<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 20, 1997
--------------------------
NORTHERN TRUST CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
0-5965 36-2723087
- ---------------------------------------- -------------------------------------
Commission File Number) (IRS Employer Identification No.)
Fifty South LaSalle Street, Chicago, Illinois 60675
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 630-6000
------------------------
<PAGE>
Item 5. Other Events
The information contained in the registrant's October 20, 1997 press
release, reporting on the registrant's earnings for the third quarter and first
nine months of 1997, a copy of which is filed as Exhibit 99 hereto, is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
Exhibit 99 October 20, 1997 Press Release
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHERN TRUST CORPORATION
--------------------------
(Registrant)
Dated: October 21, 1997 By: Perry R. Pero
-------------
Perry R. Pero
Senior Executive Vice President
and Chief Financial Officer
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<PAGE>
EXHIBIT INDEX
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Number Description Page Number
- ------ ----------- -----------
99 October 20, 1997 Press Release 5
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<PAGE>
Exhibit 99
________________________________________________________________________________
NEWS RELEASE
________________________________________________________________________________
________________________________________________________________________________
Northern Trust Corporation
50 South LaSalle Street
Chicago, Illinois 60675
Contact: Laurie McMahon, Investor Relations
(312) 444-7811 or
Dianne Kotsogiannis, Public Relations
Release #01464 (312) 444-4281 http://www.northerntrust.com
________________________________________________________________________________
FOR IMMEDIATE RELEASE
- ---------------------
NORTHERN TRUST CORPORATION REPORTS RECORD 1997 THIRD
QUARTER EARNINGS OF $.69 PER SHARE, UP 21%
(Chicago, October 20, 1997) Northern Trust Corporation reported record net
income per common share of $.69 for the third quarter, an increase of 21% from
$.57 earned a year ago. Net income increased 22% to a record $81.0 million from
the $66.5 million earned in the third quarter of last year. This performance
resulted in a return on average common equity of 20.7%.
William A. Osborn, Chairman and Chief Executive Officer, commented, "Our
third quarter results were outstanding and demonstrate our strong growth
momentum. The Corporation's two business units continued to perform at record
levels, supported by strong new business. The quarterly results were
highlighted by a 20% growth in recurring revenues which was driven by record
trust fees and foreign exchange profits. Our 21% earnings per share growth and
20.7% return on common equity significantly exceeded our strategic financial
targets."
"Trust assets under administration exceeded $1 trillion for the first time
at September 30, 1997. One perspective on this significant milestone captures
the remarkable pace of our
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growth: it took Northern Trust 105 years to reach $500 billion in assets under
administration, but less than 3 years to double that and reach $1 trillion. Of
this, $164.5 billion in assets were under management."
THIRD QUARTER PERFORMANCE HIGHLIGHTS
Trust fees grew 20% to a record $177.4 million in the quarter compared to
$148.2 million last year and represent 48% of total revenues and 70% of
noninterest income.
Trust fees from Personal Financial Services (PFS) in the quarter increased
19% and totaled $87.5 million compared to $73.6 million in the year-ago quarter.
The increase in PFS trust fees resulted primarily from exceptionally strong new
business throughout Northern Trust's five-state office network and favorable
equity markets. The Wealth Management Group, which administers significant
family asset pools nationwide, also had excellent performance, with trust fees
increasing 32%, and now administers $27.8 billion of trust assets. Total
administered personal trust assets increased $5.3 billion since June 30, 1997
and totaled $101.0 billion at September 30, 1997, exceeding $100 billion for the
first time. Of this, $59.0 billion was under management.
During the third quarter, Northern Trust expanded its Arizona presence by
opening a northwest Tucson office, the seventh location in that state. With the
addition of this new office, Northern Trust's national network of Personal
Financial Services offices includes 62 locations in Illinois, Florida,
California, Arizona and Texas.
