Losses), net (4.0 ) 0.4 N/M
Total Noninterest Income 794.8 795.3 -
Net Interest Income
Interest Income 295.4 302.4 (2 )
Interest Expense 49.7 52.5 (5 )
Net Interest Income 245.7 249.9 (2 )
Total Revenue 1,040.5 1,045.2 -
Provision for Credit Losses 3.0 5.0 (40 )
Noninterest Expense
Compensation 341.8 334.8 2
Employee Benefits 66.9 66.5 1
Outside Services 144.4 152.1 (5 )
Equipment and Software 101.3 98.6 3
Occupancy 44.2 43.8 1
Other Operating Expense 69.4 98.7 (30 )
Total Noninterest Expense 768.0 794.5 (3 )
Income before Income Taxes 269.5 245.7 10
Provision for Income Taxes 88.1 76.0 16
NET INCOME $ 181.4 $ 169.7 7 %
Earnings Allocated to Participating Securities 2.9 2.7 7 %
Earnings Allocated to Common and Potential Common Shares 178.5 167.0 7
Per Common Share
Net Income
Basic $ 0.75 $ 0.70 7 %
Diluted 0.75 0.70 7
Average Common Equity $ 7,926.4 $ 7,775.7 2 %
Return on Average Common Equity 9.28 % 8.66
%
7
Return on Average Assets 0.73 % 0.68
%
7
Cash Dividends Declared per Common Share $ 0.31 $ 0.31 - %
Average Common Shares Outstanding (000s)
Basic 237,208 238,228
Diluted 239,051 239,656
Common Shares Outstanding (EOP) (000s)
236,481
237,322
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) MARCH 31
2014 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 510.0 $ 251.5 103 %
Interest-Bearing Deposits with Banks 17,155.8 18,694.8 (8 )
Federal Reserve Deposits and Other Interest-Bearing 12,211.0 5,828.6 110
Securities
U.S. Government 2,414.7 1,782.4 35
Obligations of States and Political Subdivisions 200.8 307.4 (35 )
Government Sponsored Agency 18,182.9 16,939.7 7
Other (**) 13,366.4 11,526.3 16
Total Securities 34,164.8 30,555.8 12
Loans and Leases 29,660.8 28,862.9 3
Total Earning Assets 93,702.4 84,193.6 11
Allowance for Credit Losses Assigned to Loans and Leases (279.2 ) (294.1 ) (5 )
Cash and Due from Banks 3,676.3 3,773.5 (3 )
Buildings and Equipment 449.4 457.2 (2 )
Client Security Settlement Receivables 1,845.2 816.5 126
Goodwill 541.6 529.5 2
Other Assets 3,896.9 3,680.6 6
Total Assets $ 103,832.6 $ 93,156.8 11 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 15,506.0 $ 14,819.8 5 %
Savings Certificates and Other Time 2,034.5 2,296.1 (11 )
Non-U.S. Offices - Interest-Bearing 47,564.4 39,822.4 19
Total Interest-Bearing Deposits 65,104.9 56,938.3 14
Short-Term Borrowings 2,402.9 3,246.0 (26 )
Senior Notes 1,996.7 2,402.0 (17 )
Long-Term Debt 1,731.3 1,198.4 44
Floating Rate Capital Debt 277.2 277.1 -
Total Interest-Related Funds 71,513.0 64,061.8 12
Demand and Other Noninterest-Bearing Deposits 21,162.8 18,883.8 12
Other Liabilities 3,208.5 2,599.1 23
Total Liabilities 95,884.3 85,544.7 12
Total Equity 7,948.3 7,612.1 4
Total Liabilities and Stockholders' Equity $ 103,832.6 $ 93,156.8 11 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) MARCH 31 DECEMBER 31
2014 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 510.0 $ 529.6 (4 ) %
Interest-Bearing Deposits with Banks 17,155.8 19,397.4 (12 )
Federal Reserve Deposits and Other Interest-Bearing 12,211.0 12,911.5 (5 )
Securities
U.S. Government 2,414.7 1,917.9 26
Obligations of States and Political Subdivisions 200.8 229.8 (13 )
Government Sponsored Agency 18,182.9 17,563.8 4
Other (**) 13,366.4 11,431.7 17
Total Securities 34,164.8 31,143.2 10
Loans and Leases 29,660.8 29,385.5 1
Total Earning Assets 93,702.4 93,367.2 -
Allowance for Credit Losses Assigned to Loans and Leases (279.2 ) (278.1 ) -
Cash and Due from Banks 3,676.3 3,162.4 16
Buildings and Equipment 449.4 458.8 (2 )
Client Security Settlement Receivables 1,845.2 1,355.2 36
Goodwill 541.6 540.7 -
Other Assets 3,896.9 4,341.1 (10 )
Total Assets $ 103,832.6 $ 102,947.3 1 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 15,506.0 $ 14,991.5 3 %
Savings Certificates and Other Time 2,034.5 1,874.4 9
Non-U.S. Offices - Interest-Bearing 47,564.4 48,461.7 (2 )
Total Interest-Bearing Deposits 65,104.9 65,327.6 -
Short-Term Borrowings 2,402.9 3,441.0 (30 )
Senior Notes 1,996.7 1,996.6 -
Long-Term Debt 1,731.3 1,709.2 1
Floating Rate Capital Debt 277.2 277.1 -
Total Interest-Related Funds 71,513.0 72,751.5 (2 )
Demand and Other Noninterest-Bearing Deposits 21,162.8 18,770.5 13
Other Liabilities 3,208.5 3,513.3 (9 )
Total Liabilities 95,884.3 95,035.3 1
Total Equity 7,948.3 7,912.0 -
Total Liabilities and Stockholders' Equity $ 103,832.6 $ 102,947.3 1 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
($ In Millions) FIRST QUARTER
2014 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 530.3 $ 249.5 113 %
Interest-Bearing Deposits with Banks 17,062.5 18,099.5 (6 )
Federal Reserve Deposits and Other Interest-Bearing 12,702.5 3,872.0 N/M
Securities
U.S. Government 2,313.7 1,782.8 30
Obligations of States and Political Subdivisions 213.1 321.1 (34 )
Government Sponsored Agency 17,834.7 18,280.6 (2 )
Other (**) 12,006.5 10,890.6 10
Total Securities 32,368.0 31,275.1 3
Loans and Leases 29,177.4 28,661.9 2
Total Earning Assets 91,840.7 82,158.0 12
Allowance for Credit Losses Assigned to Loans and Leases (277.8 ) (296.1 ) (6 )
Cash and Due from Banks 2,806.6 3,392.5 (17 )
Buildings and Equipment 457.7 467.5 (2 )
Client Security Settlement Receivables 904.4 793.3 14
Goodwill 540.8 532.6 2
Other Assets 3,971.1 4,521.5 (12 )
Total Assets $ 100,243.5 $ 91,569.3 9 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,713.8 $ 14,880.3 (1 ) %
Savings Certificates and Other Time 1,825.5 2,385.6 (23 )
Non-U.S. Offices - Interest-Bearing 46,566.4 39,221.1 19
Total Interest-Bearing Deposits 63,105.7 56,487.0 12
Short-Term Borrowings 4,552.0 3,405.5 34
Senior Notes 1,996.6 2,403.9 (17 )
Long-Term Debt 1,728.9 1,277.7 35
Floating Rate Capital Debt 277.1 277.1 -
Total Interest-Related Funds 71,660.3 63,851.2 12
Demand and Other Noninterest-Bearing Deposits 17,642.1 16,899.1 4
Other Liabilities 3,014.7 3,275.8 (8 )
Total Liabilities 92,317.1 84,026.1 10
Total Equity 7,926.4 7,543.2 5
Total Liabilities and Stockholders' Equity $ 100,243.5 $ 91,569.3 9 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
FIRST FOURTH
($ In Millions) QUARTER QUARTER
2014 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 530.3 $ 549.7 (4 ) %
Interest-Bearing Deposits with Banks 17,062.5 18,264.9 (7 )
Federal Reserve Deposits and Other Interest-Bearing 12,702.5 13,220.9 (4 )
Securities
U.S. Government 2,313.7 1,318.8 75
Obligations of States and Political Subdivisions 213.1 248.2 (14 )
Government Sponsored Agency 17,834.7 17,574.6 1
Other (**) 12,006.5 11,566.5 4
Total Securities 32,368.0 30,708.1 5
Loans and Leases 29,177.4 28,858.1 1
Total Earning Assets 91,840.7 91,601.7 -
Allowance for Credit Losses Assigned to Loans and Leases (277.8 ) (283.8 ) (2 )
Cash and Due from Banks 2,806.6 2,676.5 5
Buildings and Equipment 457.7 454.2 1
Client Security Settlement Receivables 904.4 813.3 11
Goodwill 540.8 537.9 1
Other Assets 3,971.1 3,906.9 2
Total Assets $ 100,243.5 $ 99,706.7 1 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,713.8 $ 14,340.8 3 %
Savings Certificates and Other Time 1,825.5 1,861.6 (2 )
Non-U.S. Offices - Interest-Bearing 46,566.4 47,920.3 (3 )
Total Interest-Bearing Deposits 63,105.7 64,122.7 (2 )
Short-Term Borrowings 4,552.0 4,989.9 (9 )
Senior Notes 1,996.6 1,996.5 -
Long-Term Debt 1,728.9 1,485.8 16
Floating Rate Capital Debt 277.1 277.1 -
Total Interest-Related Funds 71,660.3 72,872.0 (2 )
Demand and Other Noninterest-Bearing Deposits 17,642.1 16,004.8 10
Other Liabilities 3,014.7 3,054.2 (1 )
Total Liabilities 92,317.1 91,931.0 -
Total Equity 7,926.4 7,775.7 2
Total Liabilities and Stockholders' Equity $ 100,243.5 $ 99,706.7 1 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
QUARTERLY TREND DATA
2014
2013
($ In Millions Except Per Share Data)
QUARTER
QUARTERS
FIRST FOURTH THIRD SECOND FIRST
Net Income Summary
Trust, Investment and Other Servicing Fees $ 679.5 $ 673.8 $ 648.0 $ 657.3 $ 630.7
Other Noninterest Income 115.3 121.5 162.2 143.1 119.6
Net Interest Income 245.7 249.9 237.0 220.1 226.1
Total Revenue 1,040.5 1,045.2 1,047.2 1,020.5 976.4
Provision for Credit Losses 3.0 5.0 5.0 5.0 5.0
Noninterest Expense 768.0 794.5 740.7 729.7 728.9
Income before Income Taxes 269.5 245.7 301.5 285.8 242.5
Provision for Income Taxes 88.1 76.0 95.0 94.7 78.5
Net Income $ 181.4 $ 169.7
$ 206.5
$ 191.1
$ 164.0
Per Common Share
Net Income - Basic $ 0.75 $ 0.70 $ 0.85 $ 0.78 $ 0.68
- Diluted 0.75 0.70 0.84 0.78 0.67
Cash Dividends Declared per Common Share 0.31 0.31 0.31 0.31 0.30
Book Value (EOP) 33.61 33.34 32.71 32.17 31.82
Market Value (EOP) 65.56 61.89 54.38 57.90 54.56
Ratios
Return on Average Common Equity 9.28 % 8.66 % 10.64 % 10.02 % 8.82 %
Return on Average Assets 0.73 0.68 0.86 0.83 0.73
Net Interest Margin (GAAP) 1.09 1.08 1.10 1.06 1.12
Net Interest Margin (FTE) 1.12 1.12 1.14 1.10 1.15
Capital Ratios
Tier 1 13.0 % 13.4 % 13.6 % 13.1 % 13.3 %
Total (Tier 1 + Tier 2) 15.5 15.8 14.9 14.4 14.7
Tier 1 Leverage 7.8 7.9 8.3 8.4 8.4
Common Equity Tier 1 12.8 12.9 13.1 12.6 12.8
Assets Under Custody ($ In Billions) - EOP
Corporate $ 5,249.9 $ 5,079.7 $ 4,766.5 $ 4,538.9 $ 4,569.1
Wealth Management 503.6 496.0 470.5 452.6 455.3
Total Assets Under Custody $ 5,753.5 $ 5,575.7 $ 5,237.0 $ 4,991.5 $ 5,024.4
Assets Under Management ($ In Billions) - EOP $ 915.4 $ 884.5 $ 846.2 $ 803.0 $ 810.2
Asset Quality ($ In Millions) - EOP
Nonperforming Loans and Leases $ 259.9 $ 262.8 $ 270.1 $ 266.7 $ 251.7
Other Real Estate Owned (OREO) 9.8 11.9 13.9 14.5 10.5
Total Nonperforming Assets $ 269.7 $ 274.7 $ 284.0 $ 281.2 $ 262.2
Nonperforming Assets / Loans and Leases and OREO 0.91 % 0.93 % 0.98 % 0.98 % 0.91 %
Gross Charge-offs $ 11.5 $ 19.5 $ 11.6 $ 15.6 $ 12.6
Less: Gross Recoveries 10.0 4.9 3.3 7.5 3.9
Net Charge-offs $ 1.5 $ 14.6
$ 8.3
$ 8.1
$ 8.7
Net Charge-offs (Annualized) to Average Loans and Leases 0.02 % 0.20 % 0.12 % 0.11 % 0.12 %
Allowance for Credit Losses Assigned to Loans and Leases $ 279.2 $ 278.1 $ 287.2 $ 290.4 $ 294.1
Allowance to Nonperforming Loans and Leases 1.1x 1.1x 1.1x 1.1x 1.2x
Allowance for Other Credit-Related Exposures $ 30.2 $ 29.8 $ 30.3 $ 30.3 $ 29.7
Contact:
Northern Trust Corporation
Investor Contact:
Bev Fleming, (312) 444-7811
Beverly_Fleming@ntrs.com
or
Media Contact:
Doug Holt, (312) 557-1571
Doug_Holt@ntrs.com
http://www.northerntrust.com
Drmicrocap
12年前
Northern Trust Corporation Reports Fourth Quarter Net Income of $169.7 Million, Earnings Per Common Share of $0.70.
