The following excerpt is from the company's SEC filing.

$234.6

MILLION, EARNINGS PER COMMON SHARE OF

INCREASED 14%

TOTAL REVENUE INCREASED

OVER THE PRIOR-YEAR QUARTER

RETURNED

$225.5

MILLION IN CAPITAL TO COMMON STOCKHOLDERS

(Chicago,

October 21, 2015

) Northern Trust Corporation today reported

quarter net income per diluted common share of

, compared to

in the

quarter of

second

. Net income was

$234.6 million

$204.5 million

in the prior-year quarter and

$269.2 million

in the prior quarter. Return on ave rage common equity was

The prior quarter included a pre-tax gain on the sale of

1.0 million

Visa Inc. Class B common shares totaling

$99.9 million

voluntary cash contributions to certain constant dollar net-asset-value (NAV) funds of

$45.8 million

and the impairment of the residual value of certain aircraft under leveraged lease agreements of

$17.8 million

Excluding these items, net income per diluted common share, net income and return on average common equity for the prior quarter were

$246.7 million

, respectively.

THIRD QUARTER 2015 PERFORMANCE (continued)

“We continue to perform well in a challenging environment, with net income and earnings per share exhibiting strong growth of

, respectively. Noninterest income and net interest income grew

, respectively. Expense growth of

reflects continued investments in our business as well as ongoing support of regulatory requirements and technology initiatives.

In the third quarter, we returned

$225.5 million

to common stockholders through dividends and stock repurchases, demonstrating our continuing commitment to returning capital to our common stockholders,” said Frederick H. Waddell, Chairman and Chief Executive Officer.

PERFORMANCE VS.

Net income per diluted common share was

, up from

in the prior-year quarter.

Revenue of

$1.16 billion

was up

$76.6 million

, from

$1.08 billion

in the prior-year quarter, primarily reflecting higher trust, investment and other servicing fees, foreign exchange trading income and security commissions and trading income.

Trust, investment and other servicing fees were

$749.1 million

$30.9 million

$718.2 million

in the prior-year quarter, primarily reflecting new business.

Assets under custody and assets under management are the primary drivers of the Corporation’s trust, investment and other servicing fees. The following table presents the Corporation’s assets under custody and assets under management by reporting segment.

($ In Billions)

September 30,

June 30,

% Change Q3-15/Q2-15

% Change Q3-15/Q3-14

Assets Under Custody

   Corporate & Institutional Services

5,460.6

5,652.6

5,403.1

   Wealth Management

     Total Assets Under Custody

5,956.4

6,177.0

5,910.3

Assets Under Management

     Total Assets Under Management

THIRD QUARTER 2015 PERFORMANCE VS. THIRD QUARTER 2014 (continued)

Corporate & Institutional Services (C&IS) trust, investment and other servicing fees increased

$29.8 million

, to $

429.7 million

from the prior-year quarter’s

$399.9 million

($ In Millions)

Q3 2015

Q3 2014

Change Q3 2015 from Q3 2014

C&IS Trust, Investment and Other Servicing Fees

Custody and Fund Administration

Investment Management

Securities Lending

Custody and fund administration fees, the largest component of C&IS fees, increased

, driven by new business and higher equity markets, partially offset by the unfavorable impact of movements in foreign exchange rates. Investment management fees increased

due to new business and lower money market mutual fund fee waivers. Money market mutual fund fee waivers in C&IS totaled

$12.2 million

in the current quarter compared to

$16.7 million

in the prior-year quarter. Securities lending decreased

due to changes in fee arrangements.

Wealth Management trust, investment and other servicing fees totaled

$319.4 million

, increasing

$1.1 million

$318.3 million

Wealth Management Trust, Investment and Other Servicing Fees

Central

Global Family Office

Global Family Office fees increased 15%, primarily attributable to new business, while fees across the regions decreased 1% to 2%. Money market mutual fund fee waivers in Wealth Management totaled

$15.3 million

$16.9 million

Foreign exchange trading income totaled

$62.9 million

$16.5 million

, compared with

$46.4 million

in the prior-year quarter. The increase was primarily due to higher currency volatility as compared to the prior-year quarter.

