Northern Trust Corp. (NTRS, Financial) filed Quarterly Report for the period ended 2010-06-30.
Northern Trust Corp. has a market cap of $11.49 billion; its shares were traded at around $47.49 with a P/E ratio of 16 and P/S ratio of 3. The dividend yield of Northern Trust Corp. stocks is 2.3%. Northern Trust Corp. had an annual average earning growth of 1% over the past 10 years.NTRS is in the portfolios of Private Capital of Private Capital Management, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Pioneer Investments, Manning & Napier Advisors, Inc, Richard Aster Jr of Meridian Fund, Tom Gayner of Markel Gayner Asset Management Corp, John Paulson of Paulson & Co., Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC, Murray Stahl of Horizon Asset Management, Steven Cohen of SAC Capital Advisors, John Keeley of Keeley Fund Management, Tom Russo of Gardner Russo & Gardner, Dodge & Cox.
Operating earnings, which exclude a $12.7 million pre-tax benefit ($8.0 million after tax, or $.04 per common share) from the reduction of an indemnification liability related to Visa, Inc. (Visa), were $191.6 million, or $.78 per common share, for the quarter. Operating earnings is a non-GAAP financial measure. A reconciliation of operating earnings to reported earnings prepared in accordance with U.S. generally accepted accounting principles (GAAP) is provided on page 55.
Consolidated revenues stated on a fully taxable equivalent (FTE) basis totaled $973.8 million, down from last years second quarter revenues of $1.05 billion. Trust, investment and other servicing fees declined by $57.9 million, or 10%, to $543.5 million. Foreign exchange trading income decreased $18.9 million, or 14%, to $115.4 million from $134.3 million in the prior year. Net interest income on an FTE basis totaled $242.4 million, a decrease of 7%. Noninterest expenses totaled $614.4 million in the current quarter and $502.7 million in the prior year quarter, a current quarter increase of 22% or $111.7 million.
Average earning assets of $66.1 billion were 1% higher than a year ago, driven by an 11% growth in average securities balances to $19.4 billion, partially offset by a decrease in average loans and leases of 5% to $27.6 billion. Average money market assets equaled $19.2 billion for the quarter, up slightly from the prior year periods average. The securities portfolio growth primarily reflects an increase in the average balance of government sponsored agency securities and corporate debt. Within the loan and lease portfolio, residential real estate loans averaged $10.9 billion in the quarter, up 2% from the prior years second quarter, and represented 39% of the average loan and lease portfolio. Commercial loans averaged $6.3 billion, down 19% from $7.7 billion last year, while personal loans averaged $4.9 billion, up 5% from last years second quarter. The net interest margin, stated on an FTE basis, was 1.47%, compared with 1.59% in the prior year quarter, primarily reflecting the continued compression of spreads between interest rates on short-term investments and overnight funding sources and the diminished value of non-interest bearing funds in the current low interest rate environment.
Northern Trust utilizes a diverse mix of funding sources. Total interest-bearing deposits averaged $45.0 billion, up 9% from the second quarter of 2009. The increase was attributable to higher levels of average domestic savings and non-U.S. office global custody related deposit balances as compared to the prior years second quarter. Other interest-related funds averaged $10.7 billion in the quarter as compared to $10.2 billion in the prior year quarter. The balances within these classifications vary based on funding requirements and strategies, interest rate levels, changes in the volume of lower-cost deposit sources, and the availability of collateral to secure these borrowings. The increase in other interest-related funds resulted primarily from higher levels of short-term borrowings. Net noninterest-related funds utilized to fund earning assets averaged $10.4 billion compared with $14.3 billion in last years second quarter, the decrease resulting primarily from lower levels of U.S. office noninterest-bearing deposits.
The provision for credit losses was $50.0 million in the second quarter compared with $60.0 million in the prior year quarter. The current quarter provision reflects the prolonged weakness in the broader economic environment. The reserve for credit losses at June 30, 2010 was $361.6 million compared with $350.0 million at March 31, 2010 and $319.1 million at June 30, 2009. Net charge-offs totaled $38.3 million for the quarter. Net charge-offs in the prior year quarter totaled $44.7 million. For additional discussion of the provision and reserve for credit losses, refer to the Asset Quality section below.
