Earnings Per Share Growth of 13%
Return on Average Common Equity of
11.7%
Assets under Custody Growth of 13%
Northern Trust Corporation today reported third quarter net
income per diluted common share of $1.08, compared to $0.96 in the
third quarter of 2015 and $1.10^ in the second quarter of 2016. Net
income was $257.6 million, compared to $234.6 million in the
prior-year quarter and $263.0 million^ in the prior quarter. Return
on average common equity was 11.7%.
“Northern Trust performed well in the third quarter of 2016,
producing 1.3 points of positive operating leverage and driving our
expense-to-fee ratio lower to 107%. Total revenue grew 5% versus
one year ago, with strong growth in net interest income and steady
growth in trust, investment and other servicing fees, partially
offset by lower foreign exchange trading income. Expenses were well
managed, growing 4% versus one year ago. Earnings per share of
$1.08 increased a strong 13% compared to one year ago, and we
increased our quarterly cash dividend by 6% to $0.38 per common
share,” said Frederick H. Waddell, Chairman and Chief Executive
Officer.
The prior quarter included a net pre-tax gain in revenue of
$96.6 million from the sale of Visa Inc. Class B common shares,
partially offset by impairment charges associated with our leasing
portfolio, and expense charges of $82.6 million relating to certain
securities lending litigation, contractual modifications associated
with certain existing asset servicing clients, and severance and
other personnel related charges. Excluding these items, prior
quarter net income per diluted common share, net income and return
on average common equity were $1.07^, $255.0 million^ and 11.9%^,
respectively.
^
Q2 2016 results have been adjusted to
reflect the early adoption of ASU 2016-09, “Compensation - Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting.” See Adoption of the New Accounting Standard
Related to Share-Based Compensation section for additional details
related to the adjustment.
SUMMARY RESULTS & KEY METRICS
% Change vs.
($ In Millions
except per share data)
Q3 2016 Q2 2016^ Q3 2015 Q2 2016 Q3 2015 Total Revenue
(FTE*)
$ 1,220.7 $ 1,323.6 $ 1,161.6 (8 )% 5 %
Noninterest Expense
843.0 925.0 812.3 (9 ) 4 Provision for
Credit Losses
(3.0 ) (3.0 ) (10.0 ) — (70 ) Provision
for Income Taxes
116.1 131.7 118.6 (12 ) (2 ) Net Income
257.6 263.0 234.6 (2 ) 10 Net Income Applicable to Common
Stock
251.7 257.2 228.8 (2 ) 10 Diluted Earnings per
Common Share
$ 1.08 $ 1.10 $ 0.96 (2 )% 13 %
Return on Average Common Equity
11.71 % 12.30 % 10.91
% Return on Average Assets
0.88 % 0.92 % 0.85 %
Average Assets
$ 116,382.5 $ 114,913.8 $
109,924.1 1 % 6 % (*) Total revenue and net interest income
presented on a fully taxable equivalent (FTE) basis are
non-generally accepted accounting principle financial measures that
facilitate the analysis of asset yields. Please refer to the
Reconciliation of Reported Total Revenue and Net Interest Income
section for further detail. (^)
Q2 2016 results have been adjusted to
reflect the early adoption of ASU 2016-09, “Compensation - Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting.” See Adoption of the New Accounting Standard
Related to Share-Based Compensation section for additional details
related to the adjustment.
CLIENT ASSETS
Assets under custody/administration (AUC/A) and assets under
management are the primary drivers of the Corporation’s trust,
investment and other servicing fees, the largest component of
noninterest income. Assets under custody/administration totaled
$8.50 trillion at September 30, 2016, up $379.9 billion, or
5%, from $8.12 trillion at June 30, 2016. The following table
presents the Corporation’s assets under custody, a component of
AUC/A, and assets under management by reporting segment.
As of % Change vs.
($ In
Billions)
September 30,2016 June 30,2016 September 30,2015 June
30,2016 September 30,2015
Assets Under Custody
Corporate & Institutional Services (C&IS)
$
6,173.6 $ 5,838.6 $ 5,460.6 6 % 13 % Wealth Management
533.2 514.2 495.8 4 8
Total Assets Under Custody
$ 6,706.8 $
6,352.8 $ 5,956.4 6 % 13 %
Assets Under
Management Corporate & Institutional Services
$
703.6 $ 672.3 $ 661.5 5 % 6 % Wealth Management
242.2
233.9 225.3 4 8 Total
Assets Under Management
$ 945.8 $ 906.2
$ 886.8 4 % 7 %
TOTAL REVENUE (FTE)
% Change
vs.
($ In Millions
except per share data)
Q3 2016 Q2 2016 Q3 2015 Q2 2016 Q3 2015 Noninterest
Income
$ 910.6 $ 1,017.0 $ 886.6 (10 )% 3 % Net
Interest Income (FTE*)
310.1 306.6 275.0
1 13 Total Revenue (FTE*)
$
1,220.7 $ 1,323.6 $ 1,161.6 (8 )% 5 %
(*) Total revenue and net interest income presented on a
fully taxable equivalent (FTE) basis are non-generally accepted
accounting principle financial measures that facilitate the
analysis of asset yields. Please refer to the Reconciliation of
Reported Total Revenue and Net Interest Income section for further
detail.
Noninterest Income
% Change vs.
($ In
Millions)
Q3 2016 Q2 2016 Q3 2015 Q2 2016 Q3 2015
Noninterest
Income Trust, Investment and Other Servicing Fees
$
788.3 $ 777.2 $ 749.1 1 % 5 % Foreign Exchange Trading
Income
53.6 64.4 62.9 (17 ) (15 ) Treasury Management Fees
15.0 16.0 16.1 (6 ) (7 ) Security Commissions and Trading
Income
20.4 20.6 20.4 (1 ) — Other Operating Income
33.1 141.2 38.1 (77 ) (13 ) Investment Security Gains
(Losses), net
0.2 (2.4 ) — N/M N/M Total
Noninterest Income
$ 910.6 $ 1,017.0 $
886.6 (10 )% 3 %
Q3 2016 vs. Q2 2016
- Trust, investment and other servicing
fees increased primarily due to new business and favorable equity
markets, partially offset by the unfavorable impact of movements in
foreign exchange rates.
