<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 19, 1998
--------------------
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 19, 1998 press
release, reporting on the registrant's earnings for the third quarter and first
nine months of 1998, 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 19, 1998 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 20, 1998 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 19, 1998 Press Release 5
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<PAGE>
- --------------------------------------------------------------------------------
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 #01478 (312) 444-4281 http://www.northerntrust.com
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
- ---------------------
NORTHERN TRUST CORPORATION REPORTS RECORD 1998 THIRD QUARTER EARNINGS OF $.78
PER SHARE, UP 11%.
(Chicago, October 19, 1998) Northern Trust Corporation reported record net
income per share of $.78 for the third quarter, an increase of 11% from the $.70
earned a year ago. Net income also increased 11% to a record $90.2 million from
the $81.0 million earned in the third quarter of last year. This performance
resulted in a return on average common equity of 20.5%.
William A. Osborn, Chairman and Chief Executive Officer, commented, "We are
pleased to report another record quarter, again confirming the value of our
sharply focused strategy of delivering trust, investment management and banking
services to targeted individual, corporate and institutional markets. Trust fees
grew by 15% and continue to represent the key driver of our revenue growth. The
11% earnings per share growth for the quarter, 161% productivity ratio, and
20.5% return on common equity exceeded our strategic financial targets. Since
September 30, 1997, trust assets under administration have grown 12% to $1.1
trillion, with assets under management increasing 34% to $221 billion."
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Mr. Osborn continued, "Our performance during the quarter was especially
gratifying in view of the level of risk in the global financial markets.
Conservative management of risk allowed us to avoid the recent problems
associated with lending to hedge funds and credit exposure in emerging markets."
THIRD QUARTER PERFORMANCE HIGHLIGHTS
Revenues, after adjusting for a $10.0 million nonrecurring gain in 1997,
increased 8% to $392.4 million. The third quarter of 1997 also benefited from a
record $33.5 million in foreign exchange trading profits which were $9.9 million
higher than in the quarter just ended. Trust fees grew 15% to a record $203.6
million in the quarter compared to $177.4 million in the third quarter of last
year, representing 52% of total revenues and 77% of noninterest income.
Trust fees from Personal Financial Services (PFS) in the quarter increased
18% and totaled $98.8 million compared to $83.7 million in the year-ago quarter.
The increase resulted primarily from strong new business throughout Northern
Trust's PFS office network. In addition, trust fees benefited from the favorable
equity markets that prevailed at June 30th when most of the market-based trust
fees for the quarter were determined. Trust fees in each state increased 16% or
more from last year's third quarter, with growth exceptionally strong in
Florida, Arizona and Texas. The Wealth Management Group, which now administers
$31.8 billion for significant family asset pools nationwide, also had solid
performance with trust fees increasing 15%.
With the opening of the Bloomfield Hills, Michigan and Beverly Hills,
California offices, Northern Trust's network of Personal Financial Services
offices now includes 66 locations in seven states. Three additional offices will
open in the fourth quarter of 1998 or early 1999. Total personal trust assets
under administration increased 14% from September 30, 1997 to $104.8 billion at
September 30, 1998 but, reflecting the sharp decline in the equity markets
during the quarter, decreased 5% from June 30, 1998. Of the personal trust
assets under administration, $65.0 billion is managed by Northern Trust.
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (continued)
Trust fees from Corporate & Institutional Services (C&IS) in the quarter
increased 12% and totaled $104.8 million compared to $93.7 million in the year-
ago quarter, reflecting excellent new business. C&IS trust 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 worldwide, and all
of these services contributed to the third quarter fee growth. Strong custody
fees contributed approximately 25% of the growth in C&IS trust fees. New
business drove a 30% increase in retirement services recordkeeping and
consulting fees. Securities lending fees increased 11%, or $1.9 million, from
the prior year quarter to $20.1 million. Corporate trust fees also benefited
from $3.5 million in fees generated by Northern Trust Quantitative Advisors,
Inc., a December 31, 1997 acquisition. On a sequential quarter basis, C&IS trust
fees were down slightly because international securities lending fees benefit
from increased borrowing in the second quarter due to the seasonal nature of
dividends on certain international securities. Total C&IS trust assets under
administration increased 11% from September 30, 1997 to $1.0 trillion at
September 30, 1998 but, reflecting the decline in equity markets during the
quarter, decreased 6% from June 30, 1998. Of the C&IS trust assets under
administration, $155.7 billion is managed by Northern Trust. Trust assets under
administration included approximately $176 billion of global custody assets.
