Annual Meeting of Stockholders northerntrust.com © 2011 Northern Trust Corporation Service Expertise Integrity Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E Northern Trust Corporation Annual Meeting of Stockholders Frederick H. Waddell Chairman, President & Chief Executive Officer EXHIBIT 99.1 |
2 Annual Meeting of Stockholders Forward Looking Statement This presentation may include forward-looking statements such as statements that relate to Northern Trust’s financial goals, capital adequacy, dividend policy, expansion and business development plans, risk management policies, anticipated expense levels and projected profit improvements, business prospects and positioning with respect to market, demographic and pricing trends, strategic initiatives, re-engineering and outsourcing activities, new business results and outlook, changes in securities market prices, credit quality including reserve levels, planned capital expenditures and technology spending, anticipated tax benefits and expenses, and the effects of any extraordinary events and various other matters (including developments with respect to litigation, other contingent liabilities and obligations, and regulation involving Northern Trust and changes in accounting policies, standards and interpretations) on Northern Trust’s business and results. These statements speak of Northern Trust’s plans, goals, targets, strategies, beliefs, and expectations, and refer to estimates or use similar terms. Actual results could differ materially from those indicated by these statements because the realization of those results is subject to many risks and uncertainties. Our 2010 annual report and periodic reports to the SEC contain information about specific factors that could cause actual results to differ, and you are urged to read them. Northern Trust disclaims any continuing accuracy of the information provided in this presentation after today. |
3 Annual Meeting of Stockholders Agenda Northern Trust Corporation Financial Overview Investing in our Businesses Personal Financial Services Corporate & Institutional Services Northern Trust Global Investments Stock Price Performance Legacy of Leadership |
Annual Meeting of Stockholders northerntrust.com © 2011 Northern Trust Corporation Service Expertise Integrity Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E Financial Overview |
5 Annual Meeting of Stockholders Solid performance despite challenging macroeconomic environment. ($MM, except EPS) Trust, Inv. & Other Servicing Fees Foreign Exchange Trading Income Other Non-Interest Income Net Interest Income Total Revenues Non-Interest Expenses Provision for Credit Losses Pre-Tax Income Taxes Net Income Earnings per Share $2,082 $382 $265 $958 $3,687 $2,498 $160 $1,029 $359 $670 $2.74 2010 n/m -14% +3% -8% -4% +8% -26% -21% -17% -23% -13% 2010 vs. 2009 Key Accomplishments Strong new business results despite difficult macroeconomic environment Invested approximately $518 million in technology Maintained our dividend for the 114 th consecutive year Acquisition of Los Angeles- based Waterline Partners, LLC Announced acquisition of Bank of Ireland Securities Services in February 2011 2010 Financial Performance Presented on a fully taxable equivalent basis |
6 Annual Meeting of Stockholders 1Q11 1Q11 vs 1Q10 Trust, Inv. & Other Servicing Fees Foreign Exchange Trading Income Other Non-Interest Income Net Interest Income Total Revenues Non-Interest Expenses Provision for Credit Losses Pre-Tax Income Taxes Net Income Earnings per Share $515 $85 $63 $245 $908 $653 $15 $240 $89 $151 $0.61 -% +6% -14% +2% -% +5% -63% -3% -1% -4% -4% First Quarter 2011 Financial Performance ($MM, except EPS) Presented on a fully taxable equivalent basis New Business Wins Queensland Investment Corporation, one of the largest asset managers in Australia Lothian Pension Fund, one of the 10 largest local government pensions in the United Kingdom Stenham Asset Management, a leading global fund of hedge funds manager |
7 Annual Meeting of Stockholders Assets Under Custody ($ Trillion) Assets Under Management ($ Billion) Indicative of our successful new business efforts, we continue to gather client assets at rates which exceed market growth. Client Asset Accumulation AUC CAGR 8% S&P 500 CAGR 1% US$EAFE CAGR 0% AUM CAGR 1% S&P 500 CAGR 1% US$EAFE CAGR 0% |