Trust fees from Corporate & Institutional Services (C&IS) in the quarter
increased 21% and totaled $89.9 million compared to $74.6 million in the year-
ago quarter, reflecting strong new business. These fees are derived from a full
range of custody, investment and advisory services rendered to retirement and
other asset pools of corporate and institutional clients
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (Continued)
worldwide, and all of these services contributed to the third quarter fee
growth. Securities lending continued to achieve outstanding results, with fees
increasing 47% from the prior year quarter to $18.0 million. Fees from
investment management services, including the activities of Northern Trust
Global Advisors, Inc., were also strong. Since June 30, 1997, total C&IS trust
assets under administration increased $108.4 billion to $911.1 billion at
September 30, 1997, of which $105.5 billion is managed by Northern Trust. Trust
assets under administration included approximately $126 billion of global
custody assets.
During early October Northern Trust announced an agreement to acquire ANB
Investment Management and Trust Company, a leading manager of index funds, from
First Chicago NBD Corporation for approximately $50 million. This firm had
assets under management of approximately $28 billion at June 30, 1997 and will
complement Northern Trust's well-established and growing investment management
business. Northern will benefit from adding a broad product array with
successful long-term track records and a team of seasoned investment
professionals.
C&IS trust relationships are increasingly priced to reflect earnings from
activities such as custody-related deposits and foreign exchange trading which
are not included in trust fees. Foreign exchange trading profits set another
record, increasing 122% to $33.5 million from $15.1 million in the same quarter
last year. The record profits reflect both increased cross-border trading
volumes as our global custody assets continue to grow and volatility in the
currency markets, particularly in the southeastern Asia region.
Fees from treasury management services were $14.8 million, up from $13.9
million in the comparable quarter last year. Total treasury management
revenues from both fees and the
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (Continued)
computed value of compensating deposit balances increased 4% from the third
quarter of 1996 to $22.7 million, reflecting the continued growth in business
from both new and existing clients. Other operating income included $10.0
million resulting from a settlement reached with Illinois banking regulators
concerning the disposition of certain unclaimed balances accumulated over a
number of years.
Net interest income for the quarter, stated on a fully taxable equivalent
basis, totaled $117.6 million, up 10% from the $107.2 million reported in last
year's third quarter. The increase in net interest income reflects higher
levels of noninterest-related funds, driven by increases in common equity and
demand deposits, and 15% growth in average earning assets primarily driven by
increases in loan volume and money market assets. Residential mortgages
accounted for 37% of the loan volume increase. The net interest margin
decreased to 2.14% from 2.26% reported in the year-ago quarter. The decline in
the margin is attributable to a higher proportion of low-spread money market
assets and narrowing spreads earned on the government securities portfolio due
to the flattening of the yield curve.
Nonperforming assets of $50.4 million at quarter-end decreased from $58.5
million at June 30, 1997 and was up from $37.7 million at September 30, 1996.
The overall quality of the loan portfolio remains strong. Nonaccrual and
restructured loans of $46.3 million at quarter-end represent .38% of total loans
and were covered 3.2 times by the $148.0 million reserve for credit losses.
Third quarter net charge-offs, at .18% of average loans, totaled $5.4 million.
The provision for credit losses of $5.0 million in the third quarter was $2.5
million higher than the third quarter of 1996 and $4.5 million higher than the
second quarter of 1997. The increase in the provision for credit losses
essentially maintained the reserve for credit losses at the prior quarter level.
It is not expected that the provision for credit losses in the fourth quarter
will return to the unusually low levels of the first half of 1997.
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (Continued)
Noninterest expenses totaled $234.7 million for the quarter and included
$8.9 million of technology-related special charges. Of these charges, $5.4
million were for Year 2000-related costs, including the purchase of software
programming tools and the effect of replacing certain software that is not Year
2000 compliant. Another $3.5 million in charges were incurred for the planned
relocation of the computer data facility to Northern Trust's new technology
center located near its Chicago operations building. These costs are primarily
reflected in other operating and equipment expenses.
Excluding these charges, expenses increased $34.0 million or 18% from the
year-ago quarter. This increase was primarily attributable to higher
performance-based compensation and staff growth. Excellent new business
results, record foreign exchange profits, strong corporate earnings and the
price increase in Northern Trust Corporation stock increased performance-based
compensation expenses by $12.0 million. The increase in compensation expense
also resulted from merit increases and a 9% increase in staff levels from one
year ago required to support growth initiatives and strong new business in both
PFS and C&IS. In addition, the noninterest expense increase in the third
quarter reflects a number of new initiatives over the past twelve months,
including seven additional private banking and trust offices, a new Singapore
office and expansion of the global custody network. Staff on a full-time
equivalent basis at September 30, 1997 totaled 7,337, up 9% from 6,754 at
September 30, 1996.