Foreign exchange trading profits were $23.6 million compared to the record
$33.5 million in the third quarter of last year. The prior year results
benefited from high levels of volatility in the Asian currencies and higher
trading volumes as clients repositioned their securities portfolios with respect
to these markets. Also, the current year's results were impacted by decreased
volatility in the EMU currencies and lower client portfolio holdings in emerging
markets.
Total treasury management revenues from both fees and the computed value of
compensating deposit balances increased 8% from the third quarter of 1997 to
$24.4 million, reflecting the continued growth in business from both new and
existing clients. The fee portion
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (continued)
of these revenues accrued in the quarter was $17.6 million, up from $14.8
million in the comparable quarter last year. Security commissions and trading
income of $6.9 million were unchanged from a year ago.
Other operating income was $12.9 million for the third quarter compared
with $22.0 million in the same period of last year. The prior year quarter
included $10.0 million of nonrecurring income resulting from a settlement
reached with Illinois banking regulators concerning the disposition of certain
unclaimed balances accumulated over a number of years. Exclusive of this
nonrecurring item, the increase over last year is primarily due to higher fees
from trust deposit activities and banking services.
Net interest income for the quarter, stated on a fully taxable equivalent
basis, totaled $127.7 million, up 9% from the $117.6 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 demand and noninterest-
bearing deposits and common equity, and 16% growth in average earning assets.
The asset growth included a 12% or $1.4 billion increase in loans and leases and
a 35% or $2.2 billion increase in securities. The net interest margin decreased
to 2.01% from 2.14% reported in the year-ago quarter. The decline in the margin
is attributable to the flattening yield curve which has compressed interest rate
spreads and a higher proportion of assets held in lower spread short-term
securities.
Nonperforming assets of $31.1 million at quarter-end decreased from $43.3
million at December 31, 1997 but were up slightly from $29.0 million at June 30,
1998. The overall quality of the loan portfolio remains strong. Nonaccrual and
restructured loans of $29.5 million at quarter-end represent .22% of total loans
and were covered 5.0 times by the $146.6 million reserve for credit losses.
Third quarter net charge-offs, at .03% of average loans, totaled $1.1 million.
The provision for credit losses of $1.0 million in the third quarter was $4.0
million below the comparable quarter in 1997.
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (continued)
Noninterest expenses totaled $243.8 million for the quarter, an increase of
4% or $9.1 million from the $234.7 million in the year-ago quarter. The prior
year quarter included $8.9 million of technology-related special charges.
Exclusive of these charges, noninterest expenses increased 8% from the year-ago
level. Approximately 70% of the increase in recurring expenses related to
salaries and employee benefits. In addition, the expense growth reflects costs
associated with technology investments and business promotion.
The increase in salaries and benefits was primarily attributable to staff
growth and merit increases, which was partially offset by lower performance-
based compensation. Staff levels increased from one year ago to support growth
initiatives and strong new business in both PFS and C&IS. Staff on a full-time
equivalent basis at September 30, 1998 totaled 7,950, up 8% from 7,337 at
September 30, 1997, and up 5% from 7,553 at December 31, 1997. Lower
performance-based compensation principally reflects lower accruals for stock-
based compensation plans.
BALANCE SHEET
Balance sheet assets averaged $27.6 billion for the quarter, up 14% from
last year's average of $24.2 billion, reflecting growth in loans and securities.
Loans and leases averaged $13.4 billion for the quarter, an increase of $1.4
billion or 12%. Residential mortgages increased $645 million or 13% to average
$5.6 billion for the quarter and represented 41% of the total loan portfolio.
