Exhibit 99
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NEWS RELEASE
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Northern Trust Corporation
50 South LaSalle Street
Chicago, Illinois 60675
Contact: Bev Fleming, Investor Relations
(312) 444-7811 or
Katherine Sopranos, Public Relations
(312)444-4281 http://www.northerntrust.com
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FOR IMMEDIATE RELEASE
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NORTHERN TRUST CORPORATION REPORTS 2003 THIRD QUARTER EARNINGS OF
$.51 PER SHARE.
(Chicago, October 15, 2003) Northern Trust Corporation today reported net income
per common share of $.51 for the third quarter, an increase of 19% from $.43 per
share earned a year ago. Net income increased 18% to $113.8 million from $96.4
million earned in the third quarter of last year. This performance resulted in a
return on average common equity of 15.40%.
William A.Osborn, Chairman and Chief Executive Officer, commented, "These
results reflect strong execution of our core business strategies coupled with
improved economic and equity market conditions. Trust fees for the quarter grew
8% while assets under administration reached a record high of $1.9 trillion, up
33% from a year ago. Assets under management reached a record $435.7 billion at
September 30, 2003, a 49% increase from one year ago. During this quarter we
began to see the benefit of actions announced in the second quarter aimed at
reducing operating costs and strategically positioning Northern Trust for
improved profitability. We are also pleased to experience revenue growth in
several areas that our strategic review identified for increased focus."
THIRD QUARTER PERFORMANCE HIGHLIGHTS
Revenues from continuing operations of $538.8 million were up 4% from
$516.0 million in last year's third quarter. Trust fees were $304.0 million in
the quarter, up 8% from $281.4 million in the third quarter of last year. Trust
fees represented 56% of total third quarter revenues, and total fee-related
income represented 73% of total revenues.
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (continued)
Trust fees from Personal Financial Services (PFS) in the quarter increased
3% and totaled $152.5 million, compared with $147.9 million in the year-ago
quarter. The increase in PFS trust fees resulted primarily from net new business
and improved equity markets. Personal trust assets under administration totaled
$180.8 billion at September 30, 2003, compared with $156.7 billion at December
31, 2002, and $150.7 billion at September 30, 2002. Of the total assets under
administration, $99.0 billion is managed by Northern Trust, compared with $87.7
billion at December 31, 2002 and $85.8 billion one year ago. Net new recurring
PFS trust business transitioned during the first nine months represents
approximately $24 million in annualized fees.
Trust fees from Corporate & Institutional Services (C&IS) in the quarter
increased 13% to $151.5 million from $133.5 million in the year-ago quarter, and
included approximately $7.1 million in fees resulting from the acquisition of
the Deutsche Bank passive asset management business. With this acquisition,
Northern Trust is now the third largest manager of institutional passive assets
in the U.S. Securities lending fees totaled $25.3 million compared with $17.0
million in last year's third quarter, reflecting both higher volumes and
increased spreads earned on the investment of collateral. Fees from asset
management totaled $54.5 million, which include $5.3 million in investment
management fees relating to the acquired passive asset management business,
compared with $47.0 million in the year-ago quarter. Custody fees totaled $58.2
million for the quarter, compared with $56.8 million a year ago.
C&IS assets under administration totaled $1.74 trillion at September 30,
2003, compared with $1.35 trillion at December 31, 2002 and $1.29 trillion at
September 30, 2002. C&IS assets under management totaled $336.7 billion,
including $66.6 billion relating to the acquired passive asset business. This
compares with managed assets of $214.8 billion at December 31, 2002, and $207.4
billion at September 30, 2002. Assets under administration include $660.7
billion of global custody assets, compared with $448.5 billion one year ago. Net
new recurring C&IS trust business transitioned during the first nine months
represents approximately $43 million in annualized fees.
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (continued)
Foreign exchange trading profits were $28.9 million in the quarter compared
with $26.3 million in the third quarter of last year. The improvement reflects
currency volatility and increased client volumes. Treasury management fees in
the quarter were $24.1 million, up 1% from the comparable quarter last year.
