<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) January 19, 1999
----------------------
NORTHERN TRUST CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-5965 36-2723087
- -------------------------------- ------------------------------
(Commission File Number) (IRS Employer Identification No.)
Fifty South LaSalle Street, Chicago, Illinois 60675
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(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 January 19, 1999 press
release, reporting on the registrant's earnings for the fourth quarter and for
its 1998 fiscal year, 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 January 19, 1999 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: January 19, 1999 By: Perry R. Pero
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Perry R. Pero
Senior Executive Vice President
and Chief Financial Officer
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<PAGE>
EXHIBIT INDEX
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<TABLE>
<CAPTION>
Number Description Page Number
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<S> <C> <C>
99 January 19, 1999 Press Release 5
</TABLE>
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<PAGE>
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NEWS RELEASE
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Northern Trust Corporation
50 South LaSalle Street
Chicago, Illinois 60675
Contact: Laurie McMahon, Investor Relations
(312) 444-7811 or
Dianne Kotsogiannis, Public Relations
Release #01480 (312) 444-4281 http://www.northerntrust.com
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FOR IMMEDIATE RELEASE
- ---------------------
NORTHERN TRUST CORPORATION REPORTS RECORD 1998 FOURTH QUARTER EARNINGS OF $.79
PER SHARE, UP 13%.
(Chicago, January 19, 1999) Northern Trust Corporation reported record net
income per share of $.79 for the fourth quarter, an increase of 13% from the
$.70 earned a year ago. Net income also increased 13% to a record $91.6 million
from the $81.3 million earned in the fourth quarter of last year. This
performance resulted in a return on average common equity of 20.2%.
For the full year net income per common share increased 14% to $3.04.
Net income also increased 14% to $353.9 million compared to $309.4 million last
year.
William A. Osborn, Chairman and Chief Executive Officer, commented,
"1998 marked our eleventh consecutive year of record earnings. Trust fee growth
of 18%, driven by record new business and a favorable U.S. stock market, led to
a 13% revenue increase. Earnings per share increased 14%, well above our
minimum goal of 10%, and the return on average common equity of 20.5% exceeded
our 18-20% target range for this key measure. Our annual productivity ratio of
159% represents an all-time high."
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<PAGE>
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"The fourth quarter maintained our positive momentum with earnings per
share growing 13%. Trust fees grew by 17% in both our corporate and personal
businesses, and continue to represent the key driver of our revenue growth.
Since December 31, 1997, trust assets under administration have grown 17% to
$1.26 trillion, with assets under management increasing 20% to $236 billion. We
were also pleased that we achieved excellent investment results for our clients
during 1998, both in absolute terms and relative to a very strong market. This
strong finish to an outstanding year positions us well for 1999."
Osborn added, "At the end of the year we successfully implemented our
plan for adding euro capability to our global custody, foreign exchange,
securities lending and related businesses. Extensive preparations and planning
allowed us to complete this significant conversion in a manner that was
transparent to clients and involved no interruption of our full range of
services for euro investors."
FOURTH QUARTER PERFORMANCE HIGHLIGHTS
Revenues increased 14% to $419.8 million. Trust fees grew 17% to a
record $216.7 million in the quarter compared to $185.2 million in the fourth
quarter of last year and represented 52% of total revenues and 76% of
noninterest income.
Trust fees from Personal Financial Services (PFS) in the quarter
increased 17% and totaled $102.9 million compared to $87.9 million in the year-
ago quarter, marking the first quarter in which PFS trust fees have exceeded
$100 million. The increase resulted primarily from record new business
throughout Northern Trust's national PFS network. Every state recorded a
double-digit increase in trust fees, with Florida and Texas each up over 25%.
The Wealth Management Group also had solid performance and now administers $38.4
billion for significant family asset pools nationwide, up 39% from last year.
With the establishment or acquisition of new offices in Michigan and
Colorado in 1998, and the opening of an office in northwest Chicago during the
fourth quarter, Northern Trust's
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FOURTH QUARTER PERFORMANCE HIGHLIGHTS (continued)
network of Personal Financial Services offices now includes 67 locations in
seven states. Total personal trust assets under administration increased 26%
from December 31, 1997 to $121.2 billion at December 31, 1998, and 16% from
September 30, 1998. Of these assets under administration, $73.4 billion is
managed by Northern Trust.