- Foreign exchange trading income
decreased due to lower client volumes and currency volatility.
- Other operating income in the prior
quarter included the pre-tax gain on the sale of 1.1 million Visa
Inc. Class B common shares, net of the valuation adjustment to
existing swap agreements, totaling $118.2 million, offset by $18.9
million of the total impairment charges and loss on sale related to
the decision to exit a portion of a non-strategic loan and lease
portfolio and impairment charges related to the residual value of
certain aircraft and rail cars. The current quarter included $5.4
million of impairment charges and loss on sales related to a
non-strategic loan and lease portfolio. In addition, the current
quarter was impacted by a $2.3 million charge related to the
valuation adjustment to existing Visa swap agreements.
Q3 2016 vs. Q3 2015
- Trust, investment and other servicing
fees increased primarily due to lower money market mutual fund fee
waivers and new business, partially offset by the unfavorable
impact of movements in foreign exchange rates.
- Foreign exchange trading income
decreased due to lower client volumes.
- Other operating income decreased
primarily due to $5.4 million of impairment charges and loss on
sales related to a non-strategic loan and lease portfolio.
Trust, Investment and Other Servicing Fees by Reporting
Segment
% Change vs.
($ In
Millions)
Q3 2016 Q2 2016 Q3 2015 Q2 2016 Q3 2015
C&IS Trust,
Investment and Other Servicing Fees Custody and Fund
Administration
$ 299.4 $ 293.3 $ 293.9 2 % 2 %
Investment Management
94.4 94.2 82.6 — 14 Securities Lending
23.1 26.8 19.8 (14 ) 17 Other
33.9 32.6
33.4 4 1 Total
$ 450.8 $
446.9 $ 429.7 1 % 5 % Money Market Mutual Fund
Fee Waivers
$ — $ 0.1 $ 12.2 (98 )% (100 )%
Q3 2016 vs. Q2 2016
- C&IS custody and fund
administration fees increased primarily due to new business,
partially offset by the unfavorable impact of movements in foreign
exchange rates.
- C&IS securities lending fees
decreased primarily reflecting lower spreads in the current quarter
due to the international dividend season that occurred in the prior
quarter.
Q3 2016 vs. Q3 2015
- C&IS custody and fund
administration fees increased primarily due to new business,
partially offset by the unfavorable impact of movements in foreign
exchange rates and equity markets.
- C&IS investment management fees
increased primarily due to lower money market mutual fund fee
waivers.
- C&IS securities lending fees
increased primarily reflecting higher spreads in the current
quarter.
% Change vs.
($ In
Millions)
Q3 2016 Q2 2016 Q3 2015 Q2 2016 Q3 2015
Wealth Management
Trust, Investment and Other Servicing Fees Central
$
135.6 $ 130.2 $ 126.8 4 % 7 % East
85.1 84.5 82.1 1 4
West
68.0 67.5 66.8 1 2 Global Family Office
48.8
48.1 43.7 2 12 Total
$ 337.5 $ 330.3 $ 319.4 2
% 6 % Money Market Mutual Fund Fee Waivers
$
0.2 $ 0.1 $ 15.3 113 % (99 )%
Q3 2016 vs. Q2 2016
- The increase in Wealth Management fees
across all regions was primarily attributable to favorable equity
markets and new business.
Q3 2016 vs. Q3 2015
- The increase in Wealth Management fees
across all regions was primarily attributable to lower money market
mutual fund fee waivers and favorable equity markets.
Net Interest Income
% Change vs.
($ In
Millions)
Q3 2016 Q2 2016 Q3 2015 Q2 2016 Q3 2015
Net Interest
Income Interest Income (FTE*)
$ 356.2 $ 351.6 $
311.8 1 % 14 % Interest Expense
46.1 45.0 36.8
2 25 Net Interest Income (FTE*)
$
310.1 $ 306.6 $ 275.0 1 % 13 %
Average Earning Assets
$ 107,844 $ 106,614 $ 100,809
1 % 7 % Net Interest Margin (FTE*)
1.14 % 1.16 % 1.08
% (*) Total revenue and net interest income presented on a
fully taxable equivalent (FTE) basis are non-generally accepted
accounting principle financial measures that facilitate the
analysis of asset yields. Please refer to the Reconciliation of
Reported Total Revenue and Net Interest Income section for further
detail.
Q3 2016 vs. Q2 2016
- Net interest income on an FTE basis in
the prior quarter included a pre-tax impairment charge related to
the residual value of certain aircraft and rail cars of $2.7
million. Excluding the impact of the prior-quarter pre-tax charge,
net interest income on an FTE basis was up slightly compared to the
prior quarter.
- Average earning assets increased
compared to the prior quarter, primarily resulting from higher
levels of securities, partially offset by a reduction in short-term
interest-bearing deposits and loans and leases.
- Excluding the impact of the prior
quarter pre-tax charge, the net interest margin on an FTE basis
decreased primarily reflecting lower yields on earning assets.
Q3 2016 vs. Q3 2015
- Net interest income on an FTE basis
increased compared to the prior-year quarter, primarily the result
of a higher net interest margin and an increase in earning
assets.
- Average earning assets increased
compared to the prior-year quarter, primarily resulting from higher
levels of securities. Earning asset growth was funded primarily by
a higher level of borrowed funds and interest-bearing and demand
deposits.
- The net interest margin on an FTE basis
was higher due to higher yields on earning assets driven by the
higher interest rate environment, partially offset by higher
premium amortization.
PROVISION FOR CREDIT LOSSES
As of and for the three-months ended, % Change vs.
