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NORTHERN TRUST CORPORATION REPORTS RECORD 1994 FIRST QUARTER EARNINGS

 CHICAGO, April 18 /PRNewswire/ -- Northern Trust Corporation (NASDAQ-NMS: NTRS) reported record net income of $45.4 million for the first quarter, up 13%. Net income per common share also increased 13% to $.80 from $.71 in 1993.
 FINANCIAL HIGHLIGHTS
 -- Return on average common equity was 17.9%.
 -- Return on average assets was 1.06%.
 -- Trust fees rose 11% to a record $109.5 million.
 -- Trust assets under administration grew to $480 billion, an increase of $46 billion or 11% from a year ago.
 -- Noninterest expenses grew only 5% from the prior year's quarter.
 -- Common stockholders' equity at March 31, 1994 exceeded the $1.0 billion mark, up 16% from 1993 and for the quarter the average grew 17%.
 Business Highlights
 -- The acquisition of Hazlehurst & Associates, Inc., a leading employee benefit consulting and recordkeeping firm, was completed April 15, 1994.
 -- A new trust and banking office in Highland Park, Ill., is scheduled to be opened in April 1994, bringing our domestic network of financial service offices to 43.
 -- The sale of the corporation's 21% interest in Banque Scandinave en Suisse was announced and is expected to close during the second quarter, with a pretax gain of approximately $30.7 million and an anticipated final dividend of approximately $2.3 million.
 Northern Trust Corporation reported record unaudited net income of $45.4 million for the first quarter of 1994, a 13% increase from $40.2 million earned last year. On a fully diluted basis, net income per common share also increased 13% to $.80 from $.71 in 1993. This earnings performance produced an annualized return on average common equity of 17.9% versus 18.4% last year and a return on average assets of 1.06% compared with 1.09% in 1993.
 PERFORMANCE HIGHLIGHTS
 David W. Fox, chairman and chief executive officer, stated the following: "Northern's continued strategic emphasis on fee-based financial services coupled with effective expense control were the key elements in the first quarter record earnings performance. Trust fees grew to a record level and foreign exchange revenues were substantially higher. Trust assets under administration increased by $46 billion, or 11%, from last year's first quarter, reaching $480 billion at March 31. Noninterest expense growth was limited to 5%, reflecting successful expense control, while planned investments in technology continued on schedule. The balance sheet remained strong, with common stockholders' equity surpassing the $1.0 billion mark for the first time."
 NONINTEREST INCOME
 Noninterest income, accounting for 62% of total taxable equivalent revenue, totaled $149.2 million in the first quarter, an improvement of 8% from the $137.6 million earned last year. Trust fees, accounting for 73% of noninterest income and 46% of total taxable equivalent revenue, increased 11% from the prior year to $109.5 million. Trust revenues continued to be evenly distributed between Personal and Corporate Financial Services.
 Higher transaction activity primarily by the clients of Northern Futures Corporation resulted in a 22% increase in security commissions and trading income which totaled $6.4 million for the quarter.
 Other operating income totaled $33.1 million, compared with $31.9 million a year ago. Within other operating income, foreign exchange trading profits increased $2.8 million for the quarter to $10.0 million. A year ago, other operating income benefited $3.6 million from the sale of mortgages compared with $.4 million this year.
 Investment security sales produced gains of $241,000, compared with $1.6 million in 1993.
 NET INTEREST INCOME
 Net interest income stated on a fully taxable equivalent basis increased 3% to $89.8 million in 1994 versus $87.6 million in 1993.
 The growth in net interest income was attributable to an 18% increase in average earning assets. The net interest margin declined to 2.41% compared with 2.76% last year. The lower net interest margin was attributable to higher funding cost due to the increase in short-term interest rates during the quarter coupled with the low spread obtained from the higher volume of short-term U.S. Government securities and money market assets.