Trust fees from Corporate & Institutional Services (C&IS) in the
quarter increased 17% and totaled $113.8 million compared to $97.3 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 fourth quarter fee
growth. Nearly one-half of the increase was a result of very strong securities
lending fees, which increased 47% or $7.9 million to $24.7 million primarily as
a result of increased spreads for both domestic and international securities.
Custody fees increased modestly as revenues from new business were partially
offset by lower client portfolio holdings in emerging markets.
C&IS trust fees also benefited from new asset management business
demonstrating continued success in introducing both passive and actively managed
investment products to trust and banking clients. Northern Trust Quantitative
Advisors, Inc. (NTQA), contributed $3.5 million in fees during the quarter,
reflecting the successful integration and strong momentum of this December 31,
1997 acquisition. Excellent new business, together with strong investment
results, drove a 20% increase in fees from other investment products. Total
C&IS trust assets under administration increased 16% from December 31, 1997 to
$1.1 trillion at December 31, 1998, and 11% from September 30, 1998. Of the
C&IS trust assets under administration, $162.6 billion is managed by Northern
Trust, up 18% from December 31, 1997. Trust assets under administration
included approximately $199 billion of global custody assets.
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FOURTH QUARTER PERFORMANCE HIGHLIGHTS (continued)
Foreign exchange trading profits were $28.7 million compared to $27.0
million in the fourth quarter of the prior year. The fourth quarter saw the
strongest quarterly performance of 1998, as increased volatility in certain
currency markets offset 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 7% from the fourth quarter of
1997 to $25.0 million, reflecting the continued growth in business from both new
and existing clients. The fee portion of these revenues accrued in the quarter
was $19.0 million, up from $15.8 million in the comparable quarter last year.
Securities commissions and trading income of $6.7 million were unchanged from a
year ago. This reflects a 20% increase in brokerage commissions at Northern
Trust Securities, Inc. offset by the absence of futures commissions resulting
from Northern Trust's exit from the futures business earlier in the year. Other
operating income was $13.5 million for the fourth quarter compared with $12.6
million in the same period of last year.
Net interest income for the quarter, stated on a fully taxable
equivalent basis, totaled $135.2 million, up 11% from the $121.5 million
reported in last year's fourth 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 11% growth in
average earning assets. The asset growth included a 12% or $1.5 billion
increase in loans and leases and a 29% or $1.1 billion increase in money market
assets. The net interest margin increased to 2.08% from 2.07% reported in the
year-ago quarter. The slight improvement in the margin is largely attributable
to increased interest rate spreads earned on short-term assets as a result of
actions taken by the Federal Reserve Bank to reduce the targeted Federal funds
rate by 75 basis points beginning in late September.
Nonperforming assets of $35.2 million at quarter-end decreased from
$43.3 million at December 31, 1997 but were up from $31.2 million at September
30, 1998. The overall
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FOURTH QUARTER PERFORMANCE HIGHLIGHTS (continued)
quality of the loan portfolio remains strong. Nonaccrual and restructured loans
of $32.9 million at quarter-end represent .24% of total loans and were covered
4.5 times by the $146.8 million reserve for credit losses. Fourth quarter net
charge-offs, at .02% of average loans, totaled $.8 million. The provision
for credit losses of $1.0 million in the fourth quarter was $2.0 million below
the comparable quarter in 1997.
Noninterest expenses totaled $269.4 million for the quarter, an
increase of 15% or $35.8 million from the $233.6 million in the year-ago
quarter. Approximately 75% of the increase in expenses related to salaries,
incentives and employee benefits. In addition, the expense growth reflects costs
associated with technology investments, business promotion, and $5.0 million of
incremental expenses related to acquisitions.
The increase in salaries and benefits was primarily attributable to
staff growth, merit increases and higher 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 December
31, 1998 totaled 8,156, up 8% from 7,553 at December 31, 1997. Higher
performance-based compensation is principally attributable to increased accruals
for incentive plans, as a result of strong performance, and for stock-based
compensation plans, reflecting the 28% increase in the price of Northern Trust's
common stock in the fourth quarter of 1998 compared to 18% in the year ago
quarter.
