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NORTHERN TRUST REPORTS RECORD NET INCOME FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF 1992

 NORTHERN TRUST REPORTS RECORD NET INCOME FOR THE SECOND QUARTER
 AND FIRST SIX MONTHS OF 1992
 CHICAGO, July 20 /PRNewswire/ -- Northern Trust Corp. (NASDAQ: NTRS) today reported record unaudited net income of $37.1 million for the second quarter of 1992, up 16 percent from $32.1 million reported last year. On a fully diluted basis, net income per common share was $.98 compared with $.87 last year, up 13 percent. The annualized return on average common equity (ROE) was 19.0 percent versus 19.6 percent in 1991 and the return on average assets (ROA) was 1.11 percent compared with 1.08 percent last year.
 For the six months ended June 30, 1992, net income increased 15 percent to $72.9 million from $63.1 million last year. On a fully diluted basis, net income per common share was $1.93 compared with $1.70 a year ago, up 14 percent. The ROE for the six months was 19.2 percent versus 19.8 percent last year and the ROA was 1.12 percent compared with 1.06 percent in 1991.
 Performance Highlights -- Second Quarter
 Commenting on the quarter, David W. Fox, chairman, president and chief executive officer, stated, "We are pleased to report another record earnings quarter. Fees from trust business activities and net interest income were at record levels. Additional items contributing to the record performance for the quarter were strong growth in the fee portion of cash management revenues and other loan-related fees. Partially offsetting these positive factors were increases in noninterest expenses for the write-down of commercial real estate properties previously acquired in foreclosures, expenses associated with the trust assets acquired from Trust Services of America, Inc. (TSA), higher provision for credit losses and expenses incurred in connection with the downtown Chicago tunnel flood. Driven by record earnings, the corporation's common equity continues to grow. In spite of the slow economic recovery and continuing difficulties in the metropolitan Chicago commercial real estate market, Northern's overall asset quality remains good. Asset quality, income diversification and capital growth continue to remain strengths of the corporation."
 Revenues
 Noninterest income accounted for 60 percent of total taxable equivalent revenue for the quarter and increased 22 percent to $127.1 million from last year's $104.1 million. Trust fees, representing 72 percent of nonintererst income and 43 percent of total taxable equivalent revenue, totaled $91.1 million, up 22 percent from $74.8 million in 1991. Approximately one-third of the trust fee increase was attributable to revenues generated from trust assets acquired from TSA in January 1992. Security distribution commissions and trading income totaled $4.8 million compared with $3.8 million last year. Other operating income increased to $31.8 million from $24.9 million last year as a result of growth in the fee portion of cash management revenues and other loan-related fees. Foreign exchange trading profits were lower than a year ago. Investment security transactions resulted in a net loss of $555,000 in 1992 versus a net gain of $658,000 in 1991.
 Net interest income on a fully taxable equivalent basis increased 7 percent to a record $83.4 million compared with $78.3 million a year earlier. The growth in net interest income was attributable to a 12 percent increase in average earning assets partially offset by a decline in the net interest margin from 3.02 percent in 1991 to 2.89 percent in 1992. Although interest rate spreads improved to 2.38 percent from 2.29 percent, lower interest rates in the current year reduced the yield on the investment of noninterest-related funds resulting in the 13 basis point decline in the net interest margin.
 Provision/Reserve For Credit Losses
 The provision for credit losses totaled $9.0 million in the second quarter of 1992, up from $7.0 million in the first quarter of 1992 and $8.0 million a year ago. Net charged-off loans totaled $9.3 million in the second quarter of 1992 (.58 percent of average loans) compared with $6.9 million (.44 percent of average loans) in the first quarter of 1992 and $10.5 million (.68 percent of average loans) for the second quarter of 1991. The reserve for credit losses at June 30, 1992 totaled $145.5 million or 2.28 percent of outstanding loans. Nonperforming assets totaled $89.4 million (including $35.2 million of other real estate owned "OREO") at June 30, 1992 down from $92.9 million (including $37.8 million of OREO) at March 31, 1992 and $93.7 million (including $48.3 million of OREO) at June 30, 1991.
 Non-Interest Expenses
 Noninterest expenses totaled $142.4 million for the quarter, up 15 percent or $18.6 million from the $123.8 million incurred in 1991. Approximately 45 percent of the growth in operating expenses was attributed to expenses associated with trust assets acquired from TSA; write-downs to reflect the decline in the values of certain commercial real estate properties previously acquired in foreclosures, and disaster recovery costs related to the downtown Chicago tunnel flood. In addition, planned increases in certain operating expenses such as salaries, benefits and Federal Deposit Insurance Corp. premiums, as well as higher incentive compensation related to strong earnings performance also contributed to the expense growth. Despite the increased level of expenses, the second quarter productivity ratio improved to 148 percent from 147 percent last year. 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.
 Performance Highlights -- First Six Months
 For the six months ended June 30, 1992, net income increased 15 percent to $72.9 million from $63.1 million in 1991. On a fully diluted basis, net income per common share was $1.93, up 14 percent from $1.70 a year ago. This record earnings performance translates into an ROE of 19.2 percent and an ROA of 1.12 percent for the period versus 19.8 percent and 1.06 percent, respectively, a year ago.
 Noninterest income increased 23 percent to $249.2 million from $202.4 million in 1991. Trust fees totaled $180.8 million, up 22 percent or $33.0 million from $147.8 million last year. Security distribution commission and trading profits amounted to $9.8 million compared with $7.6 million in 1991. Other operating income totaled $57.9 million, up 24 percent form $46.6 million earned in 1991. Net gains from investment security transactions totaled $695,000 compared with $433,000 in the prior year.
 Net interest income on a fully taxable equivalent basis increased 7 percent to $169.9 million from $158.6 million in 1991. The provision for credit losses totalled $16.0 million, versus $15.0 million last year. Net charge-offs totalled $16.2 million compared $17.4 million in 1991. Noninterest expenses totaled $285.9 million, up 16 percent from $246.4 million in 1991.
 Balance Sheet
 Total assets at June 30, 1992 were $12.8 billion and averaged $13.1 billion for the first half of 1992, up 9 percent from last year's average of $12.0 billion. Loans and leases totaled $6.4 billion at June 30, 1992 and averaged $6.4 billion for the six months, 4 percent higher than the prior year's average. Common stockholders' equity at June 30, 1992 totaled $770.0 million, an increase of 20 percent from $644.3 million at June 30, 1991. Reflecting retained earnings growth and the issuance of $50.0 million of 6.25 percent cumulative convertible preferred stock in February 1992, total stockholders' equity increased 23 percent to $940.0 million at June 30, 1992 from $764.3 million at June 30, 1991. The corporation's risk-based capital ratios at June 30, 1992 were 8.0 percent for Tier 1 and 12.0 percent for total capital, both well in excess of the final Dec. 31, 1992 regulatory capital 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 5.8 percent at June 30, 1992 exceeds the 3 percent minimum requirement.
 -0- 7/20/92
 /CONTACT: Sue Rageas of Northern Trust, 312-444-4279/
 (NTRS) CO: Nothern Trust Corp. ST: Illinois IN: FIN SU: ERN


TS -- NY057 -- 0769 07/20/92 13:02 EDT
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