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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-5965
NORTHERN TRUST CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-2723087
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 SOUTH LA SALLE STREET
CHICAGO, ILLINOIS 60675
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 630-6000
----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
55,466,443 Shares -- $1.66 2/3 Par Value
(Shares of Common Stock Outstanding on September 30, 1995)
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1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEET Northern Trust Corporation
SEPTEMBER 30 December 31 September 30
------------ ----------- ------------
($ In Millions) 1995 1994 1994
- ------------------------------------- ------------ ----------- ------------
ASSETS
Cash and Due from Banks $ 1,444.7 $ 1,192.5 $ 1,309.9
Money Market Assets
Federal Funds Sold and Securities
Purchased under Agreements to Resell 247.2 777.0 193.1
Time Deposits with Banks 1,616.4 1,864.7 2,121.0
Other 11.9 9.5 111.5
- ------------------------------------- --------- --------- ---------
Total 1,875.5 2,651.2 2,425.6
- ------------------------------------- --------- --------- ---------
Securities (Fair value $5,885.3 at
September 1995, $5,069.7 at December
1994 and $5,517.6 at September 1994) 5,855.4 5,053.1 5,491.4
Loans and Leases (Net of unearned
income of $81.0 at September 1995,
$70.4 at December 1994 and $68.3 at
September 1994) 9,808.3 8,590.6 8,452.6
Reserve for Credit Losses (147.3) (144.8) (144.9)
Buildings and Equipment 280.0 274.7 271.8
Customers' Acceptance Liability 50.0 56.3 64.9
Trust Security Settlement Receivables 234.5 305.7 210.9
Other Assets 778.6 582.3 587.5
- ------------------------------------- --------- --------- ---------
Total Assets $20,179.7 $18,561.6 $18,669.7
- ------------------------------------- --------- --------- ---------
LIABILITIES
Deposits
Demand and Other Noninterest-Bearing $ 2,642.2 $ 2,604.7 $ 2,344.1
Savings and Money Market Deposits 3,102.1 3,176.3 3,142.8
Savings Certificates 2,106.1 1,524.5 1,279.7
Other Time 375.5 342.2 289.1
Foreign Offices--Demand 310.2 225.4 509.4
--Time 2,820.9 3,861.3 3,706.0
- ------------------------------------- --------- --------- ---------
Total Deposits 11,357.0 11,734.4 11,271.1
Federal Funds Purchased 2,199.7 972.0 1,102.3
Securities Sold under Agreements to
Repurchase 1,277.2 2,216.9 994.6
Commercial Paper 145.6 123.8 172.3
Other Borrowings 2,805.6 1,077.9 2,421.7
Senior Medium-Term Notes 117.0 547.0 807.0
Notes Payable 341.1 244.8 248.3
Liability on Acceptances 50.0 56.3 64.9
Other Liabilities 475.9 307.8 326.6
- ------------------------------------- --------- --------- ---------
Total Liabilities 18,769.1 17,280.9 17,408.8
- ------------------------------------- --------- --------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock 170.0 170.0 170.0
Common Stock -- $1.66 2/3 Par Value 93.6 90.6 90.6
SEPTEMBER 1995 December 1994 September 1994
-----------------------------------------------------------
Shares authorized 140,000,000 140,000,000 140,000,000
Shares issued 56,158,064 54,360,374 54,360,374
Shares outstanding 55,466,443 54,089,259 54,162,085
Capital Surplus 308.2 302.2 302.2
Retained Earnings 888.4 762.7 738.8
Net Unrealized Loss on Securities (2.7) (15.8) (12.9)
Translation Adjustments -- -- --
Common Stock Issuable -- Performance
Plan 16.5 17.9 20.2
Deferred Compensation -- ESOP and
Other (34.6) (38.8) (43.2)
Treasury Stock -- at cost, 691,621
shares at September 1995, 271,115
shares at December 1994 and 198,289
shares at September 1994 (28.8) (8.1) (4.8)
- ------------------------------------- --------- --------- ---------
Total Stockholders' Equity 1,410.6 1,280.7 1,260.9
- ------------------------------------- --------- --------- ---------
Total Liabilities and Stockholders'
Equity $20,179.7 $18,561.6 $18,669.7
- ------------------------------------- --------- --------- ---------
CONSOLIDATED STATEMENT OF INCOME Northern Trust Corporation
THIRD QUARTER
ENDED SEPTEMBER 30 NINE MONTHS
($ In Millions Except Per Share --------------------- ---------------------
Information) 1995 1994 1995 1994
- --------------------------------- ---------- ---------- ---------- ----------
Interest Income
Money Market Assets
Federal Funds Sold and
Securities Purchased under
Agreements to Resell $ 1.9 $ 2.0 $ 9.3 $ 6.0
Time Deposits with Banks 22.4 26.1 69.9 74.7
Other .2 1.7 .7 4.4
- --------------------------------- ---------- ---------- ---------- ----------
Total 24.5 29.8 79.9 85.1
- --------------------------------- ---------- ---------- ---------- ----------
Securities 99.0 62.1 273.2 161.1
Loans and Leases 162.3 129.6 465.0 359.5
- --------------------------------- ---------- ---------- ---------- ----------
Total Interest Income 285.8 221.5 818.1 605.7
- --------------------------------- ---------- ---------- ---------- ----------
Interest Expense
Deposits -- Savings and Money
Market Deposits 27.5 22.1 81.5 61.8
-- Savings Certificates 32.6 14.4 87.7 38.2
-- Other Time 8.6 5.5 23.0 12.9
-- Foreign Offices 43.4 38.2 141.2 92.4
Federal Funds Purchased 29.9 13.3 62.1 40.1
Securities Sold under Agreements
to Repurchase 26.6 19.8 75.7 39.5
Commercial Paper 2.1 1.7 6.4 4.0
Other Borrowings 17.8 6.6 44.2 27.5
Senior Medium-Term Notes 2.8 9.5 15.5 23.5
Notes Payable 5.1 5.4 14.9 18.0
- --------------------------------- ---------- ---------- ---------- ----------
Total Interest Expense 196.4 136.5 552.2 357.9
- --------------------------------- ---------- ---------- ---------- ----------
Net Interest Income 89.4 85.0 265.9 247.8
Provision for Credit Losses 2.0 1.0 5.0 5.0
- --------------------------------- ---------- ---------- ---------- ----------
Net Interest Income after
Provision for Credit Losses 87.4 84.0 260.9 242.8
- --------------------------------- ---------- ---------- ---------- ----------
Noninterest Income
Trust Fees 127.3 115.8 371.4 338.8
Security Commissions and Trading
Income 5.8 4.4 16.9 17.2
Other Operating Income 40.0 32.6 114.7 125.1
Investment Security Gains (Losses) .3 (.2) .5 (.1)
- --------------------------------- ---------- ---------- ---------- ----------
Total Noninterest Income 173.4 152.6 503.5 481.0