BALANCE SHEET
Balance sheet assets averaged $24.2 billion for the quarter, up 15% from
last year's average of $21.0 billion, reflecting growth in loans and money
market assets. Loans and leases averaged $12.0 billion for the quarter, an
increase of $1.5 billion or 14%. Residential mortgages increased $543 million
or 12% to average $4.9 billion for the quarter and represented 41% of the total
loan portfolio at September 30, 1997. Commercial and industrial
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BALANCE SHEET (Continued)
loans averaged $3.6 billion during the quarter compared to $3.4 billion in the
third quarter of 1996. The securities portfolio was virtually unchanged at $6.2
billion. Money market assets increased from $2.1 billion in last year's third
quarter to average $3.6 billion in the current quarter.
Common stockholders' equity averaged $1.5 billion, up 12% from last year's
third quarter. The increase primarily reflects the retention of earnings offset
in part by the repurchase of common stock pursuant to the Corporation's share
buyback program. During the quarter, the Corporation acquired a total of 307,681
shares at a cost of $16.6 million. An additional 3.6 million shares may be
purchased after September 30, 1997 under the current share buyback program.
NINE MONTH PERFORMANCE HIGHLIGHTS
Net income per common share increased 20% to $1.95 for the nine month
period ended September 30, 1997. Net income increased 19% to $228.1 million
compared with $191.4 million last year and resulted in a return on average
common equity of 20.2%.
Total recurring revenues increased 15% from 1996 levels. Trust fees
totaled $504.0 million, up 14% from $441.8 million reported last year. Foreign
exchange trading profits totaled $77.8 million, up 82% from last year's
performance. Treasury management revenues from both fees and the computed value
of compensating deposit balances increased 6% to $68.1 million. Net interest
income, stated on a fully taxable equivalent basis, totaled $349.4 million, up
11% from the $313.5 million reported last year.
The provision for credit losses decreased $5.5 million to $6.0 million in
1997. Noninterest expenses, excluding technology-related special charges, were
up 14% and totaled $649.3 million compared to $568.4 million a year ago.
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FORWARD-LOOKING STATEMENTS
This news release may be deemed to include forward-looking statements, such
as statements that relate to financial goals, business outlook and credit
quality. Actual results could differ materially from those indicated by these
statements. Northern Trust's 1996 Annual Report to Stockholders and 1997
periodic reports to the SEC, including the section of the Quarterly Report on
Form 10-Q for June 30, 1997 captioned "Forward-Looking Information", contain
additional information about factors that could affect actual results.
