Financial Trends
Second Quarter 2020
July 22, 2020
Please direct inquiries to:
Mark Bette
Senior Vice President, Director of Investor Relations (312) 444-2301 or mark_bette@ntrs.com
Kelly Moen Lernihan
Vice President, Investor Relations (312) 444-7214 or km235@ntrs.com
The historical financial results and trends reflected in this report are not indicative of future financial results and trends for Northern Trust Corporation. This report should be read in conjunction with the Corporation's Second Quarter 2020 earnings press release, 2019 Annual Report to Shareholders, and periodic reports to the Securities and Exchange Commission, all of which contain additional information about factors that could affect the Corporation's future financial results and trends. The Corporation assumes no obligation to update this report.
TABLE OF CONTENTS
1 | 7 |
Financial Summary | Balance Sheet Mix Trends |
2 | 8 |
Income Statement | Interest Rate Trends |
3 | 9 |
Net Income Trends | Asset Quality |
4 | 10 |
Fee Detail | Trust Assets |
5 | 11 |
Balance Sheet (EOP) | Reconciliation to FTE |
6 | 12 |
Balance Sheet Trends | Reconciliation to FTE (Ratios) |
Northern Trust Corporation
FINANCIAL SUMMARY
($ in Millions except per share information) | ||||||||||||||||||||||||||||||||||||
2019 | 2020 | |||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr* | 3rd Qtr | 4th Qtr | ||||||||||||||||||||||||
Profitability: | ||||||||||||||||||||||||||||||||||||
$ | 973.8 | $ | 1,032.5 | $ | 1,199.0 | $ | 1,556.4 | $ | 1,492.2 | Net Income | $ | 347.1 | $ | 389.4 | $ | 384.6 | $ | 371.1 | $ | 360.6 | $ | 313.3 | ||||||||||||||
935.0 | 990.4 | 1,130.4 | 1,489.9 | 1,428.9 | Earnings Allocated to Common and Potential | 325.5 | 379.7 | 362.7 | 361.0 | 326.2 | 305.1 | |||||||||||||||||||||||||
Common Shares | ||||||||||||||||||||||||||||||||||||
$ | 4.03 | $ | 4.35 | $ | 4.95 | $ | 6.68 | $ | 6.66 | Basic Earnings Per Share | $ | 1.49 | $ | 1.76 | $ | 1.70 | $ | 1.71 | $ | 1.56 | $ | 1.47 | ||||||||||||||
3.99 | 4.32 | 4.92 | 6.64 | 6.63 | Diluted Earnings Per Share | 1.48 | 1.75 | 1.69 | 1.70 | 1.55 | 1.46 | |||||||||||||||||||||||||
20% | 8% | 14% | 35% | -% | Diluted EPS Growth over Previous Year | (6%) | 4% | 7% | (5%) | 5% | (17%) | |||||||||||||||||||||||||
11.5 % | 11.9 % | 12.6 % | 16.2 % | 14.9 % | Return on Average Common Equity | 14.0 % | 15.9 % | 14.9 % | 14.8 % | 13.4 % | 12.2 % | |||||||||||||||||||||||||
0.88 % | 0.89 % | 1.00 % | 1.27 % | 1.27 % | Return on Average Assets | 1.18 % | 1.34 % | 1.31 % | 1.25 % | 1.17 % | 0.91 % | |||||||||||||||||||||||||
31.5 % | 30.9 % | 31.0 % | 33.3 % | 32.4 % | Profit Margin (pre-tax) (FTE**) | 30.9 % | 34.0 % | 33.4 % | 31.2 % | 29.4 % | 27.1 % | |||||||||||||||||||||||||
20.6 % | 20.7 % | 22.1 % | 25.9 % | 24.4 % | Profit Margin (after-tax) (FTE**) | 23.3 % | 25.7 % | 24.9 % | 23.8 % | 22.6 % | 20.7 % | |||||||||||||||||||||||||
76.8 % | 74.7 % | 72.8 % | 72.3 % | 72.0 % | Noninterest Income to Total Revenue (FTE**) | 71.1 % | 71.9 % | 72.5 % | 72.4 % | 73.9 % | 74.9 % | |||||||||||||||||||||||||
63.0 % | 62.3 % | 63.4 % | 62.5 % | 63.1 % | Trust Fees to Total Revenue (FTE**) | 62.4 % | 63.1 % | 63.1 % | 63.7 % | 62.9 % | 63.5 % | |||||||||||||||||||||||||
33.5 % | 31.9 % | 26.6 % | 20.5 % | 23.2 % | Effective Tax Rate (US GAAP) | 23.2 % | 23.2 % | 24.4 % | 22.1 % | 21.8 % | 22.3 % | |||||||||||||||||||||||||
34.7 % | 33.1 % | 28.6 % | 22.1 % | 24.5 % | Effective Tax Rate (FTE**) | 24.5 % | 24.3 % | 25.5 % | 23.7 % | 23.1 % | 23.8 % | |||||||||||||||||||||||||
Capital Ratios: | ||||||||||||||||||||||||||||||||||||
Standardized Approach | ||||||||||||||||||||||||||||||||||||
10.8 % | 11.8 % | 12.6 % | 12.9 % | 12.7 % | Common Equity Tier 1 Capital | 13.0 % | 13.2 % | 12.9 % | 12.7 % | 11.7 % | 13.4 % | |||||||||||||||||||||||||
11.4 % | 12.9 % | 13.8 % | 14.1 % | 14.5 % | Tier 1 Capital | 14.3 % | 14.5 % | 14.1 % | 14.5 % | 12.8 % | 14.6 % | |||||||||||||||||||||||||
13.2 % | 14.5 % | 15.8 % | 16.1 % | 16.3 % | Total Capital | 16.3 % | 16.4 % | 16.0 % | 16.3 % | 14.5 % | 16.5 % | |||||||||||||||||||||||||
7.5 % | 8.0 % | 7.8 % | 8.0 % | 8.7 % | Tier 1 Leverage | 8.2 % | 8.6 % | 8.6 % | 8.7 % | 8.1 % | 7.6 % | |||||||||||||||||||||||||
Advanced Approach | ||||||||||||||||||||||||||||||||||||
11.9 % | 12.4 % | 13.5 % | 13.7 % | 13.3 % | Common Equity Tier 1 Capital | 13.4 % | 13.5 % | 13.6 % | 13.3 % | 12.9 % | 13.9 % | |||||||||||||||||||||||||
12.5 % | 13.7 % | 14.8 % | 15.0 % | 15.2 % | Tier 1 Capital | 14.7 % | 14.8 % | 14.9 % | 15.2 % | 14.1 % | 15.2 % | |||||||||||||||||||||||||
14.2 % | 15.1 % | 16.7 % | 16.9 % | 16.9 % | Total Capital | 16.5 % | 16.5 % | 16.6 % | 16.9 % | 15.7 % | 16.8 % | |||||||||||||||||||||||||
7.5 % | 8.0 % | 7.8 % | 8.0 % | 8.7 % | Tier 1 Leverage | 8.2 % | 8.6 % | 8.6 % | 8.7 % | 8.1 % | 7.6 % | |||||||||||||||||||||||||
6.2 % | 6.8 % | 6.8 % | 7.0 % | 7.6 % | Supplementary Leverage (a) | 7.2 % | 7.6 % | 7.6 % | 7.6 % | 7.2 % | 9.0 % | |||||||||||||||||||||||||
Per Share Information / Ratios: | ||||||||||||||||||||||||||||||||||||
$ | 1.41 | $ | 1.48 | $ | 1.60 | $ | 1.94 | $ | 2.60 | Cash Dividends Declared Per Common Share | $ | 0.60 | $ | 0.60 | $ | 0.70 | $ | 0.70 | $ | 0.70 | $ | 0.70 | ||||||||||||||
35 % | 34 % | 33 % | 29 % | 39 % | Dividend Payout Ratio | 41 % | 34 % | 41 % | 41 % | 45 % | 48 % | |||||||||||||||||||||||||
$ | 72.09 | $ | 89.05 | $ | 99.89 | $ | 83.59 | $ | 106.24 | Market Value Per Share (End of Period) | $ | 90.41 | $ | 90.00 | $ | 93.32 | $ | 106.24 | $ | 75.46 | $ | 79.34 | ||||||||||||||
18.1 | 20.6 | 20.3 | 12.6 | 16.0 | Stock Price Multiple of Earnings | 13.8 | 13.6 | 13.9 | 16.0 | 11.3 | 12.4 | |||||||||||||||||||||||||
(based on trailing 4 quarters of diluted EPS) | ||||||||||||||||||||||||||||||||||||
$ | 36.27 | $ | 38.88 | $ | 41.28 | $ | 43.95 | $ | 46.82 | Book Value Per Common Share (End of Period) | $ | 44.72 | $ | 46.18 | $ | 46.86 | $ | 46.82 | $ | 48.04 | $ | 50.45 |
* Capital ratios for the current quarter are considered preliminary until the Form 10-Q is filed with the Securities and Exchange Commission.
- Fully taxable equivalent (FTE). Presentation on an FTE basis is a non-generally accepted accounting principle financial measure. Please refer to the Reconciliation to Fully Taxable Equivalent - Ratios on page 12 for further detail.
- Effective January 1, 2018, the Corporation and Bank are subject to a minimum supplementary leverage ratio of 3 percent.
