Northern Trust Corp.'s first-quarter profit fell 3% amid higher expenses and impacts from still-low interest rates as revenue stayed flat. Results missed expectations.
Despite the challenges, Northern Trust's president and chief executive, Frederick H. Waddell, expressed optimism for the long term, citing signs of economic recovery, client-base growth, and a strong balance sheet and capital levels.
The provider of investment-management and other services to individuals and institutions said trust and investment fees, which accounted for more than half of revenue, increased 25% to $515.1 million. In total, fee-related income rose 8% to $667.5 million, or 74% of total revenue.
Northern Trust had achieved better earnings last year as the company paid back the $1.5 billion plus interest the U.S. Treasury had invested in it under the Troubled Asset Relief Program.
In the first quarter, the company reported a profit of $157.2 million, or 64 cents a share, compared with $161.8 million, or 61 cents a share, a year earlier. Average shares outstanding rose 8%. Revenue increased 0.4% to $907.6 million.
Analysts surveyed by Thomson Reuters expected earnings of 71 cents on revenue of $914 million.
The company reported assets under custody increasing 31% and assets under management rising 24%, excluding securities lending collateral.
Shares closed at $58.37 on Monday and weren't active premarket. The stock has risen 11% this year.