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Actionable news in NTRS: Northern Trust Corporation,

Northern Trust Corporation Reports QUARTER NET INCOME

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...


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