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Northern Trust Annual Report, Year Ended Dec 31, 2001

Filing Date
Filed March 12, 2002
Period End
December 31, 2001
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 12, 2002. Cited figures are marked; the original filing is the authoritative source.

Northern Trust Corporation (NTRS) reported a record 2001 net income of $487.5 milliona, up slightly from $485.1 million in 2000, with diluted earnings per share of $2.11 versus $2.08.

Trust fees rose to $1.23 billionb from $1.20 billion, net interest income reached a record $595.3 million, and noninterest income totaled $1.58 billion. Results were held back by a $66.5 million provision for credit losses, compared with $24.0 million in 2000, with $45.0 million of that provision recognized in the fourth quarter, largely tied to the Enron Corp. bankruptcy filing. Return on average common equity fell to 19.34% from 22.09%.

At December 31, 2001, consolidated total assets were approximately $39.7 billionc and stockholders' equity was approximately $2.8 billion. Trust assets under administration were $1.68 trillion, unchanged from the prior year, and managed trust assets declined 2% to $330.1 billion as equity markets weakened. The Board raised the quarterly dividend 9.7% to $.17 per share in November 2001, the fifteenth consecutive annual increase, and the Corporation repurchased 2,547,235 of its own shares during the year.

The Corporation reported that its banking subsidiaries met or exceeded the ratios required to be considered well capitalized. Its Tangible Tier 1 Leverage Ratio was 7.9%d, and Tier 1 and total risk-based capital ratios were 10.9% and 14.3%.

The filing states that the Corporation has not used unconsolidated special purpose entities for financing, liquidity, asset transfers or credit risk management. Much of the financial detail is incorporated by reference from the 2001 Annual Report to Shareholders, which is included as Exhibit 13.

02—Key points

Key Highlights

  1. Record 2001 net income of $487.5 million, up from $485.1 million in 2000; diluted EPS of $2.11 versus $2.08.
  2. Trust fees rose to $1.23 billion from $1.20 billion, while trust assets under administration held at $1.68 trillion and managed assets fell 2% to $330.1 billion.
  3. Net interest income reached a record $595.3 million, up from $568.6 million in 2000.
  4. Provision for credit losses increased to $66.5 million from $24.0 million, with $45.0 million recognized in the fourth quarter, largely related to Enron Corp.'s December 2001 bankruptcy filing.
  5. Return on average common equity declined to 19.34% from 22.09%; return on average assets was 1.37% versus 1.43%.
  6. Dividend increased 9.7% to $.17 per quarter in November 2001, the fifteenth consecutive annual increase.
  7. Total assets of approximately $39.7 billion and tier 1 capital ratio of 10.9% at December 31, 2001; all subsidiary banks met well-capitalized standards.

03—Questions

Frequently Asked Questions

  1. How did Northern Trust perform financially in 2001?

    The company reported record net income of $487.5 million, compared with $485.1 million in 2000. Diluted earnings per share were $2.11, up from $2.08. Earnings were supported by record trust fees and net interest income, but a higher provision for credit losses limited growth.

  2. Why did the provision for credit losses increase so sharply?

    The provision rose to $66.5 million from $24.0 million in 2000. The filing states that $45.0 million was recognized in the fourth quarter to address credit exposure to Enron Corp., which filed for bankruptcy on December 2, 2001, and other credit risks from the economic recession. About $24.0 million of the fourth-quarter provision and charge-offs related to Enron.

  3. How did trust assets and fees trend?

    Trust assets under administration were $1.68 trillion at December 31, 2001, essentially unchanged from the prior year. Managed trust assets fell 2% to $330.1 billion, reflecting weaker equity markets. Trust fees grew 3% to $1.23 billion.

  4. What is the company's capital position?

    At December 31, 2001, tier 1 capital was 10.9% and total capital was 14.3% of risk-weighted assets, both well above regulatory minimums. The Tangible Tier 1 Leverage Ratio was 7.9%. Stockholders' equity totaled $2.77 billion, and the Corporation repurchased 2,547,235 shares during 2001.

  5. What did the company say about its dividend and share buybacks?

    The Board increased the quarterly common dividend 9.7% to $.17 per share in November 2001, for a new annual rate of $.68. The Corporation repurchased 2,547,235 of its own shares in 2001 and may buy up to 4.6 million additional shares after December 31, 2001.

04—Continue

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