/ / /
<PAGE>
NORTHERN TRUST CORPORATION Page 1
(Supplemental Consolidated Financial Information)
<TABLE>
<CAPTION>
STATEMENT OF INCOME STATISTICS ($ IN MILLIONS)
- ----------------------------------------------
THIRD QUARTER
===================================
1997 1996 % Change *
===================================
<S> <C> <C> <C>
Interest Income (Taxable Equivalent) $ 347.2 $ 298.3 16%
Interest Expense 229.6 191.1 20
-------- -------- ---
Net Interest Income (Taxable Equivalent) 117.6 107.2 10
Less: Taxable Equivalent Adjustment 8.0 8.4 (5)
-------- -------- ---
Net Interest Income 109.6 98.8 11
Provision for Credit Losses 5.0 2.5 100
Noninterest Income
Trust Fees 177.4 148.2 20
Treasury Management Fees 14.8 13.9 6
Foreign Exchange Trading Profits 33.5 15.1 122
Security Commissions & Trading Income 6.9 5.0 39
Other Operating Income 22.0 12.7 75
Investment Security Transactions 0.1 (0.1) N/M
-------- -------- ---
Total Noninterest Income 254.7 194.8 31
Noninterest Expenses
Salaries 116.4 92.4 26
Pension and Other Employee Benefits 20.1 18.5 9
Occupancy Expense 17.7 15.5 14
Equipment Expense 17.6 14.2 24
Other Operating Expenses 62.9 51.2 23
-------- -------- ---
Total Noninterest Expenses 234.7 191.8 22
-------- -------- ---
Income Before Income Taxes 124.6 99.3 26
Provision for Income Taxes 43.6 32.8 33
-------- -------- ---
NET INCOME $ 81.0 $ 66.5 22%
======== ======== ===
Net Income Per Common Share
Primary $ 0.70 $ 0.57 23%
Fully Diluted 0.69 0.57 21
Return on Average Common Equity 20.68% 18.93%
Average Common Equity $1,530.0 $1,370.5 12%
Return on Average Assets 1.33% 1.26%
Common Dividend Declared per Share $ 0.18 $ 0.16 16%
Preferred Dividends (millions) 1.3 1.2 3
Average Common Shares Outstanding (000s)
Primary 114,720 114,537
Fully Diluted 115,133 114,842
</TABLE>
(N/M) Not Meaningful
(*) Percentage change calculations are based on actual balances rather than
the rounded amounts presented in Supplemental Consolidated Financial
Information.
Note: Certain reclassifications have been made to prior periods' financial
statements to place them on a basis comparable with the current period's
financial statements.
<PAGE>
NORTHERN TRUST CORPORATION Page 2
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME STATISTICS ($ IN MILLIONS)
- ----------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS
=====================================
1997 1996 % Change*
=====================================
<S> <C> <C> <C>
Interest Income (Taxable Equivalent) $ 995.5 $ 886.7 12%
Interest Expense 646.1 573.2 13
-------- -------- -----
Net Interest Income (Taxable Equivalent) 349.4 313.5 11
Less: Taxable Equivalent Adjustment 24.5 25.8 (5)
-------- -------- -----
Net Interest Income 324.9 287.7 13
Provision for Credit Losses 6.0 11.5 (48)
Noninterest Income
Trust Fees 504.0 441.8 14
Treasury Management Fees 44.4 41.4 7
Foreign Exchange Trading Profits 77.8 42.7 82
Security Commissions & Trading Income 19.4 17.7 9
Other Operating Income 40.9 34.8 18
Investment Security Transactions 0.7 0.3 N/M
-------- -------- -----
Total Noninterest Income 687.2 578.7 19
Noninterest Expenses
Salaries 325.4 270.1 20
Pension and Other Employee Benefits 61.7 57.3 8
Occupancy Expense 50.2 45.5 10
Equipment Expense 47.4 42.3 12
Other Operating Expenses 173.5 153.2 13
-------- -------- -----
Total Noninterest Expenses 658.2 568.4 16
-------- -------- -----
Income Before Income Taxes 347.9 286.5 21
Provision for Income Taxes 119.8 95.1 26
-------- -------- -----
NET INCOME $ 228.1 $ 191.4 19%
