Costs from a lawsuit settlement, the modification of some customers' contracts and employee severance costs combined to push down second-quarter profit at Northern Trust in Chicago.

The $122 billion-asset company's net income fell 3% to $255 million from a year earlier, it said Wednesday. Earnings per share fell 1% to $1.09. Revenue rose 5% to $1.32 billion.

Noninterest income rose 1% to $1.02 billion on higher trust, investment and other servicing fees. The results included a $118 million gain related to the sale of 1.1 million class B shares of Visa. The results also included $18.9 million of impairment charges and losses on the exit of a loan and lease portfolio, and impairment charges on the residual value of aircraft and railcar leases.

Foreign exchange trading income fell 14% to $64.4 million. Trading volatility increased late in the second quarter, however, after the United Kingdom voted to leave the European Union. That contributed to a 6% increase in FX trading income on a quarterly basis.

Noninterest expense rose 8% to $925 million as Northern Trust added 800 new full-time employees. Compensation rose 8% to $72.2 million.

Expenses also rose because of several one-time items. Northern Trust recorded a $46.5 million charge to settle securities litigation; an $18.6 million charge related to contractual modifications associated with customers in its corporate and institutional services division; and $17.5 million in total charges related to severance costs.

Money market fee waivers, which have eaten into the profits of all custody banks amid near-zero interest rates, improved considerably. The level of fee waivers fell 28% to about $200,000, Biff Bowman, Northern Trust's chief financial officer, said during a conference call.

Net interest income rose 19% to $300 million. The credit-loss provision fell 70% to $3 million. The net interest margin improved 16 basis points to 1.13%.

Assets under custody rose 3% to $6.4 trillion and assets under management fell 4% to $906 billion.

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