- --------------------------------- ---------- ---------- ---------- ----------
Income before Noninterest
Expenses 260.8 236.6 764.4 723.8
- --------------------------------- ---------- ---------- ---------- ----------
Noninterest Expenses
Salaries 84.0 80.6 250.9 235.6
Pension and Other Employee
Benefits 20.4 18.1 62.7 56.2
Occupancy Expense 15.6 14.4 45.1 42.7
Equipment Expense 12.0 10.8 36.6 44.8
Other Operating Expenses 43.5 42.3 135.4 136.3
- --------------------------------- ---------- ---------- ---------- ----------
Total Noninterest Expenses 175.5 166.2 530.7 515.6
- --------------------------------- ---------- ---------- ---------- ----------
Income before Income Taxes 85.3 70.4 233.7 208.2
Provision for Income Taxes 27.2 22.4 73.2 66.1
- --------------------------------- ---------- ---------- ---------- ----------
NET INCOME $ 58.1 $ 48.0 $160.5 $142.1
- --------------------------------- ---------- ---------- ---------- ----------
Net Income Applicable to Common
Stock $ 56.0 $ 46.2 $154.1 $136.9
- --------------------------------- ---------- ---------- ---------- ----------
NET INCOME PER COMMON SHARE
-- Primary $ .99 $ .83 $ 2.74 $ 2.48
-- Fully Diluted .98 .83 2.71 2.47
- --------------------------------- ---------- ---------- ---------- ----------
Average Number of Common Shares
Outstanding -- Primary 56,686,283 55,334,790 56,249,528 55,095,368
-- Fully Diluted 58,118,792 56,539,610 57,771,187 56,304,643
- --------------------------------- ---------- ---------- ---------- ----------
3
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Northern Trust Corporation
NINE MONTHS
ENDED SEPTEMBER 30
------------------
(In Millions) 1995 1994
- ------------------------------------------ -------- --------
PREFERRED STOCK
Balance at January 1 and September 30 $ 170.0 $ 170.0
- ------------------------------------------ -------- --------
COMMON STOCK
Balance at January 1 90.6 89.7
Stock Issued--Incentive Plan and Awards .3 --
Pooled Affiliate--Stock Issued 2.7 .9
- ------------------------------------------ -------- --------
Balance at September 30 93.6 90.6
- ------------------------------------------ -------- --------
CAPITAL SURPLUS
Balance at January 1 302.2 303.0
Stock Issued--Incentive Plan and Awards (.9) (.4)
Pooled Affiliate--Stock Issued 6.9 (.4)
- ------------------------------------------ -------- --------
Balance at September 30 308.2 302.2
- ------------------------------------------ -------- --------
RETAINED EARNINGS
Balance at January 1 762.7 631.9
Net Income 160.5 142.1
Dividends Declared on Common Stock (43.2) (35.6)
Dividends Declared on Preferred Stock (6.7) (5.0)
Pooled Affiliate 15.1 5.4
- ------------------------------------------ -------- --------
Balance at September 30 888.4 738.8
- ------------------------------------------ -------- --------
NET UNREALIZED LOSS ON SECURITIES
Balance at January 1 (15.8) (.4)
Unrealized Gain (Loss), net 13.1 (12.5)
- ------------------------------------------ -------- --------
Balance at September 30 (2.7) (12.9)
- ------------------------------------------ -------- --------
TRANSLATION ADJUSTMENTS
Balance at January 1 -- .6
Sale of Foreign Investment -- (.6)
- ------------------------------------------ -------- --------
Balance at September 30 -- --
- ------------------------------------------ -------- --------
COMMON STOCK ISSUABLE--PERFORMANCE PLAN
Balance at January 1 17.9 11.8
Stock Issuable, net of Stock Issued (1.4) 8.4
- ------------------------------------------ -------- --------
Balance at September 30 16.5 20.2
- ------------------------------------------ -------- --------
DEFERRED COMPENSATION--ESOP AND OTHER
Balance at January 1 (38.8) (43.5)
Compensation Deferred (1.4) (5.3)
Compensation Amortized 5.6 5.6
- ------------------------------------------ -------- --------
Balance at September 30 (34.6) (43.2)
- ------------------------------------------ -------- --------
TREASURY STOCK
Balance at January 1 (8.1) (11.4)
Stock Options and Awards 15.4 9.0
Stock Purchased (36.1) (2.4)
- ------------------------------------------ -------- --------
Balance at September 30 (28.8) (4.8)
- ------------------------------------------ -------- --------
TOTAL STOCKHOLDERS' EQUITY AT SEPTEMBER 30 $1,410.6 $1,260.9
- ------------------------------------------ -------- --------
4
CONSOLIDATED STATEMENT OF CASH FLOWS Northern Trust Corporation
Nine Months
Ended September 30,
-----------------------
(In Millions) 1995 1994
- ----------------------------------------------------------------------- ---------- ---------
Cash Flows from Operating Activities:
Net Income $ 160.5 $ 142.1
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Provision for Credit Losses 5.0 5.0
Depreciation on Buildings and Equipment 32.2 31.8
(Increase) Decrease in Interest Receivable (29.7) 14.8
Increase in Interest Payable 8.8 5.8
Amortization and Accretion of Securities and Unearned Income (132.6) 8.4
Gain on Sale of Foreign Investment (34.5)
Net Increase in Trading Account Securities (53.2) (23.7)
Other Noncash, net 4.3 89.2
- ----------------------------------------------------------------------- ---------- ---------
Net Cash Flows from Operating Activities (4.7) 238.9
- ----------------------------------------------------------------------- ---------- ---------
Cash Flows from Investing Activities:
Net Decrease in Federal Funds Sold and Securities Purchased
under Agreements to Resell 542.9 384.7
Net (Increase) Decrease in Time Deposits with Banks 248.3 (30.6)
Net Increase in Other Money Market Assets (2.4) (35.5)
Purchases of Securities-Held to Maturity (625.4) (344.3)
Proceeds from Maturity and Redemption of Securities-Held to Maturity 703.6 374.5
Purchases of Securities-Available for Sale (23,494.1) (6,798.7)
Proceeds from Sale, Maturity and Redemption of Securities-Available
for Sale 22,900.5 5,309.5
Net Increase in Loans and Leases (1,131.3) (837.2)
Purchases of Buildings and Equipment (33.1) (21.4)
Sale of Foreign Investment - 58.1
Net Decrease in Trust Security Settlement Receivables 71.2 82.2
Other, net 2.9 10.5
- ----------------------------------------------------------------------- ---------- ---------
Net Cash Flows from Investing Activities (816.9) (1,848.2)
