Northern Trust Corp. (NTRS, Financial) filed Quarterly Report for the period ended 2010-03-31.
Northern Trust Corp. has a market cap of $13.46 billion; its shares were traded at around $55.65 with a P/E ratio of 17.8 and P/S ratio of 3.5. The dividend yield of Northern Trust Corp. stocks is 2%. 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, Manning & Napier Advisors, Inc, Tom Gayner of Markel Gayner Asset Management Corp, John Paulson of Paulson & Co., Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Kenneth Fisher of Fisher Asset Management, LLC, Murray Stahl of Horizon Asset Management, Tom Russo of Gardner Russo & Gardner, Dodge & Cox, Steven Cohen of SAC Capital Advisors, John Keeley of Keeley Fund Management.
Consolidated revenues stated on a fully taxable equivalent (FTE) basis totaled $907.6 million, up slightly from last years first quarter revenues of $904.2 million. Trust, investment and other servicing fees increased 25% from last year to $515.1 million. Foreign exchange trading income decreased $51.4 million, or 39%, to $79.7 million from $131.1 million in the prior year. Net interest income on an FTE basis totaled $240.1 million, a decrease of 17%. Noninterest expenses totaled $619.7 million in the current quarter and $593.5 in the prior year quarter, a current quarter increase of 4% or $26.2 million.
Trust, investment and other servicing fees from Corporate & Institutional Services (C&IS) increased 44% from the year-ago quarter to $297.3 million. The largest component of C&IS fees is custody and fund administration fees which increased 17% to $159.2 million, reflecting improved market valuations and new business. C&IS investment management fees for the first quarter of 2010 equaled $63.7 million, up 5% from the prior year quarter. The increase primarily reflects improved market valuations and new business, partially offset by $4.2 million of waived fees in money market funds due to low level of interest rates. Securities lending fees totaled $55.6 million compared with negative $7.9 million in the first quarter of last year. The increase is attributable to the recovery of previously recorded unrealized asset valuation losses of approximately $38 million in a mark-to-market investment fund used in securities lending activities, as compared to unrealized asset valuation losses of approximately $52 million recorded in the prior year quarter. Excluding the impact of valuation adjustments, the decrease in securities lending fees of approximately $27 million is attributable to significantly lower spreads on the investment of cash collateral, while volumes improved from the prior year quarters levels.
Average U.S. loans and leases outstanding during the quarter totaled $27.5 billion, 7% lower than the $29.7 billion in last years first quarter. Within the loan and lease portfolio, residential real estate loans averaged $10.8 billion in the quarter, up 3% from the prior years first quarter, and represented 39% of the average loan and lease portfolio. Commercial loans averaged $6.4 billion, down 22% from $8.2 billion last year, while personal loans averaged $4.9 billion, up 4% from last years first quarter. Loans outside the U.S. averaged $656.5 million, a 50% decrease from $1.3 billion in the prior year quarter.
Northern Trust utilizes a diverse mix of funding sources. Total interest-bearing deposits averaged $44.7 billion, up 2%, from the first quarter of 2009. The increase was attributable to higher levels of average domestic savings and money market deposits, partially offset by a decline of $2.6 billion, or 8%, in non-U.S. office deposits from last years first quarter. The decline in non-U.S. office deposits resulted primarily from a decrease in global custody related deposit balances. Other interest-related funds averaged $11.4 billion in the quarter, consistent with $11.2 billion in last years first 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 and senior notes. The increase in senior notes reflects the May 2009 issuance of $500 million of fixed-rate senior notes of the Corporation. Net noninterest-related funds utilized to fund earning assets averaged $11.3 billion compared with $14.5 billion in last years first quarter, the decrease resulting primarily from lower levels of U.S. office noninterest-bearing deposits.
The provision for credit losses was $40.0 million in the first quarter compared with $55.0 million in the prior year quarter. The current quarter provision reflects the continued weakness in the broader economic environment. The reserve for credit losses at March 31, 2010 was $350.0 million compared with $340.6 million at December 31, 2009 and $303.3 million at March 31, 2009. Net charge-offs totaled $30.6 million for the quarter. Net charge-offs in the prior year quarter totaled $2.7 million. For additional discussion of the provision and reserve for credit losses, refer to the Asset Quality section below.