($ In
Millions)
September 30,2016 June 30,2016 September 30,2015 June
30,2016 September 30,2015
Allowance for Credit Losses
Beginning Allowance for Credit Losses
$ 227.1 $ 232.6
$ 274.2 (2 )% (17 )% Provision for Credit Losses
(3.0
) (3.0 ) (10.0 ) — (70 ) Net Recoveries / (Charge-Offs)
0.8 (2.4 ) (9.4 ) (133 ) (109 ) Effect of Foreign Exchange
Rates
— (0.1 ) (0.1 ) (100 ) (100 ) Ending Allowance
for Credit Losses
$ 224.9 $ 227.1 $
254.7 (1 )% (12 )% Allowance assigned to: Loans and
Leases
$ 191.0 $ 192.0 $ 242.2 (1 )% (21 )% Undrawn
Commitments and
Standby Letters of Credit
33.9 35.1 12.5 (3 ) 171 Ending
Allowance for Credit Losses
$ 224.9 $ 227.1
$ 254.7 (1 )% (12 )%
Q3 2016 vs. Q2 2016
- The credit provision in the current
quarter was primarily driven by a reduction in outstanding loans
and improved credit quality in the residential real estate
portfolio, partially offset by an increase in the specific reserve
requirement for the commercial portfolio. The credit provision in
the prior quarter was driven by improved credit quality in the
commercial real estate portfolio, a reduction in outstanding loans,
and improved credit quality in the residential real estate
portfolio.
Q3 2016 vs. Q3 2015
- The credit provision in the prior-year
quarter was driven by improved credit quality across the loan
portfolio. The decrease in the allowance for credit losses from the
prior-year quarter was driven by improved credit quality across the
loan and lease portfolio. Nonperforming loans and leases in the
current quarter were $173.3 million compared to $198.6 million in
the prior-year quarter.
NONINTEREST EXPENSE
% Change vs.
($ In
Millions)
Q3 2016 Q2 2016 Q3 2015 Q2 2016 Q3 2015
Noninterest
Expense Compensation
$ 382.1 $ 389.5 $ 361.6 (2
)% 6 % Employee Benefits
73.2 72.2 69.8 1 5 Outside Services
157.6 159.0 158.3 (1 ) — Equipment and Software
114.5
118.0 113.6 (3 ) 1 Occupancy
44.2 45.3 43.7 (2 ) 1 Other
Operating Expense
71.4 141.0 65.3 (49 )
9 Total Noninterest Expense
$ 843.0 $
925.0 $ 812.3 (9 )% 4 % End of Period
Full-Time Equivalent Staff
16,900 16,600 16,000 2 % 6 %
Q3 2016 vs. Q2 2016
- Excluding severance and related charges
of $13.0 million in the prior quarter, compensation expense
increased $5.6 million due to current quarter severance charges,
performance-based incentive compensation, and higher salary
expense.
- Excluding severance and related charges
of $1.5 million in the prior quarter, employee benefits expense
increased due to higher medical expense.
- Excluding severance and related charges
of $0.7 million in the prior quarter, expense for outside services
remained relatively unchanged.
- Equipment and software expense
decreased compared to the prior quarter, primarily reflecting a
reduction in software amortization and software dispositions.
- Other operating expense in the prior
quarter included a pre-tax charge in connection with an agreement
to settle certain securities lending litigation of $46.5 million,
charges related to contractual modifications associated with
existing Corporate and Institutional Services clients of $18.6
million, and other personnel charges of $2.3 million. Excluding
these charges, other operating expense decreased compared to the
prior quarter, primarily due to a reduction in various other
miscellaneous expenses, partially offset by a $3.5 million charge
in connection with the settlement of the remaining securities
lending litigation, as well as higher FDIC deposit protection
expense.
Q3 2016 vs. Q3 2015
- Compensation expense increased compared
to the prior-year quarter, primarily reflecting higher salary
expense and increased performance-based incentive
compensation.
- Employee benefits expense increased
compared to the prior-year quarter, primarily related to higher
medical expense, partially offset by lower pension expense.
- Other operating expense increased
compared to the prior-year quarter, primarily due to a $3.5 million
charge in connection with the settlement of the remaining
securities lending litigation as well as higher FDIC deposit
protection expense.
PROVISION FOR INCOME TAX
% Change vs.
($ In
Millions)
Q3 2016 Q2 2016^ Q3 2015 Q2 2016 Q3 2015
Net Income
Income before Income Taxes
$ 373.7 $ 394.7 $ 353.2 (5
)% 6 % Provision for Income Taxes
116.1 131.7
118.6 (12 ) (2 ) Net Income
$ 257.6 $
263.0 $ 234.6 (2 )% 10 % Effective Tax Rate
31.1 % 33.4 % 33.6 % (^)
Q2 2016 has been adjusted to reflect the
early adoption of ASU 2016-09, “Compensation - Stock Compensation
(Topic 718): Improvements to Employee Share-Based Payment
Accounting.” See Adoption of the New Accounting Standard Related to
Share-Based Compensation section for additional details related to
the adjustment.
Q3 2016 vs. Q2 2016
- The decrease in the provision for
income taxes compared to the prior quarter was based primarily on
decreased income before income taxes and a lower effective tax rate
driven by changes in the earnings mix in tax jurisdictions in which
the Corporation operates. In addition, the lower tax rate can be
attributed to the Corporation adopting the new share-based
compensation accounting standard (ASU 2016-09) in the quarter,
which resulted in a net income tax benefit of $6.4 million. The
prior quarter income tax provision has been revised to include a
$2.3 million benefit as a result of the adoption of the new
standard. The increase in the net benefit in the current quarter
was driven by an increase in stock options being exercised.
Q3 2016 vs. Q3 2015
- The decrease in the provision for
income taxes compared to the prior-year quarter was based primarily
on a lower effective tax rate driven by changes in the earnings mix
in tax jurisdictions in which the Corporation operates, partially
offset by increased income before income taxes. The current quarter
also includes the impact of the adoption of the new share-based
compensation accounting standard, which provided a $6.4 million
benefit to the provision for income taxes compared to the
prior-year quarter.