- ----------------------------------------------------------------------- ---------- ---------
Cash Flows from Financing Activities:
Net Increase (Decrease) in Deposits (556.8) 937.7
Net Increase (Decrease) in Federal Funds Purchased 1,227.7 (113.5)
Net Increase (Decrease) in Securities Sold under Agreement to
Repurchase (939.7) 392.4
Net Increase in Commercial Paper 21.8 48.2
Net Increase in Short-Term Other Borrowings 2,019.9 261.4
Proceeds from Term Federal Funds Purchased 2,383.0 3,113.6
Repayments of Term Federal Funds Purchased (2,675.3) (3,113.8)
Proceeds from Senior Medium-Term Notes - 330.0
Repayments of Senior Medium-Term Notes (430.0) (340.0)
Proceeds from Notes Payable 100.0 -
Repayment of Notes Payable (3.7) (78.5)
Treasury Stock Purchased-Incentive Plans (2.2) (0.7)
Treasury Stock Purchased-Buy Back Program (29.8) -
Net Proceeds from Stock Options 5.1 3.6
Cash Dividends Paid on Common and Preferred Stock (49.5) (40.2)
Other, net 3.3 (0.7)
- ----------------------------------------------------------------------- ---------- ---------
Net Cash Flows from Financing Activities 1,073.8 1,399.5
- ----------------------------------------------------------------------- ---------- ---------
Increase (Decrease) in Cash and Due from Banks 252.2 (209.8)
Cash and Due from Banks at Beginning of Year 1,192.5 1,519.7
- ----------------------------------------------------------------------- ---------- ---------
Cash and Due from Banks at September 30 $ 1,444.7 $ 1,309.9
- ----------------------------------------------------------------------- ---------- ---------
Schedule of Noncash Investing and Financing Activities:
Acquisition of Affiliate for Stock $ 24.7 $ 6.4
Supplemental Disclosures of Cash Flow Information:
Interest Paid on Deposits and Short- and Long-Term Borrowings $ 543.4 $ 352.1
Income Taxes Paid 42.6 30.3
- ----------------------------------------------------------------------- ---------- ---------
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION - The consolidated financial statements include the
accounts of Northern Trust Corporation and its subsidiaries (Northern Trust),
all of which are wholly owned. Significant intercompany balances and
transactions have been eliminated. The consolidated financial statements as of
September 30, 1995 and 1994 have not been audited by independent public
accountants. In the opinion of management, all adjustments necessary for a fair
presentation of the financial position and the results of operations for the
interim periods have been made. All such adjustments are of a normal recurring
nature. Certain reclassifications have been made to prior periods' consolidated
financial statements to place them on a basis comparable with the current
period's consolidated financial statements. For a description of Northern
Trust's significant accounting principles, refer to the Notes to Consolidated
Financial Statements in the 1994 Annual Report to Stockholders.
2. SECURITIES - The following table summarizes the book and fair values of
securities.
September 30, 1995 December 31, 1994 September 30, 1994
-------------------- --------------------- --------------------
Book Fair Book Fair Book Fair
(In Millions) Value Value Value Value Value Value
- --------------------------- --------- --------- --------- ---------- --------- ---------
Held to Maturity
U.S. Government $ 102.0 $ 102.0 $ 137.2 $ 137.0 $ 105.5 $ 105.4
Obligations of States
and Political Subdivisions 435.7 465.7 474.5 491.3 455.1 481.4
Federal Agency 22.2 22.1 - - - -
Other 30.3 30.3 29.6 29.6 29.9 29.9
- --------------------------- -------- -------- -------- -------- -------- --------
Subtotal 590.2 620.1 641.3 657.9 590.5 616.7
- --------------------------- -------- -------- -------- -------- -------- --------
Available for Sale
U.S. Government 1,512.0 1,512.0 801.3 801.3 861.3 861.3
Federal Agency 3,414.2 3,414.2 3,251.5 3,251.5 3,611.8 3,611.8
Preferred Stock 164.8 164.8 196.6 196.6 200.6 200.6
Other 117.0 117.0 158.4 158.4 167.2 167.2
- --------------------------- -------- ------- ------- ------- -------- --------
Subtotal 5,208.0 5,208.0 4,407.8 4,407.8 4,840.9 4,840.9
- --------------------------- -------- -------- -------- -------- -------- --------
Trading Account 57.2 57.2 4.0 4.0 60.0 60.0
- --------------------------- -------- -------- -------- -------- -------- --------
Total Securities $5,855.4 $5,885.3 $5,053.1 $5,069.7 $5,491.4 $5,517.6
- --------------------------- -------- -------- -------- -------- -------- --------
Reconciliation of Book
Values to Fair Values of
Securities Held to Maturity September 30, 1995
- --------------------------- ----------------------------------------
Book Gross Unrealized Fair
(In Millions) Value Gains Losses Value
- --------------------------- ------ ----- ---------- ------
Held to Maturity
U.S. Government $102.0 $ .1 $.1 $102.0
Obligations of States
and Political Subdivisions 435.7 30.1 .1 465.7
Federal Agency 22.2 - .1 22.1
Other 30.3 - - 30.3
- --------------------------- ------ ----- -- ------
Total $590.2 $30.2 $.3 $620.1
- --------------------------- ------ ----- --- ------
6
Reconciliation of
Amortized Cost to Fair
Values of
Securities Available for
Sale September 30, 1995
- --------------------------- -------------------------------------------
Gross Unrealized
Amortized ------------------- Fair
(In Millions) Cost Gains Losses Value
- --------------------------- --------- -------- --------- --------
Available for Sale
U.S. Government $1,514.8 $1.1 $3.9 $1,512.0
Federal Agency 3,410.4 5.0 1.2 3,414.2
Preferred Stock 164.9 .2 .3 164.8
Other 119.1 .5 2.6 117.0
- --------------------------- -------- -------- -------- --------
Total $5,209.2 $6.8 $8.0 $5,208.0
- --------------------------- -------- -------- -------- --------
Unrealized gains and losses on off-balance sheet financial instruments used to
hedge available for sale securities totaled $.8 million and $3.8 million,
respectively, as of September 30, 1995. Unrealized gains on these hedges are
reported as other assets in the consolidated balance sheet; unrealized losses
are reported as other liabilities. As of September 30, 1995, stockholders'
equity included a charge of $2.7 million, net of tax, to recognize the
depreciation on securities available for sale and the related hedges.