BALANCE SHEET
Balance sheet assets averaged $28.6 billion for the quarter, up 11%
from last year's average of $25.8 billion, reflecting growth in loans and money
market assets. Loans and leases averaged $14.0 billion for the quarter, an
increase of $1.5 billion or 12%. Residential mortgages increased $689 million or
14% to average $5.8 billion for the quarter and represented 41% of the total
loan portfolio. Commercial and industrial loans averaged $4.4 billion during the
quarter compared to $3.8 billion in the fourth quarter of 1997. The securities
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BALANCE SHEET (continued)
portfolio was virtually unchanged from last year's fourth quarter and totaled
$6.7 billion on average during the period. Money market assets averaged $5.1
billion in the quarter, up 29% or $1.1 billion from last year.
Common stockholders' equity averaged $1.8 billion, up 12% from last
year's fourth 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
255,180 shares at a cost of $20.0 million. An additional 1.6 million shares may
be purchased after December 31, 1998 under the current share buyback program.
PERFORMANCE HIGHLIGHTS - FULL YEAR 1998
Net income per common share increased 14% to $3.04 in 1998. Net income
also increased 14% to $353.9 million compared with $309.4 million last year and
resulted in a return on average common equity of 20.5%.
Total revenues increased 13% to $1.6 billion. Trust fees remained the
largest component of revenues and increased 18% to $816.3 million from $689.2
million in the prior year, accounting for 52% of total revenue and 76% of
noninterest income. Trust fees from PFS grew 20% over last year and totaled
$390.3 million, while C&IS fees, which includes $14.1 million of fees generated
by NTQA, grew 17% from 1997 levels and totaled $426.0 million.
Foreign exchange trading profits totaled $103.5 million, compared to
last year's record performance of $104.8 million. Treasury management revenues
from both fees and the computed value of compensating deposit balances increased
6% to $97.0 million. Other operating income totaled $52.6 million compared with
$53.5 million in 1997. The prior year included $11.1 million in nonrecurring
revenues resulting from settlements reached with Illinois banking regulators
concerning the disposition of certain unclaimed balances. Nonrecurring
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PERFORMANCE HIGHLIGHTS - FULL YEAR 1998 (continued)
gains in 1998 totaled $3.8 million and included sales of exchange membership
seats owned by Northern Futures Corporation and a sale of mortgages. Excluding
the nonrecurring items, the increase over last year is primarily attributable to
higher fees from trust deposit activities and banking services.
Net interest income, stated on a fully taxable equivalent basis,
totaled $513.1 million, up 9% from the $470.9 million reported last year. The
increase in net interest income was due to a 14% increase in average earning
assets and a 10% increase in noninterest-related funds. The increase in average
earning assets was driven by a 13% increase in loans and a 17% increase in
securities. The net interest margin declined to 2.08% from 2.18% in 1997.
The $9.0 million provision for credit losses was unchanged from 1997.
Net charge-offs of $10.0 million represented .07% of average loans compared to
$9.7 million or .08% of average loans in 1997.
Noninterest expenses increased $105.3 million or 12% and totaled
$997.1 million in 1998 compared with $891.8 million in 1997. The prior year
results included $8.9 million in technology-related special charges. Noninterest
expenses for the current year included $16.0 million of incremental expenses
related to acquisitions.
FORWARD-LOOKING STATEMENTS
This news release may be deemed to include forward-looking statements,
such as statements that relate to financial goals, business outlook, expansion
plans and credit quality. Actual results could differ materially from those
indicated by these statements. Northern Trust's 1997 Annual Report to
Stockholders and 1998 periodic reports to the SEC, including the section of the
Quarterly Report on Form 10-Q for September 30, 1998 captioned "Forward-Looking
Information", contain additional information about factors that could affect
actual results.
