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Northern Trust Q3 profit climbs 15.8% YOY

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Northern Trust Q3 profit climbs 15.8% YOY

Chicago-based Northern Trust Corp. on Oct. 18 posted a 15.8% year-over-year increase in third-quarter results.

Net income climbed to $298.4 million, or $1.20 per share, from net income of $257.6 million, or $1.08 per share, a year earlier. The S&P Capital IQ consensus mean estimate for third-quarter normalized EPS was $1.13.

Revenue increased 11% year over year to $1.36 billion. This was buoyed by trust, investment and other servicing fees, which grew 10% to $867.9 million, as well as other operating income, which increased 21% to $40.0 million. Net interest income likewise grew to $366.2 million, up 18% from the year-ago figure.

Assets under custody/administration ended the quarter at $9.06 billion, 14% higher than the previous year, reflecting higher markets and the bank's continued success in winning new business, Chairman and CEO Frederick Waddell said.

Waddell added that under its "Value for Spend" initiative, Northern Trust expects to realize $250 million in expense run-rate savings by 2020.

Net interest margin for the quarter was 1.25%, the same in the previous quarter and up from 1.12% a year ago.

The bank recorded a credit reserve release of $7.0 million, compared to a credit reserve release of $7.0 million in the previous quarter and a credit reserve release of $3.0 million a year earlier.

Net recoveries totaled $1.6 million in the third quarter, compared to net charge-offs of $3.2 million in the linked quarter and net charge-offs of $800,000 in the prior-year quarter.

At the end of the third quarter, nonperforming assets totaled $145.5 million, compared to $166.7 million in the linked quarter and down from $181.0 million a year ago.