3. PLEDGED ASSETS - Securities and loans pledged to secure public and trust
deposits, repurchase agreements and for other purposes as required or permitted
by law were $5.2 billion on September 30, 1995, $3.7 billion on December 31,
1994 and $4.8 billion on September 30, 1994.
4. CONTINGENT LIABILITIES - Standby letters of credit outstanding were $911.0
million on September 30, 1995, $819.9 million on December 31, 1994 and $833.4
million on September 30, 1994.
5. LOANS AND LEASES - Amounts outstanding in selected loan categories are
shown below.
September 30 December 31 September 30
------------ ----------- ------------
(In Millions) 1995 1994 1994
- --------------------------- ------------ ----------- ------------
Domestic
Commercial $3,207.6 $2,672.0 $2,672.7
Residential Real Estate 3,750.6 3,299.1 3,244.9
Commercial Real Estate 505.4 494.1 472.7
Broker 225.0 274.6 356.8
Consumer 772.0 662.1 622.5
Other 706.4 642.1 452.2
Lease Financing 181.5 159.9 148.1
- --------------------------- -------- -------- --------
Total Domestic 9,348.5 8,203.9 7,969.9
International 459.8 386.7 482.7
- --------------------------- -------- -------- --------
Total Loans and Leases $9,808.3 $8,590.6 $8,452.6
- --------------------------- -------- -------- --------
7
At September 30, 1995, other domestic and international loans include $946.9
million of overnight trust-related advances in connection with next day security
settlements, compared with $716.6 million at December 31, 1994 and $609.9
million at September 30, 1994.
Northern Trust adopted Statements of Financial Accounting Standards Nos. 114 and
118, "Accounting by Creditors for Impairment of a Loan", effective January 1,
1995. These statements provide guidance as to when loans should be classified
and reported as impaired and address how the reserve for credit losses related
to these loans should be determined. Any shortfall in the estimated value of an
impaired loan compared with the recorded investment of the loan, is identified
as an allocated portion of the reserve for credit losses and is one of the
factors considered by management in their overall assessment of reserve
adequacy. No changes were required to Northern Trust's accounting policies for
loans, charge-offs and interest income as a result of adopting these statements.
These policies are described in Notes to Consolidated Financial Statements
(Footnotes 1E and 1F) in the 1994 Annual Report.
At September 30, 1995, nonperforming assets totaled $35.4 million. Included in
this amount were loans with a recorded investment of $27.7 million which were
also classified as impaired. Impaired loans totaling $24.5 million had no
portion of the reserve for credit losses allocated to them, while $3.2 million
had an allocated reserve of $.4 million. For the third quarter of 1995, the
total recorded investment in impaired loans averaged $29.0 million. Total
interest income recognized on impaired loans for the quarter ended September 30,
1995 was $149 thousand, most of which was recognized using the cash-basis method
of accounting.
6. RESERVE FOR CREDIT LOSSES - Changes in the reserve for credit losses were as
follows.
Nine Months
Ended September 30
-------------------
(In Millions) 1995 1994
- ------------- ------ -------
Balance at Beginning of Period $144.8 $145.5
Charge-Offs (7.8) (8.8)
Recoveries 3.0 3.2
------ ------
Net Charge-Offs (4.8) (5.6)
Provision for Credit Losses 5.0 5.0
Reserve Related to Acquisitions 2.3 -
------ ------
Balance at End of Period $147.3 $144.9
------ ------
7. ACQUISITIONS - The acquisition of Tanglewood Bancshares, Inc., parent company
of Tanglewood Bank N.A. Houston was completed on July 31, 1995 for $32.5
million in cash.
8
On October 31, 1995 Northern Trust completed the acquisition of RCB
International, Inc. (RCB), an international provider of institutional investment
management services. RCB shareholders received at closing $11.0 million in cash,
$.6 million in notes and 392.4 thousand shares of Northern Trust Corporation
common stock. The transaction was recorded under the purchase method of
accounting. In addition, 216.1 thousand shares of Northern Trust Corporation
common stock and $2.6 million in cash were allocated for various deferred
compensation plans and other deferred payment arrangements. Shares and cash
available under these deferred payment arrangements are payable over one to
seven years and are contingent upon continued employment, non-competition
agreements and, in some cases, meeting predetermined performance goals.
8. NOTES PAYABLE - Under the terms of a September 6, 1995 Offering Circular, The
Northern Trust Company has the ability to offer from time to time up to $1.7
billion aggregate principal amount at any time outstanding of its senior bank
notes (less certain medium-term bank notes issued prior to April 1993 and still
outstanding), with maturities ranging from 30 days to 15 years and may offer up
to $300 million aggregate principal amount of its subordinated bank notes with
maturities ranging from 5 years to 15 years. On September 19, 1995, The Northern
Trust Company issued $100 million of 6.7% Subordinated Notes due 2005.
9
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THIRD QUARTER EARNINGS HIGHLIGHTS
Net income for the third quarter totaled a record $58.1 million, an increase of
21% from the $48.0 million reported in the third quarter of 1994. Net income
per common share on a fully diluted basis increased 18% to $.98 from $.83 in
1994. This earnings performance produced an annualized return on average common
equity (ROE) of 18.11% versus 17.02% reported last year and an annualized return
on average assets (ROA) of 1.14% versus 1.05% in 1994. Record levels of trust
fees, foreign exchange trading profits, and net interest income contributed to
the quarter's performance. Total noninterest expenses increased 5.5% from the
previous year while declining from the first and second quarters of 1995.