Revenues from security commissions and trading income were $13.7 million, up 19%
from the prior year. The increase results from commissions from equity security
trades and transition management services for institutional clients. Other
operating income was $20.7 million for the third quarter compared with $10.6
million in the same period last year. The prior year quarter was impacted by a
$15.0 million write-off of an equity investment, partially offset by the
recognition of approximately $8.5 million in gains by Norlease, Inc. from the
sale of leased equipment.
Net interest income for the quarter, stated on a fully taxable equivalent
basis, totaled $147.4 million, down 9% from $162.1 million reported in the prior
year quarter. The net interest margin decreased to 1.67% from 1.98% in the prior
year due primarily to a decline in the yield on the residential mortgage loan
portfolio from refinancing activity. Total average earning assets of $35.1
billion were 8% higher than a year ago with the increase concentrated in
securities, which increased 34% to average $8.8 billion. Average money market
assets increased 7% while average loans declined slightly to $17.5 billion.
The provision for credit losses was $5.0 million in the quarter, down from
$20.0 million in the same period last year. The higher credit provision in the
prior year quarter reflected the impact of management's credit evaluations at
that time and the results of the annual industry-wide Shared National Credit
Regulatory Review. Net charge-offs in the quarter totaled $5.0 million, down
from $11.9 million a year ago. Nonperforming assets totaled $100.2 million at
September 30, 2003, compared with $94.6 million at December 31, 2002 and $107.6
million at September 30, 2002. Reserves available for credit losses totaled
$172.7 million and included $7.8 million allocated to loan commitments and other
off-balance sheet exposures. The
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THIRD QUARTER PERFORMANCE HIGHLIGHTS (continued)
remaining $164.9 million reserve assigned to loans at September 30, 2003
represented a reserve to loan ratio of .92%, compared with .89% a year ago.
Nonaccrual loans of $99.8 million at quarter-end represented .56% of total loans
and were covered 1.7 times by the reserve assigned to loans.
Noninterest expenses from continuing operations totaled $347.4 million for
the quarter, up 3% from $338.9 million in the year-ago quarter. The current
quarter includes $2.8 million in charges associated with reduced leased office
space needs and $3.4 million relating to the replacement of software. Expenses
resulting from the current year acquisitions of the passive asset management
business and the Atlanta-based private wealth management firm were $4.6 million.
Compensation and employee benefit expenses totaled $190.8 million, compared
with $193.0 million last year. The decrease reflects lower staffing levels,
partially offset by salary increases and higher pension plan accruals. Staff on
a full-time equivalent basis at September 30, 2003 totaled 8,094, compared with
8,239 at June 30, 2003 and 9,328 at September 30, 2002. Staffing levels declined
as a result of the second quarter 2003 sales of Northern Trust Retirement
Consulting, L.L.C. (NTRC) and Higgins retail branch assets. In addition,
positions were also eliminated in 2003 as part of Northern Trust's business
review, offset in part by increases relating to acquisitions, staffing for new
offices, and other strategic initiatives.
Other expense categories totaled $156.6 million, up from $145.9 million
last year. The current quarter included the aforementioned $2.8 million cost
associated with reduced leased office space needs and the $3.4 million cost
associated with the replacement of software. The remainder of the increase is
primarily related to acquisitions, technology investments that increased
software amortization, and higher insurance premiums. These higher expenses were
partially offset by initiatives to reduce operating expenses and the benefit of
property tax refunds.
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BALANCE SHEET
Balance sheet assets averaged $39.3 billion for the quarter, up 8% from
last year's third quarter average of $36.5 billion. The securities portfolio
averaged $8.8 billion, up 34% from last year while money market assets averaged
$8.8 billion, up 7%. The increase in the securities portfolio was primarily in
short-term U.S. agency securities. Loans and leases averaged $17.5 billion for
the quarter, down slightly from the prior year.
Residential mortgages were virtually unchanged from last year's third
quarter and averaged $7.8 billion for the quarter, representing 45% of the total
average loan portfolio. Commercial and industrial loans averaged $3.8 billion,
down $432 million or 10% from a year ago, while personal loans increased $171
million or 8% to average $2.4 billion.