Full Year Net Income of $731.3 Million, Earnings Per Common Share of $2.99.
Business Wire Northern Trust Corporation
January 22, 2014 7:35 AM
CHICAGO--(BUSINESS WIRE)--
Northern Trust Corporation today reported fourth quarter net income per diluted common share of $0.70, up from $0.69 in the fourth quarter of 2012 and down from $0.84 in the third quarter of 2013. Net income was $169.7 million in the current quarter, up 1% from $167.7 million in the prior year fourth quarter, and down 18% from $206.5 million in the prior quarter. Return on average common equity was 8.7% in the current quarter, compared to 8.8% in the prior year quarter and 10.6% in the prior quarter.
The current quarter includes a $19.2 million pre-tax charge ($11.9 million after tax, or $0.05 per common share) in connection with an agreement to resolve certain long-standing class action litigation. Excluding the charge, fourth quarter results would have reflected net income per common share of $0.75, net income of $181.6 million, and return on average common equity of 9.3%. The prior quarter included a $32.6 million pre-tax gain ($20.3 million after tax, or $0.08 per common share) on the sale of an office building property. Excluding the gain, the prior quarter results would have reflected net income per common share of $0.76, net income of $186.2 million, and return on average common equity of 9.6%.
Reported net income per common share for the full year was $2.99, compared to the prior years $2.81 per common share. Net income for 2013 totaled $731.3 million, up $44.0 million, or 6%, from the prior years $687.3 million.
Frederick H. Waddell, Chairman and Chief Executive Officer, commented, Our fourth quarter and full year results reflect continued focus on serving our clients and improving the profitability and returns of our business. Our return on equity improved to 9.5% in 2013 from 9.3% in 2012 and 8.6% in 2011. We increased our quarterly dividend to $0.31 per share and repurchased 5.5 million shares in 2013, returning $609.0 million in capital to our shareholders compared to $449.8 million in 2012.
"Strong new business and higher equity markets drove client assets under custody and under management up 16% and 17%, respectively, compared to the prior year.
"Despite 8% growth in trust, investment and other servicing fees, overall revenue growth of 5% in 2013 was dampened by the challenging interest rate environment. Expense growth of 4% reflects the growth in our business and ongoing investment to support technology initiatives and regulatory and compliance requirements.
FOURTH QUARTER 2013 PERFORMANCE VS. FOURTH QUARTER 2012
Net income per common share was $0.70 in the fourth quarter of 2013 compared to $0.69 in the fourth quarter of 2012. Net income for the current quarter was $169.7 million, up 1% from $167.7 million in the prior year quarter. The current quarter includes the $19.2 million pre-tax charge in connection with the agreement to resolve certain long-standing class action litigation related to the Corporations securities lending program. The prior year quarter included restructuring and integration related pre-tax charges of $8.2 million ($5.2 million after tax, or $0.02 per common share).
Consolidated revenue of $1.05 billion in the current quarter was up $75.5 million, or 8%, from $969.7 million in the prior year quarter. Noninterest income, which represented 76% of revenue, increased $59.8 million, or 8%, to $795.3 million from the prior year quarters $735.5 million, primarily reflecting higher trust, investment and other servicing fees and foreign exchange trading income. Net interest income for the quarter on a fully taxable equivalent (FTE) basis increased $15.5 million, or 7%, to $259.1 million compared to $243.6 million in the prior year quarter, due to higher levels of average earning assets, partially offset by a decrease in the net interest margin.
Trust, investment and other servicing fees were $673.8 million in the current quarter, up $51.2 million, or 8%, from $622.6 million in the prior year quarter. The increase primarily reflects new business and the favorable impact of equity markets, partially offset by higher waived fees in money market mutual funds.
Assets under custody and assets under management are the primary drivers of our trust, investment and other servicing fees. The following table provides the assets under custody and assets under management of Northern Trusts Corporate & Institutional Services (C&IS) and Wealth Management business units.
December 31, September 30, December 31, % Change % Change
($ In Billions) 2013 2013 2012 Q4-13/Q3-13 Q4-13/Q4-12
Assets Under Custody
Corporate & Institutional $ 5,079.7 $ 4,766.5 $ 4,358.6 7 % 17 %
Wealth Management 496.0 470.5 446.3 5 11
Total Assets Under Custody $ 5,575.7 $ 5,237.0 $ 4,804.9 6 % 16 %
Assets Under Management
Corporate & Institutional $ 662.7 $ 634.6 $ 561.2 4 % 18 %
Wealth Management 221.8 211.6 197.7 5 12
Total Assets Under Management $ 884.5 $ 846.2 $ 758.9 5 % 17 %
C&IS trust, investment and other servicing fees increased $26.8 million, or 8%, to $371.1 million in the current quarter from the prior year quarters $344.3 million.
...
Q4 Q4
Change Q4 2013
($ In Millions) 2013 2012
from Q4 2012
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 251.3 $ 224.7 $ 26.6 12 %
Investment Management 74.9 74.2 0.7 1
Securities Lending 21.8 20.3 1.5 7
Other 23.1 25.1 (2.0) (8)
Total $ 371.1 $ 344.3 $ 26.8 8 %
Custody and fund administration fees, the largest component of C&IS fees, increased 12%, primarily driven by new business and the favorable impact of equity markets. C&IS investment management fees increased 1%. New business and the favorable impact of equity markets were offset by higher waived fees in money market mutual funds.
Money market mutual fund fee waivers in C&IS, attributable to persistent low short-term interest rates, totaled $14.7 million in the current quarter, compared to waived fees of $5.7 million in the prior year quarter. Securities lending revenue increased 7%, primarily reflecting higher volumes in the current quarter.
Trust, investment and other servicing fees in Wealth Management totaled $302.7 million in the current quarter, increasing $24.4 million, or 9%, from $278.3 million in the prior year quarter. The increased fees in the current quarter are primarily due to higher equity markets and new business, partially offset by higher waived fees in money market mutual funds. Money market mutual fund fee waivers in Wealth Management totaled $16.2 million in the current quarter compared with $9.6 million in the prior year quarter.
Foreign exchange trading income totaled $50.8 million, up $10.0 million, or 25%, compared with $40.8 million in the prior year quarter. The increase is attributable to higher trading volumes and currency market volatility compared to the prior year quarter.
Other operating income totaled $38.2 million in the current quarter, up 8% from $35.7 million in the prior year quarter.
Net interest income for the quarter on an FTE basis totaled $259.1 million, up $15.5 million, or 7%, compared to $243.6 million in the prior year quarter. The increase is the result of higher levels of average earning assets, partially offset by a decline in the net interest margin to 1.12% from 1.17% in the prior year quarter. Average earning assets for the quarter were $91.60 billion, up $8.71 billion, or 11%, from $82.89 billion in the prior year quarter, due to higher levels of client deposits and short-term borrowings. The decline in the net interest margin primarily reflects lower yields on earning assets, partially offset by a lower cost of interest-related funds.
The provision for credit losses was $5.0 million in both the current quarter and the prior year quarter. Net charge-offs totaled $14.6 million for the current quarter, resulting from $19.5 million of charge-offs and $4.9 million of recoveries, compared to $5.4 million of net charge-offs in the prior year quarter, resulting from $16.1 million of charge-offs and $10.7 million of recoveries. Nonperforming assets were relatively unchanged from the prior year quarter.
Residential real estate loans and commercial real estate loans accounted for 72% and 19%, respectively, of total nonperforming loans and leases at December 31, 2013.
The table below provides information regarding nonperforming assets, the allowance for credit losses, and associated ratios.
December 31, September 30, December 31,
($ In Millions) 2013 2013 2012
Nonperforming Assets
Nonperforming Loans and Leases $ 262.8 $ 270.1 $ 254.8
Other Real Estate Owned 11.9 13.9 20.3
Total Nonperforming Assets 274.7 284.0 275.1
Allowance for Credit Losses
Allowance for Credit Losses Assigned to:
Loans and Leases 278.1 287.2 297.9
Undrawn Loan Commitments and Standby Letters of Credit
29.8 30.3 29.7
Total Allowance for Credit Losses $ 307.9 $ 317.5 $ 327.6
Ratios
Nonperforming Loans and Leases to Total Loans and Leases
0.89 % 0.93 % 0.86 %
Allowance for Credit Losses Assigned to Loans
and Leases to Total Loans and Leases 0.95 % 0.99 % 1.01 %
Allowance for Credit Losses Assigned to Loans and
Leases to Nonperforming Loans and Leases
1.1x 1.1x 1.2x
Noninterest expense totaled $794.5 million in the current quarter, up $53.0 million, or 7%, from $741.5 million in the prior year quarter, reflecting the current quarter $19.2 million pre-tax charge as well as higher compensation, outside services, and equipment and software expense.
Compensation expense, the largest component of noninterest expense, equaled $334.8 million, up $18.5 million, or 6%, from $316.3 million in the prior year quarter, primarily attributable to higher staff levels. Staff on a full-time equivalent basis at December 31, 2013 totaled approximately 14,800, up 4% from a year ago. Employee benefit expense equaled $66.5 million, up 4% from $63.9 million in the prior year quarter.
Expense associated with outside services totaled $152.1 million, up $11.4 million, or 8%, from $140.7 million in the prior year quarter. The current quarter increase is primarily attributable to higher consulting expense, including costs associated with a growing set of regulatory and compliance requirements, as well as higher technical services and sub-custodian expense.
Equipment and software expense totaled $98.6 million, up $8.1 million, or 9%, from $90.5 million in the prior year quarter. The current quarter includes higher software amortization and related software support costs associated with the continued investment in technology related assets.
Occupancy expense equaled $43.8 million, down 5% from $46.2 million in the prior year quarter. The prior year quarter included $3.0 million of restructuring charges related to reductions in office space.