1
Northern Trust Corporation
INCOME STATEMENT
($ in Millions except per share information)
SIX MONTHS | CHANGE | SECOND QUARTER | CHANGE | |||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | |||||||||||||||
$ | 1,140.6 | $ | 1,084.6 | $ | 56.0 | 5 % | C&IS Trust, Investment and Other Servicing Fees | $ | 566.2 | $ | 549.4 | $ | 16.8 | 3 % | ||||||||
824.5 | 799.8 | 24.7 | 3 % | WM Trust, Investment and Other Servicing Fees | 395.3 | 406.1 | (10.8) | (3)% | ||||||||||||||
1,965.1 | 1,884.4 | 80.7 | 4 % | Total Fees | 961.5 | 955.5 | 6.0 | 1 % | ||||||||||||||
160.2 | 126.7 | 33.5 | 26 % | Foreign Exchange Trading Income | 71.3 | 60.5 | 10.8 | 18 % | ||||||||||||||
22.4 | 22.9 | (0.5) | (2)% | Treasury Management Fees | 11.4 | 11.2 | 0.2 | 2 % | ||||||||||||||
74.9 | 46.7 | 28.2 | 60 % | Security Commissions and Trading Income | 33.2 | 23.4 | 9.8 | 41 % | ||||||||||||||
90.9 | 67.9 | 23.0 | 34 % | Other Operating Income | 56.5 | 38.9 | 17.6 | 46 % | ||||||||||||||
0.1 | (0.5) | 0.6 | N/M | Investment Security Gains (Losses), net | 0.1 | (0.3) | 0.4 | N/M | ||||||||||||||
2,313.6 | 2,148.1 | 165.5 | 8 % | Total Noninterest Income | 1,134.0 | 1,089.2 | 44.8 | 4 % | ||||||||||||||
951.3 | 1,318.5 | (367.2) | (28)% | Interest Income (FTE*) | 414.0 | 647.9 | (233.9) | (36)% | ||||||||||||||
155.3 | 463.6 | (308.3) | (67)% | Interest Expense | 34.2 | 222.8 | (188.6) | (85)% | ||||||||||||||
796.0 | 854.9 | (58.9) | (7)% | Net Interest Income (FTE*) | 379.8 | 425.1 | (45.3) | (11)% | ||||||||||||||
3,109.6 | 3,003.0 | 106.6 | 4 % | Total Revenue (FTE*) | 1,513.8 | 1,514.3 | (0.5) | - % | ||||||||||||||
127.0 | (6.5) | 133.5 | N/M | Provision for Credit Losses | 66.0 | (6.5) | 72.5 | N/M | ||||||||||||||
960.1 | 937.5 | 22.6 | 2 % | Compensation | 460.3 | 455.5 | 4.8 | 1 % | ||||||||||||||
188.3 | 175.0 | 13.3 | 8 % | Employee Benefits | 90.4 | 89.3 | 1.1 | 1 % | ||||||||||||||
369.0 | 374.8 | (5.8) | (2)% | Outside Services | 176.2 | 186.4 | (10.2) | (5)% | ||||||||||||||
326.4 | 295.5 | 30.9 | 10 % | Equipment and Software | 164.2 | 147.2 | 17.0 | 12 % | ||||||||||||||
111.1 | 102.5 | 8.6 | 8 % | Occupancy | 60.0 | 50.9 | 9.1 | 18 % | ||||||||||||||
147.6 | 149.6 | (2.0) | (1)% | Other Operating Expense | 85.8 | 76.9 | 8.9 | 12 % | ||||||||||||||
2,102.5 | 2,034.9 | 67.6 | 3 % | Total Noninterest Expense | 1,036.9 | 1,006.2 | 30.7 | 3 % | ||||||||||||||
880.1 | 974.6 | (94.5) | (10)% | Income before Income Taxes (FTE*) | 410.9 | 514.6 | (103.7) | (20)% | ||||||||||||||
190.4 | 222.6 | (32.2) | (14)% | Provision for Income Taxes | 89.9 | 117.5 | (27.6) | (23)% | ||||||||||||||
15.8 | 15.5 | 0.3 | 2 % | Taxable Equivalent Adjustment | 7.7 | 7.7 | - | 1 % | ||||||||||||||
206.2 | 238.1 | (31.9) | (13)% | Total Taxes (FTE*) | 97.6 | 125.2 | (27.6) | (22)% | ||||||||||||||
$ | 673.9 | $ | 736.5 | $ | (62.6) | (8)% | Net Income | $ | 313.3 | $ | 389.4 | $ | (76.1) | (20)% | ||||||||
$ | 35.3 | $ | 23.2 | $ | 12.1 | 52 % | Dividends on Preferred Stock** | $ | 4.8 | $ | 5.9 | $ | (1.1) | (20)% | ||||||||
7.3 | 8.1 | (0.8) | (9)% | Earnings Allocated to Participating Securities | 3.4 | 3.8 | (0.4) | (8)% | ||||||||||||||
631.3 | 705.2 | (73.9) | (10)% | Earnings Allocated to Common and Potential Common Shares | 305.1 | 379.7 | (74.6) | (20)% | ||||||||||||||
$ | 3.03 | $ | 3.25 | $ | (0.22) | (7)% | Earnings Per Share - Basic | $ | 1.47 | $ | 1.76 | $ | (0.29) | (17)% | ||||||||
$ | 3.02 | $ | 3.23 | $ | (0.21) | (7)% | Earnings Per Share - Diluted | $ | 1.46 | $ | 1.75 | $ | (0.29) | (16)% | ||||||||
208,475 | 217,182 | Average Basic Shares (000s) | 208,069 | 216,139 | ||||||||||||||||||
209,193 | 218,214 | Average Diluted Shares (000s) | 208,568 | 217,170 | ||||||||||||||||||
208,093 | 214,891 | End of Period Shares Outstanding (000s) | 208,093 | 214,891 |
N/M - Not meaningful
* Fully taxable equivalent (FTE). Presentation on an FTE basis is a non-generally accepted accounting principle financial measure. Please refer to the Reconciliation to Fully Taxable Equivalent on page 11 for further detail.
- Dividends on Preferred Stock in the first quarter of 2020 includes $11.5 million related to the difference between the redemption amount of the Corporation's Series C Non-Cumulative Perpetual Preferred Stock, which was redeemed in the first quarter of 2020, and its carrying value.
2
Northern Trust Corporation
NET INCOME TRENDS
($ in Millions except per share information)
2019 | 2020 | |||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | ||||||||||||||||||||||||
$ | 1,696.9 | $ | 1,787.8 | $ 1,984.5 | $ | 2,173.1 | $ | 2,211.5 | C&IS Trust, Investment and Other Servicing Fees | $ | 535.2 | $ | 549.4 | $ | 559.9 | $ | 567.0 | $ | 574.4 | $ | 566.2 | |||||||||||||||
1,283.6 | 1,320.3 | 1,449.8 | 1,580.6 | 1,640.6 | WM Trust, Investment and Other Servicing Fees | 393.7 | 406.1 | 415.6 | 425.2 | 429.2 | 395.3 | |||||||||||||||||||||||||
2,980.5 | 3,108.1 | 3,434.3 | 3,753.7 | 3,852.1 | Total Fees | 928.9 | 955.5 | 975.5 | 992.2 | 1,003.6 | 961.5 | |||||||||||||||||||||||||
261.8 | 236.6 | 209.9 | 307.2 | 250.9 | Foreign Exchange Trading Income | 66.2 | 60.5 | 59.7 | 64.5 | 88.9 | 71.3 | |||||||||||||||||||||||||
64.7 | 62.8 | 56.4 | 51.8 | 44.5 | Treasury Management Fees | 11.7 | 11.2 | 11.2 | 10.4 | 11.0 | 11.4 | |||||||||||||||||||||||||
78.7 | 81.4 | 89.6 | 98.3 | 103.6 | Security Commissions and Trading Income | 23.3 | 23.4 | 29.1 | 27.8 | 41.7 | 33.2 | |||||||||||||||||||||||||
247.1 | 241.2 | 157.5 | 127.5 | 145.5 | Other Operating Income | 29.0 | 38.9 | 45.1 | 32.5 | 34.4 | 56.5 | |||||||||||||||||||||||||
(0.3) | (3.2) | (1.6) | (1.0) | (1.4) | Investment Security Gains (Losses), net | (0.2) | (0.3) | (0.4) | (0.5) | - | 0.1 | |||||||||||||||||||||||||
3,632.5 | 3,726.9 | 3,946.1 | 4,337.5 | 4,395.2 | Total Noninterest Income | 1,058.9 | 1,089.2 | 1,120.2 | 1,126.9 | 1,179.6 | 1,134.0 | |||||||||||||||||||||||||
1,095.4 | 1,260.0 | 1,475.0 | 1,663.9 | 1,710.7 | Net Interest Income (FTE*) | 429.8 | 425.1 | 425.3 | 430.5 | 416.2 | 379.8 | |||||||||||||||||||||||||
4,727.9 | 4,986.9 | 5,421.1 | 6,001.4 | 6,105.9 | Total Revenue (FTE*) | 1,488.7 | 1,514.3 | 1,545.5 | 1,557.4 | 1,595.8 | 1,513.8 | |||||||||||||||||||||||||
(43.0) | (26.0) | (28.0) | (14.5) | (14.5) | Provision for Credit Losses | - | (6.5) | (7.0) | (1.0) | 61.0 | 66.0 | |||||||||||||||||||||||||
1,443.3 | 1,541.1 | 1,733.7 | 1,806.9 | 1,859.0 | Compensation | 482.0 | 455.5 | 458.0 | 463.5 | 499.8 | 460.3 | |||||||||||||||||||||||||
285.3 | 293.3 | 319.9 | 356.7 | 355.2 | Employee Benefits | 85.7 | 89.3 | 87.6 | 92.6 | 97.9 | 90.4 | |||||||||||||||||||||||||
595.7 | 627.1 | 668.4 | 739.4 | 774.5 | Outside Services | 188.4 | 186.4 | 194.0 | 205.7 | 192.8 | 176.2 | |||||||||||||||||||||||||
454.8 | 467.4 | 524.0 | 582.2 | 612.1 | Equipment and Software | 148.3 | 147.2 | 151.7 | 164.9 | 162.2 | 164.2 | |||||||||||||||||||||||||
173.5 | 177.4 | 191.8 | 201.1 | 212.9 | Occupancy | 51.6 | 50.9 | 53.0 | 57.4 | 51.1 | 60.0 | |||||||||||||||||||||||||
328.0 | 364.4 | 331.6 | 330.6 | 329.8 | Other Operating Expense | 72.7 | 76.9 | 92.0 | 88.2 | 61.8 | 85.8 | |||||||||||||||||||||||||
3,280.6 | 3,470.7 | 3,769.4 | 4,016.9 | 4,143.5 | Total Noninterest Expense | 1,028.7 | 1,006.2 | 1,036.3 | 1,072.3 | 1,065.6 | 1,036.9 | |||||||||||||||||||||||||
1,490.3 | 1,542.2 | 1,679.7 | 1,999.0 | 1,976.9 | Income before Income Taxes (FTE*) | 460.0 | 514.6 | 516.2 | 486.1 | 469.2 | 410.9 | |||||||||||||||||||||||||
491.2 | 484.6 | 434.9 | 401.4 | 451.9 | Provision for Income Taxes | 105.1 | 117.5 | 124.0 | 105.3 | 100.5 | 89.9 | |||||||||||||||||||||||||
25.3 | 25.1 | 45.8 | 41.2 | 32.8 | Taxable Equivalent Adjustment | 7.8 | 7.7 | 7.6 | 9.7 | 8.1 | 7.7 | |||||||||||||||||||||||||
516.5 | 509.7 | 480.7 | 442.6 | 484.7 | Total Taxes (FTE*) | 112.9 | 125.2 | 131.6 | 115.0 | 108.6 | 97.6 | |||||||||||||||||||||||||
$ | 973.8 | $ | 1,032.5 | $ 1,199.0 | $ | 1,556.4 | $ | 1,492.2 | Net Income | $ | 347.1 | $ | 389.4 | $ | 384.6 | $ | 371.1 | $ | 360.6 | $ | 313.3 | |||||||||||||||
$ | 4.03 | $ | 4.35 | $ | 4.95 | $ | 6.68 | $ | 6.66 | Earnings Per Share - Basic | $ | 1.49 | $ | 1.76 | $ | 1.70 | $ | 1.71 | $ | 1.56 | $ | 1.47 | ||||||||||||||
3.99 | 4.32 | 4.92 | 6.64 | 6.63 | Earnings Per Share - Diluted | 1.48 | 1.75 | 1.69 | 1.70 | 1.55 | 1.46 | |||||||||||||||||||||||||
234,222 | 229,151 | 229,654 | 224,488 | 215,601 | Average Diluted Shares (000s) | 219,270 | 217,170 | 214,207 | 211,855 | 209,817 | 208,568 | |||||||||||||||||||||||||
$ | 23.4 | $ | 23.4 | $ | 49.8 | $ | 46.4 | $ | 46.4 | Preferred Dividends** | $ | 17.3 | $ | 5.9 | $ | 17.4 | $ | 5.8 | $ | 30.5 | $ | 4.8 |
* Fully taxable equivalent (FTE). Presentation on an FTE basis is a non-generally accepted accounting principle financial measure. Please refer to the Reconciliation to Fully Taxable Equivalent on page 11 for further detail.
