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Northern Trust sees YOY dip in Q2 net income, ups quarterly dividend

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Northern Trust sees YOY dip in Q2 net income, ups quarterly dividend

on July 20reported second-quarter net income of $260.7 million, or $1.09 per commonshare, compared to $269.2million, or $1.10 per common share, in the year-ago period. Netincome applicable to common stock was $254.9 million for the latest quarter,compared to $263.4 million for the second quarter of 2015.

Results for the recent quarter included the following: a pretaxgain on the sale of 1.1 million Visa Inc. Class B common shares, net of thevaluation adjustment to existing swap agreements, totaling $118.2 million; apretax charge in connection with an agreement to settle certain securitieslending litigation, which is subject to court approval, of $46.5 million;charges related to contractual modifications associated with existing corporateand institutional services clients of $18.6 million; severance, other personneland related charges of $17.5 million; impairment charges and the loss on salerelated to the decision to exit a portion of a nonstrategic loan and leaseportfolio of $14.1 million; and impairment charges related to the residualvalue of certain aircraft and rail cars of $7.5 million.

Excluding these items, net income was $252.7 million, or$1.06 per common share. TheS&P Capital IQ consensus estimate for normalized EPS for the latest quarterwas $1.06.

On afully taxable equivalent basis, the Chicago-based company's net interest marginwas 1.16% for the second quarter, compared to 1.21% in the previous quarter and1.00% in the second quarter of 2015.

Nonperformingassets totaled $166.4 million at June 30, compared to $174.4 million at March31 and $218.8 million at June 30, 2015.

Aprovision credit of $3.0 million was recorded in the second quarter. In theprevious quarter, the provision for credit losses was $2.0 million. In thethree months ended June 30, 2015, the company recorded a provision credit of$10 million.

Netcharge-offs in the recent quarter totaled $2.4 million, compared to $2.7million in the linked quarter and $2.6 million in the second quarter of 2015.

Northern Trust declared a quarterly cash dividend of 38cents per common share, payable Oct. 1 to stockholders of record Sept. 2. The dividendrepresents a 6% increase from the prior quarterly rate of 36 cents per commonshare, and will result in an expected annual dividend rate of $1.52, comparedwith the prior annual rate of $1.44, according to a news release.