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Northern Trust Annual Report, Year Ended Dec 31, 1997

Filing Date
Filed March 17, 1998
Period End
December 31, 1997
Securities
NTRSNTRSO
In the record · 2016–202610-K1110-Q338-K118

NTRS filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 118 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Feb ’19Feb ’19
  2. FY2020 annual report10-K · Feb ’21Feb ’21
  3. Leadership change8-K · Sep ’25Sep ’25

01—Abstract

Summary

Summary of the 10-K filed March 17, 1998. Cited figures are marked; the original filing is the authoritative source.

Northern Trust Corporation, a bank holding company headquartered in Chicago, reported in its 10-K for fiscal 1997 that consolidated total assets were approximately $25.3 billiona and stockholders' equity approximately $1.7 billion at December 31, 1997.

The Corporation's principal subsidiary, The Northern Trust Company, had total assets of approximately $21.2 billionb. Net income for 1997 was $309.4 million, compared with $258.8 million in 1996 and $220.0 million in 1995, and diluted net income per common share was $2.66, versus $2.21 in 1996. Total noninterest income rose to $934.5 million from $780.0 million, led by trust fees of $689.2 million, while net interest income increased to $438.2 million from $388.3 million.

The company's strategy centers on two business units: Corporate and Institutional Services (C&IS) and Personal Financial Services (PFS). Trust assets under administration reached $1.08 trillionc at December 31, 1997, up from $778.9 billion a year earlier, and the Bank reported total assets under administration of $974.1 billion for C&IS. Credit quality remained sound, with total nonperforming assets of $43.3 million and a reserve for credit losses of $147.6 million at year-end.

Capital strengthened, with Tier 1 risk-based capital at 9.6% and total risk-based capital at 12.8%, supported by $150 milliond and $120 million of Floating Rate Capital Securities issued in 1997. The filing incorporates most financial detail by reference to the 1997 Annual Report to Stockholders, and the Annual Report excerpts included in the filing supply the consolidated financial statements, MD&A and statistical data summarized here. The company reported 7,553 full-time equivalent staff at December 31, 1997, and noted Year 2000 renovation expenses of an estimated approximately $25 million, with $10.1 million incurred as of year-end 1997.

02—Key points

Key Highlights

  1. Net income reached a record $309.4 million in 1997, up from $258.8 million in 1996; diluted EPS was $2.66 versus $2.21.
  2. Consolidated total assets were $25.3 billion at December 31, 1997, and stockholders' equity was $1.74 billion.
  3. Trust fees rose to $689.2 million from $594.4 million, and total noninterest income was $934.5 million, up from $780.0 million.
  4. Trust assets under administration totaled $1.08 trillion at year-end 1997, compared with $778.9 billion a year earlier.
  5. Nonperforming assets were $43.3 million at December 31, 1997, versus $21.4 million a year earlier, with a reserve for credit losses of $147.6 million.
  6. Tier 1 risk-based capital ratio was 9.6% and total risk-based capital ratio was 12.8%, with leverage ratio of 6.9%, all well above regulatory minimums.
  7. The company issued $150 million and $120 million of Floating Rate Capital Securities in 1997; the quarterly common dividend was raised to $.21 from $.18 in November 1997.

03—Questions

Frequently Asked Questions

  1. How much did Northern Trust earn in 1997 and how did that compare with prior years?

    Net income for 1997 was $309.4 million, compared with $258.8 million in 1996 and $220.0 million in 1995. Diluted net income per common share was $2.66, versus $2.21 in 1996 and $1.86 in 1995.

  2. What drives Northern Trust's revenue?

    Noninterest income totaled $934.5 million in 1997, of which trust fees were $689.2 million. Net interest income was $438.2 million, and foreign exchange trading profits were $104.8 million, up from $58.8 million in 1996.

  3. How strong is the company's capital position?

    At December 31, 1997, Tier 1 risk-based capital was 9.6% and total risk-based capital was 12.8%, with a leverage ratio of 6.9%. The filing states these ratios were well above regulatory requirements, and the Bank and each subsidiary bank met the well-capitalized standard.

  4. How is credit quality?

    Total nonperforming assets were $43.3 million at December 31, 1997, up from $21.4 million in 1996. The reserve for credit losses was $147.6 million at year-end 1997, compared with $148.3 million a year earlier, and net charge-offs were $9.7 million in 1997.

  5. What is the company's exposure to the Year 2000 issue?

    The filing estimates Year 2000 renovation expense from 1997 forward at approximately $25 million, of which $10.1 million had been incurred as of December 31, 1997, with most of the remaining costs expected in 1998. Completion of critical systems work is expected by December 31, 1998.

04—Continue

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