Read the The complete Report
Northern Trust Corp. has a market cap of $11.49 billion; its shares were traded at around $47.49 with a P/E ratio of 16 and P/S ratio of 3. The dividend yield of Northern Trust Corp. stocks is 2.3%. Northern Trust Corp. had an annual average earning growth of 1% over the past 10 years.NTRS is in the portfolios of Private Capital of Private Capital Management, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Pioneer Investments, Manning & Napier Advisors, Inc, Richard Aster Jr of Meridian Fund, Tom Gayner of Markel Gayner Asset Management Corp, John Paulson of Paulson & Co., Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC, Murray Stahl of Horizon Asset Management, Steven Cohen of SAC Capital Advisors, John Keeley of Keeley Fund Management, Tom Russo of Gardner Russo & Gardner, Dodge & Cox.
Highlight of Business Operations:
Net income for the second quarter of 2010 totaled $199.6 million compared with $314.2 million in the second quarter of 2009. Net income per common share on a diluted basis was $.82 compared with net income per common share of $.95 in the prior year quarter. The prior year quarters earnings were reduced by $.37 per common share in connection with Northern Trusts participation in the U.S. Department of the Treasurys Capital Purchase Program (Capital Purchase Program). The prior year quarter also included a $130.1 million pre-tax expense reduction ($85.7 million after-tax, or $.36 per common share) in connection with Capital Support Agreements (CSAs) that had been established to support certain Northern Trust investment vehicles.Operating earnings, which exclude a $12.7 million pre-tax benefit ($8.0 million after tax, or $.04 per common share) from the reduction of an indemnification liability related to Visa, Inc. (Visa), were $191.6 million, or $.78 per common share, for the quarter. Operating earnings is a non-GAAP financial measure. A reconciliation of operating earnings to reported earnings prepared in accordance with U.S. generally accepted accounting principles (GAAP) is provided on page 55.
Consolidated revenues stated on a fully taxable equivalent (FTE) basis totaled $973.8 million, down from last years second quarter revenues of $1.05 billion. Trust, investment and other servicing fees declined by $57.9 million, or 10%, to $543.5 million. Foreign exchange trading income decreased $18.9 million, or 14%, to $115.4 million from $134.3 million in the prior year. Net interest income on an FTE basis totaled $242.4 million, a decrease of 7%. Noninterest expenses totaled $614.4 million in the current quarter and $502.7 million in the prior year quarter, a current quarter increase of 22% or $111.7 million.
Average earning assets of $66.1 billion were 1% higher than a year ago, driven by an 11% growth in average securities balances to $19.4 billion, partially offset by a decrease in average loans and leases of 5% to $27.6 billion. Average money market assets equaled $19.2 billion for the quarter, up slightly from the prior year periods average. The securities portfolio growth primarily reflects an increase in the average balance of government sponsored agency securities and corporate debt. Within the loan and lease portfolio, residential real estate loans averaged $10.9 billion in the quarter, up 2% from the prior years second quarter, and represented 39% of the average loan and lease portfolio. Commercial loans averaged $6.3 billion, down 19% from $7.7 billion last year, while personal loans averaged $4.9 billion, up 5% from last years second quarter. The net interest margin, stated on an FTE basis, was 1.47%, compared with 1.59% in the prior year quarter, primarily reflecting the continued compression of spreads between interest rates on short-term investments and overnight funding sources and the diminished value of non-interest bearing funds in the current low interest rate environment.
Northern Trust utilizes a diverse mix of funding sources. Total interest-bearing deposits averaged $45.0 billion, up 9% from the second quarter of 2009. The increase was attributable to higher levels of average domestic savings and non-U.S. office global custody related deposit balances as compared to the prior years second quarter. Other interest-related funds averaged $10.7 billion in the quarter as compared to $10.2 billion in the prior year quarter. The balances within these classifications vary based on funding requirements and strategies, interest rate levels, changes in the volume of lower-cost deposit sources, and the availability of collateral to secure these borrowings. The increase in other interest-related funds resulted primarily from higher levels of short-term borrowings. Net noninterest-related funds utilized to fund earning assets averaged $10.4 billion compared with $14.3 billion in last years second quarter, the decrease resulting primarily from lower levels of U.S. office noninterest-bearing deposits.
The provision for credit losses was $50.0 million in the second quarter compared with $60.0 million in the prior year quarter. The current quarter provision reflects the prolonged weakness in the broader economic environment. The reserve for credit losses at June 30, 2010 was $361.6 million compared with $350.0 million at March 31, 2010 and $319.1 million at June 30, 2009. Net charge-offs totaled $38.3 million for the quarter. Net charge-offs in the prior year quarter totaled $44.7 million. For additional discussion of the provision and reserve for credit losses, refer to the Asset Quality section below.
Read the The complete Report