Common stockholders' equity averaged a record $2.9 billion, up 6% from last
year's third quarter. The increase primarily reflects the retention of earnings
offset in part by the repurchase of common stock pursuant to the Corporation's
share buyback program. During the quarter, the Corporation acquired 829,814
shares at a cost of $35.6 million. An additional 11.1 million shares are
authorized for purchase after September 30, 2003 under the previously announced
share buyback program.
NINE-MONTH PERFORMANCE HIGHLIGHTS
Net income per common share of $1.23 for the nine-month period ended
September 30, 2003, compared with $1.54 per share earned a year ago. Net income
totaled $275.1 million, compared with $350.8 million reported last year. This
performance resulted in a return on average common equity of 12.64%.
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NINE-MONTH PERFORMANCE HIGHLIGHTS (continued)
As a result of the second quarter disposition of the assets of NTRC, its
operating results for 2003 and all prior periods presented have been
reclassified and shown as discontinued operations in Northern Trust's
consolidated statement of income. The net loss from discontinued operations in
the current year totaled $17.7 million, which included the $20.2 million pre-tax
loss on the sale, and NTRC's net loss from operations. This compares with net
income of $.8 million for the same period last year.
Revenues from continuing operations of $1.60 billion were down 1% from the
$1.61 billion last year. Trust fees were $878.5 million in the nine-month
period, down 1% compared with $885.2 million in the same period of last year.
Trust fees represented 55% of total revenues, and total fee-related income
represented 72% of total revenues.
Trust fees from Personal Financial Services in the period decreased 4% and
totaled $443.5 million, compared with $461.9 million last year. The decline in
PFS trust fees resulted from lower equity markets, partially offset by net new
business. Trust fees resulting from acquisitions totaled $1.7 million for the
period.
Trust fees from Corporate & Institutional Services (C&IS) increased 3% to
$435.0 million from $423.3 million in the year-ago period, and included
approximately $15.6 million in fees resulting from the acquisition of the
passive asset management business. Securities lending fees totaled $75.4 million
compared with $79.2 million last year, reflecting reduced spreads earned on the
investment of collateral resulting from low short-term interest rates, partially
offset by higher lending volumes. Fees from asset management totaled $155.1
million, which include $12.0 million in fees relating to the acquired passive
asset management business, compared with $140.9 million in the year-ago period.
Custody fees totaled $165.1 million for the first nine months, compared with
$166.7 million a year ago.
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NINE-MONTH PERFORMANCE HIGHLIGHTS (continued)
Foreign exchange trading profits were $82.4 million in the period compared
with $87.5 million in the first nine months of last year. Treasury management
fees in the period were $72.4 million, up 1% from the comparable period last
year. Revenues from security commissions and trading income were $41.5 million,
up 33% from the prior year. The increase primarily reflects commissions from
fixed income security trades and transition management services for
institutional clients. Other operating income was $73.3 million for the period
compared with $47.0 million in the same period last year. The current year
includes a $17.8 million gain from the sale of the Higgins branch assets, while
the prior year results were reduced by a $15.0 million write-off of an equity
investment. Gains on the sale of leased equipment by Norlease, Inc. totaled $1.8
million compared with $8.4 million last year.
Net interest income for the nine months, stated on a fully taxable
equivalent basis, totaled $451.0 million, a decline of 7% from the $486.2
million reported in the prior year period. The net interest margin decreased to
1.76% from 1.96% in the prior year due in large part to a decline in the yield
on the residential mortgage loan portfolio due to the impact of refinancing
activity. Total average earning assets of $34.2 billion were 3% higher than a
year ago with the increase concentrated in securities. Average money market
assets decreased 1% while average loans were virtually unchanged at $17.5
billion.
The 2003 provision for credit losses of $17.5 million was $12.5 million
lower than the $30.0 million required in 2002. Net charge-offs totaled $13.3
million and represented .10% of average loans compared with $23.2 million or
..18% of average loans in the first nine months of 2002.
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NINE-MONTH PERFORMANCE HIGHLIGHTS (continued)
Noninterest expenses from continuing operations totaled $1.11 billion for
the period, up 9% from $1.02 billion a year-ago. The current year includes the
previously discussed severance charges in the second quarter ($22.9 million),
office space charges in the second quarter ($16.1 million) and third quarter
($2.8 million) and software charges in the second quarter ($9.5 million) and
third quarter ($3.4 million) which totaled $54.7 million. Expenses resulting
from the acquisitions of a passive asset management business and an
Atlanta-based private wealth management firm were $16.2 million.