- Dividends on Preferred Stock in the first quarter of 2020 includes $11.5 million related to the difference between the redemption amount of the Corporation's Series C Non-Cumulative Perpetual Preferred Stock, which was redeemed in the first quarter of 2020, and its carrying value.
3
Northern Trust Corporation
TRUST, INVESTMENT AND OTHER SERVICING FEES DETAIL
($ in Millions)
2019 | 2020 | |||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | ||||||||||||||||||||||||
Corporate & Institutional Services | ||||||||||||||||||||||||||||||||||||
$ | 1,150.8 | $ | 1,182.2 | $ | 1,342.1 | $ | 1,501.1 | $ | 1,549.3 | Custody & Fund Administration | $ | 375.1 | $ | 385.1 | $ | 392.2 | $ | 396.9 | $ | 394.9 | $ | 376.3 | ||||||||||||||
325.2 | 371.8 | 403.5 | 436.8 | 445.7 | Investment Management | 104.3 | 110.8 | 114.7 | 115.9 | 120.8 | 128.4 | |||||||||||||||||||||||||
90.5 | 97.7 | 96.4 | 102.0 | 87.2 | Securities Lending | 22.7 | 21.8 | 20.1 | 22.6 | 23.4 | 27.3 | |||||||||||||||||||||||||
130.4 | 136.1 | 142.6 | 133.2 | 129.3 | Other | 33.1 | 31.7 | 32.9 | 31.6 | 35.3 | 34.2 | |||||||||||||||||||||||||
$ | 1,696.9 | $ | 1,787.8 | $ | 1,984.6 | $ | 2,173.1 | $ | 2,211.5 | Total Trust, Investment and Other Servicing Fees | $ | 535.2 | $ | 549.4 | $ | 559.9 | $ | 567.0 | $ | 574.4 | $ | 566.2 | ||||||||||||||
Wealth Management | ||||||||||||||||||||||||||||||||||||
$ | 514.3 | $ | 523.8 | $ | 575.5 | $ | 607.8 | $ | 619.3 | Central | $ | 150.7 | $ | 153.1 | $ | 157.3 | $ | 158.2 | $ | 159.4 | $ | 142.1 | ||||||||||||||
332.7 | 334.4 | 356.2 | 401.7 | 422.2 | East | 100.9 | 104.3 | 106.8 | 110.2 | 111.5 | 104.2 | |||||||||||||||||||||||||
267.7 | 268.9 | 291.7 | 320.0 | 330.9 | West | 79.5 | 82.8 | 83.6 | 85.0 | 87.0 | 80.0 | |||||||||||||||||||||||||
168.9 | 193.2 | 226.3 | 251.1 | 268.2 | Global Family Office | 62.6 | 65.9 | 67.9 | 71.8 | 71.3 | 69.0 | |||||||||||||||||||||||||
$ | 1,283.6 | $ | 1,320.3 | $ | 1,449.7 | $ | 1,580.6 | $ | 1,640.6 | Total Trust, Investment and Other Servicing Fees | $ | 393.7 | $ | 406.1 | $ | 415.6 | $ | 425.2 | $ | 429.2 | $ | 395.3 | ||||||||||||||
4
Northern Trust Corporation
BALANCE SHEET
END OF PERIOD
($ in Millions) | ||||||||||||
CHANGE | ||||||||||||
Assets | 6/30/2020 | 6/30/2019 | $ | % | ||||||||
Federal Reserve and Other Central Banks Deposits and Other(2) | $ | 42,213.9 | $ | 27,530.3 | $ | 14,683.6 | 53 % | |||||
Interest-Bearing Due from and Deposits with Banks(3) | 4,918.8 | 6,619.3 | (1,700.5) | (26)% | ||||||||
Federal Funds Sold and Securities Purchased under Agreements to Resell | 1,505.5 | 660.5 | 845.0 | 128 % | ||||||||
Securities:(1) | ||||||||||||
U.S. Government | 4,274.3 | 5,197.1 | (922.8) | (18)% | ||||||||
Obligations of States and Political Subdivisions | 2,033.0 | 769.4 | 1,263.6 | 164 % | ||||||||
Government Sponsored Agency | 23,409.1 | 22,509.6 | 899.5 | 4 % | ||||||||
Other(4) | 26,622.4 | 20,782.6 | 5,839.8 | 28 % | ||||||||
Total Securities | 56,338.8 | 49,258.7 | 7,080.1 | 14 % | ||||||||
Loans and Leases | 33,757.3 | 30,982.3 | 2,775.0 | 9 % | ||||||||
Total Earning Assets | 138,734.3 | 115,051.1 | 23,683.2 | 21 % | ||||||||
Allowance for Credit Losses | (218.0) | (110.8) | (107.2) | 97 % | ||||||||
Cash and Due From Banks and Other Central Bank Deposits(5) | 2,417.9 | 2,965.9 | (548.0) | (18)% | ||||||||
Buildings and Equipment | 501.0 | 407.5 | 93.5 | 23 % | ||||||||
Client Security Settlement Receivables | 2,069.9 | 1,311.1 | 758.8 | 58 % | ||||||||
Goodwill | 690.6 | 682.0 | 8.6 | 1 % | ||||||||
Other Assets | 7,237.2 | 6,244.1 | 993.1 | 16 % | ||||||||
Total Assets | $ | 151,432.9 | $ | 126,550.9 | $ | 24,882.0 | 20 % | |||||
Liabilities and Stockholders' Equity | ||||||||||||
Savings, Money Market and Other | $ | 24,657.6 | $ | 18,197.2 | $ | 6,460.4 | 36 % | |||||
Savings Certificates and Other Time | 1,505.7 | 897.3 | 608.4 | 68 % | ||||||||
Non- U.S. Offices - Interest-Bearing | 67,277.5 | 59,028.0 | 8,249.5 | 14 % | ||||||||
Total Interest-Bearing Deposits | 93,440.8 | 78,122.5 | 15,318.3 | 20 % | ||||||||
Short-Term Borrowings | 8,229.1 | 8,259.6 | (30.5) | - % | ||||||||
Senior Notes | 3,667.3 | 2,565.6 | 1,101.7 | 43 % | ||||||||
Long-Term Debt | 1,200.4 | 1,147.6 | 52.8 | 5 % | ||||||||
Floating Rate Capital Debt | 277.7 | 277.6 | 0.1 | - % | ||||||||
Total Interest-Related Funds | 106,815.3 | 90,372.9 | 16,442.4 | 18 % | ||||||||
Demand and Other Noninterest-Bearing Deposits | 28,613.3 | 22,107.9 | 6,505.4 | 29 % | ||||||||
Other Liabilities | 4,622.1 | 3,264.6 | 1,357.5 | 42 % | ||||||||
Total Liabilities | 140,050.7 | 115,745.4 | 24,305.3 | 21 % | ||||||||
Common Equity | 10,497.3 | 9,923.5 | 573.8 | 6 % | ||||||||
Preferred Equity | 884.9 | 882.0 | 2.9 | - % | ||||||||
Total Stockholders' Equity | 11,382.2 | 10,805.5 | 576.7 | 5 % | ||||||||
Total Liabilities and Stockholders' Equity | $ | 151,432.9 | $ | 126,550.9 | $ | 24,882.0 | 20 % | |||||
(1) | Memo - at 6/30/2020: | |||||||||||
Debt Securities Held to Maturity | $ 15,241.9 | |||||||||||
Debt Securities Available for Sale | 39,968.9 | |||||||||||
Trading Securities | 1.0 | |||||||||||
Other Earning Assets | 1,127.0 |
- 56,338.8
- Federal Reserve and Other Central Bank Deposits and Other includes collateral deposits with certain securities depositories and clearing houses for the purpose of presenting earning assets; such deposits are presented in Other Assets on the consolidated balance sheets in our periodic filings with the SEC.