Security commissions and trading income totaled

$20.4 million

$6.2 million

$14.2 million

in the prior-year quarter. The increase was primarily attributable to higher income from interest rate protection products sold to clients.

Other operating income totaled

$38.1 million

$34.1 million

, reflecting increases in various categories.

Net interest income on an FTE basis totaled

$275.0 million

$18.8 million

$256.2 million

in the prior-year quarter. The increase was primarily the result of growth in earning assets and a higher net interest margin. Earning assets for the quarter averaged

$100.8 billion

$3.8 billion

$97.0 billion

in the prior-year quarter, resulting from higher levels of securities and loans. Earning asset growth was funded by a higher level of demand deposits. The net interest margin increased to

in the prior-year quarter, primarily reflecting a lower cost of interest-related funds, partially offset by lower yields on certain categories of earning assets.

The provision for credit losses was a credit of

$10.0 million

in the current quarter, reflecting improved credit quality. There was no provision for credit losses recorded in the prior-year quarter. Net charge-offs in the current quarter were

$9.4 million

, resulting from charge-offs of

$11.9 million

and recoveries of

$2.5 million

. The prior-year quarter included

$5.2 million

of net charge-offs, resulting from

$8.6 million

of charge-offs and

$3.4 million

of recoveries. Nonperforming assets of

$207.5 million

$231.2 million

The table below provides information regarding nonperforming assets, the allowance for credit losses and associated ratios.

Nonperforming Assets

   Nonperforming Loans and Leases

   Other Real Estate Owned

 Total Nonperforming Assets

Allowance for Credit Losses

Allowance for Credit Losses Assigned to:

Undrawn Loan Commitments and Standby Letters of credit

Total Allowance for Credit Losses

Ratios

Nonperforming Loans and Leases to Total Loans and Leases

Allowance for Credit Losses Assigned to Loans and Leases to Total Loans and Leases

Allowance for Credit Losses Assigned to Loans and Leases to Nonperforming Loans and Leases

Noninterest expense totaled

$812.3 million

in the current quarter, up

$37.6 million

$774.7 million

in the prior-year quarter, attributable to higher outside services, compensation and equipment and software expenses.

Compensation expense, the largest component of noninterest expense

, equaled

$361.6 million

$13.6 million

$348.0 million

. The increase primarily reflects higher staff levels, base pay adjustments and performance-based compensation, partially offset by the favorable impact of movements in foreign exchange rates.

Staff on a full-time equivalent basis at

September 30, 2015

totaled approximately

16,000

September 30, 2014

Employee benefit expense totaled

$69.8 million

in the current quarter, down

slightly from

$70.6 million

, reflecting lower expense associated with employee medical benefits offset by higher pension expense.

Expense associated with outside services totaled

$158.3 million

$15.9 million

$142.4 million

primarily reflecting higher consulting expense due to regulatory related spend and increased technical services expense, partially offset by lower third-party advisory and sub-custodian expenses

Equipment and software expense totaled

$113.6 million

$13.1 million

$100.5 million

reflecting higher software-related costs.

Occupancy expense equaled

$43.7 million

, relatively unchanged from

$43.8 million

Other operating expense totaled

$65.3 million

$69.4 million

, reflecting decreases in various categories.

The provision for income taxes was

$118.6 million

in the current quarter, representing an effective tax rate of

. The provision for income taxes in the prior-year quarter was

$99.7 million

SECOND

in the current quarter, compared to

. Net income totaled

Revenue was

$1.26 billion

in the prior quarter. Noninterest income totaled

$886.6 million

in the current quarter, down

$118.1 million

$1.00 billion

in the prior quarter. The prior quarter included a

gain on the sale of a portion of the Visa Inc. Class B common shares held by the Corporation. The remainder of the decrease reflected lower foreign exchange trading income and trust, investment and other servicing fees. Net interest income on an FTE basis was

$17.4 million

$257.6 million

. The prior quarter net interest income included the

impairment of the residual value of certain aircraft under leveraged lease agreements. Excluding the impairment, net interest income on an FTE basis was

$275.4 million

Trust, investment and other servicing fees totaled

$7.7 million

$756.8 million

in the prior quarter, primarily attributable to lower securities lending fees and unfavorable equity markets.