Compensation and employee benefits represented 54% of total operating
expenses and totaled $595.0 million, compared with $571.6 million last year, and
included $19.5 million in severance-related costs. The remainder of the increase
from a year ago resulted primarily from salary increases, partially offset by
lower performance-based compensation.
Other expense categories totaled $514.4 million, up from $446.1 million
last year. The current period includes the previously discussed office space,
software and outplacement benefit charges, which totaled $35.2 million. The
remainder of the increase is primarily related to acquisitions, technology
investments that increased software amortization and equipment-related costs,
business promotion and other professional fees.
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FORWARD-LOOKING STATEMENTS
This news release may be deemed to include forward-looking statements, such
as statements that relate to Northern Trust's financial goals, dividend policy,
expansion and business development plans, projected profit improvements,
business prospects and positioning with respect to market 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,
and the effect of extraordinary events and various other matters (including
changes in accounting standards and interpretations) on Northern Trust's
business and results. Forward-looking statements are typically identified by
words or phrases, such as "believe," "expect," "anticipate," "intent,"
"estimate," "may increase," "may fluctuate," and similar expressions or future
or conditional verbs such as "will," "should," "would," and "could."
Forward-looking statements are Northern Trust's current estimates or
expectations of future events or future results. Actual results could differ
materially from those indicated by these statements because the realization of
those results is subject to many risks and uncertainties. Northern Trust
Corporation's 2002 Annual Report to Shareholders, including the section of
Management's Discussion and Analysis captioned "Factors Affecting Future
Results," and periodic reports to the Securities and Exchange Commission contain
additional information about factors that could affect actual results, including
certain economic, interest rate, market and credit risks, competitive
conditions, changes in U.S. and worldwide securities markets, Northern Trust's
success in executing various parts of its business plans, the impact of the
divestiture or discontinuance of portions of Northern Trust's business,
operating and technology risks, including material systems interruptions and
human errors or omissions, risks associated with regulatory changes, and
uncertainties inherent in the litigation process. All forward-looking statements
included in this news release are based on information available at the time of
the release, and Northern Trust Corporation assumes no obligation to update any
forward-looking statement.
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WEBCAST OF THIRD QUARTER EARNINGS CONFERENCE CALL
Northern Trust's third quarter earnings conference call will be webcast
live on October 15, 2003. The Internet webcast opens the call to all investors,
allowing them to listen to the Chief Financial Officer's comments. The live call
will be conducted at 11:00 a.m. CDT and is accessible on Northern Trust's web
site at:
http://www.northerntrust.com/aboutus/news/financial_releases.html
The only authorized rebroadcasts of the live call will be available on Northern
Trust's web site from 2:00 p.m. CDT on October 15, 2003 through 6:00 p.m. on
October 22, 2003. Participants will need Windows Mediatm software, which can be
downloaded free through Northern's web site. This earnings release can also be
accessed at the above web address.