- Interest-BearingDue 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 sheets in our periodic filings with the SEC.
- Other securities include certain community development investments and Federal Home Loan Bank and Federal Reserve stock, which are classified in Other Assets on the consolidated balance sheets in our periodic filings with the SEC.
- Cash and Due from Banks and Other Central Bank Deposits includes the noninterest-bearing component of Federal Reserve and Other Central Bank Deposits as presented on the consolidated balance sheets in our periodic filings with the SEC.
5
Northern Trust Corporation
BALANCE SHEET TRENDS
PERIOD AVERAGES(1)
($ in Millions)
2015 | 2016 | 2017 | 2018 | 2019 | Assets | |||||||||
$ | 19,950 | $ | 20,434 | $ | 23,904 | $ | 23,899 | $ | 18,528 | Federal Reserve and Other Central Banks Deposits and Other (2) | ||||
10,713 | 8,743 | 7,143 | 6,023 | 5,997 | Interest-Bearing Due from and Deposits with Banks (3) | |||||||||
1,163 | 1,776 | 1,850 | 1,499 | 848 | Federal Funds Sold and Securities Purchased | |||||||||
under Agreements to Resell | ||||||||||||||
4,986 | 7,073 | 6,342 | 5,737 | 5,297 | Securities: | |||||||||
U.S. Government | ||||||||||||||
113 | 586 | 887 | 725 | 981 | Obligations of States and Political Subdivisions | |||||||||
16,459 | 17,421 | 17,987 | 20,683 | 22,634 | Government Sponsored Agency | |||||||||
15,850 | 16,961 | 19,499 | 23,136 | 21,773 | Other(4) | |||||||||
37,408 | 42,041 | 44,716 | 50,281 | 50,684 | Total Securities | |||||||||
33,016 | 34,044 | 33,565 | 32,029 | 31,053 | Loans and Leases | |||||||||
102,250 | 107,038 | 111,178 | 113,731 | 107,109 | Total Earning Assets | |||||||||
(256) | (193) | (157) | (126) | (111) | Allowance for Credit Losses | |||||||||
2,139 | 2,035 | 2,583 | 2,534 | 2,394 | Cash and Due From Banks and Other Central Bank Deposits (5) | |||||||||
443 | 446 | 466 | 439 | 426 | Buildings and Equipment | |||||||||
1,002 | 1,137 | 892 | 1,002 | 1,070 | Client Security Settlement Receivables | |||||||||
531 | 525 | 544 | 643 | 683 | Goodwill | |||||||||
4,607 | 4,583 | 4,101 | 4,725 | 5,981 | Other Assets | |||||||||
$ | 110,715 | $ | 115,570 | $ | 119,607 | $ | 122,947 | $ | 117,551 | Total Assets | ||||
2019 | 2020 | ||||||||||||||||||||
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | ||||||||||||||
$ | 20,163 | $ | 19,236 | $ | 17,525 | $ | 17,230 | $ | 19,826 | $ | 30,299 | ||||||||||
6,452 | 5,812 | 5,657 | 6,074 | 5,838 | 5,506 | ||||||||||||||||
978 | 651 | 817 | 946 | 668 | 986 | ||||||||||||||||
5,239 | 5,150 | 5,507 | 5,288 | 4,639 | 4,472 | ||||||||||||||||
771 | 770 | 907 | 1,468 | 1,723 | 1,835 | ||||||||||||||||
22,439 | 22,397 | 22,494 | 23,199 | 23,366 | 23,398 | ||||||||||||||||
23,441 | 20,593 | 21,118 | 21,964 | 22,235 | 23,179 | ||||||||||||||||
51,889 | 48,911 | 50,025 | 51,919 | 51,963 | 52,884 | ||||||||||||||||
31,189 | 31,099 | 30,936 | 30,991 | 32,316 | 35,507 | ||||||||||||||||
110,672 | 105,709 | 104,959 | 107,160 | 110,611 | 125,182 | ||||||||||||||||
(114) | (115) | (111) | (106) | (110) | (160) | ||||||||||||||||
1,941 | 2,784 | 2,552 | 2,293 | 2,723 | 2,967 | ||||||||||||||||
424 | 413 | 412 | 454 | 501 | 507 | ||||||||||||||||
982 | 1,045 | 1,090 | 1,163 | 1,531 | 1,298 | ||||||||||||||||
675 | 681 | 680 | 693 | 693 | 690 | ||||||||||||||||
4,836 | 5,842 | 6,771 | 6,449 | 8,221 | 8,288 | ||||||||||||||||
$ | 119,417 | $ | 116,359 | $ | 116,352 | $ | 118,105 | $ | 124,171 | $ | 138,771 | ||||||||||
Liabilities and Equity | |||||||||||||||||||||||||||||||
$ | 15,307 | $ | 15,142 | $ | 15,576 | $ | 15,149 | $ | 16,578 | Savings, Money Market and Other | $ | 14,373 | $ | 15,951 | $ | 17,803 | $ | 18,130 | $ | 20,251 | $ | 24,017 | |||||||||
1,610 | 1,432 | 1,273 | 871 | 868 | Savings Certificates and Other Time | 761 | 889 | 899 | 919 | 960 | 1,404 | ||||||||||||||||||||
49,377 | 50,808 | 56,583 | 58,557 | 54,885 | Non- U.S. Offices - Interest-Bearing | 58,377 | 54,680 | 53,632 | 52,926 | 54,543 | 63,593 | ||||||||||||||||||||
66,294 | 67,383 | 73,432 | 74,577 | 72,331 | Total Interest-Bearing Deposits | 73,511 | 71,519 | 72,333 | 71,975 | 75,754 | 89,013 | ||||||||||||||||||||
4,758 | 6,337 | 6,696 | 10,784 | 9,359 | Short-Term Borrowings | 10,494 | 9,428 | 8,769 | 8,771 | 9,701 | 7,360 | ||||||||||||||||||||
1,497 | 1,497 | 1,497 | 1,704 | 2,389 | Senior Notes | 2,014 | 2,361 | 2,588 | 2,585 | 2,615 | 3,333 | ||||||||||||||||||||
1,426 | 1,392 | 1,519 | 1,297 | 1,139 | Long-Term Debt | 1,113 | 1,132 | 1,157 | 1,154 | 1,169 | 1,198 | ||||||||||||||||||||
277 | 277 | 277 | 278 | 278 | Floating Rate Capital Debt | 278 | 278 | 278 | 278 | 278 | 278 | ||||||||||||||||||||
74,253 | 76,886 | 83,422 | 88,638 | 85,495 | Total Interest-Related Funds | 87,410 | 84,718 | 85,124 | 84,762 | 89,517 | 101,182 | ||||||||||||||||||||
24,474 | 26,231 | 23,073 | 20,527 | 17,456 | Demand and Other Noninterest-Bearing Deposits | 17,858 | 17,827 | 16,687 | 17,463 | 19,332 | 21,857 | ||||||||||||||||||||
3,364 | 3,368 | 3,132 | 3,553 | 3,952 | Other Liabilities | 3,720 | 3,277 | 3,853 | 4,948 | 4,535 | 4,690 | ||||||||||||||||||||
102,091 | 106,485 | 109,627 | 112,718 | 106,903 | Total Liabilities | 108,988 | 105,821 | 105,664 | 107,173 | 113,384 | 127,729 | ||||||||||||||||||||
8,236 | 8,500 | 9,099 | 9,347 | 9,705 | Common Equity | 9,547 | 9,656 | 9,806 | 9,808 | 9,898 | 10,157 | ||||||||||||||||||||
389 | 585 | 882 | 882 | 943 | Preferred Equity | 882 | 882 | 882 | 1,124 | 889 | 885 | ||||||||||||||||||||
8,625 | 9,085 | 9,981 | 10,229 | 10,648 | Total Stockholders' Equity | 10,429 | 10,538 | 10,688 | 10,933 | 10,787 | 11,041 | ||||||||||||||||||||
$ | 110,715 | $ | 115,570 | $ | 119,607 | $ | 122,947 | $ | 117,551 | Total Liabilities and Stockholders' Equity | $ | 119,417 | $ | 116,359 | $ | 116,352 | $ | 118,105 | $ | 124,171 | $ | 138,771 | |||||||||
$ | 27,997 | $ | 30,152 | $ | 27,756 | $ | 25,093 | $ | 21,614 | Net Noninterest-Related Funds | $ | 23,262 | $ | 20,991 | $ | 19,835 | $ | 22,398 | $ | 21,094 | $ | 24,000 |
- Summations may not equal due to rounding
- Federal Reserve and Other Central Bank Deposits and Other includes collateral deposits with certain securities depositories and clearing houses for the purpose of presenting earning assets; such deposits are presented in Other Assets on the consolidated balance sheets in our periodic filings with the SEC.
- Interest-BearingDue 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 sheets in our periodic filings with the SEC.
- Other securities include certain community development investments and Federal Home Loan Bank and Federal Reserve stock, which are classified in Other Assets on the consolidated balance sheets in our periodic filings with the SEC.
- Cash and Due from Banks and Other Central Bank Deposits includes the noninterest-bearing component of Federal Reserve and Other Central Bank Deposits as presented on the consolidated balance sheets in our periodic filings with the SEC.