Commercial and industrial loans averaged $4.1 billion during the quarter
compared to $3.6 billion in the third quarter of 1997. The securities portfolio
increased $2.2 billion or 35% to $8.4 billion reflecting a higher level of
investments in short-term U.S. agency securities. Money market assets averaged
$3.4 billion in the quarter, down slightly from last year.
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BALANCE SHEET (continued)
Common stockholders' equity averaged $1.7 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 508,414
shares at a cost of $36.1 million. An additional 1.9 million shares may be
purchased after September 30, 1998 under the current share buyback program.
NINE-MONTH PERFORMANCE HIGHLIGHTS
Net income per common share increased 15% to $2.25 for the nine-month
period ended September 30, 1998. Net income also increased 15% to $262.3 million
compared with $228.1 million last year and resulted in a return on average
common equity of 20.6%. The record performance for the nine-month period was
driven by a 13% increase in recurring revenues while recurring expenses
increased 12%.
The 15% earnings per share growth for the nine-month period ended September
30, 1998, 160% productivity ratio, and 20.6% return on common equity met or
exceeded each of our strategic financial targets.
Trust fees totaled $599.6 million, up 19% from $504.0 million reported last
year. Foreign exchange trading profits totaled $74.8 million, down 4% from last
year's record performance. Treasury Management revenues from both fees and the
computed value of compensating deposit balances increased 6% to $72.0 million.
Net interest income, stated on a fully taxable equivalent basis, totaled $377.9
million, up 8% from the $349.4 million reported last year.
The $8.0 million provision for credit losses was $2.0 million higher than
the provision required in the first nine months of 1997. Noninterest expenses,
excluding technology-related special charges, were up 12% and totaled $727.7
million compared to $649.3 million a year ago.
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FORWARD-LOOKING STATEMENTS
This news release may be deemed to include forward-looking statements, such
as statements that relate to financial goals, business outlook, expansion plans
and credit quality. Actual results could differ materially from those indicated
by these statements. Northern Trust's 1997 Annual Report to Stockholders and
1998 periodic reports to the SEC, including the section of the Quarterly Report
on Form 10-Q for June 30, 1998 captioned "Forward-Looking Information", contain
additional information about factors that could affect actual results.
/ / /
<PAGE>
NORTHERN TRUST CORPORATION Page 1
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME STATISTICS ($ IN MILLIONS)
- ----------------------------------------------
<TABLE>
<CAPTION>
THIRD QUARTER
--------------------------------------
1998 1997 % Change*
--------------------------------------
<S> <C> <C> <C>
Interest Income (Taxable Equivalent) $402.6 $347.2 16 %
Interest Expense 274.9 229.6 20
---------- ---------- --------
Net Interest Income (Taxable Equivalent) 127.7 117.6 9
Noninterest Income
Trust Fees 203.6 177.4 15
Treasury Management Fees 17.6 14.8 18
Foreign Exchange Trading Profits 23.6 33.5 (30)
Security Commissions & Trading Income 6.9 6.9 -
Other Operating Income 12.9 22.0 (41)
Investment Security Transactions 0.1 0.1 -
---------- ---------- --------
Total Noninterest Income 264.7 254.7 4
Total Revenue (Taxable Equivalent) 392.4 372.3 5 (**)
Noninterest Expenses
Salaries 126.3 116.4 8
Pension and Other Employee Benefits 23.0 20.1 15
Occupancy Expense 17.4 17.7 (1)
Equipment Expense 15.9 17.6 (10)
Other Operating Expenses 61.2 62.9 (3)
---------- ---------- --------
Total Noninterest Expenses 243.8 234.7 4 (**)
Provision for Credit Losses 1.0 5.0 N/M
Taxable Equivalent Adjustment 9.7 8.0 22
---------- ---------- --------
Income Before Income Taxes 137.9 124.6 11
Provision for Income Taxes 47.7 43.6 9
---------- ---------- --------
NET INCOME $90.2 $81.0 11 %
========= ========= =======
Net Income Per Common Share
Basic $0.81 $0.72 13 %
Diluted 0.78 0.70 11
Return on Average Common Equity 20.55 % 20.68 %
Average Common Equity $1,718.2 $1,530.0 12 %
Return on Average Assets 1.30 % 1.33 %
Common Dividend Declared per Share $0.21 $0.18 17 %
Preferred Dividends (millions) 1.2 1.3 N/M
Average Common Shares Outstanding (000s)
Basic 110,518 111,066
Diluted 114,714 114,720
</TABLE>
(N/M) Not Meaningful
(*) Percentage change calculations are based on actual balances rather than
the rounded amounts presented in Supplemental Consolidated Financial
Information.