Other operating expense totaled $98.7 million, up $14.8 million, or 18%, from $83.9 million in the prior year quarter. The current quarter includes the $19.2 million pre-tax charge. The prior year quarter included $3.3 million of restructuring and integration related charges. Excluding the current and prior year charges, other operating expense decreased by 1% from the prior year quarter.
Income tax expense was $76.0 million in the current quarter, representing an effective tax rate of 30.9%, and $55.5 million in the prior year quarter, representing an effective tax rate of 24.9%. These compare to full year 2013 and 2012 effective tax rates of 32.0% and 30.7%, respectively. The prior year quarter included an $11.7 million tax benefit in connection with the resolution of certain leveraged lease related matters.
FOURTH QUARTER 2013 PERFORMANCE VS. THIRD QUARTER 2013
Net income per common share was $0.70 in the current quarter, compared with $0.84 in the third quarter of 2013. Net income for the current quarter totaled $169.7 million, down $36.8 million, or 18%, from $206.5 million in the prior quarter. Excluding the current quarter $19.2 million pre-tax charge in connection with the legal settlement, net income per common share and net income would have been $0.75 and $181.6 million, respectively. Excluding the prior quarter $32.6 million pre-tax gain on the sale of an office building property, net income per common share and net income in the prior quarter would have been $0.76 and $186.2 million, respectively.
Consolidated revenue was $1.05 billion in both the current and prior quarter. Excluding the prior quarter gain, consolidated revenue in the current quarter increased 3% as compared to the prior quarter. Noninterest income in the current quarter decreased $14.9 million, or 2%, to $795.3 million from the prior quarter’s $810.2 million, primarily attributable to lower other operating income and foreign exchange trading income, partially offset by higher trust, investment and other servicing fees. Net interest income for the current quarter on an FTE basis increased $14.3 million, or 6%, to $259.1 million from $244.8 million in the prior quarter, due to higher levels of average earning assets, partially offset by a decline in the net interest margin.
Trust, investment and other servicing fees totaled $673.8 million in the current quarter, up $25.8 million, or 4%, from $648.0 million in the prior quarter, primarily reflecting higher equity markets and new business.
C&IS trust, investment and other servicing fees totaled $371.1 million in the current quarter, up $11.3 million, or 3%, from $359.8 million in the prior quarter.
Q4 Q3
Change Q4 2013
($ In Millions) 2013 2013
from Q3 2013
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 251.3 $ 239.4 $ 11.9 5 %
Investment Management 74.9 71.3 3.6 5
Securities Lending 21.8 22.7 (0.9) (4)
Other 23.1 26.4 (3.3) (12)
Total $ 371.1 $ 359.8 $ 11.3 3 %
C&IS custody and fund administration fees increased 5%, primarily driven by new business and the favorable impact of equity markets. Investment management fees, which include waived fees in money market mutual funds attributable to the low short-term interest rates, increased 5%, primarily due to new business and higher equity markets. Money market mutual fund fee waivers totaled $14.7 million in C&IS in the current quarter, compared to $15.3 million in the prior quarter. Securities lending revenue decreased 4%, reflecting lower volumes in the current quarter.
Wealth Management trust, investment and other servicing fees were $302.7 million, up $14.5 million, or 5%, from $288.2 million in the prior quarter, primarily due to higher equity markets and new business. Money market mutual fund fee waivers in Wealth Management totaled $16.2 million in the current quarter, compared to $17.1 million in the prior quarter.
Foreign exchange trading income decreased $12.0 million, or 19%, to $50.8 million compared to $62.8 million in the prior quarter. The current quarter decrease reflects lower currency market volatility and trading volumes.
Other operating income in the current quarter totaled $38.2 million, down $29.0 million, or 43%, from $67.2 million in the prior quarter. The prior quarter included the $32.6 million pre-tax gain on the sale of an office building property. Excluding the prior quarter gain, other operating income in the current quarter increased by 10%.
Net interest income on an FTE basis in the current quarter totaled $259.1 million, up $14.3 million, or 6%, compared to $244.8 million in the prior quarter. The increase is primarily the result of higher levels of average earning assets, partially offset by a decline in the net interest margin. Average earning assets totaled $91.60 billion in the current quarter, up $6.07 billion, or 7%, compared to $85.53 billion in the prior quarter. The net interest margin decreased to 1.12% in the current quarter from 1.14% in the prior quarter, reflecting lower yields on earning assets, partially offset by a lower cost of interest-related funds.
The provision for credit losses totaled $5.0 million in both the current quarter and the prior quarter. Net charge-offs totaled $14.6 million for the current quarter resulting from $19.5 million of charge-offs and $4.9 million of recoveries, compared to $8.3 million of net charge-offs in the prior quarter resulting from $11.6 million of charge-offs and $3.3 million of recoveries. Nonperforming assets declined 3% as compared to the prior quarter.
Noninterest expense totaled $794.5 million in the current quarter, up $53.8 million, or 7% from $740.7 million in the prior quarter. Excluding the current quarter $19.2 million pre-tax charge, noninterest expense as compared to the prior quarter increased $34.6 million, or 5%, primarily reflecting higher compensation, outside services and other operating expense in the current quarter.
Compensation expense totaled $334.8 million for the current quarter, up $10.2 million, or 3%, from $324.6 million in the prior quarter, primarily reflecting higher staff levels. Employee benefit expense totaled $66.5 million for the current quarter, up 5% from $63.5 million in the prior quarter, primarily due to higher costs associated with employee medical benefits.
Expense for outside services totaled $152.1 million, an increase of $6.2 million, or 4%, compared to $145.9 million in the prior quarter, primarily reflecting higher expense for legal services and increased sub-custodian expense in the current quarter.
Equipment and software expense totaled $98.6 million in the current quarter, up 3% from $95.5 million in the prior quarter. Occupancy expense totaled $43.8 million, relatively unchanged from $43.3 million in the prior quarter.
Other operating expense totaled $98.7 million, up $30.8 million, or 45%, from $67.9 million in the prior quarter. Excluding the current quarter $19.2 million pre-tax charge, other operating expense as compared to the prior quarter increased $11.6 million, or 17%, primarily reflecting higher charges associated with other account servicing activities as well as increased business promotion expense.
Total income tax expense was $76.0 million for the current quarter, representing an effective tax rate of 30.9%. Income tax expense was $95.0 million in the prior quarter, representing an effective tax rate of 31.5%.
FULL YEAR 2013 PERFORMANCE VS. FULL YEAR 2012
Reported net income per common share for the full year was $2.99, compared to the prior full year’s $2.81 per common share. Net income for 2013 totaled $731.3 million, up $44.0 million, or 6%, from the prior year’s $687.3 million. The performance in 2013 produced a return on average common equity of 9.5% compared to 9.3% in 2012. The return on average assets was 0.8% in 2013 compared with 0.7% in 2012.
The current year includes the $19.2 million pre-tax charge in connection with the legal settlement and a $12.4 million pre-tax write-off of certain fee receivables resulting from the correction of an accrual methodology followed in prior years, offset by the $32.6 million pre-tax gain on the sale of an office building property. The prior year included restructuring, acquisition and integration related pre-tax charges of $18.6 million, partially offset by the $11.7 million tax benefit in connection with the resolution of certain leveraged lease related matters. Excluding these current and prior year items, net income per common share and return on average common equity in both periods would have been unchanged from their reported amounts, while net income would have been $730.7 million in 2013, up $43.1 million, or 6%, from $687.6 million in 2012.
Consolidated revenue totaled $4.09 billion in 2013, an increase of $193.2 million, or 5%, from $3.90 billion in the prior year. Noninterest income increased $250.4 million, or 9%, to $3.16 billion from $2.91 billion in 2012, primarily reflecting higher trust, investment and other servicing fees and foreign exchange trading income. The increased noninterest income was partially offset by lower net interest income.
Net interest income on an FTE basis in 2013 totaled $965.6 million, a decrease of $65.5 million, or 6%, compared to $1.03 billion in 2012, primarily due to a decline in the net interest margin, partially offset by higher levels of average earning assets.
Noninterest expense totaled $2.99 billion in 2013, up $115.0 million, or 4%, from $2.88 billion in the prior year. The current year includes higher compensation and outside services expense, the $19.2 million pre-tax charge and higher charges associated with other account servicing activities, higher equipment and software expense, and increases in various other miscellaneous categories of other operating expense. The prior year included the $18.6 million pre-tax restructuring, acquisition and integration related charges.
STOCKHOLDERS’ EQUITY
Total stockholders’ equity averaged $7.78 billion, up 3% from the prior year quarter’s average of $7.55 billion. The increase is primarily attributable to earnings, partially offset by dividend declarations and the repurchase of common stock pursuant to the Corporation’s share buyback program. During the three months and year ended December 31, 2013, the Corporation repurchased 2,144,788 shares at a cost of $122.9 million ($57.31 average price per share) and 5,545,401 shares at a cost of $310.0 million ($55.90 average price per share), respectively. The Corporation is authorized by its board of directors to repurchase up to 7.9 million common shares after December 31, 2013.
As reflected in the table below, the risk-based capital ratios of Northern Trust and its principal subsidiary bank, The Northern Trust Company, remained strong at December 31, 2013, with all ratios exceeding the U.S. regulatory requirements for classification as “well capitalized” institutions.
December 31, 2013 September 30, 2013 December 31, 2012
Tier 1 Total Leverage Tier 1 Total Leverage Tier 1 Total Leverage
Capital Capital Ratio Capital Capital Ratio Capital Capital Ratio
Northern Trust Corporation 13.4 % 15.8 % 7.9 % 13.6 % 14.9 % 8.3 % 12.8 % 14.3 % 8.2 %
The Northern Trust Company 11.5 % 14.3 % 6.8 % 11.7 % 13.3 % 7.2 % 11.9 % 13.7 % 7.6 %
Minimum to Qualify as
Well Capitalized
6.0 % 10.0 % 5.0 % 6.0 % 10.0 % 5.0 % 6.0 % 10.0 % 5.0 %
The following table provides the Corporation’s ratios of tier 1 capital and of tier 1 common equity to risk-weighted assets, as well as a reconciliation of tier 1 capital calculated in accordance with applicable U.S. regulatory requirements and GAAP to tier 1 common equity.
December 31, September 30, December 31,
($ In Millions) 2013 2013 2012
Ratios
Tier 1 Capital 13.4 % 13.6 % 12.8 %
Tier 1 Common Equity 12.9 % 13.1 % 12.4 %
Tier 1 Capital $ 7,853.2 $ 7,849.5 $ 7,489.0
Less: Floating Rate Capital Securities 268.8 268.8 268.7
Tier 1 Common Equity $ 7,584.4 $ 7,580.7 $ 7,220.3
Northern Trust is providing the tier 1 common equity ratio, a non-GAAP financial measure, in addition to its capital ratios prepared in accordance with regulatory requirements and GAAP as it is a measure that Northern Trust and investors use to assess capital adequacy.
RECONCILIATION OF REPORTED NET INTEREST INCOME TO FULLY TAXABLE EQUIVALENT
Net interest income stated on an FTE basis is a non-GAAP financial measure that facilitates the analysis of asset yields. Management believes an FTE presentation provides a clearer indication of net interest margins for comparative purposes. When adjusted to an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. The tables below present a reconciliation of interest income and net interest income prepared in accordance with GAAP to interest income and net interest income on an FTE basis.