/ / /
NORTHERN TRUST CORPORATION Page 1
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME STATISTICS
($ In Millions Except Per Share Data)
THIRD QUARTER
--------------------------------------------
2003 2002 % Change (*)
--------------------------------------------
Noninterest Income
Trust Fees $304.0 $281.4 8%
Foreign Exchange Trading Profits 28.9 26.3 10
Treasury Management Fees 24.1 23.9 1
Security Commissions & Trading Income 13.7 11.6 19
Other Operating Income 20.7 10.6 95
Investment Security Transactions -- 0.1 --
----------- -------- -----
Total Noninterest Income 391.4 353.9 11
Interest Income (Taxable Equivalent) 267.6 320.3 (16)
Interest Expense 120.2 158.2 (24)
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Net Interest Income (Taxable Equivalent) 147.4 162.1 (9)
Total Revenue (Taxable Equivalent) 538.8 516.0 4
Noninterest Expenses
Compensation 157.9 160.3 (1)
Employee Benefits 32.9 32.7 1
Occupancy Expense 29.3 27.1 8
Equipment Expense 21.5 21.4 1
Other Operating Expenses 105.8 97.4 9
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Total Noninterest Expenses 347.4 338.9 3
Provision for Credit Losses 5.0 20.0 (75)
Taxable Equivalent Adjustment 13.1 12.2 7
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Income from Continuing Operations before Income Taxes 173.3 144.9 20
Provision for Income Taxes 58.5 47.4 23
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Income from Continuing Operations 114.8 97.5 18
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Income (Loss) from Operations of Discontinued NTRC (1.7) (1.7) --
Loss on Disposal of NTRC -- -- --
Income Tax Benefit (Expense) 0.7 0.6 --
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Net Income (Loss) from Discontinued Operations (1.0) (1.1) --
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NET INCOME $113.8 $ 96.4 18%
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Per Common Share
Income from Continuing Operations
Basic $0.52 $0.44 18%
Diluted 0.51 0.43 19
Net Income
Basic $0.52 $0.44 18%
Diluted 0.51 0.43 19
Return on Average Common Equity 15.40% 13.69%
Average Common Equity $2,933.0 $2,778.3 6%
Return on Average Assets 1.15% 1.05%
Common Dividend Declared per Share $0.17 $0.17 --%
Preferred Dividends (millions) -- 0.6 (100)
Average Common Shares Outstanding (000s)
Basic 220,263 220,432
Diluted 224,653 225,098
Common Shares Outstanding (EOP) 220,354 220,923
(*) Percentage change calculations are based on actual balances rather than the
rounded amounts presented in Supplemental Consolidated Financial
Information.
Note: Certain reclassifications have been made to the prior period's financial
statements to place them on a basis comparable with the current period's
financial statements.
NORTHERN TRUST CORPORATION Page 2
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME STATISTICS
($ In Millions Except Per Share Data)
NINE MONTHS
-----------------------------------------------------------
2003 2002 % Change (*)
-----------------------------------------------------------
Noninterest Income
Trust Fees $878.5 $885.2 (1) %
Foreign Exchange Trading Profits 82.4 87.5 (6)
Treasury Management Fees 72.4 71.9 1
Security Commissions & Trading Income 41.5 31.2 33
Other Operating Income 73.3 47.0 56
Investment Security Transactions - 0.2 -
------------- ------------- --------------
Total Noninterest Income 1,148.1 1,123.0 2
Interest Income (Taxable Equivalent) 838.3 970.0 (14)
Interest Expense 387.3 483.8 (20)
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Net Interest Income (Taxable Equivalent) 451.0 486.2 (7)
Total Revenue (Taxable Equivalent) 1,599.1 1,609.2 (1)
Noninterest Expenses
Compensation 493.6 472.7 4
Employee Benefits 101.4 98.9 3
Occupancy Expense 102.5 76.7 34
Equipment Expense 66.6 64.5 3
Other Operating Expenses 345.3 304.9 13
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Total Noninterest Expenses 1,109.4 1,017.7 9
Provision for Credit Losses 17.5 30.0 (42)