STOCKHOLDERS' EQUITY
Total stockholders’ equity averaged $9.2 billion, up $520.1
million, or 6% from the prior-year quarter’s average of $8.7
billion. The increase was primarily attributable to the issuance of
preferred stock and earnings, 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 issued and sold 500,000 depositary shares, each
representing a 1/100th ownership interest in a share of Series D
Non-Cumulative Perpetual Preferred Stock for proceeds of $493.5
million, net of underwriting discounts, commissions and other
issuance costs. During the current quarter, the Corporation
declared cash dividends totaling $5.9 million to preferred
stockholders and cash dividends totaling $87.8 million to common
stockholders. During the three and nine months ended
September 30, 2016, the Corporation repurchased 951,401 shares
of common stock, including 42,012 shares withheld related to
share-based compensation, at a total cost of $64.9 million ($68.26
average price per share) and 5,231,246 shares of common stock,
including 429,855 shares withheld related to share-based
compensation, at a total cost of $346.1 million ($66.15 average
price per share), respectively.
CAPITAL RATIOS
The capital ratios of Northern Trust and its principal
subsidiary, The Northern Trust Company, remained strong at
September 30, 2016, 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.
September 30, 2016 June 30, 2016 September 30,
2015
Capital Ratios - Advanced Standardized Advanced
Standardized Advanced Standardized
Northern Trust
Corporation Approach Approach Approach Approach Approach
Approach Common Equity Tier 1
11.8 % 11.2
% 11.5 % 10.6 % 12.4 % 10.5 % Tier 1
13.1 %
12.3 % 12.0 % 11.0 % 13.0 % 11.0 % Total
14.5
% 14.0 % 13.5 % 12.7 % 14.8 % 12.8 % Tier 1
Leverage
7.9 % 7.9 % 7.4 % 7.4 % 7.8 %
7.8 % Supplementary Leverage(a)
6.6 % N/A 6.2
% N/A 6.4 % N/A September 30, 2016 June 30,
2016 September 30, 2015
Capital Ratios - Advanced
Standardized Advanced Standardized Advanced
Standardized
The Northern Trust Company Approach Approach
Approach Approach Approach Approach Common Equity Tier 1
12.0 % 11.1 % 11.6 % 10.4 % 12.0 % 9.9
% Tier 1
12.0 % 11.1 % 11.6 % 10.4 %
12.0 % 9.9 % Total
13.6 % 12.9 % 13.3 %
12.3 % 13.6 % 11.6 % Tier 1 Leverage
7.0 % 7.0
% 7.0 % 7.0 % 7.0 % 7.0 % Supplementary Leverage(a)
5.9 % N/A 5.8 % N/A 5.7 % N/A (a)
Effective January 1, 2018, the Northern Trust will be subject to a
minimum supplementary leverage ratio of 3 percent.
RECONCILIATION OF REPORTED TOTAL REVENUE
AND NET INTEREST INCOME TO FULLY TAXABLE EQUIVALENT
The following table presents a reconciliation of interest
income, net interest income, net interest margin, and total revenue
prepared in accordance with GAAP to such measures on an FTE basis,
which are non-GAAP financial measures. Management believes this
presentation provides a clearer indication of these financial
measures 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.
Three Months Ended September 30, 2016 June 30, 2016
September 30, 2015
($ In
Millions)
Reported FTE Adj. FTE Reported FTE Adj.
FTE Reported FTE Adj. FTE
Net Interest Income
Interest Income
$ 349.2 $ 7.0 $
356.2 $ 344.7 $ 6.9 $ 351.6 $ 305.7 $ 6.1 $ 311.8 Interest
Expense
46.1 — 46.1 45.0
— 45.0 36.8 — 36.8 Net
Interest Income
$ 303.1 $ 7.0
$ 310.1 $ 299.7 $ 6.9 $
306.6 $ 268.9 $ 6.1 $ 275.0 Net
Interest Margin
1.12 % 1.14 % 1.13 %
1.16 % 1.06 % 1.08 % Total Revenue
$ 1,213.7
$ 7.0 $ 1,220.7 $ 1,316.7 $ 6.9 $
1,323.6 $ 1,155.5 $ 6.1 $ 1,161.6
ADOPTION OF THE NEW ACCOUNTING STANDARD
RELATED TO SHARE-BASED COMPENSATION
In the current quarter, Northern Trust elected to early adopt
ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718):
Improvements to Employee Share-Based Payment Accounting,” effective
January 1, 2016. The primary impact of the adoption was the
recognition of excess tax benefits in the Corporation's provision
for income taxes rather than additional paid-in capital in common
equity for all periods in 2016.
Adoption of the new standard resulted in the recognition of
excess tax benefits in the Corporation's provision for income taxes
rather than additional paid-in capital in common equity of $6.4
million and $12.3 million for the three and nine months ended
September 30, 2016, respectively, and impacted the Corporation's
previously reported quarterly results as follows:
Q2 2016 Q1 2016
($ In Millions
except per share data)
As Reported As Adjusted As Reported As Adjusted
Provision for Income Taxes $ 134.0 $ 131.7 $ 117.4 $ 113.8 Net
Income 260.7 263.0 241.8 245.4 Earnings Allocated to Participating
Securities 4.7 4.8 4.1 4.1 Net Income Applicable to Common Stock
254.9 257.2 235.9 239.5 Effective Tax Rate 33.9 % 33.4 %
32.7 % 31.7 % Basic Earnings per Share $ 1.10 $ 1.11 $ 1.01
$ 1.03 Diluted Earnings per Share 1.09 1.10 1.01 1.03 Diluted
Weighted Average Shares Outstanding (000s) 229,197 229,280 229,980
229,798 Return on Average Common Equity 12.20 % 12.30 %
11.43 % 11.60 % Return on Average Assets 0.91 % 0.92 % 0.86 % 0.87
%
FORWARD-LOOKING STATEMENTS
This release may include statements which constitute
“forward-looking statements” within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are identified typically 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 include statements, other than those
related to historical facts, that relate to Northern Trust’s
financial results and outlook, capital adequacy, dividend policy,
anticipated expense levels, spending related to technology and
regulatory initiatives, risk management policies, contingent
liabilities, strategic initiatives, industry trends, and
expectations regarding the impact of recent legislation. These
statements are based on Northern Trust’s current beliefs and
expectations of future events or future results, and involve risks
and uncertainties that are difficult to predict and subject to
change. These statements are also 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 THIRD QUARTER EARNINGS CONFERENCE
CALL
Northern Trust’s third quarter earnings conference call will be
webcast on October 19, 2016. 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 3:00 p.m. CT on October 19, 2016, for
approximately four weeks. Participants will need Windows Media 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 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.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider
of wealth management, asset servicing, asset management and banking
to corporations, institutions, affluent families and individuals.