Three Months Ended
December 31, 2013 September 30, 2013 December 31, 2012
($ In Millions) Reported FTE Adj. FTE Reported FTE Adj. FTE Reported FTE Adj. FTE
Net Interest Income
Interest Income $ 302.4 $ 9.2 $ 311.6 $ 291.1 $ 7.8 $ 298.9 $ 302.1 $ 9.4 $ 311.5
Interest Expense 52.5 – 52.5 54.1 – 54.1 67.9 – 67.9
Net Interest Income $ 249.9 $ 9.2 $ 259.1 $ 237.0 $ 7.8 $ 244.8 $ 234.2 $ 9.4 $ 243.6
Net Interest Margin 1.08 % 1.12 % 1.10 % 1.14 % 1.12 % 1.17 %
Twelve Months Ended
December 31, 2013 December 31, 2012
($ In Millions) Reported FTE Adj. FTE Reported FTE Adj. FTE
Net Interest Income
Interest Income $ 1,155.5 $ 32.5 $ 1,188.0 $ 1,287.7 $ 40.8 $ 1,328.5
Interest Expense 222.4 – 222.4 297.4 – 297.4
Net Interest Income $ 933.1 $ 32.5 $ 965.6 $ 990.3 $ 40.8 $ 1,031.1
Net Interest Margin 1.09 % 1.13 % 1.18 % 1.22 %
FORWARD-LOOKING STATEMENTS
This news release may be deemed to include forward-looking statements, such as statements that relate to Northern Trust's financial goals, capital adequacy, dividend policy, expansion and business development plans, risk management policies, anticipated expense levels and projected profit improvements, business prospects and positioning with respect to market, demographic and pricing trends, strategic initiatives, re-engineering and outsourcing activities, new business results and outlook, changes in securities market prices, credit quality including allowance levels, planned capital expenditures and technology spending, anticipated tax benefits and expenses, and the effects of any extraordinary events and various other matters (including developments with respect to litigation, other contingent liabilities and obligations, and regulation involving Northern Trust and changes in accounting policies, standards and interpretations) on Northern Trust's business and results. Forward-looking statements are typically identified by words or phrases, such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” “plan,” “goal,” “target,” “strategy,” and similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are Northern Trust’s current estimates or expectations of future events or future results. Actual results could differ materially from those indicated by these statements because the realization of those results is subject to many risks and uncertainties. Northern Trust Corporation’s 2012 Financial Annual Report to Shareholders, including the section of Management’s Discussion and Analysis captioned “Factors Affecting Future Results,” and periodic reports to the Securities and Exchange Commission, including the section captioned “Risk Factors,” contain additional information about factors that could affect actual results, including: economic, market, and monetary policy risks; operational risks; investment performance, fiduciary, and asset servicing risks; credit risks; liquidity risks; holding company risks; regulation risks; litigation risks; tax and accounting risks; strategic and competitive risks; and reputation risks. All forward-looking statements included in this news release are based on information available at the time of the release, and Northern Trust Corporation assumes no obligation to update any forward-looking statement.
WEBCAST OF FOURTH QUARTER EARNINGS CONFERENCE CALL
Northern Trust’s fourth quarter earnings conference call will be webcast live on January 22, 2014. The live call will be conducted at 11.00 a.m. CT and is accessible on Northern Trust’s website at:
http://www.northerntrust.com/financialreleases
The rebroadcast of the live call will be available on Northern Trust’s website from 2:00 p.m. CT on January 22, 2014, for approximately four weeks. Participants will need Windows Mediatm or Adobe Flash software, which can be downloaded for free through Northern Trust’s website. This earnings release can also be accessed at the above web address.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
FOURTH QUARTER
2013 2012 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 673.8 $ 622.6 8 %
Foreign Exchange Trading Income 50.8 40.8 25
Treasury Management Fees 17.5 16.4 6
Security Commissions and Trading Income 14.6 20.0 (27 )
Other Operating Income 38.2 35.7 8
Investment Security Gains (Losses), net 0.4 - N/M
Total Noninterest Income 795.3 735.5 8
Net Interest Income
Interest Income 302.4 302.1 -
Interest Expense 52.5 67.9 (23 )
Net Interest Income 249.9 234.2 7
Total Revenue 1,045.2 969.7 8
Provision for Credit Losses 5.0 5.0 -
Noninterest Expense
Compensation 334.8 316.3 6
Employee Benefits 66.5 63.9 4
Outside Services 152.1 140.7 8
Equipment and Software 98.6 90.5 9
Occupancy 43.8 46.2 (5 )
Other Operating Expense 98.7 83.9 18
Total Noninterest Expense 794.5 741.5 7
Income before Income Taxes 245.7 223.2 10
Provision for Income Taxes 76.0 55.5 37
NET INCOME $ 169.7 $ 167.7 1 %
Earnings Allocated to Participating Securities 2.7 2.5 8 %
Earnings Allocated to Common and Potential Common Shares 167.0 165.2 1
Per Common Share
Net Income
Basic $ 0.70 $ 0.69 1 %
Diluted 0.70 0.69 1
Average Common Equity $ 7,775.7 $ 7,552.0 3 %
Return on Average Common Equity 8.66 % 8.83 % (2 )
Return on Average Assets 0.68 % 0.73 % (7 )
Cash Dividends Declared per Common Share $ 0.31 $ 0.30 3 %
Average Common Shares Outstanding (000s)
Basic 238,228 239,456
Diluted 239,656 239,916
Common Shares Outstanding (EOP) (000s) 237,322 268,915
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
FOURTH
THIRD
($ In Millions Except Per Share Data)
QUARTER QUARTER
2013 2013 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 673.8 $ 648.0 4 %
Foreign Exchange Trading Income 50.8 62.8 (19 )
Treasury Management Fees 17.5 17.6 (1 )
Security Commissions and Trading Income 14.6 16.8 (13 )
Other Operating Income 38.2 67.2 (43 )
Investment Security Gains (Losses), net 0.4 (2.2 ) N/M
Total Noninterest Income 795.3 810.2 (2 )
Net Interest Income
Interest Income 302.4 291.1 4
Interest Expense 52.5 54.1 (3 )
Net Interest Income 249.9 237.0 5
Total Revenue 1,045.2 1,047.2 -
Provision for Credit Losses 5.0 5.0 -
Noninterest Expense
Compensation 334.8 324.6 3
Employee Benefits 66.5 63.5 5
Outside Services 152.1 145.9 4
Equipment and Software 98.6 95.5 3
Occupancy 43.8 43.3 1
Other Operating Expense 98.7 67.9 45
Total Noninterest Expense 794.5 740.7 7
Income before Income Taxes 245.7 301.5 (18 )
Provision for Income Taxes 76.0 95.0 (20 )
NET INCOME $ 169.7 $ 206.5 (18 ) %
Earnings Allocated to Participating Securities 2.7 3.5 (23 ) %
Earnings Allocated to Common and Potential Common Shares 167.0 203.0 (18 )
Per Common Share
Net Income
Basic $ 0.70 $ 0.85 (18 ) %
Diluted 0.70 0.84 (17 )
Average Common Equity $ 7,775.7 $ 7,697.8 1 %
Return on Average Common Equity 8.66 % 10.64 % (19 )
Return on Average Assets 0.68 % 0.86 % (21 )
Cash Dividends Declared per Common Share $ 0.31 $ 0.31 - %
Average Common Shares Outstanding (000s)
Basic 238,228 239,930
Diluted 239,656 241,331
Common Shares Outstanding (EOP) (000s) 237,322 238,984
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
TWELVE MONTHS
2013 2012 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 2,609.8 $ 2,405.5 8 %
Foreign Exchange Trading Income 244.4 206.1 19
Treasury Management Fees 69.0 67.4 2
Security Commissions and Trading Income 68.0 73.6 (8 )
Other Operating Income 166.5 154.9 8
Investment Security Gains (Losses), net (1.5 ) (1.7 ) (9 )
Total Noninterest Income 3,156.2 2,905.8 9
Net Interest Income
Interest Income 1,155.5 1,287.7 (10 )
Interest Expense 222.4 297.4 (25 )
Net Interest Income 933.1 990.3 (6 )
Total Revenue 4,089.3 3,896.1 5
Provision for Credit Losses 20.0 25.0 (20 )
Noninterest Expense
Compensation 1,306.6 1,267.4 3
Employee Benefits 257.5 258.2 -
Outside Services 564.1 529.2 7
Equipment and Software 377.6 366.7 3
Occupancy 173.8 174.4 -
Other Operating Expense 314.2 282.9 11
Total Noninterest Expense 2,993.8 2,878.8 4
Income before Income Taxes 1,075.5 992.3 8
Provision for Income Taxes 344.2 305.0 13
NET INCOME $ 731.3 $ 687.3 6 %
Earnings Allocated to Participating Securities 11.9 10.0 19 %
Earnings Allocated to Common and Potential Common Shares 719.4 677.3 6
Per Common Share
Net Income
Basic $ 3.01 $ 2.82 7 %
Diluted 2.99 2.81 6
Average Common Equity $ 7,667.0 $ 7,358.2 4 %
Return on Average Common Equity 9.54 % 9.34 % 2
Return on Average Assets 0.77 % 0.74 % 4
Cash Dividends Declared per Common Share $ 1.23 $ 1.18 4 %
Average Common Shares Outstanding (000s)
Basic 239,265 240,418
Diluted 240,555 240,881
Common Shares Outstanding (EOP) (000s) 237,322 238,915
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) DECEMBER 31
2013 2012 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 529.6 $ 60.8 N/M %
Interest-Bearing Deposits with Banks 19,397.4 18,803.5 3
Federal Reserve Deposits and Other Interest-Bearing 12,911.5 7,619.7 69
Securities
U.S. Government 1,917.9 1,784.6 7
Obligations of States and Political Subdivisions 229.8 343.4 (33 )
Government Sponsored Agency 17,563.8 18,751.7 (6 )
Other (**) 11,431.7 10,604.5 8
Total Securities 31,143.2 31,484.2 (1 )
Loans and Leases 29,385.5 29,504.5 -
Total Earning Assets 93,367.2 87,472.7 7
Allowance for Credit Losses Assigned to Loans and Leases (278.1 ) (297.9 ) (7 )
Cash and Due from Banks 3,162.4 3,752.7 (16 )
Buildings and Equipment 458.8 469.9 (2 )
Client Security Settlement Receivables 1,355.2 2,049.1 (34 )
Goodwill 540.7 537.8 1
Other Assets 4,341.1 3,479.5 25
Total Assets $ 102,947.3 $ 97,463.8 6 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,991.5 $ 15,189.7 (1 ) %
Savings Certificates and Other Time 1,874.4 2,466.1 (24 )
Non-U.S. Offices - Interest-Bearing 48,461.7 39,720.2 22
Total Interest-Bearing Deposits 65,327.6 57,376.0 14
Short-Term Borrowings 3,441.0 1,847.4 86
Senior Notes 1,996.6 2,405.8 (17 )
Long-Term Debt 1,709.2 1,421.6 20
Floating Rate Capital Debt 277.1 277.0 -
Total Interest-Related Funds 72,751.5 63,327.8 15
Demand and Other Noninterest-Bearing Deposits 18,770.5 24,031.8 (22 )
Other Liabilities 3,513.3 2,577.2 36
Total Liabilities 95,035.3 89,936.8 6
Total Equity 7,912.0 7,527.0 5
Total Liabilities and Stockholders' Equity $ 102,947.3 $ 97,463.8 6 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) DECEMBER 31 SEPTEMBER 30
2013 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 529.6 $ 534.6 (1 ) %
