Chicago’s biggest bank posted first-quarter earnings Tuesday that handily beat analysts’ forecasts.
Northern Trust, which serves corporate and institutional customers and wealthy individuals and families, earned 94 cents a share in the first quarter. Consensus estimates called for it to earn 87 cents a share. In the same period a year earlier, it made 75 cents a share.
“The beat vs. our expectation was fairly well-balanced across revenues, non-interest expenses and credit costs,” Sandler O’Neill analyst Jeffery Harte said in a report. He predicted that Northern Trust would earn 88 cents a share.
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Northern Trust also had return on equity of 11.3 percent in the first quarter, up from 9.3 percent in the same period a year earlier. Its goal for return on equity is 10 to 15 percent.
The company has been under pressure to reduce expenses.
Expenses rose 3 percent in the quarter, but that was 1 percentage point less than what Sandler’s Harte expected.
Also, total revenues grew 9 percent.
Northern Trust has more than $30 billion in loans on its balance sheet.
The quality of those loans was considered so improved that the company’s set-aside for potential loan losses in the quarter turned out to be a credit of $4.5 million. At most banks, that ends up being a quarterly charge that eats into earnings.
Northern Trust said it also declared $78.5 million in dividends to holders of common stock in the first quarter, and bought back $107.2 million in common stock, at an average price of $68.93 a share.
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