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NORTHERN TRUST CORP. REPORTS RECORD 1993 SECOND QUARTER AND SIX MONTH EARNINGS

 HIGHLIGHTS
 Northern Trust Corp. reported record net income of $41.6 million for the second quarter, up 12 percent. Net income per common share was $.73 compared with $.65 last year, also up 12 percent. Net income totaled a record $81.8 million for i?rst six months, an increase of 12 percent. Net income per common share was $1.44 versus $1.29 last year, up 12 percent.
 -- Return on average common equity for the quarter was 18.1 percent.
 -- Trust assets under administration grew 18 percent to $448 billion from a year ago.
 -- Nonperforming assets declined 20 percent to $65 million from March 31, 1993, the lowest level in three years.
 -- The Northern Trust Company successfully completed a $100 million subordinated note offering, adding Tier 2 capital at a favorable rate.
 -- To enhance community development efforts in Chicago, a $1 million investment in Shorebank Corp. was announced in May and completed early in July.
 NORTHERN TRUST CORP. REPORTS RECORD NET INCOME
 FOR THE SECOND QUARTER AND THE FIRST SIX MONTHS OF 1993
 CHICAGO, July 19 /PRNewswire/ -- Northern Trust Corp. reported record unaudited net income of $41.6 million for the second quarter of 1993, a 12 percent increase from $37.1 million earned last year. On a fully diluted basis, net income per common share, reflecting the three- for-two stock split effected in December 1992, also increased 12 percent to $.73 from $.65 in 1992. This earnings performance produced an annualized return on average common equity (ROE) of 18.1 percent versus 19.0 percent last year and a return on average assets (ROA) of 1.06 percent compared with 1.11 percent in 1992.
 Net income reached $81.8 million for the first six months of 1993, an increase of 12 percent from $72.9 million reported in 1992. On a fully diluted basis, net income per common share was up 12 percent to $1.44 compared with $1.29 last year. The ROE for the first six months was 18.3 percent while the ROA was 1.07 percent versus 19.2 percent and 1.12 percent, respectively, for the first six months of 1992.
 PERFORMANCE HIGHLIGHTS - SECOND QUARTER
 David W. Fox, chairman, president and chief executive officer, stated the following: "Northern's performance in the second quarter was at a record level. Both trust fees and net interest income exceeded year ago levels. Trust assets under administration grew 18 percent to a record $448 billion from June 30, 1992. A marked improvement was achieved during the quarter in asset quality, as nonperforming assets declined 20 percent to $65 million, which is the lowest level in three years. Northern continues to remain well positioned to pursue opportunities in our targeted corporate and personal trust and banking markets.
 "We were also pleased to announce the investment of $1.0 million in Shorebank Corporation, parent of South Shore Bank, Chicago's pioneering community development bank. Our investment represents a commitment to work actively with Shorebank in ways that will help us strengthen our own community development lending programs."
 NONINTEREST INCOME
 Noninterest income, accounting for 60 percent of total taxable equivalee?venue, totaled $134.9 million in the second quarter of 1993, an increase of 6% from $127.1 million earned last year. Excluding $6.0 million of fees related to prepayments of fixed rate loans received in the second quarter of 1992, noninterest income would have been up 11 percent. Despite relatively flat securities lending revenues, trust fees increased 8 percent from $91.1 million in 1992 to $98.5 million. Trust fees for the second quarter accounted for 73 percent of noninterest income and 44 percent of total taxable equivalent revenue. Higher revenue from deposit and foreign exchange activities associated with master trust and global custody services also contributed to the growth in trust-related revenues.
 Security distribution revenues totaled $5.1 million compared with $4.8 million in 1992.
 Other operating income totaled $31.2 million for the quarter, down slightly from $31.8 million reported last year, which included $6.0 million of fees related to prepayments of fixed rate loans. Other operating income includes foreign exchange trading profits, up $4.0 million for the quarter to $7.1 million, and the fee portion of cash management revenues, up 10 percent to $12.9 million.
 Investment security sales produced gains of $67,000 compared with losses of $555,000 in 1992.
 NET INTEREST INCOME
 Net interest income on a fully taxable equivalent basis increased 9 percent to a record high of $91.1 million in 1993 versus $83.4 million in 1992. The strong growth in net interest income was attributable to an increase in average earning assets. The net interest margin declined to 2.65 percent compared with 2.89 percent last year, principally as a result of lower yields obtained on the repricing of fixed rate assets during the past year and a significant growth in narrow-margined, low-risk, short-term U.S. Government securities.