Interest-Bearing Deposits with Banks 19,397.4 17,383.9 12
Federal Reserve Deposits and Other Interest-Bearing 12,911.5 8,452.8 53
Securities
U.S. Government 1,917.9 1,524.5 26
Obligations of States and Political Subdivisions 229.8 263.2 (13 )
Government Sponsored Agency 17,563.8 17,066.0 3
Other (**) 11,431.7 12,123.6 (6 )
Total Securities 31,143.2 30,977.3 1
Loans and Leases 29,385.5 29,064.8 1
Total Earning Assets 93,367.2 86,413.4 8
Allowance for Credit Losses Assigned to Loans and Leases (278.1 ) (287.2 ) (3 )
Cash and Due from Banks 3,162.4 2,690.7 18
Buildings and Equipment 458.8 444.3 3
Client Security Settlement Receivables 1,355.2 1,630.2 (17 )
Goodwill 540.7 537.7 1
Other Assets 4,341.1 4,540.4 (4 )
Total Assets $ 102,947.3 $ 95,969.5 7 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,991.5 $ 13,802.6 9 %
Savings Certificates and Other Time 1,874.4 1,939.6 (3 )
Non-U.S. Offices - Interest-Bearing 48,461.7 45,017.2 8
Total Interest-Bearing Deposits 65,327.6 60,759.4 8
Short-Term Borrowings 3,441.0 3,327.3 3
Senior Notes 1,996.6 1,996.5 -
Long-Term Debt 1,709.2 993.5 72
Floating Rate Capital Debt 277.1 277.1 -
Total Interest-Related Funds 72,751.5 67,353.8 8
Demand and Other Noninterest-Bearing Deposits 18,770.5 17,402.3 8
Other Liabilities 3,513.3 3,396.3 3
Total Liabilities 95,035.3 88,152.4 8
Total Equity 7,912.0 7,817.1 1
Total Liabilities and Stockholders' Equity $ 102,947.3 $ 95,969.5 7 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
($ In Millions) FOURTH QUARTER
2013 2012 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 549.7 $ 239.3 130 %
Interest-Bearing Deposits with Banks 18,264.9 18,355.2 -
Federal Reserve Deposits and Other Interest-Bearing 13,220.9 4,118.7 N/M
Securities
U.S. Government 1,318.8 1,785.1 (26 )
Obligations of States and Political Subdivisions 248.2 371.8 (33 )
Government Sponsored Agency 17,574.6 19,041.4 (8 )
Other (**) 11,566.5 9,793.3 18
Total Securities 30,708.1 30,991.6 (1 )
Loans and Leases 28,858.1 29,180.8 (1 )
Total Earning Assets 91,601.7 82,885.6 11
Allowance for Credit Losses Assigned to Loans and Leases (283.8 ) (298.1 ) (5 )
Cash and Due from Banks 2,676.5 4,059.3 (34 )
Buildings and Equipment 454.2 461.2 (2 )
Client Security Settlement Receivables 813.3 624.6 30
Goodwill 537.9 536.9 -
Other Assets 3,906.9 3,401.0 15
Total Assets $ 99,706.7 $ 91,670.5 9 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,340.8 $ 14,023.4 2 %
Savings Certificates and Other Time 1,861.6 2,728.9 (32 )
Non-U.S. Offices - Interest-Bearing 47,920.3 37,461.3 28
Total Interest-Bearing Deposits 64,122.7 54,213.6 18
Short-Term Borrowings 4,989.9 1,614.2 N/M
Senior Notes 1,996.5 2,492.6 (20 )
Long-Term Debt 1,485.8 1,423.7 4
Floating Rate Capital Debt 277.1 277.0 -
Total Interest-Related Funds 72,872.0 60,021.1 21
Demand and Other Noninterest-Bearing Deposits 16,004.8 21,280.4 (25 )
Other Liabilities 3,054.2 2,817.0 8
Total Liabilities 91,931.0 84,118.5 9
Total Equity 7,775.7 7,552.0 3
Total Liabilities and Stockholders' Equity $ 99,706.7 $ 91,670.5 9 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
FOURTH THIRD
($ In Millions) QUARTER QUARTER
2013 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 549.7 $ 548.2 - %
Interest-Bearing Deposits with Banks 18,264.9 17,767.6 3
Federal Reserve Deposits and Other Interest-Bearing 13,220.9 7,987.5 66
Securities
U.S. Government 1,318.8 1,619.2 (19 )
Obligations of States and Political Subdivisions 248.2 268.8 (8 )
Government Sponsored Agency 17,574.6 17,082.6 3
Other (**) 11,566.5 11,592.8 -
Total Securities 30,708.1 30,563.4 -
Loans and Leases 28,858.1 28,662.4 1
Total Earning Assets 91,601.7 85,529.1 7
Allowance for Credit Losses Assigned to Loans and Leases (283.8 ) (289.6 ) (2 )
Cash and Due from Banks 2,676.5 2,776.8 (4 )
Buildings and Equipment 454.2 453.0 -
Client Security Settlement Receivables 813.3 714.8 14
Goodwill 537.9 532.5 1
Other Assets 3,906.9 5,495.9 (29 )
Total Assets $ 99,706.7 $ 95,212.5 5 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,340.8 $ 14,286.5 - %
Savings Certificates and Other Time 1,861.6 1,969.0 (5 )
Non-U.S. Offices - Interest-Bearing 47,920.3 43,064.7 11
Total Interest-Bearing Deposits 64,122.7 59,320.2 8
Short-Term Borrowings 4,989.9 5,447.2 (8 )
Senior Notes 1,996.5 2,192.5 (9 )
Long-Term Debt 1,485.8 978.5 52
Floating Rate Capital Debt 277.1 277.1 -
Total Interest-Related Funds 72,872.0 68,215.5 7
Demand and Other Noninterest-Bearing Deposits 16,004.8 16,134.2 (1 )
Other Liabilities 3,054.2 3,165.0 (3 )
Total Liabilities 91,931.0 87,514.7 5
Total Equity 7,775.7 7,697.8 1
Total Liabilities and Stockholders' Equity $ 99,706.7 $ 95,212.5 5 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
QUARTERLY TREND DATA
2013 2012
($ In Millions Except Per Share Data)
QUARTERS QUARTERS
FOURTH THIRD SECOND FIRST FOURTH
Net Income Summary
Trust, Investment and Other Servicing Fees $ 673.8 $ 648.0 $ 657.3 $ 630.7 $ 622.6
Other Noninterest Income 121.5 162.2 143.1 119.6 112.9
Net Interest Income 249.9 237.0 220.1 226.1 234.2
Total Revenue 1,045.2 1,047.2 1,020.5 976.4 969.7
Provision for Credit Losses 5.0 5.0 5.0 5.0 5.0
Noninterest Expense 794.5 740.7 729.7 728.9 741.5
Income before Income Taxes 245.7 301.5 285.8 242.5 223.2
Provision for Income Taxes 76.0 95.0 94.7 78.5 55.5
Net Income $ 169.7 $ 206.5 $ 191.1 $ 164.0 $ 167.7
Per Common Share
Net Income - Basic $ 0.70 $ 0.85 $ 0.78 $ 0.68 $ 0.69
- Diluted 0.70 0.84 0.78 0.67 0.69
Cash Dividends Declared per Common Share 0.31 0.31 0.31 0.30 0.30
Book Value (EOP) 33.34 32.71 32.17 31.82 31.51
Market Value (EOP) 61.89 54.38 57.90 54.56 50.16
Ratios
Return on Average Common Equity 8.66 % 10.64 % 10.02 % 8.82 % 8.83
%
Return on Average Assets 0.68 0.86 0.83 0.73 0.73
Net Interest Margin (GAAP) 1.08 1.10 1.06 1.12 1.12
Net Interest Margin (FTE) 1.12 1.14 1.10 1.15 1.17
Risk-based Capital Ratios
Tier 1 13.4 % 13.6 % 13.1 % 13.3 % 12.8
%
Total (Tier 1 + Tier 2) 15.8 14.9 14.4 14.7 14.3
Tier 1 Leverage 7.9 8.3 8.4 8.4 8.2
Tier 1 Common Equity (non-GAAP) 12.9 13.1 12.6 12.8 12.4
Assets Under Custody ($ In Billions) - EOP
Corporate $ 5,079.7 $ 4,766.5 $ 4,538.9 $ 4,569.1 $ 4,358.6
Wealth Management 496.0 470.5 452.6 455.3 446.3
Total Assets Under Custody $ 5,575.7 $ 5,237.0 $ 4,991.5 $ 5,024.4 $ 4,804.9
Assets Under Management ($ In Billions) - EOP $ 884.5 $ 846.2 $ 803.0 $ 810.2 $ 758.9
Asset Quality ($ In Millions) - EOP
Nonperforming Loans and Leases $ 262.8 $ 270.1 $ 266.7 $ 251.7 $ 254.8
Other Real Estate Owned (OREO) 11.9 13.9 14.5 10.5 20.3
Total Nonperforming Assets $ 274.7 $ 284.0 $ 281.2 $ 262.2 $ 275.1
Nonperforming Assets / Loans and Leases and OREO 0.93 % 0.98 % 0.98 % 0.91 % 0.93
%
Gross Charge-offs $ 19.5 $ 11.6 $ 15.6 $ 12.6 $ 16.1
Less: Gross Recoveries 4.9 3.3 7.5 3.9 10.7
Net Charge-offs $ 14.6 $ 8.3 $ 8.1 $ 8.7 $ 5.4
Net Charge-offs (Annualized) to Average Loans and Leases 0.20 % 0.12 % 0.11 % 0.12 % 0.07
%
Allowance for Credit Losses Assigned to Loans and Leases $ 278.1 $ 287.2 $ 290.4 $ 294.1 $ 297.9
Allowance to Nonperforming Loans and Leases 1.1x 1.1x 1.1x 1.2x 1.2x
Allowance for Other Credit-Related Exposures $ 29.8 $ 30.3 $ 30.3 $ 29.7 $ 29.7
Contact:
Northern Trust Corporation
Investor Contact:
Bev Fleming, (312) 444-7811
Beverly_Fleming@ntrs.com
or
Media Contact:
Doug Holt, (312) 557-1571
Doug_Holt@ntrs.com
http://www.northerntrust.com
Drmicrocap
13年前
Northern Trust Corporation Reports Third Quarter Net Income of $206.5 Million, Earnings Per Common Share of $0.84.
Business WirePress Release: Northern Trust Corporation – Wed, Oct 16, 2013 7:30 AM EDT..
Northern Trust Corporation today reported third quarter net income per diluted common share of $0.84, up from $0.73 in the third quarter of 2012 and $0.78 in the second quarter of 2013. Net income was $206.5 million in the current quarter, an increase of 15% from $178.8 million in the prior year third quarter, and up 8% from $191.1 million in the prior quarter. Return on average common equity was 10.6% in the current quarter, compared to 9.6% in the prior year quarter and 10.0% in the prior quarter.
The current quarter includes a $32.6 million pre-tax gain on the sale of an office building property. Excluding the current quarter gain, net income per diluted common share, net income and return on average common equity would have been $0.76, $186.2 million, and 9.6%, respectively.
Frederick H. Waddell, Chairman and Chief Executive Officer, commented, “Revenue growth in the third quarter reflects a solid increase in trust, investment and other servicing fees. Assets under custody and under management increased 10% and 13%, respectively, versus last year, reflecting our success in winning new clients and serving existing clients, as well as higher equity markets. Expenses increased as a result of the growth in our business, including recent office openings in Frankfurt, Germany and Riyadh, Saudi Arabia, and continued investment to support technology initiatives and a growing set of regulatory and compliance requirements for our clients.”
THIRD QUARTER 2013 PERFORMANCE VS. THIRD QUARTER 2012
Net income per common share in the third quarter of 2013 was $0.84 compared to $0.73 per common share in the third quarter of 2012. Net income for the current quarter was $206.5 million, up $27.7 million, or 15%, from $178.8 million in the prior year quarter.
Consolidated revenue of $1.05 billion in the current quarter was up $74.7 million, or 8%, from $972.5 million in the prior year quarter. Noninterest income, which represented 77% of revenue, increased $83.3 million, or 11%, to $810.2 million from the prior year quarter’s $726.9 million, primarily reflecting higher trust, investment and other servicing fees; other operating income; and foreign exchange trading income. Net interest income for the quarter on a fully taxable equivalent (FTE) basis decreased $12.1 million, or 5%, to $244.8 million compared to $256.9 million in the prior year quarter, primarily due to a decrease in the net interest margin.
Trust, investment and other servicing fees were $648.0 million in the current quarter, up $46.1 million, or 8%, from $601.9 million in the prior year quarter. The increase primarily reflects new business and the favorable impact of equity markets on fees, partially offset by higher waived fees on money market mutual funds.