Founded in Chicago in 1889, Northern Trust has offices in the
United States in 19 states and Washington, D.C., and 22
international locations in Canada, Europe, the Middle East and the
Asia-Pacific region. As of September 30, 2016 Northern Trust
had assets under custody of US$6.7 trillion, and assets under
management of US$946 billion. For more than 125 years, Northern
Trust has earned distinction as an industry leader for exceptional
service, financial expertise, integrity and innovation. Visit
northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle
Street, Chicago, Illinois 60603 U.S.A., incorporated with limited
liability in the U.S. Global legal and regulatory information can
be found at http://www.northerntrust.com/disclosures.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial
Information)
STATEMENT OF
INCOME DATA
($ In Millions Except Per Share Data)
THIRD QUARTER 2016 2015 % Change (*)
Noninterest Income Trust, Investment and Other Servicing
Fees
$ 788.3 $ 749.1 5 % Foreign Exchange Trading
Income
53.6 62.9 (15 ) Treasury Management Fees
15.0
16.1 (6 ) Security Commissions and Trading Income
20.4 20.4
1 Other Operating Income
33.1 38.1 (14 ) Investment Security
Gains (Losses), net
0.2 — N/A Total
Noninterest Income
910.6 886.6 3
Net Interest
Income Interest Income
349.2 305.7 14 Interest Expense
46.1 36.8 25 Net Interest Income
303.1 268.9 13 Total Revenue
1,213.7 1,155.5 5
Provision for Credit Losses
(3.0 ) (10.0 ) (70
)
Noninterest Expense Compensation
382.1 361.6
6 Employee Benefits
73.2 69.8 5 Outside Services
157.6 158.3 — Equipment and Software
114.5 113.6 1
Occupancy
44.2 43.7 1 Other Operating Expense
71.4
65.3 9 Total Noninterest Expense
843.0
812.3 4 Income before Income Taxes
373.7 353.2 6
Provision for Income Taxes
116.1 118.6 (2 )
NET INCOME $ 257.6 $ 234.6 10 %
Dividends on Preferred Stock
$ 5.9 $ 5.8 — %
Earnings Allocated to Participating Securities
4.8 3.8 27
Earnings Allocated to Common and Potential Common Shares
246.9 225.0 10
Per Common Share Net Income
Basic
$ 1.09 $ 0.97 12 % Diluted
1.08 0.96 13
Average Common Equity
$ 8,552.5 $ 8,322.0 3 %
Return on Average Common Equity
11.71
%
10.91 % Return on Average Assets
0.88
%
0.85 % Cash Dividends Declared per Common Share
$
0.38 $ 0.36 6 % Average Common Shares Outstanding
(000s) Basic
226,540 232,232 Diluted
228,055 234,163
Common Shares Outstanding (EOP) (000s)
226,431 231,220 (*)
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 2016
2016^ % Change (*)
Noninterest Income Trust,
Investment and Other Servicing Fees
$ 788.3 $ 777.2 1
% Foreign Exchange Trading Income
53.6 64.4 (17 ) Treasury
Management Fees
15.0 16.0 (6 ) Security Commissions and
Trading Income
20.4 20.6 (1 ) Other Operating Income
33.1 141.2 (77 ) Investment Security Gains (Losses), net
0.2 (2.4 ) (106 ) Total Noninterest Income
910.6 1,017.0 (10 )
Net Interest Income
Interest Income
349.2 344.7 1 Interest Expense
46.1
45.0 2 Net Interest Income
303.1 299.7
1 Total Revenue
1,213.7 1,316.7 (8 ) Provision
for Credit Losses
(3.0 ) (3.0 ) —
Noninterest Expense Compensation
382.1 389.5 (2 )
Employee Benefits
73.2 72.2 1 Outside Services
157.6
159.0 (1 ) Equipment and Software
114.5 118.0 (3 ) Occupancy
44.2 45.3 (2 ) Other Operating Expense
71.4
141.0 (49 ) Total Noninterest Expense
843.0
925.0 (9 ) Income before Income Taxes
373.7
394.7 (5 ) Provision for Income Taxes
116.1 131.7
(12 )
NET INCOME $ 257.6 $ 263.0
(2 )% Dividends on Preferred Stock
$
5.9 $ 5.8 — % Earnings Allocated to Participating Securities
4.8 4.8 — Earnings Allocated to Common and Potential Common
Shares
246.9 252.4 (2 )
Per Common Share Net
Income Basic
$ 1.09 $ 1.11 (2 )% Diluted
1.08
1.10 (2 ) Average Common Equity
$ 8,552.5 $
8,404.2 2 % Return on Average Common Equity
11.71
%
12.30 % Return on Average Assets
0.88
%
0.92 % Cash Dividends Declared per Common Share
$
0.38 $ 0.36 6 % Average Common Shares Outstanding
(000s) Basic
226,540 227,536 Diluted
228,055 229,280
Common Shares Outstanding (EOP) (000s)
226,431 226,591 (*)
Percentage calculations are based on actual balances rather
than the rounded amounts presented in the Supplemental Consolidated
Financial Information. (^)
Q2 2016 has been adjusted to reflect the
early adoption of ASU 2016-09, “Compensation - Stock Compensation
(Topic 718): Improvements to Employee Share-Based Payment
Accounting.” See Adoption of the New Accounting Standard Related to
Share-Based Compensation section for additional details related to
the adjustment.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF
INCOME DATA
($ In Millions Except Per Share Data)
NINE MONTHS 2016^ 2015 % Change (*)