6
Northern Trust Corporation
BALANCE SHEET MIX TRENDS
PERIOD AVERAGES(1)
2019 | 2020 | |||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Assets | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | |||||||||||
18.0 % | 17.7 % | 20.0 % | 19.4 % | 15.8 % | Federal Reserve and Other Central Banks Deposits and Other(2) | 16.9 % | 16.5 % | 15.1 % | 14.6 % | 16.0 % | 21.8 % | |||||||||||||
9.7 | 7.6 | 6.0 | 4.9 | 5.1 | Interest-Bearing Due from and Deposits with Banks(3) | 5.4 | 5.0 | 4.9 | 5.1 | 4.7 | 4.0 | |||||||||||||
Federal Funds Sold and Securities Purchased | ||||||||||||||||||||||||
1.1 | 1.5 | 1.5 | 1.2 | 0.7 | under Agreements to Resell | 0.8 | 0.6 | 0.7 | 0.8 | 0.5 | 0.7 | |||||||||||||
Securities: | ||||||||||||||||||||||||
4.5 | 6.1 | 5.3 | 4.7 | 4.5 | U.S. Government | 4.4 | 4.4 | 4.7 | 4.5 | 3.7 | 3.2 | |||||||||||||
0.1 | 0.5 | 0.7 | 0.6 | 0.8 | Obligations of States and Political Subdivisions | 0.6 | 0.7 | 0.8 | 1.2 | 1.4 | 1.3 | |||||||||||||
14.9 | 15.1 | 15.0 | 16.8 | 19.3 | Government Sponsored Agency | 18.8 | 19.2 | 19.3 | 19.6 | 18.8 | 16.9 | |||||||||||||
14.3 | 14.7 | 16.3 | 18.8 | 18.5 | Other(4) | 19.6 | 17.7 | 18.1 | 18.6 | 17.9 | 16.7 | |||||||||||||
33.8 | 36.4 | 37.4 | 40.9 | 43.1 | Total Securities | 43.5 | 42.0 | 43.0 | 44.0 | 41.8 | 38.1 | |||||||||||||
29.8 | 29.5 | 28.1 | 26.1 | 26.4 | Loans and Leases | 26.1 | 26.7 | 26.6 | 26.2 | 26.0 | 25.6 | |||||||||||||
92.4 | 92.6 | 93.0 | 92.5 | 91.1 | Total Earning Assets | 92.7 | 90.8 | 90.2 | 90.7 | 89.1 | 90.2 | |||||||||||||
(0.2) | (0.2) | (0.1) | (0.1) | (0.1) | Allowance for Credit Losses | (0.1) | (0.1) | (0.1) | (0.1) | (0.1) | (0.1) | |||||||||||||
1.9 | 1.8 | 2.2 | 2.1 | 2.0 | Cash and Due From Banks and Other Central Bank Deposits(5) | 1.6 | 2.4 | 2.2 | 1.9 | 2.2 | 2.1 | |||||||||||||
0.4 | 0.4 | 0.4 | 0.4 | 0.4 | Buildings and Equipment | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | 0.4 | |||||||||||||
0.9 | 1.0 | 0.7 | 0.8 | 0.9 | Client Security Settlement Receivables | 0.8 | 0.9 | 0.9 | 1.0 | 1.2 | 0.9 | |||||||||||||
0.5 | 0.5 | 0.5 | 0.5 | 0.6 | Goodwill | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 | 0.5 | |||||||||||||
4.2 | 4.0 | 3.4 | 3.8 | 5.1 | Other Assets | 4.1 | 5.0 | 5.8 | 5.5 | 6.6 | 6.0 | |||||||||||||
100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | Total Assets | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | |||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||
13.8 % | 13.1 % | 13.0 % | 12.3 % | 14.1 % | Savings, Money Market and Other | 12.0 % | 13.7 % | 15.3 % | 15.4 % | 16.3 % | 17.3 % | |||||||||||||
1.5 | 1.2 | 1.1 | 0.7 | 0.7 | Savings Certificates and Other Time | 0.6 | 0.8 | 0.8 | 0.8 | 0.8 | 1.0 | |||||||||||||
44.6 | 44.0 | 47.3 | 47.6 | 46.7 | Non- U.S. Offices - Interest-Bearing | 48.9 | 47.0 | 46.1 | 44.8 | 43.9 | 45.8 | |||||||||||||
59.9 | 58.3 | 61.4 | 60.7 | 61.5 | Total Interest-Bearing Deposits | 61.6 | 61.5 | 62.2 | 60.9 | 61.0 | 64.1 | |||||||||||||
4.3 | 5.5 | 5.6 | 8.8 | 8.0 | Short-Term Borrowings | 8.8 | 8.1 | 7.5 | 7.4 | 7.8 | 5.3 | |||||||||||||
1.4 | 1.3 | 1.3 | 1.4 | 2.0 | Senior Notes | 1.7 | 2.0 | 2.2 | 2.2 | 2.1 | 2.4 | |||||||||||||
1.3 | 1.2 | 1.3 | 1.1 | 1.0 | Long-Term Debt | 0.9 | 1.0 | 1.0 | 1.0 | 0.9 | 0.9 | |||||||||||||
0.3 | 0.2 | 0.2 | 0.2 | 0.2 | Floating Rate Capital Debt | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | |||||||||||||
67.1 | 66.5 | 69.7 | 72.1 | 72.7 | Total Interest-Related Funds | 73.2 | 72.8 | 73.2 | 71.8 | 72.1 | 72.9 | |||||||||||||
22.1 | 22.7 | 19.3 | 16.7 | 14.8 | Demand and Other Noninterest-Bearing Deposits | 15.0 | 15.3 | 14.3 | 14.8 | 15.6 | 15.8 | |||||||||||||
3.0 | 2.9 | 2.6 | 2.9 | 3.4 | Other Liabilities | 3.1 | 2.8 | 3.3 | 4.2 | 3.7 | 3.4 | |||||||||||||
92.2 | 92.1 | 91.7 | 91.7 | 90.9 | Total Liabilities | 91.3 | 90.9 | 90.8 | 90.7 | 91.3 | 92.0 | |||||||||||||
7.4 | 7.4 | 7.6 | 7.6 | 8.3 | Common Equity | 8.0 | 8.3 | 8.4 | 8.3 | 8.0 | 7.3 | |||||||||||||
0.4 | 0.5 | 0.7 | 0.7 | 0.8 | Preferred Equity | 0.7 | 0.8 | 0.8 | 1.0 | 0.7 | 0.6 | |||||||||||||
7.8 | 7.9 | 8.3 | 8.3 | 9.1 | Total Stockholders' Equity | 8.7 | 9.1 | 9.2 | 9.3 | 8.7 | 8.0 | |||||||||||||
100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | Total Liabilities and Stockholders' Equity | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | 100.0 % | |||||||||||||
- Summations may not equal due to rounding
- Federal Reserve and Other Central Bank Deposits and Other includes collateral deposits with certain securities depositories and clearing houses for the purpose of presenting earning assets; such deposits are presented in Other Assets on the consolidated balance sheets in our periodic filings with the SEC.
- Interest-BearingDue 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 sheets in our periodic filings with the SEC.
- Other securities include certain community development investments and Federal Home Loan Bank and Federal Reserve stock, which are classified in Other Assets on the consolidated balance sheets in our periodic filings with the SEC.
- Cash and Due from Banks and Other Central Bank Deposits includes the noninterest-bearing component of Federal Reserve and Other Central Bank Deposits as presented on the consolidated balance sheets in our periodic filings with the SEC.
7
Northern Trust Corporation
INTEREST RATE TRENDS (FTE(1) Basis)
PERIOD AVERAGES
Net Interest Income (FTE Adjusted), a non-GAAP financial measure, includes adjustments to a fully taxable equivalent basis for loans and securities. A reconciliation of net interest income, net interest margin, and net interest spread on a GAAP basis to net interest income, net interest margin, and net interest spread on an FTE basis, respectively, (each of which is a non-GAAP financial measure) is provided on pages 11 and 12. Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets. Net interest spread is calculated as the difference between the interest rate earned (annualized interest income divided by average interest-earning assets) and the interest rate incurred (annualized interest expense divided by average interest-related funds).
2019 | 2020 | ||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Earnings Assets | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | ||||||||||||||
0.32 % | 0.45 % | 0.65 % | 0.87 % | 0.98 % | Federal Reserve and Other Central Banks Deposits and | 1.23 % | 0.96 % | 0.91 % | 0.78 % | 0.47 % | 0.05 % | ||||||||||||||||
Other(2) | |||||||||||||||||||||||||||
0.79 | 0.73 | 0.89 | 1.16 | 1.21 | Interest-Bearing Due from and Deposits with Banks(3) | 1.13 | 1.33 | 1.31 | 1.09 | 0.88 | 0.33 | ||||||||||||||||
Federal Funds Sold and Securities Purchased under | |||||||||||||||||||||||||||
0.54 | 1.04 | 1.48 | 2.22 | 2.11 | Agreements to Resell | 2.84 | 2.62 | 1.93 | 1.18 | 0.97 | 0.22 | ||||||||||||||||
Securities: | |||||||||||||||||||||||||||
1.11 | 1.10 | 1.41 | 1.89 | 2.09 | U.S. Government | 2.22 | 2.16 | 2.03 | 1.94 | 1.88 | 1.60 | ||||||||||||||||
6.58 | 1.94 | 1.48 | 1.91 | 2.49 | Obligations of States and Political Subdivisions | 2.57 | 2.68 | 2.46 | 2.38 | 2.46 | 2.43 | ||||||||||||||||
0.87 | 1.02 | 1.57 | 2.20 | 2.58 | Government Sponsored Agency | 2.69 | 2.69 | 2.60 | 2.34 | 2.13 | 1.88 | ||||||||||||||||
0.94 | 1.12 | 1.30 | 1.59 | 1.75 | Other(4) | 1.77 | 1.81 | 1.72 | 1.73 | 1.67 | 1.34 | ||||||||||||||||
0.95 | 1.09 | 1.43 | 1.88 | 2.17 | Total Securities | 2.22 | 2.26 | 2.16 | 2.04 | 1.92 | 1.64 | ||||||||||||||||
2.24 | 2.38 | 2.77 | 3.45 | 3.74 | Loans and Leases | 3.90 | 3.90 | 3.75 | 3.40 | 3.13 | 2.15 | ||||||||||||||||
1.22 % | 1.35 % | 1.63 % | 2.08 % | 2.36 % | Total Earning Assets | 2.46 % | 2.46 % | 2.38 % | 2.17 % | 1.95 % | 1.33 % | ||||||||||||||||
Interest-Bearing Funds | |||||||||||||||||||||||||||
0.06 % | 0.08 % | 0.16 % | 0.54 % | 0.97 % Savings, Money Market and Other | 0.99 % | 1.07 % | 1.03 % | 0.81 % | 0.61 % | 0.12 % | |||||||||||||||||
0.47 | 0.58 | 0.74 | 0.90 | 1.86 | Savings Certificates and Other Time | 1.48 | 1.89 | 2.01 | 2.00 | 1.91 | 1.42 | ||||||||||||||||
0.12 | 0.12 | 0.26 | 0.50 | 0.57 | Non- U.S. Offices - Interest-Bearing | 0.76 | 0.64 | 0.53 | 0.33 | 0.19 | (0.08) | ||||||||||||||||
0.11 | 0.12 | 0.25 | 0.52 | 0.68 | Total Interest-Bearing Deposits | 0.81 | 0.75 | 0.67 | 0.47 | 0.32 | - | ||||||||||||||||
0.13 | 0.34 | 1.00 | 1.93 | 2.29 | Short-Term Borrowings | 2.52 | 2.48 | 2.26 | 1.84 | 1.34 | 0.35 | ||||||||||||||||
3.13 | 3.13 | 3.13 | 3.13 | 3.04 | Senior Notes | 3.19 | 3.14 | 3.00 | 2.86 | 2.76 | 2.39 | ||||||||||||||||
1.71 | 1.90 | 2.58 | 3.47 | 3.36 | Long-Term Debt | 3.64 | 3.54 | 3.21 | 3.07 | 2.90 | 2.35 | ||||||||||||||||
0.86 | 1.25 | 1.75 | 2.72 | 2.98 | Floating Rate Capital Debt | 3.27 | 3.17 | 2.89 | 2.59 | 2.41 | 2.24 | ||||||||||||||||
0.21 % | 0.24 % | 0.41 % | 0.79 % | 0.96 % | Total Interest-Related Funds | 1.12 % | 1.06 % | 0.95 % | 0.73 % | 0.54 % | 0.14 % | ||||||||||||||||
1.01 % | 1.11 % | 1.22 % | 1.29 % | 1.40 % | Net Interest Spread | 1.34 % | 1.40 % | 1.43 % | 1.44 % | 1.41 % | 1.19 % | ||||||||||||||||
1.07 % | 1.18 % | 1.33 % | 1.46 % | 1.60 % | Net Interest Margin | 1.58 % | 1.61 % | 1.61 % | 1.59 % | 1.51 % | 1.22 % | ||||||||||||||||
- Fully taxable equivalent. The 2018 through 2020 FTE adjustments are based on a federal income tax rate of 21% and the 2015 through 2017 FTE adjustments are based on a federal income tax rate of 35%, where the rate is adjusted for applicable state income taxes, net of related federal tax benefit.