 PROVISION/RESERVE FOR CREDIT LOSSES
 The provision for credit losses declined to $3.0 million in the first quarter of 1994 versus $6.0 million in 1993. Net charged-off loans declined to $2.9 million (.15% of average loans on an annualized basis) compared with $6.0 million (.35% of average loans) in the first quarter of 1993. The reserve for credit losses at $145.6 million amounted to 1.80% of outstanding loans at March 31, 1994. Nonperforming assets remained low and totaled $45.8 million (including $5.8 million of other real estate owned or "OREO") at March 31, 1994, compared with $37.0 million (including $9.7 million of OREO) at Dec. 31, 1993, and $81.1 million (including $24.0 million of OREO) at March 31, 1993. The level of nonperforming assets compares favorably to that of other institutions within Northern's peer group, enabling the Corporation to remain in a leadership position with respect to asset quality.
 NONINTEREST EXPENSES
 Noninterest expenses totaled $161.9 million for the quarter, up 5% or $7.9 million from the $154.0 million reported in 1993. The modest increase in noninterest expenses reflects a 2% growth in compensation expense, with staff levels slightly below those of last year. Ongoing investment in technology, higher benefit costs and trust-related operating expenses accounted for the remainder of the increases. The productivity ratio improved to 148% compared with 146% for the first quarter of 1993. The productivity ratio is noninterest income plus net interest income on a taxable equivalent basis before the provision for credit losses divided by noninterest expenses.
 PROVISION FOR INCOME TAXES
 Income taxes for the first quarter totaled $20.8 million, an increase of $3.8 million from 1993. The higher provision in 1994 resulted from growth in taxable earnings for federal income tax purposes, and the increase in the federal tax rate from 34% to 35%.
 The effective tax rate for the quarter was 31% versus 30% in 1993.
 BALANCE SHEET
 Total assets at March 31, 1994, were $18.2 billion and averaged $17.3 billion for the first quarter, up 16% from last year's average of $14.9 billion. With increased lending activity, loans and leases totaled $8.1 billion at March 31, 1994 and averaged $7.9 billion for the quarter, an increase of 14% from $7.0 billion last year. Reflecting continued strong earnings performance, common stockholders' equity increased 16% and totaled $1.0 billion at March 31, 1994, versus $877.7 million last year. Total stockholders' equity increased a commensurate amount, totaling $1.2 billion at March 31, 1994, compared with $1.0 billion at March 31, 1993. The Corporation's risk-based capital ratios remain strong at 8.9% for tier 1 and 12.7% for total capital at March 31, 1994. These ratios substantially exceeded the regulatory guidelines of 4% for tier 1 and 8% for total capital. The leverage ratio (tier 1 capital to first quarter average assets) of 6.0% at March 31, 1994, also exceeded the regulatory requirement of 3%.
 NORTHERN TRUST CORPORATION
 (Supplemental Consolidated Financial Information)
 STATEMENT OF INCOME STATISTICS ($ IN MILLIONS)
 FIRST QUARTER
 1994 1993 % CHANGE
 Net Interest Income (Taxable Equivalent) $89.8 $87.6 2.6%
 Less: Taxable Equivalent Adjustment 7.9 8.0 (0.1)
 Net Interest Income 81.9 79.6 2.8
 Provision for Credit Losses 3.0 6.0 (50.0)
 Trust Fees 109.5 98.9 10.7