Taxable Equivalent Adjustment 39.0 35.8 9
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Income from Continuing Operations before Income Taxes 433.2 525.7 (18)
Provision for Income Taxes 140.4 175.7 (20)
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Income from Continuing Operations 292.8 350.0 (16)
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Income (Loss) from Operations of Discontinued NTRC (8.8) 1.4 -
Loss on Disposal of NTRC (20.2) - -
Income Tax Benefit (Expense) 11.3 (0.6) -
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Net Income (Loss) from Discontinued Operations (17.7) 0.8 -
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NET INCOME $275.1 $350.8 (22) %
============= ============= ==============
Per Common Share
Income from Continuing Operations
Basic $1.33 $1.58 (16) %
Diluted 1.31 1.54 (15)
Net Income
Basic $1.25 $1.58 (21) %
Diluted 1.23 1.54 (20)
Return on Average Common Equity 12.64 % 17.16 %
Average Common Equity $2,902.9 $2,720.1 7 %
Return on Average Assets 0.96 % 1.26 %
Common Dividends Declared per Share $0.51 $0.51 - %
Preferred Dividends (millions) 0.7 1.7 (57)
Average Common Shares Outstanding (000s)
Basic 220,311 220,715
Diluted 223,982 226,383
Common Shares Outstanding (EOP) 220,354 220,923
NORTHERN TRUST CORPORATION Page 3
(Supplemental Consolidated Financial Information)
BALANCE SHEET ($ IN MILLIONS)
SEPTEMBER 30
------------------------------------------------------------
2003 2002 % Change (*)
------------------------------------------------------------
Assets
Money Market Assets $9,186.7 $8,875.0 4 %
Securities
U.S. Government 103.9 155.8 (33)
Federal Agency and Other 8,114.0 7,262.2 12
Municipal 880.4 709.6 24
Trading Account 4.1 11.2 (63)
---------------- --------------- --------------
Total Securities 9,102.4 8,138.8 12
Loans and Leases 17,918.1 17,924.6 -
---------------- --------------- --------------
Total Earning Assets 36,207.2 34,938.4 4
Reserve for Credit Losses Assigned to Loans (164.9) (160.3) 3
Cash and Due from Banks 1,425.4 1,951.9 (27)
Trust Security Settlement Receivables 318.3 762.5 (58)
Buildings and Equipment, net 503.9 506.8 (1)
Other Nonearning Assets 2,454.3 1,671.2 47
---------------- --------------- --------------
Total Assets $40,744.2 $39,670.5 3 %
================ ============== ==============
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings $9,156.5 $8,637.9 6 %
Other Time 283.9 348.7 (19)
Foreign Office Time 10,498.7 9,492.1 11
---------------- --------------- --------------
Total Interest-Bearing Deposits 19,939.1 18,478.7 8
Borrowed Funds 8,575.1 9,349.2 (8)
Senior Notes and Long-Term Debt 1,582.9 1,483.8 7
---------------- --------------- --------------
Total Interest-Related Funds 30,097.1 29,311.7 3
Demand & Other Noninterest-Bearing Deposits 5,714.9 5,894.4 (3)
Other Liabilities 1,931.9 1,519.3 27
---------------- --------------- --------------
Total Liabilities 37,743.9 36,725.4 3
Common Equity 3,000.3 2,825.1 6
Preferred Equity - 120.0 -
---------------- --------------- --------------
Total Liabilities and Stockholders' Equity $40,744.2 $39,670.5 3 %
================ =============== ==============
NORTHERN TRUST CORPORATION Page 4
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET ($ IN MILLIONS)
THIRD QUARTER
----------------------------------------------
2003 2002 % Change (*)
----------------------------------------------
Assets
Money Market Assets $8,820.3 $8,272.6 7 %
Securities
U.S. Government 104.0 158.1 (34)
Federal Agency and Other 7,822.2 5,733.6 36
Municipal 872.8 659.3 32
Trading Account 5.6 7.6 (27)
--------- --------- ------------
Total Securities 8,804.6 6,558.6 34
Loans and Leases 17,452.8 17,589.3 (1)
--------- --------- ------------
Total Earning Assets 35,077.7 32,420.5 8
Reserve for Credit Losses Assigned to Loans (165.1) (156.8) 5
Nonearning Assets 4,405.1 4,227.7 4
--------- --------- ------------