THIRD QUARTER 2015 PERFORMANCE VS. SECOND QUARTER 2015 (continued)

C&IS trust, investment and other servicing fees totaled

$429.7 million

, down slightly from

$432.0 million

Q2 2015

Change Q3 2015 from Q2 2015

C&IS custody and fund administration fees remained relatively unchanged from the prior quarter. Investment management fees increased

in the current quarter, primarily attributable to lower money market mutual fund fee waivers. Money market mutual fund fee waivers in C&IS totaled

in the current quarter compared with

in the prior quarter. Securities lending decreased

, primarily reflecting lower spreads due to the international dividend season that occurred in the prior quarter.

Wealth Management trust, investment and other servicing fees were

$5.4 million

$324.8 million

The decreased Wealth Management fees were primarily due to unfavorable equity markets in the current quarter. Money market mutual fund fee waivers in Wealth Management totaled

$14.6 million

Foreign exchange trading income in the current quarter decreased

$74.8 million

in the prior quarter, due to lower client volumes and lower currency volatility.

Other operating income totaled

$99.3 million

$137.4 million

Visa Inc. Class B common shares held by the Corporation. Excluding the gain, other operating income remained relatively consistent with the prior quarter.

impairment of the residual value of certain aircraft under leveraged lease agreements. Excluding the impairment, net interest income remained relatively unchanged compared to the prior quarter. Earning assets averaged

$3.0 billion

$103.8 billion

in the prior quarter. The net interest margin increased to

in the prior quarter. Excluding the impairment, the net interest margin was

in the prior quarter. The increase excluding the impairment was primarily driven by a decrease in lower yielding money market assets.

in both the current quarter and in the prior quarter. Net charge-offs in the current quarter totaled

of recoveries, compared to

$2.6 million

of net charge-offs in the prior quarter resulting from

$6.1 million

$3.5 million

of recoveries. Nonperforming assets of

$218.8 million

$42.2 million

$854.5 million

charge related to voluntary cash contributions to certain constant dollar NAV funds. Excluding this charge, noninterest expense increased slightly from

$808.7 million

Compensation expense in the current quarter totaled

$361.9 million

Employee benefit expense totaled

from the prior quarter, primarily reflecting decreased payroll tax expense and lower expense associated with employee medical benefits.

Expense for outside services totaled

in the current quarter, an increase of

$11.1 million

$147.2 million

in the prior quarter, primarily reflecting higher consulting expense due to regulatory related spend and increased technical services expense.

Equipment and software expense in the current quarter totaled

$114.4 million

Other operating expense totaled

for the current quarter, down

$49.5 million

$114.8 million

in the prior quarter. The prior quarter included a charge of

related to voluntary cash contributions to certain constant dollar NAV funds. Excluding this charge, other operating expense decreased

, primarily due to lower charitable contributions.

The provision for income taxes in the current quarter totaled

, representing an effective tax rate of

. The provision for income taxes in the prior quarter totaled

$142.2 million

STOCKHOLDERS' EQUITY

Total stockholders’ equity averaged

$8.71 billion

$425.0 million

from the prior-year quarter’s average of

$8.29 billion

was primarily attributable to 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 declared cash dividends totaling

$5.8 million

to preferred stockholders and cash dividends totaling

$85.0 million

to common stockholders. During the

three and nine

months ended

the Corporation repurchased

1,914,950

shares of common stock at a cost of

$140.5 million

$73.37

average price per share) and

4,766,083

$344.4 million

$72.27

average price per share), respectively.    

CAPITAL RATIOS

The capital ratios of Northern Trust and its principal subsidiary bank, The Northern Trust Company,

remained strong at

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.