 PROVISION/RESERVE FOR CREDIT LOSSES
 The provision for credit losses declined to $6.0 million in the second quarter of 1993 versus $9.0 million in 1992. Net charged-off loans declined to $6.0 million (.34 percent of average loans) compared with $9.3 million (.58 percent of average loans) in the second quarter of 1992. The reserve for credit losses at $145.5 million amounted to 1.98 percent of outstanding loans at June 30, 1993. Nonperforming assets continued to decline and totaled $65.0 million (including $20.3 million of other real estate owned or "OREO") at June 30, 1993, compared with $81.1 million (including $24.0 million of OREO) at March 31, 1993, and $89.4 million (including $35.2 million of OREO) at June 30, 1992.
 The level of nonperforming assets compares favorably to that of other institutions within Northern's peer group, enabling the corporation to remain in the top quartile of bank performance with respect to asset quality.
 NONINTEREST EXPENSES
 Noninterest expenses totaled $154.9 million for the quarter, up 9 percent or $12.5 million from the $142.4 million reported in 1992. Noninterest expense growth was virtually flat relative to the $154.0 million reported for the first quarter of 1993. Planned increases in salaries and benefits, which include the impact of adopting Statement of Financial Accounting Standards No. 106 on postretirement health care, as well as systems development activities were the predominant factors contributing to the increase from last year.
 PERFORMANCE HIGHLIGHTS - FIRST SIX MONTHS
 Net income totaled a record $81.8 million for the six months ended June 30, 1993, compared with $72.9 million last year, an increase of 12 percent. On a fully diluted basis, net income per common share, reflecting the three-for-two stock split in December 1992, was $1.44, up 12 percent from the $1.29 earned last year. The ROE and ROA for the first six months were 18.3 percent and 1.07 percent, respectively, compared with a ROE of 19.2 percent and a ROA of 1.12 percent in 1992.
 Noninterest income increased 9 percent to $272.5 million from $249.2 million one year ago. Noninterest income comprised over 60 percent of total taxable equivalent revenue at June 30, 1993, reflecting the corporation's well-diversified sources of revenue. Trust fees totaled $197.4 million, up 9 percent or $16.6 million from $180.8 million last year. Security distribution revenues totaled $10.3 million or 5 percent greater than the $9.8 million earned last year. Other operating income totaled $63.1 million, an increase of 9% from $57.9 million earned in 1992. Other operating income for the first six months of 1993 included gains of $4.1 million from the sales of mortgage loans. This compares with gains of $1.2 million from the sales of mortgage loans and $6.0 million of fees related to prepayments of fixed rate loans realized in 1992. Investment security transactions produced net gains of $1.7 million versus $695,000 last year.
 Net interest income on a fully taxable equivalent basis amounted to $178.4 million, an increase of 5 percent from $169.2 million reported in 1992. The provision for credit losses decreased to $12.0 million from $16.0 million last year. Net loan charge-offs likewise declined to $12.0 million from $16.2 million in 1992. Noninterest expenses totaled $308.9 million, up 8 percent from $285.9 million in 1992.
 STATEMENT OF CONDITION
 Total assets at June 30, 1993 were $16.3 billion and averaged $15.4 billion for the first six months of 1993, up 17 percent from last year's average of $13.1 billion. Loans and leases totaled $7.3 billion at June 30, 1993 and averaged $7.1 billion for the six months, an increase of 10 percent from $6.4 billion last year. Driven by continued strong earnings growth, common stockholders' equity increased 19 percent and totaled $912.9 million at June 30, 1993, versus $770.0 million last year. Total stockholders' equity increased commensurately and totaled $1.1 billion at June 30, 1993 compared with $940.0 million at June 30, 1992. The corporation's risk-based capital ratios remain strong at 8.7 percent for Tier 1 and 13.0 percent for total capital at June 30, 1993. The risk-based capital ratios substantially exceeded the regulatory guidelines of 4 percent for Tier 1 and 8 percent for total capital. The leverage ratio (Tier 1 capital to second quarter average assets) of 5.9 percent at June 30, 1993, also exceeded the regulatory requirement of 3 percent.
 -0- 7/19/93
 /CONTACT: Sue A. Rageas, public relations, 312-444-4279 or David L. Eddy, investor relations, 312-444-7402, both of Northern Trust/
 /FIRST AND FINAL ADD -- TABULAR MATERIAL -- TO FOLLOW/
 (NTRS)


CO: Northern Trust Corp. ST: Illinois IN: FIN SU: ERN

WB -- NY067 -- 3108 07/19/93 13:30 EDT
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Date:Jul 19, 1993
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