Investment management and banking solutions provider Northern Trust Corp. (NTRS), on Wednesday, posted a profit for the third quarter from a loss last year, on a strong growth in client assets and absence of charges from last year. Nevertheless, revenues for the quarter dropped, reflecting a decrease in trust, investment and other servicing fees and foreign exchange trading income.
For the third quarter, the Chicago, Illinois-based company posted net income applicable to common stock of $187.9 million or $0.77 per share, compared to a net loss of $148.3 million or $0.66 in the prior-year quarter.
The year-ago quarter's results included client support related charges of $353.2 million or $1.59 per share, and non-cash accounting charges associated with lease transactions of $100.2 million or $0.44 per share.
Excluding one-time items, operating earnings for the quarter were $176.7 million or $0.72 per common share, compared to an operating loss of $129.4 million or $0.58 per share in the same quarter last year. Operating results for the quarter exclude a $17.8 million pre-tax benefit from the reduction of an indemnification liability related to Visa, Inc. (V) and a $30.0 million pre-tax charge relating to Visa indemnifications recorded last year.
On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.84 per share for the quarter. Analysts' estimate typically excludes one-time charges and gains.
Quarterly revenues on a taxable equivalent basis slid 1% to $927.6 million from $938.5 million in the year-ago quarter. Analysts expected the company to report revenue of $984.57 million for the quarter.
In the sequentially preceding second quarter, Northern Trust reported net income applicable to common stock of $226.1 million, up 5% from $215.6 million in the prior-year quarter. Earnings per share for the quarter declined 1% to $0.95 from $0.96 per share in the prior-year period, on higher share count. Quarterly revenues, on a taxable equivalent basis, declined 4% to $1.05 billion from $1.09 billion in the prior-year quarter.
Trust, investment and other servicing fees for the quarter under review increased 10% from last year to $523.1 million and represented 56% of third quarter revenues. Foreign exchange trading income decreased 34% year-over-year to $92.9 million.
Net interest income on a fully taxable equivalent basis for the quarter was $248.2 million, down 7% from last year, while total non-interest income rose 1% to $679.4 million and represented 73% of revenues.
Net interest margin for the quarter contracted to 1.54% from 1.62% in the prior year quarter, primarily reflecting the diminished value of non-interest bearing funds in the current low interest rate environment.
Provision for credit losses for the quarter soared to $60.0 million from $25.0 million last year. The company's total net charge-offs as a percent of average loans on an annualized basis for the quarter were 0.65%, compared to 0.01% last year.
Total non-interest expenses for the quarter plunged 48% to $599.2 million from $1.15 billion in the previous-year quarter.
Net investment security losses totaled $4.0 million for the current quarter, compared to losses of $16.9 million in the prior year quarter.
Frederick Waddell, President and Chief Executive Officer, Northern Trust said, "The financial markets continue to send mixed signals. Although equity markets improved compared with the second quarter, they remain well below year-ago levels and interest rates have fallen dramatically year-over-year."
The company during the quarter, repurchased the warrant that was issued to the U.S. Department of the Treasury under its Capital Purchase Program at a cost of $87 million. At September 30, 2009, Northern Trust's capital ratios remains strong with a Tier 1 capital ratio of 13.2% and a a tier 1 common equity ratio of 12.7%.
At September 30, 2009, Northern Trust's assets under custody were $3.2 trillion, consistent with the prior year quarter and included $1.9 trillion of global custody assets, up 11% from year-earlier quarter. Total assets under management was $610.5 billion, down 6% from $652.4 billion at September 30, 2008.
At September 30, 2009, Northern Trust's total interest-bearing deposits were $41.26 billion, compared to $49.11 billion, while total assets were $71.21 billion, compared to $73.32 billion last year.
For the nine-month period, net income applicable to common stock increased to $663.9 million or $2.34 per share from $452.5 million or $2.00 per share in the same period last year. Excluding one-time items, operating earnings rose to $652.7 million or $2.29 per share from $317.9 million or $1.40 per share in the year-earlier period.
For the nine months, revenues, which excludes the current and prior period Visa related adjustments were $2.88 billion, down 4% from $3.01 billion last year.
Net interest income for nine months edged up 2% to $796.0 million from $780.6 million in the same period last year, while non-interest income decreased 13% to $2.08 billion from $2.40 billion last year.
Provision for credit losses for the period surged to $175.0 million from $55.0 million in the year-ago period.
Amongst others in the sector, Bank of New York Mellon Corp. (BK), on October 20, reported a loss for the third quarter of fiscal 2009, hurt by a hefty charge from the restructuring of its investment portfolio. Excluding items, the bank reported a profit, that came lower than the previous year. The company reported third-quarter net loss applicable to common shareholders, including discontinued operations, of $2.46 billion or $2.05 per common share, compared to net income of $303 million or $0.26 per common share, in the third quarter of 2008. Total revenue was $2.617 billion, down 15% from $3.088 billion in the year ago-quarter.
State Street Corp. (STT), on October 20, reported third-quarter net income available to common shareholders of $516 million, up 8% from $477 million in the prior-year quarter. Earnings per share, however, declined 5% to $1.04 from $1.09 last year, on a higher share count. On an operating basis, State Street's net income available to common shareholders decreased 3% to $523 million from $538 million a year earlier. Operating earnings per common share fell 15% to $1.05 from $1.24 in the corresponding quarter of the prior year. Total revenue for the quarter were down 19% to $2.24 billion from the previous year's $2.77 billion.
NTRS is currently trading at $54.37, down $3.08 or 5.36%, on a volume of 4.31 million shares on the Nasdaq. In the past 52 weeks, the stock trended in a broad range of $33.88 - $66.08, with a three-month average volume of 1.90 million shares.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.