Assets under custody and assets under management are the primary drivers of our trust, investment and other servicing fees. The following table provides the assets under custody and assets under management of Northern Trust’s Corporate & Institutional Services (C&IS) and Wealth Management business units.*
September 30, June 30, September 30, % Change % Change
($ In Billions) 2013 2013 2012 Q3-13/Q2-13 Q3-13/Q3-12
Assets Under Custody
Corporate & Institutional $ 4,766.5 $ 4,538.9 $ 4,331.9 5 % 10 %
Wealth Management 470.5 452.6 429.5 4 10
Total Assets Under Custody $ 5,237.0 $ 4,991.5 $ 4,761.4 5 % 10 %
Assets Under Management
Corporate & Institutional $ 634.6 $ 600.5 $ 565.6 6 % 12 %
Wealth Management 211.6 202.5 184.1 4 15
Total Assets Under Management $ 846.2 $ 803.0 $ 749.7 5 % 13 %
C&IS trust, investment and other servicing fees increased $25.4 million, or 8%, to $359.8 million in the current quarter from the prior year quarter’s $334.4 million.
Q3 Q3
Change Q3 2013
($ In Millions) 2013 2012
from Q3 2012
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 239.4 $ 214.4 $ 25.0 12 %
Investment Management 71.3 73.2 (1.9 ) (3 )
Securities Lending 22.7 23.8 (1.1 ) (5 )
Other 26.4 23.0 3.4 15
Total $ 359.8 $ 334.4 $ 25.4 8 %
Custody and fund administration fees, the largest component of C&IS fees, increased 12%, primarily driven by favorable equity markets and new business. C&IS investment management fees decreased 3%, primarily due to higher waived fees in money market mutual funds, partially offset by favorable equity markets and new business. Money market mutual fund fee waivers in C&IS, attributable to persistent low short-term interest rates, totaled $15.3 million in the current quarter, compared to waived fees of $6.5 million in the prior year quarter. Securities lending revenue decreased 5%, primarily reflecting lower spreads in the current quarter, partially offset by higher volumes.
Trust, investment and other servicing fees in Wealth Management totaled $288.2 million in the current quarter, increasing $20.7 million, or 8%, from $267.5 million in the prior year quarter. The increased fees in the current quarter are primarily due to new business and the favorable impact of equity markets on fees, partially offset by higher waived fees in money market mutual funds. Money market mutual fund fee waivers in Wealth Management totaled $17.1 million in the current quarter compared with $10.3 million in the prior year quarter.
Foreign exchange trading income totaled $62.8 million, up $18.8 million, or 43%, compared with $44.0 million in the prior year quarter. The current quarter increase is attributable to higher currency market volatility and trading volumes compared to the prior year quarter.
Other operating income totaled $67.2 million in the current quarter, up $20.6 million, or 44%, from $46.6 million in the prior year quarter. The current quarter includes the $32.6 million pre-tax gain on the sale of an office building property. The prior year quarter included a $5.3 million gain on foreign exchange contracts related to hedges of certain investments in foreign currency denominated subsidiaries. Excluding these current and prior year quarter gains, other operating income decreased $6.7 million.
Net investment security losses totaled $2.2 million, resulting from realized losses on the sale of securities in the current quarter.
Net interest income for the quarter on an FTE basis totaled $244.8 million, down $12.1 million, or 5%, compared to $256.9 million in the prior year quarter. The decrease is primarily the result of a decline in the net interest margin to 1.14% from 1.21% in the prior year quarter, partially offset by higher levels of average earning assets. The decline in the net interest margin primarily reflects lower yields on earning assets, partially offset by a lower cost of interest-related funds due to lower short-term interest rates. Average earning assets for the quarter were $85.5 billion, up $1.0 billion, or 1%, from $84.5 billion in the prior year quarter.
The provision for credit losses was $5.0 million in the current quarter compared to $10.0 million in the prior year quarter. Net charge-offs totaled $8.3 million for the current quarter resulting from $11.6 million of charge-offs and $3.3 million of recoveries, compared to $11.9 million of net charge-offs in the prior year quarter resulting from $16.3 million of charge-offs and $4.4 million of recoveries. Nonperforming assets declined slightly from the prior year quarter. Residential real estate loans and commercial real estate loans accounted for 70% and 20%, respectively, of total nonperforming loans and leases at September 30, 2013.
The table below provides information regarding nonperforming assets, the allowance for credit losses, and associated ratios.
September 30, June 30, September 30,
($ In Millions) 2013 2013 2012
Nonperforming Assets
Nonperforming Loans and Leases $ 270.1 $ 266.7 $ 269.0
Other Real Estate Owned 13.9 14.5 20.6
Total Nonperforming Assets 284.0 281.2 289.6
Allowance for Credit Losses
Allowance for Credit Losses Assigned to:
Loans and Leases 287.2 290.4 298.6
Unfunded Loan Commitments and Standby Letters of Credit 30.3 30.3 29.4
Total Allowance for Credit Losses $ 317.5 $ 320.7 $ 328.0
Ratios
Nonperforming Loans and Leases to Total Loans and Leases
0.93 % 0.93 % 0.91 %
Allowance for Credit Losses Assigned to Loans and Leases to Total Loans and Leases
0.99 % 1.01 % 1.01 %
Allowance for Credit Losses Assigned to Loans and Leases to Nonperforming Loans and Leases
1.1x 1.1x 1.1x
Noninterest expense totaled $740.7 million in the current quarter, up $44.3 million, or 6%, from $696.4 million in the prior year quarter, primarily reflecting higher outside services, equipment and software, and compensation expense.
Compensation expense, the largest component of noninterest expense, equaled $324.6 million, up $8.9 million, or 3%, from $315.7 million in the prior year quarter, attributable to higher staff levels. Staff on a full-time equivalent basis at September 30, 2013 totaled approximately 14,600, up 3% from a year ago. Employee benefit expense equaled $63.5 million, up 4% from $61.3 million in the prior year quarter.
Expense associated with outside services totaled $145.9 million, up $19.3 million, or 15%, from $126.6 million in the prior year quarter. The current quarter increase is primarily due to higher consulting and technical services expense, including costs associated with a growing set of regulatory and compliance requirements.
Equipment and software expense totaled $95.5 million, up $9.5 million, or 11%, from $86.0 million in the prior year quarter. The current quarter includes higher software amortization associated with the continued investment in technology related assets.
Occupancy expense equaled $43.3 million, relatively unchanged from $43.8 million in the prior year quarter. Other operating expense totaled $67.9 million compared with $63.0 million in the prior year quarter, an increase of 8%, primarily reflecting increases in various miscellaneous expense categories.
Income tax expense was $95.0 million in the current quarter, representing an effective tax rate of 31.5%, and $87.3 million in the prior year quarter, representing an effective tax rate of 32.8%.
THIRD QUARTER 2013 PERFORMANCE VS. SECOND QUARTER 2013
Net income per common share was $0.84 in the current quarter, compared with $0.78 in the second quarter of 2013. Net income for the current quarter totaled $206.5 million, up $15.4 million, or 8%, from $191.1 million in the prior quarter.
Consolidated revenue of $1.05 billion for the current quarter was up $26.7 million, or 3%, from $1.02 billion in the prior quarter. Noninterest income increased $9.8 million, or 1%, to $810.2 million from the prior quarter’s $800.4 million, primarily attributable to higher other operating income, partially offset by lower trust, investment and other servicing fees and foreign exchange trading income. Net interest income for the current quarter on an FTE basis increased $16.8 million, or 7%, to $244.8 million from $228.0 million in the prior quarter, due to an increase in the net interest margin and higher levels of average earning assets.
Trust, investment and other servicing fees totaled $648.0 million in the current quarter, down $9.3 million, or 1%, from $657.3 million in the prior quarter.
C&IS trust, investment and other servicing fees totaled $359.8 million in the current quarter, down 1%, from $364.2 million in the prior quarter.
Q3 Q2
Change Q3 2013
($ In Millions) 2013 2013
from Q2 2013
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 239.4 $ 234.4 $ 5.0 2 %
Investment Management 71.3 73.9 (2.6 ) (4 )
Securities Lending 22.7 31.1 (8.4 ) (27 )
Other 26.4 24.8 1.6 6
Total $ 359.8 $ 364.2 $ (4.4 ) (1 ) %
C&IS custody and fund administration fees increased 2%, primarily driven by new business. Investment management fees decreased 4%, primarily due to higher waived fees on money market mutual funds. Money market mutual fund fee waivers, attributable to the low short-term interest rates, totaled $15.3 million in C&IS in the current quarter, up from $9.8 million in the prior quarter. Securities lending revenue decreased 27%, reflecting lower spreads, primarily due to the international dividend season that occurred in the prior quarter.
Wealth Management trust, investment and other servicing fees were $288.2 million, down 2% from $293.1 million in the prior quarter, primarily due to higher waived fees on money market mutual funds. Money market mutual fund fee waivers in Wealth Management totaled $17.1 million in the current quarter, compared to $12.9 million in the prior quarter.
Foreign exchange trading income decreased $8.5 million, or 12%, to $62.8 million compared to $71.3 million in the prior quarter. The current quarter decrease reflects lower currency market volatility and trading volumes.
Other operating income in the current quarter totaled $67.2 million, up $30.9 million, or 85%, from $36.3 million in the prior quarter. The increase is primarily attributable to the current quarter $32.6 million pre-tax gain on the sale of an office building property.
Net interest income on an FTE basis in the current quarter totaled $244.8 million, up $16.8 million, or 7%, compared to $228.0 million in the prior quarter. The increase is primarily the result of an increase in the net interest margin as well as higher levels of average earning assets. The net interest margin increased to 1.14% in the current quarter from 1.10% in the prior quarter, reflecting higher yields on earning assets and a lower cost of interest-related funds. Average earning assets totaled $85.5 billion in the current quarter, up $2.4 billion compared to $83.1 billion in the prior quarter.
The provision for credit losses totaled $5.0 million in both the current quarter and the prior quarter. Net charge-offs totaled $8.3 million for the current quarter resulting from $11.6 million of charge-offs and $3.3 million of recoveries, compared to $8.1 million of net charge-offs in the prior quarter resulting from $15.6 million of charge-offs and $7.5 million of recoveries. Nonperforming assets increased slightly as compared to the prior quarter.
Noninterest expense totaled $740.7 million in the current quarter, up $11.0 million, or 2% from $729.7 million in the prior quarter.
Compensation expense totaled $324.6 million for the current quarter, down 1% from $326.9 million in the prior quarter. Employee benefit expense totaled $63.5 million for the current quarter, down 1% from $64.2 million in the prior quarter.
Expense for outside services totaled $145.9 million, an increase of $9.7 million, or 7%, compared to $136.2 million in the prior quarter. The current quarter increase is primarily due to higher consulting and technical services expense, including costs associated with a growing set of regulatory and compliance requirements.
Equipment and software expense totaled $95.5 million in the current quarter, up 4%, from $92.1 million in the prior quarter. The increase is primarily attributable to higher levels of software amortization and support costs associated with the continued investment in technology related assets.
Occupancy expense totaled $43.3 million, relatively unchanged from $43.5 million in the prior quarter. Other operating expense totaled $67.9 million, up 1% from $66.8 million in the prior quarter.
Total income tax expense was $95.0 million for the current quarter, representing an effective tax rate of 31.5%. Income tax expense was $94.7 million in the prior quarter, representing an effective tax rate of 33.1%.
STOCKHOLDERS’ EQUITY
Total stockholders’ equity averaged $7.7 billion, up 4% from the prior year quarter’s average of $7.4 billion. The increase is primarily attributable to earnings, partially offset by dividend declarations and the repurchase of common stock pursuant to the Corporation’s share buyback program. During the three and nine months ended September 30, 2013, the Corporation repurchased 1,715,921 shares at a cost of $97.3 million ($56.73 average price per share) and 3,400,613 shares at a cost of $187.1 million ($55.02 average price per share), respectively. The Corporation’s common stock repurchase authorization was replaced in April of 2013. The stock repurchase authorization remaining after September 30, 2013 is 10.0 million shares.
As reflected in the table below, the risk-based capital ratios of Northern Trust and its principal subsidiary bank, The Northern Trust Company, remained strong at September 30, 2013, with all ratios exceeding the U.S. regulatory requirements for classification as “well capitalized” institutions.