======== ======== =====
Net Income Per Common Share
Primary $ 1.96 $ 1.63 20%
Fully Diluted 1.95 1.62 20
Return on Average Common Equity 20.21% 18.59%
Average Common Equity $1,484.7 $1,348.6 10%
Return on Average Assets 1.30% 1.22%
Common Dividends Declared per Share $ 0.54 $ 0.47 16%
Preferred Dividends (millions) 3.7 3.7 -
Average Common Shares Outstanding (000s)
Primary 114,618 114,801
Fully Diluted 115,196 115,594
</TABLE>
<PAGE>
NORTHERN TRUST CORPORATION Page 3
(Supplemental Consolidated Financial Information)
BALANCE SHEET ($ IN MILLIONS)
<TABLE>
<CAPTION>
SEPTEMBER 30
---------------------------------------------
1997 1996 % Change *
---------------------------------------------
Assets
- ------
<S> <C> <C> <C>
Money Market Assets $ 5,064.7 $ 2,378.4 113%
Securities
U.S. Government 779.7 1,268.6 (39)
Federal Agency and Other 4,728.7 4,139.9 14
Municipal 405.4 410.3 (1)
Trading Account 10.9 9.0 21
--------- --------- ---
Total Securities 5,924.7 5,827.8 2
Loans and Leases 12,223.7 10,909.2 12
--------- --------- ---
Total Earning Assets 23,213.1 19,115.4 21
Reserve for Credit Losses (148.0) (147.4) N/M
Cash and Due from Banks 2,293.6 1,068.6 115
Trust Security Settlement Receivables 302.4 236.4 28
Buildings and Equipment 312.4 288.8 8
Other Nonearning Assets 945.7 798.3 18
--------- --------- ---
Total Assets $26,919.2 $21,360.1 26%
========= ========= ===
Liabilities and Stockholders' Equity
- ------------------------------------
Interest-Bearing Deposits
Savings Deposits $ 5,752.0 $ 5,746.7 N/M%
Other Time Deposits 743.9 511.6 45
Foreign Office Time Deposits 5,631.6 3,636.8 55
--------- --------- ---
Total Interest-Bearing Deposits 12,127.5 9,895.1 23
Borrowed Funds 7,089.8 5,297.9 34
Senior Notes and Long-Term Debt 1,596.1 637.0 151
--------- --------- ---
Total Interest-Related Funds 20,813.4 15,830.0 31
Demand & Other Noninterest-Bearing Deposits 3,715.9 3,543.5 5
Other Liabilities 692.4 469.8 47
--------- --------- ---
Total Liabilities 25,221.7 19,843.3 27
Common Equity 1,577.5 1,396.8 13
Preferred Equity 120.0 120.0 -
--------- --------- ---
Total Liabilities and Stockholders' Equity $26,919.2 $21,360.1 26%
========= ========= ===
</TABLE>
<PAGE>
NORTHERN TRUST CORPORATION Page 4
(Supplemental Consolidated Financial Information)
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEET ($ IN MILLIONS)
- -------------------------------------
THIRD QUARTER
=====================================
1997 1996 % Change *
=====================================
<S> <C> <C> <C>
Assets
- ------
Money Market Assets $ 3,553.1 $ 2,082.6 71%
Securities
U.S. Government 787.4 1,525.0 (48)
Federal Agency and Other 5,035.0 4,317.0 17
Municipal 401.3 409.8 (2)
Trading Account 8.4 5.3 59
--------- --------- ---
Total Securities 6,232.1 6,257.1 N/M
Loans and Leases 12,001.2 10,533.9 14
--------- --------- ---
Total Earning Assets 21,786.4 18,873.6 15
Reserve for Credit Losses (148.2) (147.4) 1
Nonearning Assets 2,525.2 2,264.1 12
--------- --------- ---
Total Assets $24,163.4 $20,990.3 15%
========= ========= ===
Liabilities and Stockholders' Equity
- ------------------------------------
Interest-Bearing Deposits
Savings Deposits $ 5,840.6 $ 5,596.4 4%
Other Time Deposits 771.0 523.0 47
Foreign Office Time Deposits 5,261.0 4,040.6 30
--------- --------- ---
Total Interest-Bearing Deposits 11,872.6 10,160.0 17
Borrowed Funds 4,961.0 5,317.0 (7)
Senior Notes and Long-Term Debt 1,554.9 544.7 185
--------- --------- ---
Total Interest-Related Funds 18,388.5 16,021.7 15