 Security Commissions and
 Trading Income 6.4 5.2 21.8
 Other Operating Income
 Treasury Management Fees 12.0 11.7 2.7
 Foreign Exchange Trading Profits 10.0 7.2 39.9
 Other 11.1 13.0 (14.1)
 Total Other Operating Income 33.1 31.9 4.2
 Investment Security Transactions 0.2 1.6 (85.0)
 Noninterest Expenses
 Salaries 74.4 72.9 2.0
 Staff Benefits 19.1 17.0 12.3
 Occupancy 13.7 13.7 UNCH
 Equipment Expense 11.3 10.5 8.5
 Other 43.4 39.9 8.8
 Total Noninterest Expenses 161.9 154.0 5.1
 Income Before Taxes 66.2 57.2 15.8
 Provision for Income Taxes 20.8 17.0 22.8
 NET INCOME $45.4 $40.2 12.8
 %
 Preferred Dividends $1.6 $1.6 UNCH
 Average Common Shares Outstanding
 - Primary 54,681,649 54,479,957
 - Fully Diluted 55,899,002 55,893,947
 Per Common Share
 Net Income-Primary $0.80 $0.71 13.0%
 -Fully Diluted 0.80 0.71 13.0
 Dividend Declared 0.22 0.185 18.9
 Book Value - End of Period 19.00 16.58 14.6
 RATIOS
 Return on - Average Assets 1.06% 1.09%
 - Average Common Equity 17.86 18.44
 Net Interest Margin 2.41 2.76
 (Supplemental Consolidated Financial Information)
 BALANCE SHEET STATISTICS ($ IN MILLIONS)
 MARCH 31
 1994 1993 % CHANGE
 Total Assets $18,167.1 $15,269.0 19.0%
 Earning Assets 15,778.3 13,139.2 20.1
 Money Market Assets 3,007.2 1,753.5 71.5
 Securities 4,689.9 4,197.9 11.7
 Loans and Leases 8,081.2 7,187.8 12.4
 Reserve For Credit Losses 145.6 145.5 0.1
 Deposits 10,644.5 9,545.3 11.5
 Demand and Other Noninterest Bearing 2,553.6 2,506.5 1.9
 Savings and Money Market Deposits 3,096.9 3,428.0 (9.7)
 Savings Certificates 1,115.2 1,221.1 (8.7)
 Other Time 322.4 384.8 (16.2)
 Foreign Offices - Demand 460.6 48.5 N/M
 - Time 3,095.8 1,956.4 58.2
 Borrowed Funds 4,684.6 3,595.9 30.3
 Stockholders' Equity 1,184.0 1,047.7 13.0
 Common Stockholders' Equity 1,014.0 877.7 15.5
 MARCH 31 DEC. 31 MARCH 31
 NONPERFORMING ASSETS ($ In Millions) 1994 1993 1993
 Nonaccrual Loans $40.0 $27.3 $57.1
 Other Real Estate Owned (OREO) 5.8 9.7 24.0
 Total Nonperforming Assets $45.8 $37.0 $81.1
 RATIOS
 Reserve for Credit Losses as a % of Loans 1.80% 1.91% 2.02%
 Nonperforming Assets as a %
 of Loans and OREO 0.57 0.49 1.12
 Tier 1 Capital to Risk-adjusted Assets 8.9 9.3 8.8
 Total Capital to Risk-adjusted Assets 12.7 13.4 12.3
 Leverage 6.0 6.2 6.0
 N/M Not Meaningful
 AVERAGE BALANCE SHEET STATISTICS ($ IN MILLIONS)
 FIRST QUARTER
 1994 1993 % CHANGE
 Total Assets $17,322.9 $14,904.4 16.2%
 Earning Assets 15,133.5 12,850.9 17.8
 Money Market Assets 2,441.8 1,898.8 28.6
 Securities 4,761.3 3,992.8 19.2
 Loans and Leases 7,930.4 6,959.3 14.0
 Reserve For Credit Losses 145.6 145.5 0.1
 Deposits 10,496.8 9,899.0 6.0
 Demand and Other Noninterest Bearing 2,627.8 2,596.7 1.2
 Savings and Money Market Deposits 3,463.8 3,496.7 (0.9)
 Savings Certificates 1,099.8 1,229.1 (10.5)
 Other Time 311.2 385.3 (19.2)
 Foreign Offices - Demand 330.4 39.6 N/M
 - Time 2,663.8 2,151.6 23.8
 Borrowed Funds 4,207.3 2,923.1 43.9
 Stockholders' Equity 1,163.6 1,020.3 14.1
 Common Stockholders' Equity 993.6 850.3 16.9
 N/M Not Meaningful
 -0- 4/18/94
 /CONTACT: Sue A. Rageas, 312-444-4279, or (investors) David L. Eddy, 312-444-7402, both of Northern Trust Corporation/


CO: Northern Trust Corporation ST: Illinois IN: FIN SU: ERN

CK -- NY081 -- 8819 04/18/94 13:08 EDT
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Date:Apr 18, 1994
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