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.
Compensation expense, the largest component of noninterest expense, equaled $316.3 million, down $25.6 million, or 7%, compared to $341.9 million in the prior year quarter. The prior year quarter included $28.6 million of severance related accruals recorded in connection with initiatives to reduce staff expense levels, while the current quarter includes $1.3 million of net reductions in severance related accruals. Excluding the severance related items, compensation expense in the current quarter increased by $4.3 million, or 1%. Staff on a full-time equivalent basis at December 31, 2012 totaled approximately 14,200, up 1% from a year ago.
Employee benefit expense equaled $63.9 million, down $5.6 million, or 8%, compared to $69.5 million in the prior year quarter. The prior year quarter included $4.0 million of severance related accruals.
Expense associated with outside services totaled $140.7 million, down $13.5 million, or 9%, from $154.2 million in the prior year quarter. The current and prior year quarter include $2.6 million and $10.2 million of restructuring and integration charges, respectively. Excluding the current and prior year quarter restructuring and integration charges, outside services expense decreased $5.9 million, or 4%, primarily reflecting lower manager of manager advisory fees and decreased expense associated with legal and technical services.
Equipment and software expense totaled $90.5 million, a decrease of 5% from $95.3 million in the prior year quarter. The prior year quarter included $10.9 million of restructuring charges related to software write-offs. The current quarter includes higher levels of software amortization and related software support costs from the continued investment in technology related assets.Occupancy expense equaled $46.2 million, a decrease of 7% from $49.6 million in the prior year quarter. The current and prior year quarter include $3.0 million and $6.3 million, respectively, of restructuring charges related to reductions in office space. Other operating expense equaled $83.9 million, up $9.7 million, or 13%, from $74.2 million in the prior year quarter. The current quarter includes restructuring and integration related charges of $3.3 million, higher staff related and business promotion expense, and increases within various other miscellaneous categories of other operating expense.
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