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Northern Trust Corporation Reports Fourth Quarter Net Income Of $167.7 Million, Earnings Per Common Share Of $0.69. Full Year Net Income Of $687.3 Million, Earnings Per Common Share Of $2.81.

Consolidated revenue of $969.7 million in the current quarter was up $14.1 million, or 1%, from $955.6 million in the prior year quarter. Noninterest income, which represented 76% of revenue, increased $51.7 million, or 8%, to $735.5 million from the prior year quarter’s $683.8 million, primarily reflecting higher trust, investment and other servicing fees, partially offset by lower foreign exchange trading income. Net interest income for the quarter on a fully taxable equivalent (FTE) basis decreased $37.6 million, or 13%, to $243.6 million compared to $281.2 million in the prior year quarter, primarily due to lower average earning assets and a continued decline in the net interest margin.

Trust, investment and other servicing fees were $622.6 million in the current quarter, up $81.1 million, or 15%, from $541.5 million in the prior year quarter. The increase primarily reflects strong new business, the favorable impact of equity markets on fees, and lower waived fees on money market mutual funds.

Assets under custody and assets under management are the primary drivers of our trust, investment and other servicing fees. The following table provides Northern Trust’s assets under custody and assets under management by business segment.
  December 31,   September 30,   December 31,   % Change   % Change
($ In Billions)   2012   2012   2011   Q4-12/Q3-12   Q4-12/Q4-11
Assets Under Custody
Corporate & Institutional $ 4,358.6 $ 4,331.9 $ 3,877.6 1 % 12 %
Personal     446.3     429.5     385.2   4     16  
Total Assets Under Custody   $ 4,804.9   $ 4,761.4   $ 4,262.8   1 %   13 %
 
December 31, September 30, December 31, % Change % Change
($ In Billions)   2012   2012   2011   Q4-12/Q3-12   Q4-12/Q4-11
Assets Under Management
Corporate & Institutional $ 561.2 $ 565.6 $ 489.2 (1) % 15 %
Personal     197.7     184.1     173.7   7     14  
Total Assets Under Management   $ 758.9   $ 749.7   $ 662.9   1 %   14 %
 

Trust, investment and other servicing fees in Corporate & Institutional Services (C&IS) increased $38.6 million, or 13%, to $344.3 million in the current quarter from the prior year quarter’s $305.7 million.
             
  Q4   Q4  

Change Q4 2012
($ In Millions)   2012   2011  

from Q4 2011
C&IS Trust, Investment and Other Servicing Fees  
Custody and Fund Administration $ 224.7 $ 205.6 $ 19.1 9 %
Investment Management 74.2 60.9 13.3 22
Securities Lending 20.3 19.3 1.0 5
Other     25.1     19.9     5.2   26  
Total   $ 344.3   $ 305.7   $ 38.6   13 %
 

Custody and fund administration fees, the largest component of C&IS fees, increased 9%, primarily reflecting new business and the favorable impact of equity markets on fees. C&IS investment management fees increased 22%, reflecting lower waived fees in money market mutual funds, new business and the favorable impact of markets. Money market mutual fund fee waivers in C&IS, attributable to persistent low short-term interest rates, totaled $5.7 million in the current quarter, compared to waived fees of $12.3 million in the prior year quarter. Securities lending revenue increased 5%, primarily reflecting higher spreads in the current quarter.

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