(**) Exclusive of nonrecurring revenue of $10.0 million and nonrecurring
expenses of $8.9 million included in the prior year results, the
percentage change for both total revenue and noninterest expenses would
be 8%.
Note: Certain reclassifications have been made to prior periods' financial
statements to place them on a basis comparable with the current period's
financial statements.
<PAGE>
NORTHERN TRUST CORPORATION Page 2
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME STATISTICS ($ IN MILLIONS)
- ----------------------------------------------
<TABLE>
<CAPTION>
NINE MONTHS
---------------------------------------
1998 1997 % Change *
---------------------------------------
<S> <C> <C> <C>
Interest Income (Taxable Equivalent) $1,147.6 $995.5 15 %
Interest Expense 769.7 646.1 19
---------- ---------- --------
Net Interest Income (Taxable Equivalent) 377.9 349.4 8
Noninterest Income
Trust Fees 599.6 504.0 19
Treasury Management Fees 50.9 44.4 15
Foreign Exchange Trading Profits 74.8 77.8 (4)
Security Commissions & Trading Income 21.3 19.4 10
Other Operating Income 39.1 40.9 (4)
Investment Security Transactions 1.3 0.7 N/M
---------- ---------- --------
Total Noninterest Income 787.0 687.2 15
Total Revenue (Taxable Equivalent) 1,164.9 1,036.6 12 (**)
Noninterest Expenses
Salaries 373.2 325.4 15
Pension and Other Employee Benefits 69.3 61.7 12
Occupancy Expense 51.6 50.2 3
Equipment Expense 47.3 47.4 N/M
Other Operating Expenses 186.3 173.5 7
---------- ---------- --------
Total Noninterest Expenses 727.7 658.2 11 (**)
Provision for Credit Losses 8.0 6.0 33
Taxable Equivalent Adjustment 27.1 24.5 11
---------- ---------- --------
Income Before Income Taxes 402.1 347.9 16
Provision for Income Taxes 139.8 119.8 17
---------- ---------- --------
NET INCOME $262.3 $228.1 15 %
========= ========= =======
Net Income Per Common Share
Basic $2.34 $2.02 16 %
Diluted 2.25 1.96 15
Return on Average Common Equity 20.58 % 20.21 %
Average Common Equity $1,680.2 $1,484.7 13 %
Return on Average Assets 1.31 % 1.30 %
Common Dividends Declared per Share $0.63 $0.54 17 %
Preferred Dividends (millions) 3.7 3.7 N/M
Average Common Shares Outstanding (000s)
Basic 110,742 111,009
Diluted 114,924 114,618
Common Shares Outstanding (EOP) 111,046 111,550
</TABLE>
(N/M) Not Meaningful
(*) Percentage change calculations are based on actual balances rather than
the rounded amounts presented in Supplemental Consolidated Financial
Information.
(**) Exclusive of nonrecurring revenue of $10.0 million and nonrecurring
expenses of $8.9 million included in the prior year results, the
percentage change for total revenue and noninterest expenses would be 13%
and 12%, respectively.