Noninterest Income Trust, Investment and Other Servicing
Fees
$ 2,313.7 $ 2,233.4 4 % Foreign Exchange Trading
Income
178.5 209.3 (15 ) Treasury Management Fees
47.2 48.5 (3 ) Security Commissions and Trading Income
59.9 60.2 — Other Operating Income
212.4 214.1 (1 )
Investment Security Gains (Losses), net
(1.9 ) (0.3 )
N/M Total Noninterest Income
2,809.8 2,765.2 2
Net
Interest Income Interest Income
1,045.9 893.3 17
Interest Expense
135.3 112.6 20 Net
Interest Income
910.6 780.7 17 Total Revenue
3,720.4 3,545.9 5 Provision for Credit Losses
(4.0 ) (24.5 ) (84 )
Noninterest
Expense Compensation
1,150.4 1,077.8 7 Employee Benefits
216.0 215.9 — Outside Services
466.5 440.6 6
Equipment and Software
346.7 338.3 3 Occupancy
130.4
129.7 — Other Operating Expense
286.8 253.5 13
Total Noninterest Expense
2,596.8 2,455.8
6 Income before Income Taxes
1,127.6
1,114.6 1 Provision for Income Taxes
361.6 380.1
(5 )
NET INCOME $ 766.0 $ 734.5
4 % Dividends on Preferred Stock
$ 17.6
$ 17.5 — % Earnings Allocated to Participating Securities
13.7 11.6 18 Earnings Allocated to Common and Potential
Common Shares
734.7 705.4 4
Per Common Share
Net Income Basic
$ 3.23 $ 3.03 7 % Diluted
3.21 3.00 7 Average Common Equity
$
8,420.2 $ 8,209.4 3 % Return on Average Common Equity
11.87
%
11.68 % Return on Average Assets
0.89
%
0.90 % Cash Dividends Declared per Common Share
$
1.10 $ 1.05 5 % Average Common Shares Outstanding
(000s) Basic
227,561 232,916 Diluted
229,041 234,891
Common Shares Outstanding (EOP) (000s)
226,431 231,220 (*)
Percentage calculations are based on actual balances rather
than the rounded amounts presented in the Supplemental Consolidated
Financial Information. (^)
Q2 2016 and Q1 2016 have been adjusted to
reflect the early adoption of ASU 2016-09, “Compensation - Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting.” See Adoption of the New Accounting Standard
Related to Share-Based Compensation section for additional details
related to the adjustment.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE
SHEET
($ In Millions) SEPTEMBER 30
2016 2015 % Change (*)
Assets Federal
Funds Sold and Securities Purchased under Agreements to Resell
$ 2,066.0 $ 1,255.6 65 % Interest-Bearing Due from
and Deposits with Banks (**)
9,037.5 10,899.3 (17 ) Federal
Reserve and Other Central Bank Deposits
22,195.0 27,663.8
(20 ) Securities U.S. Government
7,671.9 5,125.2 50
Obligations of States and Political Subdivisions
851.4 101.6
N/M Government Sponsored Agency
18,032.5 15,716.6 15 Other
(***)
18,488.3 16,425.0 13 Total
Securities
45,044.1 37,368.4 21 Loans and Leases
33,423.0 33,378.4 — Total Earning
Assets
111,765.6 110,565.5 1 Allowance for Credit Losses
Assigned to Loans and Leases
(191.0 ) (242.2 ) (21 )
Cash and Due from Banks and Other Central Bank Deposits (****)
1,724.7 2,109.8 (18 ) Buildings and Equipment
438.8
427.7 3 Client Security Settlement Receivables
1,984.5
1,918.4 3 Goodwill
524.4 529.7 (1 ) Other Assets
3,838.0 4,686.3 (18 )
Total Assets
$ 120,085.0 $ 119,995.2 — %
Liabilities and Stockholders’ Equity Interest-Bearing
Deposits Savings and Money Market
$ 14,779.2 $
15,153.5 (2 )% Savings Certificates and Other Time
1,507.7
1,457.1 3 Non-U.S. Offices - Interest-Bearing
54,024.3
53,823.8 — Total Interest-Bearing Deposits
70,311.2 70,434.4 — Short-Term Borrowings
4,682.7
4,908.6 (5 ) Senior Notes
1,496.4 1,497.3 — Long-Term Debt
1,400.9 1,394.3 — Floating Rate Capital Debt
277.4
277.3 — Total Interest-Related Funds
78,168.6 78,511.9 — Demand and Other Noninterest-Bearing
Deposits
29,160.1 29,501.5 (1 ) Other Liabilities
3,176.5 3,197.3 (1 ) Total Liabilities
110,505.2 111,210.7 (1 ) Common Equity
8,697.8
8,396.0 4 Preferred Equity
882.0 388.5 127
Total Equity
9,579.8 8,784.5 9
Total Liabilities and Stockholders’ Equity $
120,085.0 $ 119,995.2 — % (*)
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 sheets 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 sheets in our periodic filings with the SEC. (****)
Cash and Due from Banks and Other Central Bank Deposits includes
the non-interest-bearing component of Federal Reserve and Other
Central Bank Deposits as presented on the consolidated balance
sheets in our periodic filings with the SEC.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE
SHEET
($ In Millions) SEPTEMBER 30
JUNE 30 2016 2016 % Change (*)
Assets Federal Funds Sold and Securities Purchased under
Agreements to Resell
$ 2,066.0 $ 1,862.7 11 %
Interest-Bearing Due from and Deposits with Banks (**)
9,037.5 10,311.8 (12 ) Federal Reserve and Other Central
Bank Deposits
22,195.0 23,022.2 (4 ) Securities U.S.
