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Northern Trust Annual Report, Year Ended Dec 31, 2002

Filing Date
Filed March 10, 2003
Period End
December 31, 2002
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 10, 2003. Cited figures are marked; the original filing is the authoritative source.

Northern Trust Corporation's Form 10-K for fiscal year 2002, filed March 10, 2003, reports consolidated total assets of approximately $39.5 billiona and stockholders' equity of approximately $3.0 billion at December 31, 2002.

The company is a bank holding company whose principal subsidiary is The Northern Trust Company, and it operates through two principal business units: Corporate and Institutional Services (C&IS) and Personal Financial Services (PFS), with investment management provided by Northern Trust Global Investments (NTGI). Total trust assets under administration were $1.50 trillionb at year-end, down 10% from the prior year, and net income for 2002 was $447.1 million, down 8% from $487.5 million in 2001. Diluted earnings per share were $1.97 versus $2.11 in 2001.

The decline in profitability was attributed to weak equity markets, which fell for a third consecutive year, and lower securities lending fees and foreign exchange trading profits. Net interest income reached a record $601.8 million, and treasury management fees rose to $96.3 millionc. Provision for credit losses fell to $37.5 million from $66.5 million, and nonaccrual loans declined to $93.4 million.

Capital ratios remained well above the well-capitalized thresholds, with Tier 1 capital at 11.1% and total capital at 14.1% of risk-weighted assets. During and after 2002 the company made several moves: it closed the acquisition of Deutsche Bank AG's global passive equity, enhanced equity and passive fixed income investment management businesses on January 31, 2003 for approximately $100 milliond, with assets under management of $44.1 billion, and it signed a definitive agreement to acquire Legacy South, an Atlanta-based private wealth firm with about $300 million in assets under management, expected to close in the first quarter of 2003. The quarterly dividend was maintained at $.17 per share.

02—Key points

Key Highlights

  1. Net income of $447.1 million in 2002, down 8% from $487.5 million in 2001; diluted EPS of $1.97 versus $2.11
  2. Record net interest income of $601.8 million, up 1% from $595.3 million in 2001
  3. Trust assets under administration of $1.50 trillion at December 31, 2002, down 10% from the prior year
  4. Total assets of approximately $39.5 billion and stockholders' equity of approximately $3.0 billion at year-end 2002
  5. Provision for credit losses decreased to $37.5 million from $66.5 million; net charge-offs were $30.6 million
  6. Tier 1 capital ratio of 11.1% and total capital ratio of 14.1% of risk-weighted assets, well above well-capitalized minimums
  7. Acquired Deutsche Bank AG's global passive equity and related fixed income management businesses on January 31, 2003 for approximately $100 million, with $44.1 billion in assets under management

03—Questions

Frequently Asked Questions

  1. How did Northern Trust's earnings change in 2002?

    Net income fell to $447.1 million from $487.5 million in 2001, and diluted earnings per share declined to $1.97 from $2.11. The filing attributes the decline to weak equity markets, which fell for a third consecutive year, along with lower securities lending fees and foreign exchange trading profits.

  2. What drove the drop in trust fees?

    Trust fees totaled $1.23 billion, down from $1.26 billion in 2001. Securities lending fees in Corporate and Institutional Services fell to $100.0 million from $135.7 million, and the decline in equity markets reduced asset-based fees, partly offset by net new business.

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

    At December 31, 2002, Tier 1 capital was 11.1% and total capital was 14.1% of risk-weighted assets, compared with minimum requirements of 4.0% and 8.0%. The leverage ratio was 7.8%, and the company and all its banking subsidiaries exceeded the well-capitalized standard.

  4. What acquisitions did Northern Trust complete or agree to in early 2003?

    On January 31, 2003, Northern Trust closed its acquisition of Deutsche Bank AG's global passive equity, enhanced equity and passive fixed income investment management businesses for approximately $100 million, based on $44.1 billion in assets under management. It also signed a definitive agreement in November 2002 to acquire Legacy South, an Atlanta-based private wealth management firm with about $300 million in assets under management, expected to close in the first quarter of 2003.

04—Continue

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