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NORTHERN TRUST REPORTS RECORD YEAR-END EARNINGS

             NORTHERN TRUST REPORTS RECORD YEAR-END EARNINGS
    CHICAGO, Jan. 21 /PRNewswire/ -- Northern Trust Corp. (NASDAQ: NTRS)


today reported unaudited net income for the year ended Dec. 31, 1991. Net income for the year totaled $127.4 million, a 10 percent increase from $115.4 million in 1990. Fourth quarter net income of $33.1 million represented an 8 percent gain from a year ago.
    Net income per share for the year on a fully diluted basis was $3.41 compared with $3.08 a year ago, an increase of 11 percent.  For 1991 the return on average common equity (ROE) was 19.0 percent versus 19.8 percent in 1990, and the return on average assets (ROA) was 1.05 percent compared with .99 percent a year ago.  Trust assets under administration grew 31 percent to a record $361 billion, which includes managed assets totaling $59 billion.
    Commenting on the year, David W. Fox, chairman, president and chief executive officer, stated, "1991 was a very successful year for Northern.  Both trust fees and net interest income were at record levels and the rate of annual increase in noninterest expenses was at the lowest level in recent years.  Nineteen ninety one marks the fourth consecutive year Northern has reported record earnings and the fifth consecutive year in which the quarterly dividend per common share has been raised.
    Northern's successful year reflects continued growth in target markets and a renewed emphasis by Northern people on quality service to clients."
    Fox further stated, "Northern continues in a very strong financial position evidenced by sound overall asset quality and significant growth in capital.  Through the retention of earnings, common equity increased 19 percent to $701 million and Northern's capital position was strengthened further during the year by the issuance of $98 million of subordinated fixed rate medium-term notes.  Nonperforming assets remained low by industry standards and were covered 1.5 times by the reserve for credit losses."
    Revenues
    Noninterest income, which accounted for 56 percent of total taxable equivalent revenue for 1991, increased 12 percent to $412.8 million from the prior year's $369.3 million.  Trust fees, representing 73 percent of noninterest income and 41 percent of total taxable equivalent revenue, totaled $303.1 million, up 12 percent from $270.7 million in 1990.  The growth in trust revenues continues to reflect increases in both individual and corporate services.  The five-year compound growth rate for trust fees was 15 percent.  Other operating income increased 14 percent to $91.1 million from $80.0 million a year ago, reflecting growth in the fee portion of cash management revenues and foreign exchange trading profits.  Security distribution commissions and trading income amounted to $15.1 million compared with $16.7 million last year. Net gains from security sales totaled $3.5 million versus $1.9 million in 1990.
    Net Interest Income
    Net interest income on a fully taxable equivalent basis increased 11 percent to a record $317.9 million compared to $287.4 million in 1990. The growth in net interest income reflects a 3 percent increase in average earning assets as well as an improvement in the interest rate spread to 2.29 percent from 1.86 percent, which helped to improve the net interest margin to 3.00 percent from 2.80 percent last year.
    Provision/Reserve for Credit Losses
    The provision for credit losses totaled $31.0 million, up $17.0 million from the $14.0 million reported in 1990.  The increase reflected the prolonged recession and weakness in the commercial real estate market in metropolitan Chicago.  Net charged-off loans in 1991, after recoveries of $5.2 million, totaled $33.3 million (.54 percent of average loans) compared with $16.1 million in 1990 after recoveries of $7.6 million.  At Dec. 31, 1991, the reserve for credit losses was $145.7 million or 2.32 percent of outstanding loans compared with $148.0 million or 2.67 percent of outstanding loans at Dec. 31, 1990. Nonperforming assets totaled $94.2 million (including $40.4 million of OREO) at Dec. 31, 1991, compared with $87.5 million (including $40.2 million of OREO) at Sept. 30, 1991.
    Noninterest Expenses
    Noninterest expenses totaled $500.1 million, up $35.2 million or 8 percent from $464.9 million in 1990.  The rate of growth in noninterest expenses compares favorably with the 11 percent increase (after adjusting for nonrecurring expenses) experienced for all of 1990.  The lower rate of expense growth, together with a higher level of revenues, resulted in a productivity ratio of 146 percent for the year compared with 141 percent a year ago.  The productivity ratio is net interest income on a taxable equivalent basis before the provision for credit losses plus noninterest income, divided by noninterest expenses.
    Balance Sheet
    Total assets at Dec. 31, 1991, were $13.2 billion and averaged $12.2 billion for the year, an increase of 4 percent from the 1990 average. Loans and leases totaled $6.3 billion at Dec. 31, 1991, and averaged $6.2 billion for the year, 6 percent higher than the prior year average. Common stockholders' equity at Dec. 31, 1991, increased 19 percent to $700.7 million from $588.5 million at Dec. 31, 1990.  Total stockholders' equity at Dec. 31, 1991 and 1990 was $820.7 million and $708.5 million, respectively.  The corporation's risk-based capital ratios at Dec. 31, 1991, were 6.7 percent for Tier 1 and 10.7 percent for total capital, both well in excess of the 1992 regulatory guidelines of 4 percent for Tier 1 and 8 percent for total capital.
    Results for the Fourth Quarter
    Net income for the fourth quarter totaled $33.1 million in 1991, up 8 percent from $30.6 million last year.  Net income per share on a fully diluted basis was $.89 compared with $.81 a year ago, an increase of 9 percent.  This strong earnings performance produced an ROE of 18.5 percent versus 19.8 percent in 1990 while the ROA was 1.05 percent compared with .99 percent for the prior year.
    Noninterest income, which accounted for 57 percent of total taxable revenue, increased 11 percent to $108.2 million from $97.3 million in 1990.  Trust revenues totaled $78.9 million, up 10 percent or $6.9 million from last year.  Security distribution commissions and trading income totaled $3.6 million versus $4.5 million last year.  Net security gains totaled $2.1 million compared with $73,000 for 1990.
    Net interest income on a fully taxable equivalent basis totaled $81.1 million, up 7 percent from last year's $76.0 million.  The provision for credit losses totaled $8.0 million, unchanged from the third quarter of 1991, versus $5.0 million for the fourth quarter of 1990.  Net charge-offs totaled $7.9 million compared with $5.4 million a year ago.
    Noninterest expenses totaled $130.2 million, an increase of 6 percent from $123.0 million last year.  Excluding fourth quarter 1990 nonrecurring expenses, noninterest expenses for 1991 would have been up 8 percent.
    -0-        1/21/92
    /CONTACT:  Sue A. Rageas of Northern Trust, 312-444-4279/
    (NTRS) CO:  Northern Trust Corp. ST:  Illinois IN:  FIN SU:  ERN SM -- NY074 -- 1869 01/21/92 12:54 EST
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Date:Jan 21, 1992
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