planning a national expansion focused on providing personal trust services in fast-growing regions. Chief executive William A. Osborn said in an interview that he plans to boost the Chicago-based banking company's network of offices to about 75 during the next three years, from 54 now. While Mr. Osborn said he expects the expansion to be concentrated in four states where the $21 billion-asset company already operates - Florida, California, Arizona, and Texas - he made clear that Northern is also eyeing new territory. "I expect we will be in more states than we are today by the end of 1999," Mr. Osborn said. He declined to be specific, saying only that the company would enter "a few more" states. Northern Trust has operated outposts in states other than its Illinois home base since entering Florida in 1971, Arizona in 1974, and California in 1988. But its biggest inroads in new markets came in the early 1990s, reflecting the banking industry's increased willingness to look far afield for growth opportunities. Analysts applauded Northern Trust's effort to continue building its out- of-state presence, a drive that has already enabled the company to derive about half its trust fees from outside Illinois. "They've tapped out the market in Chicago," said Michael Durante, an analyst at McDonald & Co. Securities. Northern and Harris Trust and Savings Bank "own the place," he said. Added James Schutz, a Chicago Corp. analyst: "The greater growth is going to come from outside Illinois." Till now, the company has expanded chiefly by opening offices, but Mr. Osborn said he is examining "acquisitions in the right market where growth and wealth demographics are good." Last year, the company bought a bank in Texas and one in Florida, each with $200 million of assets. Northern's expansion effort is centered on its personal trust business, the institution's major focus along with corporate trust accounts. In the first quarter, for example, it reported total trust fees grew 19%, to $144 million, 76% of the bank's total noninterest income. The expansion drive is already beginning. Northern Trust's Florida offices now total 22, thanks to openings during the past six months in Bradenton, Bonita Springs, Delray Beach, and Stuart. It has five Arizona locations, including an office in Sun City that was opened April 30. An office will be added in Mesa, Ariz., this year, Mr. Osborn said. The company also operates 11 offices in Illinois, six in California, and five in Texas. "We're already as national a business as anyone" in the private banking field, Mr. Osborn said. Mr. Osborn remains bullish on Florida, though large bank competitors, such as NationsBank Corp., have big private banking divisions. "There's competition down there, but we're doing very well," he said. Expansion has been extremely profitable for the bank in Florida. Northern Trust of Florida Corp. is the parent company's top-performing unit. In the first quarter it had a 40% return on equity and a 23.4% return on assets. Earnings totaled $11 million, up 43% from the year-earlier quarter. Katharine Fraser contributed to this report.

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