8 Annual Meeting of Stockholders Consistently Strong and Conservative Balance Sheet 85% of Northern Trust’s total securities portfolio composed of triple-A rated securities 89% of Asset-Backed Securities rated triple-A Exposure to subprime Asset-Backed securities relative to the overall portfolio minimal at ~1% The securities portfolio is in a net unrealized gain position High Quality, Short Duration Securities Portfolio NTRS data is as of March 31, 2011 but is preliminary until the 10Q is filed with the SEC. Peer data is as of 12/31/10, as reported by SNL Financial. |
9 Annual Meeting of Stockholders Consistently Strong and Conservative Balance Sheet Relationship-based lending practices Consistent and conservative underwriting standards Loan quality is notably better than peer averages Diversified, High Quality Loan Portfolio Northern Trust Top 20 Peer Avg. 85% of Northern Trust’s total securities portfolio composed of triple-A rated securities 89% of Asset-Backed Securities rated triple-A Exposure to subprime Asset-Backed securities relative to the overall portfolio minimal at ~1% The securities portfolio is in a net unrealized gain position High Quality, Short Duration Securities Portfolio NTRS data is as of March 31, 2011 but is preliminary until the 10Q is filed with the SEC. Peer data is as of 12/31/10, as reported by SNL Financial. 1.36% 0.31% 4.13% 2.23% NPAs to Loans NCOs to Avg. Loans |
10 Annual Meeting of Stockholders Consistently Strong and Conservative Balance Sheet Consistently Outstanding Capital Strength Relationship-based lending practices Consistent and conservative underwriting standards Loan quality is notably better than peer averages Diversified, High Quality Loan Portfolio Northern Trust Top 20 Peer Avg. 85% of Northern Trust’s total securities portfolio composed of triple-A rated securities 89% of Asset-Backed Securities rated triple-A Exposure to subprime Asset-Backed securities relative to the overall portfolio minimal at ~1% The securities portfolio is in a net unrealized gain position High Quality, Short Duration Securities Portfolio Common Equity ($ Billions) CAGR: +11% Northern Trust Corporation Tier 1 Capital Ratio 13.5% Well Capitalized Guideline 6.0% Total Risk-Based Ratio 15.4% Well Capitalized Guideline 10.0% Leverage Ratio 8.5% Well Capitalized Guideline 5.0% Tier 1 Common Equity 13.0% Tangible Common Equity 7.1% NTRS data is as of March 31, 2011 but is preliminary until the 10Q is filed with the SEC. Peer data is as of 12/31/10, as reported by SNL Financial. |
11 Annual Meeting of Stockholders Service Expertise Integrity Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E Investing in our Businesses northerntrust.com © 2011 Northern Trust Corporation |
12 Annual Meeting of Stockholders New York (1) Network of PFS Offices in 18 States Over 50% of the U.S. millionaire market resides within a 45-minute drive of Northern Trust offices. Arizona (6) Florida (25) Illinois (15) Colorado (1) Nevada (1) Missouri (1) Washington (1) Michigan (3) Texas (7) California (10) Connecticut (1) Georgia (1) Minnesota (1) Massachusetts (1) Personal Financial Services Extensive Reach in the Affluent Market Investing in the Business: Making strategic hires around the country Acquisition of Los Angeles-based Waterline Partners Continuing to augment our investment capabilities Expanding to Washington, D.C. in 2011 Evaluating international expansion opportunities PFS Assets Under Management ($ Billions) CAGR S&P500 CAGR Delaware (1) +7% +2% Ohio (1) Wisconsin (1) |
13 Annual Meeting of Stockholders Northern Trust provides comprehensive financial advice and solutions delivered by a dedicated team of multi-disciplinary professionals. Asset Servicing Financial Planning Investment Management Bank A Broker B Asset Manager C Banking Services Trust Services Retired East Coast Executive Personal Financial Services Spotlight on: Wealth Advisory |