September 30, 2013 June 30, 2013 September 30, 2012
Tier 1 Total Leverage Tier 1 Total Leverage Tier 1 Total Leverage
Capital Capital Ratio Capital Capital Ratio Capital Capital Ratio
Northern Trust Corporation 13.6 % 14.9 % 8.3 % 13.1 % 14.4 % 8.4 % 12.8 % 14.3 % 8.1 %
The Northern Trust Company 11.7 % 13.3 % 7.2 % 11.3 % 13.0 % 7.3 % 11.8 % 13.8 % 7.5 %
Minimum to Qualify as Well Capitalized
6.0 % 10.0 % 5.0 % 6.0 % 10.0 % 5.0 % 6.0 % 10.0 % 5.0 %
The following table provides the Corporation’s ratios of tier 1 capital and of tier 1 common equity to risk-weighted assets, as well as a reconciliation of tier 1 capital calculated in accordance with applicable U.S. regulatory requirements and GAAP to tier 1 common equity.
September 30, June 30, September 30,
($ In Millions) 2013 2013 2012
Ratios
Tier 1 Capital 13.6 % 13.1 % 12.8 %
Tier 1 Common Equity 13.1 % 12.6 % 12.3 %
Tier 1 Capital $ 7,849.5 $ 7,776.1 $ 7,425.5
Less: Floating Rate Capital Securities 268.8 268.8 268.7
Tier 1 Common Equity $ 7,580.7 $ 7,507.3 $ 7,156.8
Northern Trust is providing the tier 1 common equity ratio, a non-GAAP financial measure, in addition to its capital ratios prepared in accordance with regulatory requirements and GAAP as it is a measure that Northern Trust and investors use to assess capital adequacy.
RECONCILIATION OF REPORTED NET INTEREST INCOME TO FULLY TAXABLE EQUIVALENT
Net interest income stated on an FTE basis is a non-GAAP financial measure that facilitates the analysis of asset yields. Management believes an FTE presentation provides a clearer indication of net interest margins for comparative purposes. When adjusted to an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. The tables below present a reconciliation of interest income and net interest income prepared in accordance with GAAP to interest income and net interest income on an FTE basis.
Three Months Ended
September 30, 2013 June 30, 2013 September 30, 2012
($ In Millions) Reported FTE Adj. FTE Reported FTE Adj. FTE Reported FTE Adj. FTE
Net Interest Income
Interest Income $ 291.1 $ 7.8
$
298.9
$ 275.3 $ 7.9 $ 283.2 $ 323.1 $ 11.3 $ 334.4
Interest Expense 54.1 – 54.1 55.2 – 55.2 77.5 – 77.5
Net Interest Income $ 237.0 $ 7.8
$
244.8
$ 220.1 $ 7.9 $ 228.0 $ 245.6 $ 11.3 $ 256.9
Net Interest Margin 1.10 % 1.14 % 1.06 % 1.10 % 1.16 % 1.21 %
FORWARD-LOOKING STATEMENTS
This news release may be deemed to include forward-looking statements, such as statements that relate to Northern Trust's financial goals, capital adequacy, dividend policy, expansion and business development plans, risk management policies, anticipated expense levels and projected profit improvements, business prospects and positioning with respect to market, demographic and pricing trends, strategic initiatives, re-engineering and outsourcing activities, new business results and outlook, changes in securities market prices, credit quality including allowance levels, planned capital expenditures and technology spending, anticipated tax benefits and expenses, and the effects of any extraordinary events and various other matters (including developments with respect to litigation, other contingent liabilities and obligations, and regulation involving Northern Trust and changes in accounting policies, standards and interpretations) on Northern Trust's business and results. Forward-looking statements are typically identified by words or phrases, such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” “plan,” “goal,” “target,” “strategy,” and similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are Northern Trust’s current estimates or expectations of future events or future results. Actual results could differ materially from those indicated by these statements because the realization of those results is subject to many risks and uncertainties. Northern Trust Corporation’s 2012 Financial Annual Report to Shareholders, including the section of Management’s Discussion and Analysis captioned “Factors Affecting Future Results,” and periodic reports to the Securities and Exchange Commission, including the section captioned “Risk Factors,” contain additional information about factors that could affect actual results, including: economic, market, and monetary policy risks; operational risks; investment performance, fiduciary, and asset servicing risks; credit risks; liquidity risks; holding company risks; regulation risks; litigation risks; tax and accounting risks; strategic and competitive risks; and reputation risks. All forward-looking statements included in this news release are based on information available at the time of the release, and Northern Trust Corporation assumes no obligation to update any forward-looking statement.
WEBCAST OF THIRD QUARTER EARNINGS CONFERENCE CALL
Northern Trust’s third quarter earnings conference call will be webcast live on October 16, 2013. The Internet webcast opens the call to all investors, allowing them to listen to the Chief Financial Officer’s comments. The live call will be conducted at 11.00 a.m. CT and is accessible on Northern Trust’s web site at:
http://www.northerntrust.com/financialreleases
The only authorized rebroadcast of the live call will be available on Northern Trust’s web site from 2:00 p.m. CT on October 16, 2013, for approximately four weeks. Participants will need Windows Mediatm or Adobe Flash software, which can be downloaded free through Northern Trust’s web site. This earnings release can also be accessed at the above web address.
* In October 2013, Northern Trust changed the names of its Personal Financial Services and Northern Trust Global Investments business units to Wealth Management and Asset Management, respectively, in order to better reflect the nature of those businesses. There were no changes to the Corporate & Institutional Services or Operations and Technology business unit names, or to the way in which Northern Trust is organized to serve its clients.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
THIRD QUARTER
2013 2012 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees
$
648.0 $ 601.9 8 %
Foreign Exchange Trading Income 62.8 44.0 43
Treasury Management Fees 17.6 16.3 8
Security Commissions and Trading Income 16.8 17.9 (6 )
Other Operating Income 67.2 46.6 44
Investment Security Gains (Losses), net (2.2 ) 0.2 N/M
Total Noninterest Income 810.2 726.9 11
Net Interest Income
Interest Income 291.1 323.1 (10 )
Interest Expense 54.1 77.5 (30 )
Net Interest Income 237.0 245.6 (4 )
Total Revenue 1,047.2 972.5 8
Provision for Credit Losses 5.0 10.0 (50 )
Noninterest Expense
Compensation 324.6 315.7 3
Employee Benefits 63.5 61.3 4
Outside Services 145.9 126.6 15
Equipment and Software 95.5 86.0 11
Occupancy 43.3 43.8 (1 )
Other Operating Expense 67.9 63.0 8
Total Noninterest Expense 740.7 696.4 6
Income before Income Taxes 301.5 266.1 13
Provision for Income Taxes 95.0 87.3 9
NET INCOME $ 206.5 $ 178.8 15 %
Earnings Allocated to Participating Securities
$
3.5
$
2.8 25 %
Earnings Allocated to Common and Potential Common Shares 203.0 176.0 15
Per Common Share
Net Income
Basic $ 0.85 $ 0.73 16 %
Diluted 0.84 0.73 15
Average Common Equity $ 7,697.8 $ 7,241.9 6 %
Return on Average Common Equity 10.64 % 9.59 % 11
Return on Average Assets 0.86 % 0.77 % 12
Cash Dividends Declared per Common Share $ 0.31 $ 0.30 3 %
Average Common Shares Outstanding (000s)
Basic 239,930 240,237
Diluted 241,331 240,697
Common Shares Outstanding (EOP) (000s) 238,984 239,799
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
THIRD SECOND
($ In Millions Except Per Share Data)
QUARTER QUARTER
2013 2013 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 648.0 $ 657.3 (1 ) %
Foreign Exchange Trading Income 62.8 71.3 (12 )
Treasury Management Fees 17.6 17.1 3
Security Commissions and Trading Income 16.8 18.3 (8 )
Other Operating Income 67.2 36.3 85
Investment Security Gains (Losses), net (2.2 ) 0.1 N/M
Total Noninterest Income 810.2 800.4 1
Net Interest Income
Interest Income 291.1 275.3 6
Interest Expense 54.1 55.2 (2 )
Net Interest Income 237.0 220.1 8
Total Revenue 1,047.2 1,020.5 3
Provision for Credit Losses 5.0 5.0 -
Noninterest Expense
Compensation 324.6 326.9 (1 )
Employee Benefits 63.5 64.2 (1 )
Outside Services 145.9 136.2 7
Equipment and Software 95.5 92.1 4
Occupancy 43.3 43.5 (1 )
Other Operating Expense 67.9 66.8 1
Total Noninterest Expense 740.7 729.7 2
Income before Income Taxes 301.5 285.8 5
Provision for Income Taxes 95.0 94.7 -
NET INCOME $ 206.5 $ 191.1 8 %
Earnings Allocated to Participating Securities
$
3.5
$
3.2 9 %
Earnings Allocated to Common and Potential Common Shares 203 187.9 8
Per Common Share
Net Income
Basic $ 0.85 $ 0.78 9 %
Diluted 0.84 0.78 8
Average Common Equity $ 7,697.8 $ 7,648.3 1 %
Return on Average Common Equity 10.64 % 10.02 % 6
Return on Average Assets 0.86 % 0.83 % 4
Cash Dividends Declared per Common Share $ 0.31 $ 0.31 - %
Average Common Shares Outstanding (000s)
Basic 239,930 239,739
Diluted 241,331 241,041
Common Shares Outstanding (EOP) (000s) 238,984 240,138
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
NINE MONTHS
2013 2012 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 1,936.0 $ 1,782.9 9 %
Foreign Exchange Trading Income 193.6 165.3 17
Treasury Management Fees 51.5 51.0 1
Security Commissions and Trading Income 53.4 53.6 -
Other Operating Income 128.3 119.2 8
Investment Security Gains (Losses), net (1.9 ) (1.7 ) 10
Total Noninterest Income 2,360.9 2,170.3 9
Net Interest Income
Interest Income 853.1 985.6 (13 )
Interest Expense 169.9 229.5 (26 )
Net Interest Income 683.2 756.1 (10 )
Total Revenue 3,044.1 2,926.4 4
Provision for Credit Losses 15.0 20.0 (25 )
Noninterest Expense
Compensation 971.8 951.1 2
Employee Benefits 191.0 194.3 (2 )
Outside Services 412.0 388.5 6
Equipment and Software 279.0 276.2 1
Occupancy 130.0 128.2 1
Other Operating Expense 215.5 199.0 8
Total Noninterest Expense 2,199.3 2,137.3 3
Income before Income Taxes 829.8 769.1 8
