Earnings Review and Free Research Report: Northern Trust's Net Interest Income Grew 14%

Research Desk Line-up: BlackRock Post Earnings Coverage

LONDON, UK / ACCESSWIRE / July 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Northern Trust Corp. (NTRS) ("NTRS"), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=NTRS, following the Company's disclosure of its financial results on July 19, 2017, for the second quarter fiscal 2017. The wealth management firm reported a y-o-y gain in revenue and earnings. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the Asset Management industry. Pro-TD has currently selected BlackRock, Inc. (NYSE: BLK) for due-diligence and potential coverage as the Company reported on July 17, 2017, its financial results for Q2 2017 which ended on June 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on BlackRock when we publish it.

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Earnings Reviewed

For three months ended June 30, 2017, NTRS's total revenue increased marginally to $1.33 billion compared to revenue of $1.30 billion in Q2 2016. The increase was in-line with analysts' expectations for revenue of $1.33 billion.

During Q2 FY17, NTRS's net interest income increased 14% on a y-o-y basis to $350.4 million. The rise was due to increased levels of average earning assets and higher net interest margin. For the reported quarter, the Company's net interest margin increased 12 basis points on a y-o-y basis to 1.28%. The increase was attributable to higher short-term interest rates and reduced premium amortization, partially mitigated by an unfavorable mix shift in earning assets.

For the reported quarter, NTRS's non-interest income decreased 4% on a y-o-y basis to $979.7 million. The decrease was due to fall in foreign exchange trading income, other operating income, and treasury management fees. The decrease was partially offset by increased trust investment along with rise in security commissions and trading income.

During Q2 FY17, NTRS's non-interest expenses increased by 1% on a y-o-y basis to $937.4 million. The rise was mainly due to an increase in almost all components of expenses.

For the reported quarter, NTRS's net income was $267.9 million compared to $263.0 million in Q2 FY16. During Q2 FY17, the Company's diluted EPS increased by 1.8% to $1.12 from $1.10 in the same quarter last year. For the reported quarter, NTRS's adjusted EPS was $1.18, which was below analysts' expectations of $1.24.

During Q2 FY17, NTRS appointed David Wicks as head of continental Europe. The Company repurchased 1.76 million shares for $157.6 million.

On July 18, 2017, NTRS declared a quarterly cash dividend of $0.42 per common share, payable on October 01, 2017, to holders of record on September 01, 2017.

Balance Sheet

As on June 30, 2017, NTRS's total assets under custody had increased by 16% on a y-o-y basis to $7.38 trillion. During Q2 FY17, the Company's total assets under management (AUM) increased by 14% on a y-o-y basis to $1.03 trillion.

During Q2 FY17, NTRS's return on average common equity ratio was 11.6% compared to 12.3% in the same quarter last year. For the reported quarter, the Company's Tier 1 capital ratio was 14.5% compared to 12.0% in Q2 FY16. During Q2 FY17, NTRS's Tier 1 leverage ratio and total capital ratio was 8.1% and 16.5%, respectively, compared to 7.4% and 13.5%, respectively, in Q2 FY16.

NTRS's total stockholders' equity averaged $10.0 billion, up 13% from the prior-year's quarter average of $8.8 billion. The increase was primarily attributable to the issuance of preferred stock and earnings, partially offset by dividend declarations and the repurchase of common stock pursuant to the Corporation's share repurchase program.

Credit Quality

During Q2 FY17, NTRS's total allowance for credit losses decreased by 21% on a y-o-y basis to $178.8 million. For the reported quarter, the Company's net charge-offs increased by 33% on a y-o-y basis to $3.2 million.

For the reported quarter, NTRS's credit provision was $7.0 million compared to $3.0 million in Q2 FY16. During Q2 FY17, the Company's non-performing assets were $166.7 million compared to $166.4 million in Q2 FY16.

Stock Performance

At the closing bell, on Thursday, July 20, 2017, Northern Trust's stock slipped 1.92%, ending the trading session at $87.50. A total volume of 4.00 million shares has exchanged hands, which was higher than the 3-month average volume of 1.10 million shares. The Company's stock price soared 0.06% in the last three months, 4.77% in the past six months, and 31.64% in the previous twelve months. The stock is trading at a PE ratio of 19.91 and has a dividend yield of 1.74%. The stock currently has a market cap of $20.10 billion.

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