<PAGE>
NORTHERN TRUST CORPORATION Page 3
(Supplemental Consolidated Financial Information)
BALANCE SHEET ($ IN MILLIONS)
- -----------------------------
<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------------------------------
1998 1997 % Change *
-------------------------------------------
<S> <C> <C> <C>
Assets
- ------
Money Market Assets $5,341.9 $5,064.7 5 %
Securities
U.S. Government 327.0 779.7 (58)
Federal Agency and Other 5,672.0 4,728.7 20
Municipal 460.2 405.4 14
Trading Account 13.4 10.9 23
------------ ------------ --------
Total Securities 6,472.6 5,924.7 9
Loans and Leases 13,600.8 12,223.7 11
------------ ------------ --------
Total Earning Assets 25,415.3 23,213.1 9
Reserve for Credit Losses (146.6) (148.0) (1)
Cash and Due from Banks 1,105.2 2,293.6 (52)
Trust Security Settlement Receivables 338.7 302.4 12
Buildings and Equipment 334.4 312.4 7
Other Nonearning Assets 1,031.8 945.7 9
------------ ------------ --------
Total Assets $28,078.8 $26,919.2 4 %
============ ============ ========
Liabilities and Stockholders' Equity
- ------------------------------------
Interest-Bearing Deposits
Savings $6,580.3 $5,752.0 14 %
Other Time 668.6 743.9 (10)
Foreign Office Time 5,975.7 5,631.6 6
------------ ------------ --------
Total Interest-Bearing Deposits 13,224.6 12,127.5 9
Borrowed Funds 6,945.2 7,089.8 (2)
Senior Notes and Long-Term Debt 1,430.2 1,596.1 (10)
------------ ------------ --------
Total Interest-Related Funds 21,600.0 20,813.4 4
Demand & Other Noninterest-Bearing Deposits 3,817.0 3,715.9 3
Other Liabilities 783.1 692.4 13
------------ ------------ --------
Total Liabilities 26,200.1 25,221.7 4
Common Equity 1,758.7 1,577.5 11
Preferred Equity 120.0 120.0 -
------------ ------------ --------
Total Liabilities and Stockholders' Equity $28,078.8 $26,919.2 4 %
============ ============ ========
</TABLE>
<PAGE>
NORTHERN TRUST CORPORATION Page 4
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET ($ IN MILLIONS)
- -------------------------------------
<TABLE>
<CAPTION>
THIRD QUARTER
-------------------------------------------
1998 1997 % Change *
-------------------------------------------
<S> <C> <C> <C>
Assets
- ------
Money Market Assets $3,388.0 $3,553.1 (5)%
Securities
U.S. Government 339.3 787.4 (57)
Federal Agency and Other 7,598.5 5,035.0 51
Municipal 443.0 401.3 10
Trading Account 12.5 8.4 48
------------ ------------ --------
Total Securities 8,393.3 6,232.1 35
Loans and Leases 13,428.4 12,001.2 12
------------ ------------ --------
Total Earning Assets 25,209.7 21,786.4 16
Reserve for Credit Losses (146.6) (148.2) (1)
Nonearning Assets 2,498.1 2,525.2 (1)
------------ ------------ --------
Total Assets $27,561.2 $24,163.4 14 %
============ ============ ========
Liabilities and Stockholders' Equity
- ------------------------------------
Interest-Bearing Deposits
Savings $6,381.9 $5,840.6 9 %
Other Time 678.1 771.0 (12)
Foreign Office Time 5,927.9 5,261.0 13
------------ ------------ --------
Total Interest-Bearing Deposits 12,987.9 11,872.6 9
Borrowed Funds 7,434.8 4,961.0 50
Senior Notes and Long-Term Debt 1,095.9 1,554.9 (30)
------------ ------------ --------
Total Interest-Related Funds 21,518.6 18,388.5 17
Demand & Other Noninterest-Bearing Deposits 3,584.8 3,422.8 5
Other Liabilities 619.6 702.1 (12)
------------ ------------ --------
Total Liabilities 25,723.0 22,513.4 14
Common Equity 1,718.2 1,530.0 12
Preferred Equity 120.0 120.0 -
------------ ------------ --------