Demand & Other Noninterest-Bearing Deposits 3,422.8 2,954.8 16
Other Liabilities 702.1 523.3 34
--------- --------- ---
Total Liabilities 22,513.4 19,499.8 15
Common Equity 1,530.0 1,370.5 12
Preferred Equity 120.0 120.0 -
--------- --------- ---
Total Liabilities and Stockholders' Equity $24,163.4 $20,990.3 15%
========= ========= ===
</TABLE>
<PAGE>
NORTHERN TRUST CORPORATION Page 5
(Supplemental Consolidated Financial Information)
<TABLE>
<CAPTION>
Quarterly Trend Data ($ In Millions) 1997 1996
===================================== Quarters Quarters
================================== ====================
Third Second First Fourth Third
================================== ====================
Net Income Summary
- ------------------
<S> <C> <C> <C> <C> <C>
Trust Fees $ 177.4 $168.3 $158.3 $152.6 $ 148.2
Other Noninterest Income 77.3 54.9 51.0 48.7 46.6
Net Interest Income (Taxable Equivalent) 117.6 117.7 114.1 108.4 107.2
-------- ------ ------ ------ -------
Total Revenue (Taxable Equivalent) 372.3 340.9 323.4 309.7 302.0
Provision for Credit Losses 5.0 0.5 0.5 0.5 2.5
Noninterest Expenses 234.7 217.0 206.5 200.5 191.8
-------- ------ ------ ------ -------
Pretax Income (Taxable Equivalent) 132.6 123.4 116.4 108.7 107.7
Taxable Equivalent Adjustment 8.0 8.5 8.0 7.8 8.4
Provision for Income Taxes 43.6 39.5 36.7 33.5 32.8
-------- ------ ------ ------ -------
Net Income $ 81.0 $ 75.4 $ 71.7 $ 67.4 $ 66.5
======== ====== ====== ====== =======
Per Common Share
- ----------------
Net Income - Primary $ 0.70 $ 0.65 $ 0.62 $ 0.58 $ 0.57
- Fully Diluted 0.69 0.65 0.62 0.58 0.57
Dividend Declared 0.18 0.18 0.18 0.18 0.16
Book Value (EOP) $ 14.14 $13.69 $13.21 $12.80 $ 12.49
Market Value (EOP) 59.13 48.38 37.50 36.25 32.88
Ratios
- ------
Return on Average Common Equity 20.68% 20.01% 19.91% 18.79% 18.93%
Return on Average Assets 1.33 1.27 1.30 1.28 1.26
Net Interest Margin 2.14 2.20 2.33 2.30 2.26
Productivity Ratio * 159% 157% 157% 154% 157%
Risk-based Capital Ratios:
Tier 1 9.9% 9.6% 9.1% 8.2% 8.4%
Total (Tier 1 + Tier 2) 13.2 12.9 12.6 11.9 12.3
Leverage 7.3 7.2 6.9 6.4 6.3
Trust Assets ($ in Billions) - EOP
- ----------------------------------
Corporate $ 911.1 $802.7 $728.7 $693.7 $ 641.9
Personal 101.0 95.7 87.2 85.2 80.8
-------- ------ ------ ------ -------
Total Trust Assets $1,012.1 $898.4 $815.9 $778.9 $ 722.7
======== ====== ====== ====== =======
Memo: Managed Assets 164.5 158.4 136.3 130.3 124.3
Asset Quality ($ in Millions) - EOP
- -----------------------------------
Nonaccrual and Restructured Loans $ 46.3 $ 55.3 $ 21.7 $ 19.5 $ 33.3
Other Real Estate Owned (OREO) 4.1 3.2 2.2 1.9 4.4
-------- ------ ------ ------ -------
Total Nonperforming Assets $ 50.4 $ 58.5 $ 23.9 $ 21.4 $ 37.7
======== ====== ====== ====== =======
Nonperforming Assets/Loans & OREO 0.41% 0.49% 0.21% 0.20% 0.35%
Gross Charge-offs $ 6.0 $ 0.9 $ 2.1 $ 3.1 $ 2.8
Gross Recoveries 0.6 0.4 1.7 2.5 0.3
-------- ------ ------ ------ -------
Net Charge-offs $ 5.4 $ 0.5 $ 0.4 $ 0.6 $ 2.5
======== ====== ====== ====== =======
Net Charge-offs (Annualized) to Average Loans 0.18% 0.02% 0.02% 0.02% 0.09%
Reserve for Credit Losses $ 148.0 $148.4 $148.3 $148.3 $ 147.4
Reserve to Nonaccrual and Restructured Loans 319% 268% 686% 761% 442%
</TABLE>
(*) The productivity ratio is defined as total revenue on a taxable equivalent
basis divided by noninterest expenses. Excluding $10.0 million in
nonrecurring revenues and $8.9 million in technology-related special
charges, the productivity ratio for the third quarter 1997 is 160%.