Provision for Income Taxes 268.2 249.5 8
NET INCOME $ 561.6 $ 519.6 8 %
Earnings Allocated to Participating Securities
$
9.1
$
6.7 36 %
Earnings Allocated to Common and Potential Common Shares 552.5 512.9 8
Per Common Share
Net Income
Basic $ 2.31 $ 2.13 8 %
Diluted 2.29 2.12 8
Average Common Equity $ 7,630.3 $ 7,293.1 5 %
Return on Average Common Equity 9.84 % 9.52 % 3
Return on Average Assets 0.81 % 0.74 % 9
Cash Dividends Declared per Common Share $ 0.92 $ 0.88 5 %
Average Common Shares Outstanding (000s)
Basic 239,615 240,741
Diluted 240,858 241,205
Common Shares Outstanding (EOP) (000s) 238,984 239,799
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) SEPTEMBER 30
2013 2012 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under Agreements to Resell
$ 534.6 $ 573.4 (7 ) %
Interest-Bearing Deposits with Banks 17,383.9 19,347.8 (10 )
Federal Reserve Deposits and Other Interest-Bearing 8,452.8 6,230.5 36
Securities
U.S. Government 1,524.5 1,787.8 (15 )
Obligations of States and Political Subdivisions 263.2 389.1 (32 )
Government Sponsored Agency 17,066.0 18,715.3 (9 )
Other (**) 12,123.6 8,790.0 38
Total Securities 30,977.3 29,682.2 4
Loans and Leases 29,064.8 29,542.7 (2 )
Total Earning Assets 86,413.4 85,376.6 1
Allowance for Credit Losses Assigned to Loans and Leases (287.2 ) (298.6 ) (4 )
Cash and Due from Banks 2,690.7 3,396.7 (21 )
Buildings and Equipment 444.3 453.7 (2 )
Client Security Settlement Receivables 1,630.2 1,078.2 51
Goodwill 537.7 538.0 -
Other Assets 4,540.4 3,087.9 47
Total Assets $ 95,969.5 $ 93,632.5 2 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 13,802.6 $ 13,481.6 2 %
Savings Certificates and Other Time 1,939.6 3,011.0 (36 )
Non-U.S. Offices - Interest-Bearing 45,017.2 39,076.1 15
Total Interest-Bearing Deposits 60,759.4 55,568.7 9
Short-Term Borrowings 3,327.3 1,399.0 138
Senior Notes 1,996.5 2,610.3 (24 )
Long-Term Debt 993.5 1,428.4 (30 )
Floating Rate Capital Debt 277.1 277.0 -
Total Interest-Related Funds 67,353.8 61,283.4 10
Demand and Other Noninterest-Bearing Deposits 17,402.3 21,362.9 (18 )
Other Liabilities 3,396.3 3,454.0 (2 )
Total Liabilities 88,152.4 86,100.3 2
Total Equity 7,817.1 7,532.2 4
Total Liabilities and Stockholders' Equity $ 95,969.5 $ 93,632.5 2 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) SEPTEMBER 30 JUNE 30
2013 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under Agreements to Resell
$ 534.6 $ 531.2 1 %
Interest-Bearing Deposits with Banks 17,383.9 17,838.5 (3 )
Federal Reserve Deposits and Other Interest-Bearing 8,452.8 6,765.7 25
Securities
U.S. Government 1,524.5 1,775.1 (14 )
Obligations of States and Political Subdivisions 263.2 277.4 (5 )
Government Sponsored Agency 17,066.0 16,683.6 2
Other (**) 12,123.6 11,942.0 2
Total Securities 30,977.3 30,678.1 1
Loans and Leases 29,064.8 28,810.4 1
Total Earning Assets 86,413.4 84,623.9 2
Allowance for Credit Losses Assigned to Loans and Leases (287.2 ) (290.4 ) (1 )
Cash and Due from Banks 2,690.7 4,630.9 (42 )
Buildings and Equipment 444.3 454.5 (2 )
Client Security Settlement Receivables 1,630.2 1,486.2 10
Goodwill 537.7 530.4 1
Other Assets 4,540.4 5,800.5 (22 )
Total Assets $ 95,969.5 $ 97,236.0 (1 ) %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 13,802.6 $ 14,113.0 (2 ) %
Savings Certificates and Other Time 1,939.6 2,001.5 (3 )
Non-U.S. Offices - Interest-Bearing 45,017.2 40,698.4 11
Total Interest-Bearing Deposits 60,759.4 56,812.9 7
Short-Term Borrowings 3,327.3 5,010.2 (34 )
Senior Notes 1,996.5 2,398.3 (17 )
Long-Term Debt 993.5 980.9 1
Floating Rate Capital Debt 277.1 277.1 -
Total Interest-Related Funds 67,353.8 65,479.4 3
Demand and Other Noninterest-Bearing Deposits 17,402.3 19,722.0 (12 )
Other Liabilities 3,396.3 4,310.0 (21 )
Total Liabilities 88,152.4 89,511.4 (2 )
Total Equity 7,817.1 7,724.6 1
Total Liabilities and Stockholders' Equity $ 95,969.5 $ 97,236.0 (1 ) %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
($ In Millions) THIRD QUARTER
2013 2012 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under Agreements to Resell
$ 548.2 $ 285.6 92 %
Interest-Bearing Deposits with Banks 17,767.6 19,215.4 (8 )
Federal Reserve Deposits and Other Interest-Bearing 7,987.5 6,113.7 31
Securities
U.S. Government 1,619.2 1,786.4 (9 )
Obligations of States and Political Subdivisions 268.8 398.4 (33 )
Government Sponsored Agency 17,082.6 18,694.1 (9 )
Other (**) 11,592.8 8,986.2 29
Total Securities 30,563.4 29,865.1 2
Loans and Leases 28,662.4 29,046.0 (1 )
Total Earning Assets 85,529.1 84,525.8 1
Allowance for Credit Losses Assigned to Loans and Leases (289.6 ) (297.8 ) (3 )
Cash and Due from Banks 2,776.8 3,446.6 (19 )
Buildings and Equipment 453.0 461.7 (2 )
Client Security Settlement Receivables 714.8 434.7 64
Goodwill 532.5 534.8 -
Other Assets 5,495.9 3,604.1 52
Total Assets $ 95,212.5 $ 92,709.9 3 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,286.5 $ 13,687.1 4 %
Savings Certificates and Other Time 1,969.0 3,083.6 (36 )
Non-U.S. Offices - Interest-Bearing 43,064.7 38,896.8 11
Total Interest-Bearing Deposits 59,320.2 55,667.5 7
Short-Term Borrowings 5,447.2 2,200.7 148
Senior Notes 2,192.5 2,439.6 (10 )
Long-Term Debt 978.5 1,452.9 (33 )
Floating Rate Capital Debt 277.1 277.0 -
Total Interest-Related Funds 68,215.5 62,037.7 10
Demand and Other Noninterest-Bearing Deposits 16,134.2 20,235.8 (20 )
Other Liabilities 3,165.0 3,014.5 5
Total Liabilities 87,514.7 85,288.0 3
Total Equity 7,697.8 7,421.9 4
Total Liabilities and Stockholders' Equity $ 95,212.5 $ 92,709.9 3 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
THIRD SECOND
($ In Millions) QUARTER QUARTER
2013 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under Agreements to Resell
$ 548.2 $ 309.8 77 %
Interest-Bearing Deposits with Banks 17,767.6 18,192.6 (2 )
Federal Reserve Deposits and Other Interest-Bearing 7,987.5 5,275.5 51
Securities
U.S. Government 1,619.2 1,787.4 (9 )
Obligations of States and Political Subdivisions 268.8 287.0 (6 )
Government Sponsored Agency 17,082.6 17,270.4 (1 )
Other (**) 11,592.8 11,397.2 2
Total Securities 30,563.4 30,742.0 (1 )
Loans and Leases 28,662.4 28,601.8 -
Total Earning Assets 85,529.1 83,121.7 3
Allowance for Credit Losses Assigned to Loans and Leases (289.6 ) (290.2 ) -
Cash and Due from Banks 2,776.8 2,964.6 (6 )
Buildings and Equipment 453.0 461.6 (2 )
Client Security Settlement Receivables 714.8 822.2 (13 )
Goodwill 532.5 531.3 -
Other Assets 5,495.9 5,238.4 5
Total Assets $ 95,212.5 $ 92,849.6 3 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,286.5 $ 14,634.7 (2 ) %
Savings Certificates and Other Time 1,969.0 2,199.1 (10 )
Non-U.S. Offices - Interest-Bearing 43,064.7 39,043.3 10
Total Interest-Bearing Deposits 59,320.2 55,877.1 6
Short-Term Borrowings 5,447.2 4,750.0 15
Senior Notes 2,192.5 2,400.1 (9 )
Long-Term Debt 978.5 1,105.2 (11 )
Floating Rate Capital Debt 277.1 277.1 -
Total Interest-Related Funds 68,215.5 64,409.5 6
Demand and Other Noninterest-Bearing Deposits 16,134.2 17,468.1 (8 )
Other Liabilities 3,165.0 3,323.7 (5 )
Total Liabilities 87,514.7 85,201.3 3
Total Equity 7,697.8 7,648.3 1
Total Liabilities and Stockholders' Equity $ 95,212.5 $ 92,849.6 3 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
QUARTERLY TREND DATA
2013 2012
($ In Millions Except Per Share Data)
QUARTERS QUARTERS
THIRD SECOND FIRST FOURTH THIRD
Net Income Summary
Trust, Investment and Other Servicing Fees $ 648.0 $ 657.3 $ 630.7 $ 622.6 $ 601.9
Other Noninterest Income 162.2 143.1 119.6 112.9 125.0
Net Interest Income 237.0 220.1 226.1 234.2 245.6
Total Revenue 1,047.2 1,020.5 976.4 969.7 972.5
Provision for Credit Losses 5.0 5.0 5.0 5.0 10.0
Noninterest Expense 740.7 729.7 728.9 741.5 696.4
Income before Income Taxes 301.5 285.8 242.5 223.2 266.1
Provision for Income Taxes 95.0 94.7 78.5 55.5 87.3
Net Income $ 206.5 $ 191.1 $ 164.0 $ 167.7 $ 178.8
Per Common Share
Net Income - Basic $ 0.85 $ 0.78 $ 0.68 $ 0.69 $ 0.73
- Diluted 0.84 0.78 0.67 0.69 0.73
Cash Dividends Declared per Common Share 0.31 0.31 0.30 0.30 0.30
Book Value (EOP) 32.71 32.17 31.82 31.51 31.41
Market Value (EOP) 54.38 57.90 54.56 50.16 46.42
Ratios
Return on Average Common Equity 10.64 % 10.02 % 8.82 % 8.83 % 9.59 %
Return on Average Assets 0.86 0.83 0.73 0.73 0.77
Net Interest Margin (GAAP) 1.10 1.06 1.12 1.12 1.16
Net Interest Margin (FTE) 1.14 1.10 1.15 1.17 1.21
Risk-based Capital Ratios
Tier 1 13.6 % 13.1 % 13.3 % 12.8 % 12.8 %
Total (Tier 1 + Tier 2) 14.9 14.4 14.7 14.3 14.3
Tier 1 Leverage 8.3 8.4 8.4 8.2 8.1
Tier 1 Common Equity (non-GAAP) 13.1 12.6 12.8 12.4 12.3
Assets Under Custody ($ In Billions) - EOP
Corporate $ 4,766.5 $ 4,538.9 $ 4,569.1 $ 4,358.6 $ 4,331.9
Wealth Management 470.5 452.6 455.3 446.3 429.5
Total Assets Under Custody $ 5,237.0 $ 4,991.5 $ 5,024.4 $ 4,804.9 $ 4,761.4
Assets Under Management ($ In Billions) - EOP $ 846.2 $ 803.0 $ 810.2 $ 758.9 $ 749.7
Asset Quality ($ In Millions) - EOP
Nonperforming Loans and Leases $ 270.1 $ 266.7 $ 251.7 $ 254.8 $ 269.0
Other Real Estate Owned (OREO) 13.9 14.5 10.5 20.3 20.6
Total Nonperforming Assets $ 284.0 $ 281.2 $ 262.2 $ 275.1 $ 289.6
Nonperforming Assets / Loans and Leases and OREO 0.98 % 0.98 % 0.91 % 0.93 % 0.98 %
Gross Charge-offs $ 11.6 $ 15.6 $ 12.6 $ 16.1 $ 16.3
Less: Gross Recoveries 3.3 7.5 3.9 10.7 4.4
Net Charge-offs $ 8.3 $ 8.1 $ 8.7 $ 5.4 $ 11.9
Net Charge-offs (Annualized) to Average Loans and Leases 0.12 % 0.11 % 0.12 % 0.07 % 0.16 %
Allowance for Credit Losses Assigned to Loans and Leases $ 287.2 $ 290.4 $ 294.1 $ 297.9 $ 298.6
Allowance to Nonperforming Loans and Leases 1.1x 1.1x 1.2x 1.2x 1.1x
Allowance for Other Credit-Related Exposures $ 30.3 $ 30.3 $ 29.7 $ 29.7 $ 29.4
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.
Contact:.
.
Northern Trust Corporation
Investor Contact:
Bev Fleming, (312) 444-7811
Beverly_Fleming@ntrs.com
or
Media Contact:
Doug Holt, (312) 557-1571
Doug_Holt@ntrs.com
http://www.northerntrust.com .
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