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Northern Trust Corp. has a market cap of $13.46 billion; its shares were traded at around $55.65 with a P/E ratio of 17.8 and P/S ratio of 3.5. The dividend yield of Northern Trust Corp. stocks is 2%. 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, Manning & Napier Advisors, Inc, Tom Gayner of Markel Gayner Asset Management Corp, John Paulson of Paulson & Co., Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Kenneth Fisher of Fisher Asset Management, LLC, Murray Stahl of Horizon Asset Management, Tom Russo of Gardner Russo & Gardner, Dodge & Cox, Steven Cohen of SAC Capital Advisors, John Keeley of Keeley Fund Management.
Highlight of Business Operations:
Net income totaled $157.2 million compared with $161.8 million in the first quarter of last year. Net income per common share on a diluted basis for the first quarter was $.64 compared with net income per common share of $.61 reported in the first quarter of 2009. The prior year quarters earnings per share were reduced by $.10 in connection with Northern Trusts participation in the U.S. Department of the Treasurys Capital Purchase Program (Capital Purchase Program).Consolidated revenues stated on a fully taxable equivalent (FTE) basis totaled $907.6 million, up slightly from last years first quarter revenues of $904.2 million. Trust, investment and other servicing fees increased 25% from last year to $515.1 million. Foreign exchange trading income decreased $51.4 million, or 39%, to $79.7 million from $131.1 million in the prior year. Net interest income on an FTE basis totaled $240.1 million, a decrease of 17%. Noninterest expenses totaled $619.7 million in the current quarter and $593.5 in the prior year quarter, a current quarter increase of 4% or $26.2 million.
Trust, investment and other servicing fees from Corporate & Institutional Services (C&IS) increased 44% from the year-ago quarter to $297.3 million. The largest component of C&IS fees is custody and fund administration fees which increased 17% to $159.2 million, reflecting improved market valuations and new business. C&IS investment management fees for the first quarter of 2010 equaled $63.7 million, up 5% from the prior year quarter. The increase primarily reflects improved market valuations and new business, partially offset by $4.2 million of waived fees in money market funds due to low level of interest rates. Securities lending fees totaled $55.6 million compared with negative $7.9 million in the first quarter of last year. The increase is attributable to the recovery of previously recorded unrealized asset valuation losses of approximately $38 million in a mark-to-market investment fund used in securities lending activities, as compared to unrealized asset valuation losses of approximately $52 million recorded in the prior year quarter. Excluding the impact of valuation adjustments, the decrease in securities lending fees of approximately $27 million is attributable to significantly lower spreads on the investment of cash collateral, while volumes improved from the prior year quarters levels.
Average U.S. loans and leases outstanding during the quarter totaled $27.5 billion, 7% lower than the $29.7 billion in last years first quarter. Within the loan and lease portfolio, residential real estate loans averaged $10.8 billion in the quarter, up 3% from the prior years first quarter, and represented 39% of the average loan and lease portfolio. Commercial loans averaged $6.4 billion, down 22% from $8.2 billion last year, while personal loans averaged $4.9 billion, up 4% from last years first quarter. Loans outside the U.S. averaged $656.5 million, a 50% decrease from $1.3 billion in the prior year quarter.
Northern Trust utilizes a diverse mix of funding sources. Total interest-bearing deposits averaged $44.7 billion, up 2%, from the first quarter of 2009. The increase was attributable to higher levels of average domestic savings and money market deposits, partially offset by a decline of $2.6 billion, or 8%, in non-U.S. office deposits from last years first quarter. The decline in non-U.S. office deposits resulted primarily from a decrease in global custody related deposit balances. Other interest-related funds averaged $11.4 billion in the quarter, consistent with $11.2 billion in last years first 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 and senior notes. The increase in senior notes reflects the May 2009 issuance of $500 million of fixed-rate senior notes of the Corporation. Net noninterest-related funds utilized to fund earning assets averaged $11.3 billion compared with $14.5 billion in last years first quarter, the decrease resulting primarily from lower levels of U.S. office noninterest-bearing deposits.
The provision for credit losses was $40.0 million in the first quarter compared with $55.0 million in the prior year quarter. The current quarter provision reflects the continued weakness in the broader economic environment. The reserve for credit losses at March 31, 2010 was $350.0 million compared with $340.6 million at December 31, 2009 and $303.3 million at March 31, 2009. Net charge-offs totaled $30.6 million for the quarter. Net charge-offs in the prior year quarter totaled $2.7 million. For additional discussion of the provision and reserve for credit losses, refer to the Asset Quality section below.
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