<PAGE>
Page 1
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
<TABLE>
<CAPTION>
STATEMENT OF INCOME STATISTICS ($ IN MILLIONS)
- ----------------------------------------------
FOURTH QUARTER
------------------------------------
1998 1997 % Change *
------------------------------------
<S> <C> <C> <C>
Noninterest Income
Trust Fees $ 216.7 $ 185.2 17%
Foreign Exchange Trading Profits 28.7 27.0 6
Treasury Management Fees 19.0 15.8 20
Security Commissions & Trading Income 6.7 6.7 -
Other Operating Income 13.5 12.6 7
Investment Security Transactions - - -
------- -------- ---
Total Noninterest Income 284.6 247.3 15
Interest Income (Taxable Equivalent) 391.4 370.0 6
Interest Expense 256.2 248.5 3
------- -------- ---
Net Interest Income (Taxable Equivalent) 135.2 121.5 11
Total Revenue (Taxable Equivalent) 419.8 368.8 14
Noninterest Expenses
Salaries 144.9 122.9 18
Pension and Other Employee Benefits 22.0 17.3 27
Occupancy Expense 16.3 16.5 (2)
Equipment Expense 14.9 14.8 1
Other Operating Expenses 71.3 62.1 15
------- -------- ---
Total Noninterest Expenses 269.4 233.6 15
Provision for Credit Losses 1.0 3.0 N/M
Taxable Equivalent Adjustment 8.8 8.2 7
------- -------- ---
Income Before Income Taxes 140.6 124.0 13
Provision for Income Taxes 49.0 42.7 15
------- -------- ---
NET INCOME $91.6 $81.3 13%
======= ======== ===
Net Income Per Common Share
Basic $0.82 $0.72 14%
Diluted 0.79 0.70 13
Return on Average Common Equity 20.16% 20.04%
Average Common Equity $1,777.2 $1,583.4 12%
Return on Average Assets 1.27% 1.25%
Common Dividend Declared per Share $0.24 $0.21 14%
Preferred Dividends (millions) 1.2 1.3 N/M
Average Common Shares Outstanding (000s)
Basic 110,511 110,885
Diluted 114,698 114,791
</TABLE>
(N/M) Not Meaningful
(*) Percentage change calculations are based on actual balances rather than
the rounded amounts presented in Supplemental Consolidated Financial
Information.
Note: Certain reclassifications have been made to prior periods' financial
statements to place them on a basis comparable with the current period's
financial statements.
<PAGE>
NORTHERN TRUST CORPORATION Page 2
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME STATISTICS ($ IN MILLIONS)
- ----------------------------------------------
<TABLE>
<CAPTION>
FULL YEAR
------------------------------------
1998 1997 % Change*
------------------------------------
<S> <C> <C> <C>
Noninterest Income
Trust Fees $ 816.3 $ 689.2 18 %
Foreign Exchange Trading Profits 103.5 104.8 (1)
Treasury Management Fees 69.9 60.2 16
Security Commissions & Trading Income 28.0 26.1 7
Other Operating Income 52.6 53.5 (1)
Investment Security Transactions 1.3 0.7 N/M
---------- ---------- --------
Total Noninterest Income 1,071.6 934.5 15
Interest Income (Taxable Equivalent) 1,539.0 1,365.5 13
Interest Expense 1,025.9 894.6 15
---------- ---------- --------
Net Interest Income (Taxable Equivalent) 513.1 470.9 9
Total Revenue (Taxable Equivalent) 1,584.7 1,405.4 13
Noninterest Expenses
Salaries 518.1 448.3 16
Pension and Other Employee Benefits 91.3 79.0 16
Occupancy Expense 67.9 66.7 2
Equipment Expense 62.2 62.2 -
Other Operating Expenses 257.6 235.6 9
---------- ---------- --------
Total Noninterest Expenses 997.1 891.8 12
Provision for Credit Losses 9.0 9.0 -
Taxable Equivalent Adjustment 35.9 32.7 10
---------- ---------- --------
Income Before Income Taxes 542.7 471.9 15
Provision for Income Taxes 188.8 162.5 16
---------- ---------- --------