NONINTEREST INCOME
Noninterest income increased 14% and totaled $173.4 million for the quarter,
accounting for 64% of total taxable equivalent revenue. Trust fees, which
represent 73% of noninterest income and 47% of total taxable equivalent revenue,
grew 10% or $11.5 million over the comparable quarter of last year reaching
$127.3 million. The increase reflects an 8% growth level in Corporate and
Institutional Services (C&IS) and a 12% increase in Personal Financial Services
(PFS). Total trust assets under administration at quarter-end were $585.4
billion, up $90.6 billion from one year ago.
Trust fees from C&IS increased $4.9 million to $64.8 million. The increase in
fees reflects new business and strong growth across all products, particularly
custody, retirement services, securities lending and investment management.
Custody fees increased $1.6 million and totaled $30.6 million for the quarter.
The growth was centered primarily in domestic custody driven by an increase in
transaction-based fee revenues and new business from both new and existing
clients. Fees from retirement services generated by Hazlehurst & Associates,
Inc. increased 18% from the year ago quarter. Domestic securities lending
fees, up 28% versus last year, reflect a 26% increase in the volume of
securities loaned as well as higher spreads earned from the investment of the
cash collateral. Investment management fees increased 26%, primarily as a
result of new business. C&IS trust assets under administration grew 18% or
$80.4 billion over last year and now total $525.0 billion. C&IS assets under
the management of Northern Trust total $60.6 billion, up 29% from a year ago.
PFS trust fees amounted to $62.5 million, up 12% or $6.6 million from the
corresponding 1994 quarter. Total personal trust assets under administration
increased $10.2 billion over last year and totaled $60.4 billion, with $36.6
billion under management. The primary contributors to this fee growth were the
Wealth Management Group and PFS offices in Chicago, Florida and California.
PFS fees benefited from new business growth and higher market values of assets
under administration. The increase in trust fees also reflects the contribution
of Beach Bank, a March 31, 1995 acquisition.
10
Security commissions and trading income totaled $5.8 million, compared with $4.4
million reported in the third quarter of last year. The increase resulted
primarily from a higher volume of trading activity by individual clients.
Other operating income in the quarter totaled $40.0 million, compared to $32.6
million in the third quarter of 1994. The principal items included in other
operating income are foreign exchange trading profits and treasury management
fees. Foreign exchange trading profits were at record levels and totaled $16.2
million, an increase of $6.6 million. Foreign exchange revenues, which are
generated in both Chicago and London, have benefited from an increase in cross-
border investment activities of Master Trust/Master Custody clients and
favorable market conditions. The fee portion of treasury management revenues
rose 9% to $12.5 million. Total treasury management revenues, which, in
addition to fees, include the value of compensating deposit balances, increased
during the quarter and reflect growth across each treasury management product,
particularly electronic services. These revenues increased despite the fact
that $.8 million was credited to treasury management clients as a result of a
retroactive reduction in FDIC deposit insurance premiums.
NET INTEREST INCOME
Net interest income for the third quarter totaled $89.4 million, 5% higher than
the $85.0 million reported in the third quarter of 1994. Net interest income is
defined as the total of interest income and amortized fees on earning assets
less interest expense on deposits and borrowed funds adjusted for the impact of
off-balance sheet hedging activity. When net interest income is adjusted to a
fully taxable equivalent (FTE) basis, yields on taxable, nontaxable and
partially taxable assets are comparable, although the adjustment to a FTE basis
has no impact on net income. Net interest income on a FTE basis for the third
quarter was $98.9 million, up 6% from the $93.2 million reported in 1994. This
increase is due to higher levels of average earning assets, reflecting in part
the Beach Bank acquisition and the acquisition of Tanglewood Bank on July 31.
Earning assets for the third quarter averaged $17.8 billion, up 11% from the
$16.0 billion in the third quarter of 1994. The $1.8 billion growth in earning
assets reflects an 11% or $922 million increase in average loans, a $1.6 billion
or 30% growth in average securities and a $685 million or 28% decrease in
average money market assets.
Overall loan volume reflected a $1.0 billion or 13% increase in domestic
lending, which was partially offset by a decline in international lending.
Approximately 46% of the increase in domestic lending is attributable to
residential mortgage loans now accounting for 39% of the total average loan
portfolio. Commercial and industrial loans grew 13% or $372 million to average
$3.1 billion for the quarter. In addition, domestic and international overnight
advances related to processing certain trust client investments averaged $697
million, up $118 million from a year ago. Securities for the quarter averaged
$6.7 billion, up 30% from the $5.1 billion reported last year, due primarily to
a $1.4 billion increase in short-term federal agency securities. The decline in
money market assets of $685 million was due to short-term interest rates
providing fewer opportunities to add marginal net interest income.
11
The growth in average earning assets was funded primarily by increased levels of
interest-bearing time deposits, federal funds purchased and other borrowings,
and noninterest-related funds. Interest-bearing deposits averaged $9.4 billion,
up $705 million from the third quarter of 1994. This growth came principally
from savings certificates (up $893 million), partially offset by a $239 million
decline in foreign office time deposits. The 72% increase in the average volume
of savings certificates is due in large part to successful certificate of
deposit campaigns conducted periodically during last year's fourth quarter and
the first quarter of 1995. Average noninterest-related funds increased $163
million, due primarily to growth in stockholders' equity. Total average
stockholders' equity increased $150 million or 12% from the third quarter of
1994. The increase primarily reflects the growth in retained earnings.
The net interest margin decreased to 2.21% compared with 2.31% last year due
primarily to narrowing spreads between short-term assets and various short-term
funding sources. Also contributing to the decline in the net interest margin
was the increase in the level of nonearning trust-related overnight advances.
PROVISION FOR CREDIT LOSSES
The provision for credit losses of $2.0 million compares to $1.0 million in the
third quarter of 1994. For a discussion of the reserve for credit losses, refer
to the Asset Quality section on pages 14 and 15.
NONINTEREST EXPENSES
Noninterest expenses totaled $175.5 million for the quarter, up 5.5% from $166.2
million in the third quarter of 1994 and less than the Corporation's noninterest
expenses for each of the first two quarters of 1995. The third quarter expenses
included a $3.9 million pension settlement charge for retiring officers, $1.2
million in staff-related severance costs and approximately $2.3 million of
expenses from the Beach Bank and Tanglewood Bank acquisitions. These expenses
were largely offset by a $4.6 million refund in FDIC deposit insurance premiums
paid for the June through September 1995 period. The majority of the remaining
increase in noninterest expenses was concentrated primarily in technology
spending and personal trust business expansion.