- Federal Reserve and Other Central Bank Deposits and Other includes collateral deposits with certain securities depositories and clearing houses for the purpose of presenting earning assets; such deposits are presented in Other Assets on the consolidated balance sheets in our periodic filings with the SEC.
- Interest-BearingDue 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 sheets in our periodic filings with the SEC.
- Other securities include certain community development investments and Federal Home Loan Bank and Federal Reserve stock, which are classified in Other Assets on the consolidated balance sheets in our periodic filings with the SEC.
Note The yields on the US Government, Government Sponsored Agency and Other lines in the Securities Portfolio for 2015 and 2016 have been restated to reflect a reclassification in the interest income ascribed to each category. The yield for the Total Securities portfolio was not impacted by the aforementioned reclassification.
8
Northern Trust Corporation
ASSET QUALITY
END OF PERIOD
($ in Millions)
2019 | 2020 | |||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | ||||||||||||||||
$ 295.9 | $ 233.3 | $ 192.0 | $ 153.8 | $ | 138.2 | Beginning Allowance for Credit Losses | $ 138.2 | $ 139.4 | $ 134.1 | $ | 127.7 | $ 124.4 | $ | 198.4 | ||||||||||||||
- | - | - | - | - | Cumulative Effect Adjustment* | - | - | - | - | 13.7 | - | |||||||||||||||||
(43.0) | (26.0) | (28.0) | (14.5) | (14.5) | Provision for Credit Losses | - | (6.5) | (7.0) | (1.0) | 61.0 | 66.0 | |||||||||||||||||
(Charge-offs) Recoveries | ||||||||||||||||||||||||||||
(30.7) | (27.3) | (21.5) | (10.1) | (6.5) | Charge-offs | (1.0) | (0.6) | (1.1) | (3.8) | (1.8) | (0.4) | |||||||||||||||||
11.2 | 12.1 | 11.3 | 9.0 | 7.2 | Recoveries | 2.2 | 1.8 | 1.7 | 1.5 | 1.1 | 3.0 | |||||||||||||||||
(19.5) | (15.2) | (10.2) | (1.1) | 0.7 | Net (Charge-offs) Recoveries | 1.2 | 1.2 | 0.6 | (2.3) | (0.7) | 2.6 | |||||||||||||||||
(0.1) | (0.1) | - | - | - | Effect of Foreign Exchange Rates | - | - | - | - | - | - | |||||||||||||||||
$ 233.3 | $ 192.0 | $ 153.8 | $ 138.2 | $ | 124.4 | Ending Allowance for Credit Losses | $ 139.4 | $ 134.1 | $ 127.7 | $ | 124.4 | $ 198.4 | $ | 267.0 | ||||||||||||||
Allowance for Credit Losses Assigned to: | ||||||||||||||||||||||||||||
$ 193.8 | $ 161.0 | $ 131.2 | $ 112.6 | $ | 104.5 | Loans and Leases | $ 114.5 | $ 110.8 | $ 105.7 | $ | 104.5 | $ 147.2 | $ | 210.2 | ||||||||||||||
39.5 | 31.0 | 22.6 | 25.6 | 19.9 | Undrawn Loan Commitments and Standby Letters of | 24.9 | 23.3 | 22.0 | 19.9 | 40.4 | 49.0 | |||||||||||||||||
Credit | ||||||||||||||||||||||||||||
- | - | - | - | - | Debt Securities and Other Financial Assets | - | - | - | - | 10.8 | 7.8 | |||||||||||||||||
$ 233.3 | $ 192.0 | $ 153.8 | $ 138.2 | $ | 124.4 | Total Allowance for Credit Losses | $ 139.4 | $ 134.1 | $ 127.7 | $ | 124.4 | $ 198.4 | $ | 267.0 | ||||||||||||||
$33,016 | $34,044 | $33,565 | $32,029 | $ | 31,053 | Average Loans and Leases Outstanding | $31,189 | $31,099 | $30,936 | $ | 30,991 | $32,316 | $ | 35,507 | ||||||||||||||
Annualized Loan-Related Net (Charge-offs) | ||||||||||||||||||||||||||||
Recoveries to | ||||||||||||||||||||||||||||
(0.06)% | (0.04)% | (0.03)% | - % | - % Average Loans and Leases | 0.02 % | 0.02 % | 0.01 % | (0.03)% | (0.01)% | 0.03 % | ||||||||||||||||||
$33,181 | $33,822 | $32,592 | $32,490 | $ | 31,410 | End of Period Loans and Leases Outstanding | $30,621 | $30,982 | $30,844 | $ | 31,410 | $37,838 | $ | 33,757 | ||||||||||||||
Allowance for Credit Losses Assigned to Loans | ||||||||||||||||||||||||||||
0.58 % | 0.48 % | 0.40 % | 0.35 % | 0.33 % and Leases to Total Loans and Leases | 0.37 % | 0.36 % | 0.34 % | 0.33 % | 0.39 % | 0.62 % | ||||||||||||||||||
Nonaccrual Assets | ||||||||||||||||||||||||||||
$ 180.1 | $ 160.2 | $ 150.7 | $ 109.3 | $ | 83.6 | Nonaccrual Loans and Leases | $ 116.1 | $ 115.1 | $ 113.1 | $ | 83.6 | $ 103.9 | $ | 98.5 | ||||||||||||||
8.2 | 5.2 | 4.6 | 8.4 | 3.2 | Other Real Estate Owned (OREO) | 8.0 | 3.8 | 3.2 | 3.2 | 1.6 | 0.9 | |||||||||||||||||
$ 188.3 | $ 165.4 | $ 155.3 | $ 117.7 | $ | 86.8 | Total Nonaccrual Assets | $ 124.1 | $ 118.9 | $ 116.3 | $ | 86.8 | $ 105.5 | $ | 99.4 | ||||||||||||||
0.57 % | 0.49 % | 0.48 % | 0.36 % | 0.28 % Nonaccrual Assets to Loans and Leases and OREO | 0.41 % | 0.38 % | 0.38 % | 0.28 % | 0.28 % | 0.29 % | ||||||||||||||||||
Loan and Lease Allowance to Nonaccrual | ||||||||||||||||||||||||||||
1.1x | 1.0x | 0.9x | 1.0x | 1.3x | Loans and Leases Coverage | 1.0x | 1.0x | 0.9x | 1.3x | 1.4x | 2.1x |
* Upon the January 1, 2020 adoption of ASU 2016-13, Northern Trust increased the allowance for credit losses by $13.7 million, with a corresponding cumulative effect adjustment to decrease retained earnings $10.1 million, net of tax.