NET INCOME $ 353.9 $ 309.4 14 %
========= ========= =======
Net Income Per Common Share
Basic $ 3.15 $ 2.74 15 %
Diluted 3.04 2.66 14
Return on Average Common Equity 20.47 % 20.17 %
Average Common Equity $1,704.6 $1,509.5 13 %
Return on Average Assets 1.30 % 1.29 %
Common Dividends Declared per Share $ 0.87 $ 0.75 16 %
Preferred Dividends (millions) 4.9 5.0 N/M
Average Common Shares Outstanding (000s)
Basic 110,683 110,978
Diluted 114,867 114,661
Common Shares Outstanding (EOP) 111,215 111,367
</TABLE>
<PAGE>
Page 3
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET ($ IN MILLIONS)
- -----------------------------
<TABLE>
<CAPTION>
DECEMBER 31
----------------------------------
1998 1997 % Change *
----------------------------------
<S> <C> <C> <C>
Assets
- ------
Money Market Assets $ 4,450.9 $ 5,309.4 (16)%
Securities
U.S. Government 315.4 542.0 (42)
Federal Agency and Other 5,004.4 3,240.5 54
Municipal 527.9 406.9 30
Trading Account 9.1 8.8 3
--------- --------- -----
Total Securities 5,856.8 4,198.2 40
Loans and Leases 13,646.9 12,588.2 8
--------- --------- -----
Total Earning Assets 23,954.6 22,095.8 8
Reserve for Credit Losses (146.8) (147.6) (1)
Cash and Due from Banks 2,366.0 1,738.9 36
Trust Security Settlement Receivables 336.7 291.4 16
Buildings and Equipment 340.2 316.4 8
Other Nonearning Assets 1,019.3 1,020.5 N/M
--------- --------- -----
Total Assets $27,870.0 $25,315.4 10 %
========= ========= =====
Liabilities and Stockholders' Equity
- ------------------------------------
Interest-Bearing Deposits
Savings $ 6,789.7 $ 6,371.5 7 %
Other Time 540.2 572.0 (6)
Foreign Office Time 6,531.9 5,455.4 20
--------- --------- -----
Total Interest-Bearing Deposits 13,861.8 12,398.9 12
Borrowed Funds 5,387.3 4,984.3 8
Senior Notes and Long-Term Debt 1,425.6 1,491.9 (4)
--------- --------- -----
Total Interest-Related Funds 20,674.7 18,875.1 10
Demand & Other Noninterest-Bearing Deposits 4,340.9 3,961.1 10
Other Liabilities 914.1 740.2 23
--------- --------- -----
Total Liabilities 25,929.7 23,576.4 10
Common Equity 1,820.3 1,619.0 12
Preferred Equity 120.0 120.0 -
--------- --------- -----
Total Liabilities and Stockholders' Equity $27,870.0 $25,315.4 10 %
========= ========= =====
</TABLE>
<PAGE>
NORTHERN TRUST CORPORATION Page 4
(Supplemental Consolidated Financial Information)
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEET ($ IN MILLIONS)
- -------------------------------------
FOURTH QUARTER
----------------------------------------
1998 1997 % Change *
----------------------------------------
<S> <C> <C> <C>
Assets
- ------
Money Market Assets $ 5,067.2 $ 3,938.4 29%
Securities
U.S. Government 325.2 682.4 (52)
Federal Agency and Other 5,935.9 5,788.0 3
Municipal 461.9 397.9 16
Trading Account 13.5 10.9 23
--------- --------- ---
Total Securities 6,736.5 6,879.2 (2)
Loans and Leases 13,981.0 12,502.5 12
--------- --------- ---
Total Earning Assets 25,784.7 23,320.1 11
Reserve for Credit Losses (146.7) (147.8) (1)
Nonearning Assets 2,953.2 2,596.2 14
--------- --------- ---
Total Assets $28,591.2 $25,768.5 11%
========= ========= ===
Liabilities and Stockholders' Equity
- ------------------------------------
Interest-Bearing Deposits
Savings $ 6,537.1 $ 5,993.2 9%
Other Time 564.6 709.4 (20)
Foreign Office Time 6,450.5 6,014.3 7
--------- --------- ---
Total Interest-Bearing Deposits 13,552.2 12,716.9 7
Borrowed Funds 7,017.4 5,648.5 24