Salaries and benefits, which represent 60% of total noninterest expenses,
increased 6% to $104.4 million. The principal items contributing to the change
were merit increases, incentive compensation, severance costs, and additions to
staff at Hazlehurst & Associates to support Northern's growing retirement
services business and from the Beach Bank and Tanglewood Bank acquisitions.
Higher costs related to retirement benefits, health care and payroll taxes also
contributed to the overall increase. Staff on a full-time equivalent basis
totaled 6,465 at September 30, 1995. Adjusting for the positions added by the
Beach Bank and Tanglewood Bank acquisitions, staff levels declined by 285
positions since the end of 1994.
12
Net occupancy expenses totaled $15.6 million, up 9% or $1.2 million from $14.4
million in the third quarter of 1994. The principal components of the increase
were higher real estate taxes and utility costs, amortization and depreciation
of leasehold improvements and buildings, as well as expansion costs related to
the opening of new offices in Florida, Illinois and Texas.
Equipment expense, which includes depreciation, rental, and maintenance costs,
totaled $12.0 million, up $1.2 million or 11% from the third quarter of 1994.
The principal components of the increase were higher rental costs for computers
and equipment and increased depreciation expense primarily related to personal
computers.
Other operating expenses totaled $43.5 million, up 2% from $42.3 million in the
third quarter of 1994. Reflected in other operating expenses is the $3.9
million pension settlement charge, as well as a credit for the $4.6 million
refund of FDIC deposit insurance premiums. Increases in computer software
amortization, up $2.4 million to $8.7 million, along with higher costs incurred
from processing errors, were partially offset by lower levels of professional
service costs, transaction-based depository fees and other real estate owned
operating costs.
PROVISION FOR INCOME TAXES
The provision for income taxes was $27.2 million for the third quarter compared
with $22.4 million in the year ago quarter. The higher tax provision in 1995
resulted from the growth in taxable earnings for federal income tax purposes
while tax-exempt income declined slightly. Partially offsetting this was a
lower state income tax provision due to increased levels of tax-exempt income
for state purposes. The effective tax rate was 32% for both years.
NINE MONTHS EARNINGS HIGHLIGHTS
Net income totaled $160.5 million for the nine months ended September 30, 1995
compared to $142.1 million last year, an increase of 13%. On a fully diluted
basis, net income per common share was $2.71, up 9% from the $2.47 earned last
year. The ROE for the nine month period was 17.37% versus 17.64% one year ago,
while the ROA was 1.12% versus 1.07% in 1994.
Noninterest income increased 5% to $503.5 million from $481.0 million in the
like period of 1994. Excluding the $28.5 million gain recorded from the 1994
sale of the Corporation's interest in Banque Scandinave en Suisse (BSS), the
year-to-year increase was $51.0 million or 11%. Noninterest income comprised
63% of total taxable equivalent revenue. Trust fees totaled $371.4 million, up
10% from $338.8 million last year. Security commissions and trading income
totaled $16.9 million, down $.3 million from the $17.2 million earned last year.
Other operating income, exclusive of the BSS gain from the prior year, increased
19% to $114.7 million. Foreign exchange trading profits were at record levels
and totaled $43.0 million, an increase of $17.2 million compared with one year
ago. The fee portion of treasury management revenues totaled $36.9 million, a
5% improvement from the $35.1 million reported in 1994. Total treasury
management revenues, which, in addition to fees, include the value of
compensating deposit balances, also increased and contributed to the improvement
in net interest income.
13
Net interest income stated on a fully taxable equivalent basis totaled a record
$294.5 million, up 8% from the $272.1 million reported in the like period of
1994. The provision for credit losses remained unchanged at $5.0 million. Net
loan charge-offs declined to $4.8 million from $5.6 million in 1994.
Noninterest expenses totaled $530.7 million, up 3% from $515.6 million in
1994. Exclusive of nonrecurring charges in 1994, total noninterest expenses
increased 7% from prior year levels.
BALANCE SHEET
Total assets as of September 30, 1995 were $20.2 billion and averaged $19.1
billion for the first nine months, up 8% from last year's average of $17.7
billion. With increased lending activity, in addition to the Beach Bank and
Tanglewood Bank acquisitions, loans and leases totaled $9.8 billion at
September 30, 1995, and averaged $9.0 billion for the first nine months. This
compares with $8.5 billion in total loans at September 30, 1994 and $8.2 billion
on average for the first nine months of last year. Driven primarily by
continued strong earnings growth and the acquisition of Beach Bank, common
stockholders' equity increased 14% and totaled $1.24 billion at September 30,
1995, versus $1.09 billion at September 30, 1994. Total stockholders' equity
also increased and totaled $1.41 billion at September 30, 1995 compared with
$1.26 billion at September 30, 1994.
During the quarter, the Corporation purchased approximately 630,000 common
shares in connection with its stock buyback program. The Northern Trust Company
successfully completed a $100 million subordinated bank note offering, adding
Tier 2 capital at favorable rates. Northern Trust's risk-based capital ratios
remained strong at 8.9% for tier 1 and 12.7% for total capital at September 30,
1995. These capital ratios are well above the minimum regulatory requirements
of 4% for tier 1 and 8% for total risk-based capital ratios. The leverage ratio
(tier 1 capital to third quarter average assets) of 6.2% at September 30, 1995,
also exceeded the regulatory requirement of 3%.
Refer to footnote 7 in Notes to Consolidated Financial Statements for a
description of acquisitions.
ASSET QUALITY
Nonperforming assets consist of nonaccrual loans and leases, restructured loans,
and other real estate owned (OREO). Nonperforming assets at September 30, 1995
totaled $35.4 million, compared with $30.0 million at December 31, 1994 and
$39.2 million at September 30, 1994. Domestic nonaccrual loans and leases,
consisting primarily of commercial loans, totaled $30.4 million, or .33% of
total domestic loans and leases at September 30, 1995. Included in this total
are commercial real estate loans of $5.0 million.
The following Nonperforming Asset table presents the outstanding amounts of
nonaccrual loans and leases, restructured loans and OREO. Also shown are loans
that have interest or principal payments that are delinquent 90 days or more and
are still accruing interest. The balance in this category at any quarter end
can fluctuate widely based on the timing of cash collections, renegotiations and
renewals.