Government
7,671.9 6,897.3 11 Obligations of States and
Political Subdivisions
851.4 720.7 18 Government Sponsored
Agency
18,032.5 17,445.5 3 Other (***)
18,488.3
16,397.6 13 Total Securities
45,044.1
41,461.1 9 Loans and Leases
33,423.0 34,557.1
(3 ) Total Earning Assets
111,765.6 111,214.9 — Allowance
for Credit Losses Assigned to Loans and Leases
(191.0
) (192.0 ) (1 ) Cash and Due from Banks and Other Central
Bank Deposits (****)
1,724.7 2,005.6 (14 ) Buildings and
Equipment
438.8 434.0 1 Client Security Settlement
Receivables
1,984.5 2,217.0 (10 ) Goodwill
524.4
527.8 (1 ) Other Assets
3,838.0 5,302.3 (28 )
Total Assets $ 120,085.0 $ 121,509.6
(1 )%
Liabilities and Stockholders’ Equity
Interest-Bearing Deposits Savings and Money Market
$
14,779.2 $ 15,669.8 (6 )% Savings Certificates and Other
Time
1,507.7 1,403.1 7 Non-U.S. Offices - Interest-Bearing
54,024.3 50,547.5 7 Total
Interest-Bearing Deposits
70,311.2 67,620.4 4 Short-Term
Borrowings
4,682.7 6,909.1 (32 ) Senior Notes
1,496.4
1,496.2 — Long-Term Debt
1,400.9 1,418.8 (1 ) Floating Rate
Capital Debt
277.4 277.4 — Total
Interest-Related Funds
78,168.6 77,721.9 1 Demand and Other
Noninterest-Bearing Deposits
29,160.1 31,466.5 (7 ) Other
Liabilities
3,176.5 3,369.7 (6 ) Total
Liabilities
110,505.2 112,558.1 (2 ) Common Equity
8,697.8 8,563.0 2 Preferred Equity
882.0 388.5
127 Total Equity
9,579.8 8,951.5
7
Total Liabilities and Stockholders’ Equity $
120,085.0 $ 121,509.6 (1 )% (*)
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 sheets 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 sheets in our periodic filings with the SEC. (****)
Cash and Due from Banks and Other Central Bank Deposits includes
the non-interest-bearing component of Federal Reserve and Other
Central Bank Deposits as presented on the consolidated balance
sheets in our periodic filings with the SEC.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE
SHEET
($ In Millions) THIRD QUARTER
2016 2015 % Change (*)
Assets Federal
Funds Sold and Securities Purchased under Agreements to Resell
$ 1,613.2 $ 1,080.4 49 % Interest-Bearing Due from
and Deposits with Banks (**)
8,232.2 11,229.7 (27 ) Federal
Reserve and Other Central Bank Deposits
20,829.6 17,319.7 20
Securities U.S. Government
7,292.5 5,034.6 45 Obligations of
States and Political Subdivisions
734.7 103.3 N/M Government
Sponsored Agency
17,583.7 16,198.2 9 Other (***)
17,647.8 16,705.0 6 Total Securities
43,258.7 38,041.1 14 Loans and Leases
33,910.1
33,138.3 2 Total Earning Assets
107,843.8
100,809.2 7 Allowance for Credit Losses Assigned to Loans and
Leases
(192.9 ) (256.0 ) (25 ) Cash and Due from
Banks and Other Central Bank Deposits (****)
1,933.8 2,683.5
(28 ) Buildings and Equipment
441.3 435.6 1 Client Security
Settlement Receivables
1,200.7 1,031.8 16 Goodwill
525.5 532.4 (1 ) Other Assets
4,630.3 4,687.6
(1 )
Total Assets $ 116,382.5 $
109,924.1 6 %
Liabilities and Stockholders’
Equity Interest-Bearing Deposits Savings and Money Market
$ 15,025.7 $ 15,168.4 (1 )% Savings Certificates and
Other Time
1,450.3 1,487.0 (2 ) Non-U.S. Offices -
Interest-Bearing
51,468.6 50,107.9 3
Total Interest-Bearing Deposits
67,944.6 66,763.3 2
Short-Term Borrowings
6,961.0 3,878.5 79 Senior Notes
1,496.3 1,497.2 — Long-Term Debt
1,406.9 1,374.3 2
Floating Rate Capital Debt
277.4 277.3 —
Total Interest-Related Funds
78,086.2 73,790.6 6
Demand and Other Noninterest-Bearing Deposits
25,829.3
24,263.7 6 Other Liabilities
3,236.4 3,159.3 2
Total Liabilities
107,151.9 101,213.6 6 Common Equity
8,552.5 8,322.0 3 Preferred Equity
678.1 388.5
75 Total Equity
9,230.6 8,710.5
6
Total Liabilities and Stockholders’ Equity $
116,382.5 $ 109,924.1 6 % (*)
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 sheets 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 sheets in our periodic filings with the SEC. (****)
Cash and Due from Banks and Other Central Bank Deposits includes
the non-interest-bearing component of Federal Reserve and Other
Central Bank Deposits as presented on the consolidated balance
sheets in our periodic filings with the SEC.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE
SHEET
THIRD SECOND
($ In Millions) QUARTER
QUARTER 2016 2016 % Change (*)
Assets Federal Funds Sold and Securities Purchased under
Agreements to Resell
$ 1,613.2 $ 1,915.2 (16 )%
Interest-Bearing Due from and Deposits with Banks (**)
8,232.2 9,827.9 (16 ) Federal Reserve and Other Central Bank
Deposits
20,829.6 19,657.8 6 Securities U.S. Government
7,292.5 6,875.1 6 Obligations of States and Political
Subdivisions
734.7 470.2 56 Government Sponsored Agency
17,583.7 17,347.0 1 Other (***)
17,647.8
16,064.2 10 Total Securities
43,258.7 40,756.5
6 Loans and Leases
33,910.1 34,456.1 (2 )
Total Earning Assets
107,843.8 106,613.5 1 Allowance for
Credit Losses Assigned to Loans and Leases
(192.9 )
(195.4 ) (1 ) Cash and Due from Banks and Other Central Bank
Deposits (****)