9
Northern Trust Corporation
ASSETS UNDER MANAGEMENT AND CUSTODY
END OF PERIOD
($ in Billions)
2019 | 2020 | |||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | ||||||||||||||||||||||||
Assets under Management | ||||||||||||||||||||||||||||||||||||
$ | 648.0 | $ | 694.0 | $ | 871.2 | $ | 790.8 | $ | 917.5 | Corporate & Institutional Services | $ | 867.9 | $ | 887.0 | $ | 901.3 | $ | 917.5 | $ | 842.6 | $ | 954.0 | ||||||||||||||
Asset allocation: | ||||||||||||||||||||||||||||||||||||
342.6 | 363.4 | 443.3 | 403.3 | 483.8 | Equities | 443.6 | 460.5 | 452.6 | 483.8 | 377.2 | 461.2 | |||||||||||||||||||||||||
82.9 | 91.3 | 111.9 | 105.3 | 114.6 | Fixed Income Securities | 110.3 | 112.3 | 112.7 | 114.6 | 113.9 | 113.9 | |||||||||||||||||||||||||
118.8 | 127.5 | 148.5 | 132.4 | 156.1 | Cash and Other Assets | 149.0 | 150.9 | 157.7 | 156.1 | 184.4 | 213.2 | |||||||||||||||||||||||||
103.7 | 111.8 | 167.5 | 149.8 | 163.0 | Securities Lending Collateral | 165.0 | 163.3 | 178.3 | 163.0 | 167.1 | 165.7 | |||||||||||||||||||||||||
$ | 227.3 | $ | 248.4 | $ | 289.8 | $ | 278.6 | $ | 313.8 | Wealth Management | $ | 294.2 | $ | 293.2 | $ | 300.5 | $ | 313.8 | $ | 276.7 | $ | 303.8 | ||||||||||||||
Asset allocation: | ||||||||||||||||||||||||||||||||||||
104.1 | 117.2 | 149.0 | 130.9 | 167.0 | Equities | 148.2 | 153.3 | 154.8 | 167.0 | 127.3 | 147.3 | |||||||||||||||||||||||||
64.1 | 69.2 | 71.6 | 73.0 | 79.2 | Fixed Income Securities | 74.8 | 77.1 | 78.2 | 79.2 | 75.9 | 79.2 | |||||||||||||||||||||||||
58.9 | 61.8 | 69.0 | 74.6 | 67.5 | Cash and Other Assets | 71.1 | 62.7 | 67.4 | 67.5 | 73.5 | 77.3 | |||||||||||||||||||||||||
0.2 | 0.2 | 0.2 | 0.1 | 0.1 | Securities Lending Collateral | 0.1 | 0.1 | 0.1 | 0.1 | - | - | |||||||||||||||||||||||||
$ | 875.3 | $ | 942.4 | $ | 1,161.0 | $ | 1,069.4 | $ | 1,231.3 | Total Assets under Management | $ | 1,162.1 | $ | 1,180.2 | $ | 1,201.8 | $ | 1,231.3 | $ | 1,119.3 | $ | 1,257.8 | ||||||||||||||
Asset allocation: | ||||||||||||||||||||||||||||||||||||
$ | 446.7 | $ | 480.6 | $ | 592.3 | $ | 534.2 | $ | 650.8 | Equities | $ | 591.8 | $ | 613.8 | $ | 607.4 | $ | 650.8 | $ | 504.5 | $ | 608.5 | ||||||||||||||
147.0 | 160.5 | 183.5 | 178.3 | 193.8 | Fixed Income Securities | 185.1 | 189.4 | 190.9 | 193.8 | 189.8 | 193.1 | |||||||||||||||||||||||||
177.7 | 189.3 | 217.5 | 207.0 | 223.6 | Cash and Other Assets | 220.1 | 213.6 | 225.1 | 223.6 | 257.9 | 290.5 | |||||||||||||||||||||||||
103.9 | 112.0 | 167.7 | 149.9 | 163.1 | Securities Lending Collateral | 165.1 | 163.4 | 178.4 | 163.1 | 167.1 | 165.7 | |||||||||||||||||||||||||
Assets under Custody / Administration | ||||||||||||||||||||||||||||||||||||
7,279.7 | $ | 7,987.0 | $ | 10,066.8 | $ | 9,490.5 | $ | 11,311.6 | Corporate & Institutional Services | $ | 10,238.9 | $ | 10,623.6 | $ | 10,864.0 | $ | 11,311.6 | $ | 10,236.5 | $ | 11,347.1 | |||||||||||||||
517.3 | 554.3 | 655.8 | 634.8 | 738.8 | Wealth Management | 688.5 | 698.4 | 701.2 | 738.8 | 640.1 | 751.2 | |||||||||||||||||||||||||
$ | 7,797.0 | $ | 8,541.3 | $ | 10,722.6 | $ | 10,125.3 | $ | 12,050.4 | Total Assets under Custody / Administration | $ | 10,927.4 | $ | 11,322.0 | $ | 11,565.2 | $ | 12,050.4 | $ | 10,876.6 | $ | 12,098.3 | ||||||||||||||
Assets under Custody | ||||||||||||||||||||||||||||||||||||
$ | 5,565.8 | $ | 6,176.9 | $ | 7,439.1 | $ | 6,971.0 | $ | 8,497.8 | Corporate & Institutional Services | $ | 7,529.1 | $ | 7,820.6 | $ | 8,061.4 | $ | 8,497.8 | $ | 7,620.8 | $ | 8,542.7 | ||||||||||||||
Asset allocation: | ||||||||||||||||||||||||||||||||||||
2,423.4 | 2,761.6 | 3,400.1 | 3,043.0 | 3,866.6 | Equities | 3,392.3 | 3,513.6 | 3,505.2 | 3,866.6 | 3,044.8 | 3,661.4 | |||||||||||||||||||||||||
2,119.6 | 2,313.6 | 2,755.2 | 2,700.2 | 3,102.3 | Fixed Income Securities | 2,857.2 | 2,977.1 | 3,111.9 | 3,102.3 | 3,006.2 | 3,211.1 | |||||||||||||||||||||||||
919.1 | 989.9 | 1,116.3 | 1,078.0 | 1,365.9 | Cash and Other Assets | 1,114.6 | 1,166.6 | 1,266.1 | 1,365.9 | 1,402.7 | 1,504.5 | |||||||||||||||||||||||||
103.7 | 111.8 | 167.5 | 149.8 | 163.0 | Securities Lending Collateral | 165.0 | 163.3 | 178.2 | 163.0 | 167.1 | 165.7 | |||||||||||||||||||||||||
$ | 506.3 | $ | 543.6 | $ | 645.5 | $ | 622.9 | $ | 735.7 | Wealth Management | $ | 670.6 | $ | 698.2 | $ | 698.7 | $ | 735.7 | $ | 633.9 | $ | 747.9 | ||||||||||||||
Asset allocation: | ||||||||||||||||||||||||||||||||||||
271.7 | 296.4 | 375.6 | 336.5 | 432.0 | Equities | 380.9 | 402.0 | 397.2 | 432.0 | 331.6 | 441.4 | |||||||||||||||||||||||||
120.4 | 120.7 | 121.3 | 122.2 | 134.3 | Fixed Income Securities | 127.2 | 135.3 | 131.6 | 134.3 | 126.0 | 126.0 | |||||||||||||||||||||||||
114.0 | 126.3 | 148.4 | 164.1 | 169.3 | Cash and Other Assets | 162.4 | 160.8 | 169.8 | 169.3 | 176.3 | 180.5 | |||||||||||||||||||||||||
0.2 | 0.2 | 0.2 | 0.1 | 0.1 | Securities Lending Collateral | 0.1 | 0.1 | 0.1 | 0.1 | - | - | |||||||||||||||||||||||||
$ | 6,072.1 | $ | 6,720.5 | $ | 8,084.6 | $ | 7,593.9 | $ | 9,233.5 | Total Assets under Custody | $ | 8,199.7 | $ | 8,518.8 | $ | 8,760.1 | $ | 9,233.5 | $ | 8,254.7 | $ | 9,290.6 | ||||||||||||||
Asset allocation: | ||||||||||||||||||||||||||||||||||||
$ | 2,695.1 | $ | 3,058.0 | $ | 3,775.7 | $ | 3,379.5 | $ | 4,298.6 | Equities | $ | 3,773.2 | $ | 3,915.6 | $ | 3,902.4 | $ | 4,298.6 | $ | 3,376.4 | $ | 4,102.8 | ||||||||||||||
2,240.0 | 2,434.3 | 2,876.5 | 2,822.4 | 3,236.6 | Fixed Income Securities | 2,984.4 | 3,112.4 | 3,243.5 | 3,236.6 | 3,132.2 | 3,337.1 | |||||||||||||||||||||||||
1,033.1 | 1,116.2 | 1,264.7 | 1,242.1 | 1,535.2 | Cash and Other Assets | 1,277.0 | 1,327.4 | 1,435.9 | 1,535.2 | 1,579.0 | 1,685.0 | |||||||||||||||||||||||||
103.9 | 112.0 | 167.7 | 149.9 | 163.1 | Securities Lending Collateral | 165.1 | 163.4 | 178.3 | 163.1 | 167.1 | 165.7 | |||||||||||||||||||||||||
Memo | ||||||||||||||||||||||||||||||||||||
$ | 61.9 | $ | 69.3 | $ | 87.1 | $ | 83.5 | $ | 94.2 | WM Global Family Office AUM | $ | 86.5 | $ | 86.6 | $ | 92.3 | $ | 94.2 | $ | 89.6 | $ | 96.8 | ||||||||||||||
321.4 | 347.7 | 422.9 | 405.5 | 474.1 | WM Global Family Office AUC | 441.6 | 451.5 | 450.3 | 474.1 | 409.8 | 504.1 | |||||||||||||||||||||||||
3,529.9 | 3,966.0 | 4,937.6 | 4,700.3 | 5,894.6 | Global Custody Assets * | 5,113.5 | 5,317.8 | 5,543.5 | 5,894.6 | 5,218.4 | 5,881.5 |
* Includes the assets of non-U.S. clients plus global custody assets of U.S. clients
10
Northern Trust Corporation
RECONCILIATION TO FULLY TAXABLE EQUIVALENT
($ in Millions)
Northern Trust presents certain financial measures on a fully taxable equivalent (FTE) basis, which is a non-generally accepted accounting principle (GAAP). Management believes an FTE presentation provides a clearer indication of these financial measures for comparative purposes.
Net interest income (FTE) - Non-GAAP and net interest margin (FTE) - Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income, consistent with industry practice. The adjustments are based on the federal income tax rate, where the rate is adjusted for applicable state income taxes, net of related federal tax benefit. 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. Below is a reconciliation of the financial measures presented on an FTE basis.