Total Liabilities and Stockholders' Equity $27,561.2 $24,163.4 14 %
============ ============ ========
</TABLE>
<PAGE>
NORTHERN TRUST CORPORATION Page 5
(Supplemental Consolidated Financial Information)
Quarterly Trend Data ($ In Millions)
- ------------------------------------
<TABLE>
<CAPTION>
1998 1997
Quarters Quarters
----------------------------------- ----------------------
Third Second First Fourth Third
----------------------------------- ----------------------
<S> <C> <C> <C> <C> <C>
Net Income Summary
- ------------------
Trust Fees $203.6 $202.3 $193.7 $185.2 $177.4
Other Noninterest Income 61.1 63.4 62.9 62.1 77.3
Net Interest Income (Taxable Equivalent) 127.7 128.2 122.0 121.5 117.6
----------- ---------- ---------- ---------- ----------
Total Revenue (Taxable Equivalent) 392.4 393.9 378.6 368.8 372.3
Provision for Credit Losses 1.0 3.0 4.0 3.0 5.0
Noninterest Expenses 243.8 247.7 236.2 233.6 234.7
----------- ---------- ---------- ---------- ----------
Pretax Income (Taxable Equivalent) 147.6 143.2 138.4 132.2 132.6
Taxable Equivalent Adjustment 9.7 9.0 8.4 8.2 8.0
Provision for Income Taxes 47.7 47.0 45.1 42.7 43.6
----------- ---------- ---------- ---------- ----------
Net Income $90.2 $87.2 $84.9 $81.3 $81.0
=========== ========== ========== ========== ==========
Per Common Share
- ----------------
Net Income - Basic $0.81 $0.78 $0.75 $0.72 $0.72
- Diluted 0.78 0.75 0.73 0.70 0.70
Dividend Declared 0.21 0.21 0.21 0.21 0.18
Book Value (EOP) $15.84 $15.46 $15.07 $14.54 $14.14
Market Value (EOP) 68.25 76.25 74.75 69.75 59.13
Ratios
- ------
Return on Average Common Equity 20.55 % 20.48 % 20.73 % 20.04 % 20.68 %
Return on Average Assets 1.30 1.32 1.32 1.25 1.33
Net Interest Margin 2.01 2.14 2.11 2.07 2.14
Productivity Ratio * 161 % 159 % 160 % 158 % 159 %
Risk-based Capital Ratios
Tier 1 9.4 % 9.3 % 9.8 % 9.6 % 9.9 %
Total (Tier 1 + Tier 2) 12.7 12.6 13.0 12.8 13.2
Leverage 6.9 7.0 7.0 6.9 7.3
Trust Assets ($ in Billions) - EOP **
- -------------------------------------
Corporate $1,024.5 $1,090.3 $1,056.5 $983.4 $920.4
Personal 104.8 110.2 105.5 95.9 91.7
----------- ---------- ---------- ---------- ----------
Total Trust Assets $1,129.3 $1,200.5 $1,162.0 $1,079.3 $1,012.1
=========== ========== ========== ========== ==========
Memo: Managed Assets 220.7 228.7 216.5 196.6 164.5
Asset Quality ($ in Millions) - EOP
- -----------------------------------
Nonaccrual and Restructured Loans $29.5 $27.0 $36.2 $41.4 $46.3
Other Real Estate Owned (OREO) 1.6 2.0 3.0 1.9 4.1
----------- ---------- ---------- ---------- ----------
Total Nonperforming Assets $31.1 $29.0 $39.2 $43.3 $50.4
=========== ========== ========== ========== ==========
Nonperforming Assets / Loans & OREO 0.23 % 0.21 % 0.30 % 0.34 % 0.41 %
Gross Charge-offs $1.5 $4.6 $4.7 $5.4 $6.0
Gross Recoveries 0.4 0.4 0.8 2.0 0.6
----------- ---------- ---------- ---------- ----------
Net Charge-offs $1.1 $4.2 $3.9 $3.4 $5.4
=========== ========== ========== ========== ==========
Net Charge-offs (Annualized) to Average Loans 0.03 % 0.13 % 0.12 % 0.11 % 0.18 %
Reserve for Credit Losses $146.6 $146.7 $147.7 $147.6 $148.0
Reserve to Nonaccrual and Restructured Loans 496 % 543 % 408 % 356 % 319 %
</TABLE>
(*) The productivity ratio is defined as total revenue on a taxable equivalent
basis divided by noninterest expenses.
(**) Effective 1/1/98, the Middle Market segment was transferred to C&IS from
PFS. Trust assets and fees for all periods have been restated.