June 30, 2015

Capital Ratios -

Advanced Approach

Standardized Approach (a)

Common Equity Tier 1

Tier 1 Leverage

Supplementary Leverage (b)

In 2014, Standardized Approach risk-weighted assets were determined by Basel I requirements. Effective with the first quarter of 2015, risk-weighted assets are calculated in accordance with the Basel III Standardized Approach final rules.

Effective January 1, 2018, advanced approaches institutions, such as the Corporation, will be subject to a minimum supplementary leverage ratio of 3 percent.

RECONCILIATION OF REPORTED NET INTEREST INCOME TO FULLY TAXABLE EQUIVALENT

Net interest income stated on an FTE basis is a non-GAAP financial measure that facilitates the analysis of asset yields. Management believes an FTE presentation provides a clearer indication of net interest margins 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. The table below presents a reconciliation of interest income and net interest income prepared in accordance with GAAP to interest income and net interest income on an FTE basis.

Three Months Ended

June 30, 2015

Reported

FTE Adj.

Net Interest Income

Interest Expense

Net Interest Margin

FORWARD-LOOKING STATEMENTS

This release may include forward-looking statements concerning Northern Trust’s financial results and outlook, capital adequacy, dividend policy, anticipated expense levels and technology spending, risk management policies, contingent liabilities, strategic initiatives, industry trends, and expectations regarding the impact of recent legislation.  Forward-looking statements are typically identified 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 are Northern Trust’s current estimates or expectations of future events or future results,

and involve risks and uncertainties that are difficult to predict.  These statements are 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

quarter earnings conference call will be webcast on

. 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 2:00 p.m. CT on

, 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.

NORTHERN TRUST CORPORATION

(Supplemental Consolidated Financial Information)

STATEMENT OF INCOME DATA

($ In Millions Except Per Share Data)

% Change (*)

Noninterest Income

     Trust, Investment and Other Servicing Fees

     Foreign Exchange Trading Income

     Treasury Management Fees

     Security Commissions and Trading Income

     Other Operating Income

     Investment Security Gains, net

Total Noninterest Income

Net Interest Income

      Interest Income

      Interest Expense

Total Revenue

1,155.5

1,078.9

Provision for Credit Losses

Noninterest Expense

     Compensation

     Employee Benefits

     Outside Services

     Equipment and Software

     Occupancy

     Other Operating Expense

Total Noninterest Expense

Income before Income Taxes

Provision for Income Taxes

NET INCOME

Dividends on Preferred Stock

Earnings Allocated to Participating Securities

Earnings Allocated to Common and Potential Common Shares

Per Common Share

Net Income

     Basic

     Diluted

Average Common Equity

8,322.0

8,044.7

Return on Average Common Equity

Return on Average Assets

Cash Dividends Declared per Common Share

Average Common Shares Outstanding (000s)

232,232

235,701

234,163

237,737

Common Shares Outstanding (EOP) (000s)

231,220

235,505

(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.

     Investment Security Losses, net

1,004.7

       Interest Income

       Interest Expense

1,255.9

8,219.4

233,149

235,233

232,853

NINE MONTHS

2,233.4

2,104.6

2,765.2

2,459.5

3,545.9

3,201.1

1,077.8

1,062.2

2,455.8

2,353.7

1,114.6

8,209.4

7,973.1

232,916

236,302

234,891

238,176

BALANCE SHEET

SEPTEMBER 30

Federal Funds Sold and Securities Purchased under Agreements to Resell

1,255.6

1,010.0

Interest-Bearing Due from and Deposits with Banks (**)

16,311.1

15,334.5

Federal Reserve Deposits

22,252.0

21,328.0

       U.S. Government

5,125.2

3,409.6

       Obligations of States and Political Subdivisions

       Government Sponsored Agency

15,716.6

16,197.2

       Other (***)