Senior Notes and Long-Term Debt 1,430.2 1,504.8 (5)
--------- --------- ---
Total Interest-Related Funds 21,999.8 19,870.2 11
Demand & Other Noninterest-Bearing Deposits 3,851.3 3,515.8 10
Other Liabilities 842.9 679.1 24
--------- --------- ---
Total Liabilities 26,694.0 24,065.1 11
Common Equity 1,777.2 1,583.4 12
Preferred Equity 120.0 120.0 -
--------- --------- ---
Total Liabilities and Stockholders' Equity $28,591.2 $25,768.5 11%
========= ========= ===
</TABLE>
<PAGE>
Page 5
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
Quarterly Trend Data ($ In Millions)
- ------------------------------------
<TABLE>
<CAPTION>
1998 1997
Quarters Quarters
------------------------------------ --------
Fourth Third Second First Fourth
------------------------------------ --------
<S> <C> <C> <C> <C> <C>
Net Income Summary
- ------------------
Trust Fees $216.7 $203.6 $202.3 $193.7 $ 185.2
Other Noninterest Income 67.9 61.1 63.4 62.9 62.1
Net Interest Income (Taxable Equivalent) 135.2 127.7 128.2 122.0 121.5
--------- -------- -------- --------- -------
Total Revenue (Taxable Equivalent) 419.8 392.4 393.9 378.6 368.8
Provision for Credit Losses 1.0 1.0 3.0 4.0 3.0
Noninterest Expenses 269.4 243.8 247.7 236.2 233.6
--------- -------- -------- --------- -------
Pretax Income (Taxable Equivalent) 149.4 147.6 143.2 138.4 132.2
Taxable Equivalent Adjustment 8.8 9.7 9.0 8.4 8.2
Provision for Income Taxes 49.0 47.7 47.0 45.1 42.7
--------- -------- -------- --------- -------
Net Income $91.6 $90.2 $87.2 $84.9 $81.3
========= ======== ======== ========= =======
Per Common Share
- ----------------
Net Income - Basic $0.82 $0.81 $0.78 $0.75 $0.72
- Diluted 0.79 0.78 0.75 0.73 0.70
Dividend Declared 0.24 0.21 0.21 0.21 0.21
Book Value (EOP) $16.37 $15.84 $15.46 $15.07 $14.54
Market Value (EOP) 87.31 68.25 76.25 74.75 69.75
Ratios
- ------
Return on Average Common Equity 20.16% 20.55% 20.48% 20.73% 20.04%
Return on Average Assets 1.27 1.30 1.32 1.32 1.25
Net Interest Margin 2.08 2.01 2.14 2.11 2.07
Productivity Ratio * 156% 161% 159% 160% 158%
Risk-based Capital Ratios
Tier 1 9.8% 9.4% 9.3% 9.8% 9.6%
Total (Tier 1 + Tier 2) 13.1 12.7 12.6 13.0 12.8
Leverage 6.9 6.9 7.0 7.0 6.9
Trust Assets ($ in Billions) - EOP **
- -------------------------------------
Corporate $1,138.5 $1,024.5 $1,090.3 $1,056.5 $983.4
Personal 121.2 104.8 110.2 105.5 95.9
--------- -------- -------- --------- -------
Total Trust Assets $1,259.7 $1,129.3 $1,200.5 $1,162.0 $1,079.3
========= ======== ======== ========= =======
Memo: Managed Assets 236.0 220.7 228.7 216.5 196.6
Asset Quality ($ in Millions) - EOP
- -----------------------------------
Nonaccrual and Restructured Loans $32.9 $29.6 $27.0 $36.2 $41.4
Other Real Estate Owned (OREO) 2.3 1.6 2.0 3.0 1.9
--------- -------- -------- --------- -------
Total Nonperforming Assets $35.2 $31.2 $29.0 $39.2 $43.3
========= ======== ======== ========= =======
Nonperforming Assets / Loans & OREO 0.26% 0.23% 0.21% 0.30% 0.34%
Gross Charge-offs $1.0 $1.5 $4.6 $4.7 $5.4
Gross Recoveries 0.2 0.4 0.4 0.8 2.0
--------- -------- -------- --------- -------
Net Charge-offs $0.8 $1.1 $4.2 $3.9 $3.4
========= ======== ======== ========= =======
Net Charge-offs (Annualized) to Average Loans 0.02% 0.03% 0.13% 0.12% 0.11%
Reserve for Credit Losses $146.8 $146.6 $146.7 $147.7 $147.6
Reserve to Nonaccrual and Restructured Loans 446% 496% 543% 408% 356%
</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.