1,933.8 2,093.9 (8 ) Buildings and Equipment
441.3 439.9 — Client Security Settlement Receivables
1,200.7 1,143.0 5 Goodwill
525.5 531.2 (1 ) Other
Assets
4,630.3 4,287.7 8
Total
Assets $ 116,382.5 $ 114,913.8 1 %
Liabilities and Stockholders’ Equity Interest-Bearing
Deposits Savings and Money Market
$ 15,025.7 $
15,041.3 — % Savings Certificates and Other Time
1,450.3
1,405.0 3 Non-U.S. Offices - Interest-Bearing
51,468.6
50,443.8 2 Total Interest-Bearing Deposits
67,944.6 66,890.1 2 Short-Term Borrowings
6,961.0
6,195.0 12 Senior Notes
1,496.3 1,496.1 — Long-Term Debt
1,406.9 1,403.2 — Floating Rate Capital Debt
277.4
277.4 — Total Interest-Related Funds
78,086.2 76,261.8 2 Demand and Other Noninterest-Bearing
Deposits
25,829.3 26,718.0 (3 ) Other Liabilities
3,236.4 3,141.3 3 Total Liabilities
107,151.9 106,121.1 1 Common Equity
8,552.5 8,404.2 2
Preferred Equity
678.1 388.5 75 Total
Equity
9,230.6 8,792.7 5
Total
Liabilities and Stockholders’ Equity $ 116,382.5
$ 114,913.8 1 % (*) 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 sheets 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 sheets in our
periodic filings with the SEC. (****) Cash and Due from
Banks and Other Central Bank Deposits includes the
non-interest-bearing component of Federal Reserve and Other Central
Bank Deposits as presented on the consolidated balance sheets in
our periodic filings with the SEC.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
QUARTERLY TREND
DATA
2016 2015
($ In Millions
Except Per Share Data)
QUARTERS QUARTERS THIRD SECOND ^ FIRST ^
FOURTH THIRD
Net Income
Summary
Trust, Investment and Other Servicing Fees
$ 788.3 $ 777.2 $ 748.2 $ 747.1 $ 749.1 Other
Noninterest Income
122.3 239.8 134.0 120.2 137.5 Net
Interest Income
303.1 299.7 307.8 289.4
268.9 Total Revenue
1,213.7 1,316.7 1,190.0
1,156.7 1,155.5 Provision for Credit Losses
(3.0 )
(3.0 ) 2.0 (18.5 ) (10.0 ) Noninterest Expense
843.0
925.0 828.8 824.8 812.3 Income before
Income Taxes
373.7 394.7 359.2 350.4 353.2 Provision for
Income Taxes
116.1 131.7 113.8 111.1
118.6 Net Income
$ 257.6 $ 263.0
$ 245.4 $ 239.3 $ 234.6
Per Common
Share
Net Income - Basic
$ 1.09 $ 1.11 $ 1.03 $ 1.00 $ 0.97
- Diluted
1.08 1.10 1.03 0.99 0.96 Cash Dividends Declared per Common
Share
0.38 0.36 0.36 0.36 0.36 Book Value (EOP)
38.41
37.79 37.01 36.27 36.31 Market Value (EOP)
67.99 66.26 65.17
72.09 68.16
Financial
Ratios
Return on Average Common Equity
11.71
%
12.30 % 11.60 % 11.14 % 10.91 % Return on Average Assets
0.88 0.92 0.87 0.84 0.85 Net Interest Margin (GAAP)
1.12 1.13 1.18 1.09 1.06 Net Interest Margin (FTE)
1.14 1.16 1.21 1.11 1.08
Capital
Ratios
Standardized Approach Common Equity Tier 1
11.2
%
10.6 % 10.6 % 10.8 % 10.4 % Tier 1
12.3 11.0 11.1 11.4 11.0
Total
14.0 12.7 12.8 13.2 12.8 Tier 1 Leverage
7.9
7.4 7.4 7.5 7.8 Advanced Approach Common Equity Tier 1
11.8
%
11.5 % 11.6 % 11.9 % 12.4 % Tier 1
13.1 12.0 12.1 12.5 13.0
Total
14.5 13.5 13.6 14.2 14.8 Tier 1 Leverage
7.9
7.4 7.4 7.5 7.8 Supplementary Leverage
6.6 6.2 6.1 6.2 6.4
Assets Under
Custody ($ In Billions) - EOP
Corporate & Institutional Services
$ 6,173.6 $
5,838.6 $ 5,700.3 $ 5,565.8 $ 5,460.6 Wealth Management
533.2 514.2 511.1 506.3 495.8
Total Assets Under Custody
$ 6,706.8 $
6,352.8 $ 6,211.4 $ 6,072.1 $ 5,956.4
Assets Under
Management ($ In Billions) - EOP
Corporate & Institutional Services
$ 703.6 $
672.3 $ 669.9 $ 648.0 $ 661.5 Wealth Management
242.2
233.9 230.1 227.3 225.3 Total Assets
Under Management
$ 945.8 $ 906.2 $
900.0 $ 875.3 $ 886.8
Asset Quality ($
In Millions) - EOP
Nonperforming Loans and Leases
$ 173.3 $ 152.2 $
164.0 $ 180.1 $ 198.6 Other Real Estate Owned (OREO)
7.7
14.2 10.4 8.2 8.9 Total
Nonperforming Assets
$ 181.0 $ 166.4 $
174.4 $ 188.3 $ 207.5 Nonperforming Assets /
Loans and Leases and OREO
0.54
%
0.48 % 0.51 % 0.57 % 0.62 % Gross Charge-offs
$ 3.0 $
4.9 $ 5.3 $ 5.2 $ 11.9 Less: Gross Recoveries
3.8 2.5
2.6 2.3 2.5 Net (Recoveries) /
Charge-offs
$ (0.8 ) $ 2.4 $ 2.7
$ 2.9 $ 9.4 Net Charge-offs (Annualized) to Average
Loans and Leases
(0.01
)%
0.03 % 0.03 % 0.03 % 0.11 % Allowance for Credit Losses Assigned to
Loans and Leases
$ 191.0 $ 192.0 $ 195.6 $ 193.8 $
242.2 Allowance to Nonperforming Loans and Leases
1.1
x 1.3 x 1.2 x 1.1 x 1.2 x Allowance for Other Credit-Related
Exposures
$ 33.9 $ 35.1 $ 37.0 $ 39.5 $ 12.5 (^)
Q2 2016 and Q1 2016 have been adjusted to
reflect the early adoption of ASU 2016-09, “Compensation - Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting.” See Adoption of the New Accounting Standard
Related to Share-Based Compensation section for additional details
related to the adjustment.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161019005687/en/
Northern Trust CorporationInvestor Contact:Mark Bette(312)
444-2301Mark_Bette@ntrs.comorMedia Contact:Doug Holt(312)
557-1571Doug_Holt@ntrs.comhttps://www.northerntrust.com
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