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Northern Trust Annual Report (Amendment), Year Ended Dec 31, 1997

Filing Date
Filed March 2, 1999
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/A filed March 2, 1999. Cited figures are marked; the original filing is the authoritative source.

Northern Trust Corporation's Form 10-K/A (Amendment No. 2) for fiscal 1997 was filed to expand the discussion of its Reserve for Credit Losses methodology and how the reserve was determined in the periods reported.

The filing describes Northern Trust as a bank holding company headquartered in Chicago, with consolidated total assets of approximately $25.3 billiona and stockholders' equity of approximately $1.7 billion at December 31, 1997. Its principal subsidiary, The Northern Trust Company, had consolidated assets of approximately $21.2 billion, and the company emphasizes fee-based revenue, with total assets under administration of $974.1 billion in Corporate and Institutional Services at year-end 1997. Credit quality data in the filing show the reserve for credit losses at $147.6 million at year-end 1997 versus $148.3 million in 1996, with net charge-offs of $9.7 million in 1997 and $11.8 million in 1996.

The reserve fell to 1.17% of year-end loans and leases from 1.36% in 1996. Non-performing loans rose to $41.4 millionb in 1997 from $19.5 million in 1996, which management attributed principally to one major non-performing commercial loan. Management also changed its reserve methodology in 1997 by using a five-year historical loss period and a 1% industry base reserve for commercial and commercial real estate loans, a change the filing says increased the allocated inherent reserve by $41.9 million.

The Corporation's Tangible Tier 1 Leverage Ratio was 6.8%c at December 31, 1997, and the filing states that the Bank and each of the other subsidiary banks met or exceeded the minimum ratios to be considered well capitalized. Northern Trust employed 7,553 full-time equivalent officers and staff at year-end 1997.

02—Key points

Key Highlights

  1. Total consolidated assets of approximately $25.3 billion and stockholders' equity of approximately $1.7 billion at December 31, 1997; second largest bank holding company headquartered in Illinois.
  2. The Northern Trust Company (the Bank) had consolidated assets of approximately $21.2 billion and common equity capital of approximately $1.3 billion at December 31, 1997.
  3. Total assets under administration, excluding personal trust assets, were $974.1 billion at December 31, 1997, within Corporate and Institutional Services.
  4. Reserve for credit losses was $147.6 million at year-end 1997, or 1.17% of year-end loans and leases, down from 1.36% at year-end 1996.
  5. Net charge-offs were $9.7 million in 1997 versus $11.8 million in 1996; non-performing loans increased to $41.4 million from $19.5 million, principally due to one major commercial loan.
  6. Management changed reserve methodology in 1997 (five-year loss history and a 1% industry base reserve for commercial and commercial real estate loans), which the filing says increased the allocated inherent reserve by $41.9 million.
  7. Tangible Tier 1 Leverage Ratio of 6.8% at December 31, 1997; all subsidiary banks met or exceeded well-capitalized minimums.

03—Questions

Frequently Asked Questions

  1. Why was this Form 10-K/A amended?

    The registrant filed Amendment No. 2 to expand its discussion of Reserve for Credit Losses methodology and the determination of the reserve during the periods reported in its 1997 Form 10-K. The addition amends the Credit Risk Management section in Part I, Item 1.

  2. How did the credit loss reserve change in 1997?

    The reserve for credit losses was $147.6 million at December 31, 1997, compared with $148.3 million at year-end 1996. Provisions for credit losses were $9.0 million in 1997 and $12.0 million in 1996.

  3. What drove the increase in non-performing loans?

    Non-performing loans rose to $41.4 million in 1997 from $19.5 million in 1996. The filing states the increase was principally due to one major non-performing commercial loan, and management did not view it as evidence of a deteriorating trend in credit quality.

  4. What is the company's regulatory capital position?

    At December 31, 1997, the Corporation had a Tangible Tier 1 Leverage Ratio of 6.8%, and the Bank and each of the Corporation's other subsidiary banks met or exceeded the minimum ratios to be considered well capitalized.

04—Continue

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