Total Assets $39,317.7 $36,491.4 8 %
========= ========= ============
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings $8,508.7 $8,139.0 5 %
Other Time 300.5 361.4 (17)
Foreign Office Time 10,551.2 9,521.3 11
--------- --------- ------------
Total Interest-Bearing Deposits 19,360.4 18,021.7 7
Borrowed Funds 8,870.0 7,578.3 17
Senior Notes and Long-Term Debt 1,583.0 1,483.9 7
--------- --------- ------------
Total Interest-Related Funds 29,813.4 27,083.9 10
Demand & Other Noninterest-Bearing Deposits 4,986.6 4,969.6 -
Other Liabilities 1,584.7 1,539.6 3
--------- --------- ------------
Total Liabilities 36,384.7 33,593.1 8
Common Equity 2,933.0 2,778.3 6
Preferred Equity - 120.0 -
--------- --------- ------------
Total Liabilities and Stockholders' Equity $39,317.7 $36,491.4 8 %
========= ========= ============
NORTHERN TRUST CORPORATION Page 5
(Supplemental Consolidated Financial Information)
QUARTERLY TREND DATA 2003 2002
($ In Millions Except Per Share Data) Quarters Quarters
--------------------------------------- ------------------------
Third Second First Fourth Third
--------------------------------------- ------------------------
Net Income Summary
Trust Fees $304.0 $293.9 $280.6 $275.8 $281.4
Other Noninterest Income 87.4 107.2 75.0 65.9 72.5
Net Interest Income (Taxable Equivalent) 147.4 150.1 153.5 164.3 162.1
-------- -------- -------- -------- --------
Total Revenue (Taxable Equivalent) 538.8 551.2 509.1 506.0 516.0
Provision for Credit Losses 5.0 7.5 5.0 7.5 20.0
Noninterest Expenses 347.4 412.5 349.5 342.3 338.9
-------- -------- -------- -------- --------
Pretax Income (Taxable Equivalent) 186.4 131.2 154.6 156.2 157.1
Taxable Equivalent Adjustment 13.1 13.1 12.8 12.9 12.2
Provision for Income Taxes 58.5 36.7 45.2 46.1 47.4
-------- -------- -------- -------- --------
Income from Continuing Operations 114.8 81.4 96.6 97.2 97.5
Discontinued Operations/Loss on Sale of NTRC (1.0) (14.8) (1.9) (0.9) (1.1)
-------- -------- -------- -------- --------
Net Income $113.8 $66.6 $94.7 $96.3 $96.4
======== ======== ======== ======== ========
Per Common Share
Net Income - Basic $0.52 $0.30 $0.43 $0.43 $0.44
- Diluted 0.51 0.30 0.42 0.43 0.43
Dividend Declared 0.17 0.17 0.17 0.17 0.17
Book Value (EOP) 13.62 13.34 13.18 13.04 12.79
Market Value (EOP) 42.35 41.60 30.45 35.05 37.72
Ratios
Return on Average Common Equity 15.40 % 9.16 % 13.32 % 13.43 % 13.69 %
Return on Average Assets 1.15 0.69 1.03 0.98 1.05
Net Interest Margin 1.67 1.76 1.87 1.85 1.98
Productivity Ratio - Continuing Operations 155 % 134 % 146 % 148 % 152 %
Risk-based Capital Ratios
Tier 1 10.8 % 11.0 % 11.1 % 11.1 % 10.9 %
Total (Tier 1 + Tier 2) 13.8 14.2 15.0 14.1 13.9
Leverage 7.8 7.8 7.9 7.8 8.2
Trust Assets ($ in Billions) - EOP
Corporate $1,736.2 $1,657.0 $1,429.9 $1,346.9 $1,285.8
Personal 180.8 172.9 156.0 156.7 150.7
-------- -------- -------- -------- --------
Total Trust Assets $1,917.0 $1,829.9 $1,585.9 $1,503.6 $1,436.5
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Memo: Managed Assets $435.7 $423.4 $365.3 $302.5 $293.2
Asset Quality ($ in Millions) - EOP
Nonaccrual Loans $99.8 $107.5 $92.4 $93.4 $106.5
Other Real Estate Owned (OREO) 0.4 0.4 1.2 1.2 1.1
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Total Nonperforming Assets $100.2 $107.9 $93.6 $94.6 $107.6
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Nonperforming Assets / Loans & OREO 0.56 % 0.60 % 0.52 % 0.52 % 0.60 %
Gross Charge-offs $5.9 $5.4 $6.0 $11.2 $13.5
Less: Gross Recoveries 0.9 0.5 2.6 3.8 1.6
-------- -------- -------- -------- --------
Net Charge-offs $5.0 $4.9 $3.4 $7.4 $11.9
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Net Charge-offs (Annualized) to Average Loans 0.11 % 0.11 % 0.08 % 0.17 % 0.27 %
Reserve for Credit Losses Assigned to Loans $164.9 $165.2 $162.4 $161.1 $160.3
Reserve to Nonaccrual Loans 165 % 154 % 176 % 172 % 151 %
Reserve for Other Credit-Related Exposures $7.8 $7.5 $7.7 $7.4 $8.1