SIX | SIX | 2019 | 2020 | |||||||||||||||||||||||||
MONTHS | MONTHS | |||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2019 | 2020 | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr 3rd Qtr | 4th Qtr | |||||||||||||||
$1,224.0 | $1,416.9 | $1,769.4 | $2,321.4 | $2,499.9 | $ 1,303.0 | $ 935.5 | Interest Income - GAAP | $ 662.8 | $ 640.2 | $ 620.8 | $ 576.1 | $ 529.2 | $ 406.3 | |||||||||||||||
25.3 | 25.1 | 45.8 | 41.2 | 32.8 | 15.5 | 15.8 | Add: FTE Adjustment | 7.8 | 7.7 | 7.6 | 9.7 | 8.1 | 7.7 | |||||||||||||||
1,249.3 | 1,442.0 | 1,815.2 | 2,362.6 | 2,532.7 | 1,318.5 | 951.3 | Interest Income (FTE) - Non-GAAP | 670.6 | 647.9 | 628.4 | 585.8 | 537.3 | 414.0 | |||||||||||||||
1,070.1 | 1,234.9 | 1,429.2 | 1,622.7 | 1,677.9 | 839.4 | 780.2 | Net Interest Income - GAAP | 422.0 | 417.4 | 417.7 | 420.8 | 408.1 | 372.1 | |||||||||||||||
25.3 | 25.1 | 45.8 | 41.2 | 32.8 | 15.5 | 15.8 | Add: FTE Adjustment | 7.8 | 7.7 | 7.6 | 9.7 | 8.1 | 7.7 | |||||||||||||||
1,095.4 | 1,260.0 | 1,475.0 | 1,663.9 | 1,710.7 | 854.9 | 796.0 | Net Interest Income (FTE) - Non-GAAP | 429.8 | 425.1 | 425.3 | 430.5 | 416.2 | 379.8 | |||||||||||||||
4,702.6 | 4,961.8 | 5,375.3 | 5,960.2 | 6,073.1 | 2,987.5 | 3,093.8 | Total Revenue - GAAP | 1,480.9 | 1,506.6 | 1,537.9 | 1,547.7 | 1,587.7 | 1506.1 | |||||||||||||||
25.3 | 25.1 | 45.8 | 41.2 | 32.8 | 15.5 | 15.8 | Add: FTE Adjustment | 7.8 | 7.7 | 7.6 | 9.7 | 8.1 | 7.7 | |||||||||||||||
4,727.9 | 4,986.9 | 5,421.1 | 6,001.4 | 6,105.9 | 3,003.0 | 3,109.6 | Total Revenue (FTE) - Non-GAAP | 1,488.7 | 1,514.3 | 1,545.5 | 1,557.4 | 1,595.8 | 1513.8 | |||||||||||||||
1,465.0 | 1,517.1 | 1,633.9 | 1,957.8 | 1,944.1 | 959.1 | 864.3 | Income before Income Taxes - GAAP | 452.2 | 506.9 | 508.6 | 476.4 | 461.1 | 403.2 | |||||||||||||||
25.3 | 25.1 | 45.8 | 41.2 | 32.8 | 15.5 | 15.8 | Add: FTE Adjustment | 7.8 | 7.7 | 7.6 | 9.7 | 8.1 | 7.7 | |||||||||||||||
1,490.3 | 1,542.2 | 1,679.7 | 1,999.0 | 1,976.9 | 974.6 | 880.1 | Income before Income Taxes (FTE) - Non-GAAP | 460.0 | 514.6 | 516.2 | 486.1 | 469.2 | 410.9 | |||||||||||||||
491.2 | 484.6 | 434.9 | 401.4 | 451.9 | 222.6 | 190.4 | Provision for Income Taxes - GAAP | 105.1 | 117.5 | 124.0 | 105.3 | 100.5 | 89.9 | |||||||||||||||
25.3 | 25.1 | 45.8 | 41.2 | 32.8 | 15.5 | 15.8 | Add: FTE Adjustment | 7.8 | 7.7 | 7.6 | 9.7 | 8.1 | 7.7 | |||||||||||||||
516.5 | 509.7 | 480.7 | 442.6 | 484.7 | 238.1 | 206.2 | Provision for Income Taxes (FTE) - Non-GAAP | 112.9 | 125.2 | 131.6 | 115.0 | 108.6 | 97.6 |
11
Northern Trust Corporation
RECONCILIATION TO FULLY TAXABLE EQUIVALENT
RATIOS
Northern Trust presents certain financial measures on a fully taxable equivalent (FTE) basis, which is a non-generally accepted accounting principle (GAAP). Management believes an FTE presentation provides a clearer indication of these financial measures for comparative purposes.
Net interest income (FTE) - Non-GAAP and net interest margin (FTE) - Non-GAAP and other FTE measures include the tax equivalent adjustments on tax-exempt income, consistent with industry practice. The adjustments are based on the federal income tax rate, where the rate is adjusted for applicable state income taxes, net of related federal tax benefit. 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. Below is a reconciliation of the financial ratios presented on an FTE basis.
2019 | 2020 | |||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr 3rd Qtr 4th Qtr | ||||||||||||||
31.2 % | 30.6 % | 30.4 % | 32.8 % | 32.0 % | Profit Margin (pre-tax) - GAAP (1) | 30.5 % | 33.6 % | 33.1 % | 30.8 % | 29.0 % | 26.8 % | |||||||||||||
31.5 % | 30.9 % | 31.0 % | 33.3 % | 32.4 % Profit Margin (pre-tax) (FTE) - Non-GAAP(1) | 30.9 % | 34.0 % | 33.4 % | 31.2 % | 29.4 % | 27.1 % | ||||||||||||||
20.7 % | 20.8 % | 22.3 % | 26.1 % | 24.6 % | Profit Margin (after-tax) - GAAP (2) | 23.4 % | 25.8 % | 25.0 % | 24.0 % | 22.7 % | 20.8 % | |||||||||||||
20.6 % | 20.7 % | 22.1 % | 25.9 % | 24.4 % Profit Margin (after-tax) (FTE) - Non-GAAP(2) | 23.3 % | 25.7 % | 24.9 % | 23.8 % | 22.6 % | 20.7 % | ||||||||||||||
33.5 % | 31.9 % | 26.6 % | 20.5 % | 23.2 % | Effective Tax Rate - GAAP (3) | 23.2 % | 23.2 % | 24.4 % | 22.1 % | 21.8 % | 22.3 % | |||||||||||||
34.7 % | 33.1 % | 28.6 % | 22.1 % | 24.5 % Effective Tax Rate (FTE) - Non-GAAP(3) | 24.5 % | 24.3 % | 25.5 % | 23.7 % | 23.1 % | 23.8 % | ||||||||||||||
77.2 % | 75.1 % | 73.4 % | 72.8 % | 72.4 % Noninterest Income to Total Revenue - GAAP (4) | 71.5 % | 72.3 % | 72.8 % | 72.8 % | 74.3 % | 75.3 % | ||||||||||||||
76.8 % | 74.7 % | 72.8 % | 72.3 % | 72.0 % Noninterest Income to Total Revenue (FTE) - Non-GAAP(4) | 71.1 % | 71.9 % | 72.5 % | 72.4 % | 73.9 % | 74.9 % | ||||||||||||||
63.4 % | 62.6 % | 63.9 % | 63.0 % | 63.4 % Trust Fees to Total Revenue - GAAP (5) | 62.7 % | 63.4 % | 63.4 % | 64.1 % | 63.2 % | 63.8 % | ||||||||||||||
63.0 % | 62.3 % | 63.4 % | 62.5 % | 63.1 % Trust Fees to Total Revenue (FTE) - Non-GAAP(5) | 62.4 % | 63.1 % | 63.1 % | 63.7 % | 62.9 % | 63.5 % | ||||||||||||||
0.99 % | 1.08 % | 1.18 % | 1.25 % | 1.37 % | Net Interest Spread - GAAP (6) | 1.31 % | 1.37 % | 1.40 % | 1.40 % | 1.38 % | 1.17 % | |||||||||||||
1.01 % | 1.11 % | 1.22 % | 1.29 % | 1.40 % Net Interest Spread (FTE) - Non-GAAP(6) | 1.34 % | 1.40 % | 1.43 % | 1.44 % | 1.41 % | 1.19 % | ||||||||||||||
1.05 % | 1.15 % | 1.29 % | 1.43 % | 1.57 % | Net Interest Margin - GAAP (7) | 1.55 % | 1.58 % | 1.58 % | 1.56 % | 1.48 % | 1.20 % | |||||||||||||
1.07 % | 1.18 % | 1.33 % | 1.46 % | 1.60 % Net Interest Margin (FTE) - Non-GAAP(7) | 1.58 % | 1.61 % | 1.61 % | 1.59 % | 1.51 % | 1.22 % |
- Profit margin (pre-tax) is calculated by dividing income before income taxes by total revenue. Profit margin (pre-tax) on an FTE basis is calculated by dividing income before income taxes on an FTE basis by total revenue on an FTE basis.
- Profit margin (after-tax) is calculated by dividing net income by total revenue. Profit margin (after-tax) on an FTE basis is calculated by dividing net income by total revenue on an FTE basis.
- Effective tax rate is calculated by dividing the provision for income taxes by income before income taxes. Effective tax rate on an FTE basis is calculated by dividing the provision for income taxes on an FTE basis by income before income taxes on an FTE basis.
- Noninterest income to total revenue is calculated by dividing noninterest income by total revenue. Noninterest income to total revenue on an FTE basis is calculated by dividing noninterest income by total revenue on an FTE basis.
- Trust fees to total revenue is calculated by dividing total trust, investment and other servicing fees by total revenue. Trust fees to total revenue on an FTE basis is calculated by dividing total trust, investment and other servicing fees by total revenue on an FTE basis.
- Net interest spread is calculated as the difference between the interest rate earned (annualized interest income divided by average interest-earning assets) and the interest rate incurred (annualized interest expense divided by average interest-related funds). Net interest spread on an FTE basis is calculated as the difference between the interest rate earned (annualized interest income on an FTE basis divided by average interest-earning assets) and the interest rate incurred (annualized interest expense divided by average interest-related funds).
- Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets. Net interest margin on an FTE basis is calculated by dividing annualized net interest income on an FTE basis by average interest-earning assets.
12
Attachments
- Original document
- Permalink
Disclaimer
Northern Trust Corporation published this content on 22 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 July 2020 11:35:08 UTC