16,425.0

12,991.2

Total Securities

37,368.4

32,741.4

33,378.4

30,719.9

Total Earning Assets

110,565.5

101,133.8

(242.2

(269.4

Cash and Due from Banks

2,109.8

2,918.9

Buildings and Equipment

Client Security Settlement Receivables

1,918.4

1,538.6

Goodwill

Other Assets

4,686.3

4,857.1

119,995.2

111,153.7

Liabilities and Stockholders' Equity

Interest-Bearing Deposits

       Savings and Money Market

15,153.5

14,525.1

       Savings Certificates and Other Time

1,457.1

1,869.0

       Non-U.S. Offices - Interest-Bearing

53,823.8

50,586.1

Total Interest-Bearing Deposits

70,434.4

66,980.2

Short-Term Borrowings

4,908.6

3,411.5

Senior Notes

1,497.3

1,496.9

Long-Term Debt

1,394.3

1,598.7

Floating Rate Capital Debt

Total Interest-Related Funds

78,511.9

73,764.5

Demand and Other Noninterest-Bearing Deposits

29,501.5

24,742.3

Other Liabilities

3,197.3

4,104.3

Total Liabilities

111,210.7

102,611.1

8,396.0

8,154.1

Preferred Equity

Total Equity

8,784.5

8,542.6

Total Liabilities and Stockholders' Equity

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 sheet 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 consolidated balance sheet in our periodic filings with the SEC.

JUNE 30

1,020.0

18,909.6

17,488.7

5,018.8

16,776.9

17,289.6

39,193.2

32,953.8

109,565.3

(257.3

3,893.6

2,034.2

3,736.3

119,942.9

15,782.4

1,540.5

52,909.9

70,232.8

3,704.0

1,497.2

1,362.3

77,073.6

30,455.1

3,664.9

111,193.6

8,360.8

8,749.3

AVERAGE BALANCE SHEET

1,080.4

15,828.1

16,288.3

12,721.3

15,914.3

5,034.6

3,031.9

16,198.2

17,385.6

16,705.0

13,019.4

38,041.1

33,585.4

33,138.3

30,256.4

100,809.2

96,967.5

(256.0

(273.4

2,683.5

2,783.0

1,031.8

4,687.6

3,959.3

109,924.1

105,244.7

15,168.4

15,019.0

1,487.0

1,902.9

50,107.9

48,725.5

66,763.3

65,647.4

3,878.5

4,860.3

1,496.8

1,374.3

1,636.5

73,790.6

73,918.2

24,263.7

20,069.8

3,159.3

2,971.2

101,213.6

96,959.2

8,710.5

8,285.5

1,041.9

16,920.6

14,992.1

4,789.1

16,821.7

16,207.0

37,930.0

32,921.4

103,806.0

(260.0

2,142.9

4,079.6

111,691.1

15,705.4

1,779.5

49,291.8

66,776.7

4,404.8

1,497.1

1,380.2

74,336.1

25,558.4

3,188.7

103,083.2

8,607.9

QUARTERLY TREND DATA

QUARTERS

FOURTH

Net Income Summary

   Other Noninterest Income

   Net Interest Income

     Total Revenue

1,134.5

1,130.1

   Provision for Credit Losses

   Noninterest Expense

     Income before Income Taxes

   Provision for Income Taxes

     Net Income

   Net Income - Basic

                      - Diluted

   Cash Dividends Declared per Common Share

   Book Value (EOP)

   Market Value (EOP)

Financial Ratios

   Return on Average Common Equity

   Return on Average Assets

   Net Interest Margin (GAAP)

   Net Interest Margin (FTE)

   Standardized Approach

       Common Equity Tier 1

       Tier 1

       Total

       Tier 1 Leverage

   Advanced Approach

       Supplementary Leverage

Assets Under Custody ($ In Billions) - EOP

5,566.2

5,453.1

6,090.8

5,968.8

Assets Under Management ($ In Billions) - EOP

Asset Quality ($ In Millions) - EOP

   Other Real Estate Owned (OREO)

     Total Nonperforming Assets

   Nonperforming Assets / Loans and Leases and OREO

   Gross Charge-offs

   Less: Gross Recoveries

     Net Charge-offs

   Net Charge-offs (Annualized) to Average Loans and Leases

   Allowance for Credit Losses Assigned to Loans and Leases

   Allowance to Nonperforming Loans and Leases

        1.2x

   Allowance for Other Credit-Related Exposures

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. Northern Trust Corporation next reports earnings on October 21, 2015.

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