14
Nonperforming Assets and 90 Day Past Due Loans and Leases
September 30 June 30 December 31 September 30
(In Millions) 1995 1995 1994 1994
- ------------------------------------------------------------------------------------
Nonaccrual Loans
Domestic $30.4 $29.8 $26.5 $34.3
International .4 .7 1.3 1.3
- ------------------------------------------------------------------------------------
Total Nonaccrual Loans 30.8 30.5 27.8 35.6
Restructured Loans 2.8 2.8 - -
OREO 1.8 1.2 2.2 3.6
- ------------------------------------------------------------------------------------
Total Nonperforming Assets $35.4 $34.5 $30.0 $39.2
- ------------------------------------------------------------------------------------
Total 90 Day Past Due Loans
(still accruing) $21.5 $14.1 $17.3 $23.9
- ------------------------------------------------------------------------------------
PROVISION AND RESERVE FOR CREDIT LOSSES. The provision for credit losses is
the charge against current earnings that is determined by management through a
disciplined credit review process as the amount needed to maintain a reserve
that is sufficient to absorb credit losses inherent in Northern Trust's loan and
lease portfolios and other credit undertakings. While the largest portion of
this reserve is intended to cover loan and lease losses, it is considered a
general reserve that is available to cover all credit-related exposures.
The 1995 third quarter provision for credit losses was $2.0 million, compared
with $1.0 million in 1994. Net charge-offs totaled $1.8 million in the third
quarter of 1995 versus net charge-offs of $1.0 million last year. The reserve
for credit losses was $147.3 million, equal to 1.50% of outstanding loans at
September 30, 1995. This compares with $144.8 million or 1.69% of outstanding
loans at December 31, 1994 and $144.9 million or 1.71% of outstanding loans at
September 30, 1994. The lower reserve to outstanding loans ratio at September
30, 1995 is attributable to loan growth, a significant portion of which is in
low-risk residential lending and overnight trust related advances.
The overall credit quality of the domestic portfolio has remained good as
evidenced by the low level of nonperforming loans and net charge-offs.
Management's assessment of the current U.S. economy, the financial condition of
certain clients facing financial difficulties, bank acquisitions and portfolio
growth were primary factors impacting management's decision to increase the
reserve for credit losses to $147.3 million at September 30, 1995, up slightly
from December 31, 1994 and September 30, 1994.
Northern Trust continues to monitor closely several credits, but the overall
quality of its loan portfolio remains sound and the reserve for credit losses is
adequate to cover credit-related uncertainties as they exist today. Established
credit review procedures ensure that close attention is given to commercial real
estate-related loans and other commercial loans, as well as other credit
exposures that might be adversely affected by significant increases in interest
rates or unexpected downturns in segments of the economies of the United States
or other countries.
15
(THIS PAGE INTENTIONALLY LEFT BLANK)
16
The following schedule should be read in conjunction with the Net Interest
Income section of Management's Discussion and Analysis of Financial Condition
and Results of Operations.
CONSOLIDATED ANALYSIS OF NET INTEREST INCOME
THIRD QUARTER
--------------------------------------------------
(Interest and rate on a 1995 1994
taxable equivalent basis) ------------------------ ------------------------
($ Amounts in Millions) INTEREST VOLUME RATE Interest Volume Rate
- -------------------------- -------- --------- ----- -------- --------- -----
AVERAGE EARNING ASSETS
Money Market Assets
Federal Funds Sold and
Repurchase Agreements $ 1.9 $ 125.7 6.04% $ 2.0 $ 177.8 4.65%
Time Deposits with Banks 22.4 1,604.2 5.53 26.1 2,107.6 4.90
Other .2 9.9 8.76 1.7 139.6 4.88
- -------------------------- ------ --------- ----- ------ --------- -----
Total Money Market Assets 24.5 1,739.8 5.59 29.8 2,425.0 4.88
- -------------------------- ------ --------- ----- ------ --------- -----
Securities
U.S. Government 20.1 1,339.6 5.94 13.5 1,172.3 4.59
Obligations of States and
Political Subdivisions 11.5 433.1 10.61 12.6 454.9 11.04
Federal Agency 69.8 4,499.3 6.16 36.8 3,054.8 4.79
Other 5.2 341.6 6.09 5.3 403.2 5.23
Trading Account 1.1 63.7 7.02 1.2 55.5 8.01
- -------------------------- ------ --------- ----- ------ --------- -----
Total Securities 107.7 6,677.3 6.41 69.4 5,140.7 5.37
- -------------------------- ------ --------- ----- ------ --------- -----
Loans and Leases 163.1 9,356.9 6.91 130.5 8,434.9 6.14
- -------------------------- ------ --------- ----- ------ --------- -----
Total Earning Assets $295.3 $17,774.0 6.59% $229.7 $16,000.6 5.70%
- -------------------------- ------ --------- ----- ------ --------- -----
AVERAGE SOURCE OF FUNDS
Deposits
Savings and Money Market
Deposits $ 27.5 $ 3,327.0 3.28% $ 22.1 $ 3,391.6 2.58%
Savings Certificates 32.6 2,124.7 6.09 14.4 1,232.0 4.66
Other Time 8.6 584.8 5.82 5.5 469.5 4.59
Foreign Offices Time 43.4 3,338.4 5.15 38.2 3,576.9 4.24
- -------------------------- ------ --------- ----- ------ --------- -----
Total Deposits 112.1 9,374.9 4.74 80.2 8,670.0 3.67
Federal Funds Purchased 29.9 2,047.1 5.80 13.3 1,163.7 4.54
Repurchase Agreements 26.6 1,830.6 5.76 19.8 1,779.5 4.41
Commercial Paper 2.1 147.5 5.86 1.7 153.5 4.59
Other Borrowings 17.8 1,292.0 5.47 6.6 668.8 3.94