14 Annual Meeting of Stockholders The Americas Europe, Middle East, and Africa Asia Pacific Corporate & Institutional Services Positioned Globally for Growth C&IS Assets Under Custody ($ Trillions) Strategically Positioned in Three Dynamic Regions Investing in the Business: Growing our Global Fund Services business Building relationships with sovereign wealth funds and financial institutions Expanding the breadth of capabilities offered to clients Continuing to enhance our technology platform to provide innovative solutions Converted our Beijing office to a full service licensed branch Bank of Ireland Securities Services CAGR +11% S&P500 CAGR +2% US$EAFE CAGR +4% |
15 Annual Meeting of Stockholders Recent success in Australia and New Zealand exhibits Northern Trust’s ability to expand globally into strategically important markets. Corporate & Institutional Services Spotlight on: Australasia |
Investing in the Business: Focusing on international growth through strategic hires and product development Building exchange-traded fund products Expanding alternative investment capabilities Driving revenue growth through direct sales of our core capabilities $44 Billion (7%) Assets Under Management: $662.2 Billion A Diversified Asset Manager $313 Billion (47%) Active $289 Billion (44%) Index Manager of Managers Across Asset Classes Across Client Segments $494 Billion Institutional $168 Billion Personal Across Styles Equities $294 Billion (44%) Fixed Income $119 Billion (18%) Short Duration $231 Billion (35%) Other $18 Billion (3%) Other $16 BN (2%) Northern Trust Global Investments Client Focused, Diversified Investment Manager 16 Annual Meeting of Stockholders Preliminary data as of March 31, 2011 |
17 Annual Meeting of Stockholders Northern Trust Global Investments Spotlight on: Investment Program Solutions $4.2 Billion 3,800 Plans 39,000 Participants Northern Trust - Trustee Open architecture Broad set of implementation options Investment Program Development and Oversight Manager Selection Fund Construction Performance Measurement Custody Fund Administration Investment Management Asset servicing Reporting Fund accounting Regulatory reporting 17 Annual Meeting of Stockholders |
Annual Meeting of Stockholders Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E Stock Price Performance |
19 Annual Meeting of Stockholders December 31, 2005 through December 31, 2010 Average (excl. NTRS): -36% KBW Bank Index: -50% S&P 500: 1% 32% 7% 7% 1% -2% -5% -10% -16% -20% -26% -37% -42% -51% -59% -61% -71% -73% -80% -84% -90% Stock Price Performance: 5-years |
Service Expertise Integrity Service Expertise Integrity P R I N C I P L E S T H A T E N D U R E Legacy of Leadership northerntrust.com © 2011 Northern Trust Corporation |
21 Annual Meeting of Stockholders William D. Smithburg Director of The Northern Trust Company and Northern Trust Corporation for 30 years Served The Quaker Oats Company for 31 years Quaker Oats Chief Executive Officer 1981-97 Chairman, 1983-97 President, 1979-83, 1990-93, 1995-97 Served community as member of the Civic Committee and the Commercial Club of Chicago and the Board of Trustees at Northwestern University During Bill's tenure as Director from 1981-2011, Northern Trust’s stockholder's equity rose from $304.4 million to $6.6 billion, revenue increased from $223 million to $3.7 billion, and net income grew from $35.2 million to $669.5 million. |
22 Annual Meeting of Stockholders Market Leader in Focused Businesses Largest Personal Trust provider in the United States Best Private Bank in North America (Financial Times, November 2010 and 2009) Best Global Investor Services House (Euromoney, July 2010) One of the largest Fund Administrators in Ireland and Guernsey 11 largest manager of worldwide institutional assets (Pensions & Investments, May 2010) Strong History of Organic Growth Assets Under Custody CAGR of 11% 2001 – 1Q2011 Net new business up 28% in 2010 versus prior year Continuing to invest in the business Distinctive Financial Strength 85% of securities portfolio rated triple A NPAs to loans relatively low at 1.36% Tier 1 Common Equity ratio of 13.0% 96% of total Tier 1 Capital is Tier 1 Common Equity Invested & Experienced Management Team Combined service at Northern Trust of 216 years As of March 31, 2011 Northern Trust: Strategically Positioned for Growth th |
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