Northern Trust reported net income of $181.4 million for the first quarter, up 11% from $164.0 million in the prior year first quarter, and up 7% from $169.7 million in the prior quarter.
Northern Trust says the prior quarter included a $19.2 million pretax charge ($11.9 million after tax) in connection with an agreement to resolve certain long-standing class action litigation related to Northern Trust’s securities lending program.
Revenue of $1.04 billion in the current quarter was up $64.1 million ($1.05 billion in the prior quarter), or 7%, from $976.4 million in the prior year quarter.
Non interest income, which represented 76% of revenue, increased $44.5 million, or 6%, to $794.8 million from the prior year quarter’s $750.3 million (Q4 2013: $795.3 million), primarily reflecting higher trust, investment and other servicing fees, partially offset by lower foreign exchange trading income as compared to the prior year quarter, says Northern Trust.
Net interest income for the current quarter on a fully taxable equivalent (FTE) basis increased $20.7 million, or 9%, to $254. 4 million (Q4 2013: $259.1 million) compared to $233.7 million in the prior year quarter, due to higher levels of average earning assets, partially offset by a decrease in the net interest margin, says Northern Trust.
Trust, investment and other servicing fees totaled $679.5 million in the current quarter, up $5.7 million, or 1%, from $673.8 million in the prior quarter, primarily reflecting new business and higher equity markets in the current quarter. These fees were up $48.8 million, or 8%, from $630.7 million in the prior year quarter. The increase primarily reflects new business and the favorable impact of equity markets, partially offset by higher waived fees in money market mutual funds, says Northern Trust.
Corporate & Institutional Service (C&IS) trust, investment and other servicing fees increased $30.5 million, or 9%, to $379.2 million in the current quarter (Q4 2013 $371.1 million) from the prior year quarter’s $348.7 million.
Assets under custody in C&IS increased to $5.2 billion at the end of March 2014, from $4.57 billion at the end of the first quarter of 2013 and $5 billion at the end of the fourth quarter of 2013, an increase of 15% and 3% respectively. Total assets under custody increased to $5.7 billion at the end of March 2014, from $5 billion at the end of March 2013 and $5.57 billion at the end of December 2013, an increase of 15% and 3% respectively.
Custody and fund administration fees, the largest component of C&IS fees, increased 13%, primarily driven by new business and the favorable impact of equity markets, says Northern Trust. Securities lending revenue increased 2%, primarily reflecting higher volumes in the current quarter.
Securities lending revenue increased 4%, primarily reflecting increased volumes in the current quarter. Other C&IS trust, investment and other servicing fees increased 27%, primarily reflecting increased income attributable to benefit payment and investment risk and analytical services in the current quarter, says Northern Trust.
Northern Trust's Q1 Net Income Up 11% From the Prior Year
Northern Trust reported net income of $181.4 million for the first quarter, up 11% from $164.0 million in the prior year first quarter, and up 7% from $169.7 million in the prior quarter.