Senior Medium-Term Notes 2.8 174.6 6.44 9.5 801.6 4.69
Notes Payable 5.1 254.1 7.90 5.4 273.6 7.91
- -------------------------- ------ --------- ----- ------ --------- -----
Total Interest-Related
Funds 196.4 15,120.8 5.15 136.5 13,510.7 4.01
- -------------------------- ------ --------- ----- ------ --------- -----
Interest Rate Spread -- -- 1.44% -- -- 1.69%
- -------------------------- ------ --------- ----- ------ --------- -----
Noninterest-Related Funds -- 2,653.2 -- -- 2,489.9 --
- -------------------------- ------ --------- ----- ------ --------- -----
Total Source of Funds $196.4 $17,774.0 4.38% $136.5 $16,000.6 3.39%
- -------------------------- ------ --------- ----- ------ --------- -----
NET INTEREST INCOME/MARGIN $ 98.9 -- 2.21% $ 93.2 -- 2.31%
- -------------------------- ------ --------- ----- ------ --------- -----
ANALYSIS OF NET INTEREST INCOME CHANGES DUE TO VOLUME AND RATE
THIRD QUARTER
1995/94 NINE MONTHS 1995/94
------------------ ---------------------
CHANGE DUE
TO CHANGE DUE TO
------------ -------------
(In Millions) VOLUME RATE TOTAL VOLUME RATE TOTAL
- ---------------------- ------ ----- ----- ------ ------ ------
Earning Assets $29.0 $36.6 $65.6 $77.7 $139.0 $216.7
Interest-Related Funds 23.5 36.4 59.9 50.0 144.3 194.3
- ---------------------- ----- ----- ----- ----- ------ ------
Net Interest Income $ 5.5 $ .2 $ 5.7 $27.7 $ (5.3) $ 22.4
- ---------------------- ----- ----- ----- ----- ------ ------
17
Northern Trust Corporation
NINE MONTHS
--------------------------------------------------
1995 1994
------------------------ ------------------------
INTEREST VOLUME RATE Interest Volume Rate
-------- --------- ----- -------- --------- -----
$ 9.3 $ 205.4 6.09% $ 6.0 $ 197.7 4.07%
69.9 1,647.2 5.67 74.7 2,154.4 4.63
.7 12.7 7.07 4.4 140.1 4.22
------ --------- ----- ------ --------- -----
79.9 1,865.3 5.73 85.1 2,492.2 4.57
------ --------- ----- ------ --------- -----
45.9 1,083.8 5.65 61.9 2,052.9 4.03
36.0 442.1 10.87 39.9 469.4 11.32
197.4 4,166.7 6.33 63.3 1,882.7 4.50
17.1 366.7 6.23 14.2 372.3 5.08
2.6 49.3 7.14 3.3 55.2 7.90
------ --------- ----- ------ --------- -----
299.0 6,108.6 6.54 182.6 4,832.5 5.05
------ --------- ----- ------ --------- -----
467.8 8,958.5 6.98 362.3 8,214.2 5.90
------ --------- ----- ------ --------- -----
$846.7 $16,932.4 6.68% $630.0 $15,538.9 5.42%
------ --------- ----- ------ --------- -----
$ 81.5 $ 3,293.3 3.31% $ 61.8 $ 3,436.2 2.40%
87.7 1,949.2 6.02 38.2 1,162.4 4.40
23.0 527.4 5.82 12.9 399.8 4.30
141.2 3,607.6 5.23 92.4 3,105.3 3.98
------ --------- ----- ------ --------- -----
333.4 9,377.5 4.75 205.3 8,103.7 3.39
62.1 1,416.2 5.86 40.1 1,408.7 3.81
75.7 1,731.8 5.84 39.5 1,349.8 3.91
6.4 145.9 5.89 4.0 135.9 3.98
44.2 1,089.1 5.43 27.5 1,101.0 3.34
15.5 340.2 6.05 23.5 785.7 3.98
14.9 247.9 8.02 18.0 308.8 7.81
------ --------- ----- ------ --------- -----
552.2 14,348.6 5.14 357.9 13,193.6 3.63
------ --------- ----- ------ --------- -----
-- -- 1.54% -- -- 1.79%
------ --------- ----- ------ --------- -----
-- 2,583.8 -- -- 2,345.3 --
------ --------- ----- ------ --------- -----
$552.2 $16,932.4 4.36% $357.9 $15,538.9 3.08%
------ --------- ----- ------ --------- -----
$294.5 -- 2.32% $272.1 -- 2.34%
------ --------- ----- ------ --------- -----
18
PART II - OTHER INFORMATION
Item 5. Other Information
On October 3, 1995, William A. Osborn became Chairman and Chief
Executive Officer and Barry G. Hastings became President and Chief
Operating Officer, implementing a previously announced succession
plan approved by the Corporation's Board of Directors. Their
elections followed the retirement of David W. Fox after 40 years
of service with the Corporation and its principal subsidiary, The
Northern Trust Company.
Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits
--------
Exhibit (3) Amendment to By-laws of the Corporation and By-laws as
amended.
Exhibit (4) Instruments Defining the Rights of Security Holders
(i) Form of The Northern Trust Company's Global Senior
Bank Note (Fixed Rate).
(ii) Form of The Northern Trust Company's Global Senior
Bank Note (Floating Rate).
(iii) Form of The Northern Trust Company's Global
Subordinated Medium-Term Bank Note (Fixed Rate).
(iv) Form of The Northern Trust Company's Global
Subordinated Medium-Term Bank Note (Floating Rate).
Exhibit (11) Computation of Per Share Earnings
Exhibit (27) Financial Data Schedule
(b.) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed for the three months ended
September 30, 1995.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHERN TRUST CORPORATION
--------------------------
(Registrant)
Date: November 13, 1995 By: PERRY R. PERO
------------------------------
PERRY R. PERO
Senior Executive Vice President
and Chief Financial Officer
Date: November 13, 1995 By: HARRY W. SHORT
------------------------------
HARRY W. SHORT
Senior Vice President and Controller
(Chief Accounting Officer)
20
EXHIBIT INDEX
-------------
The following exhibits have been filed herewith.
Exhibit
Number Description
- ------ -----------
(3) Amendment to By-laws of the Corporation and By-laws as amended.
(4) Instruments Defining the Rights of Security Holders
(i) Form of The Northern Trust Company's Global Senior Bank Note
(Fixed Rate).
(ii) Form of The Northern Trust Company's Global Senior Bank Note
(Floating Rate).
(iii) Form of The Northern Trust Company's Global Subordinated
Medium-Term Bank Note (Fixed Rate).
(iv) Form of The Northern Trust Company's Global Subordinated
Medium-Term Bank Note (Floating Rate).
(11) Computation of Per Share Earnings.
(27) Financial Data Schedule.
21