When he takes the helm at Northern Trust Corp. this summer, William Osborn will set his sights on a region where the Chicago-based banking company has no presence.
"We have our eyes on the Northeast," said Mr. Osborn, whom the board of directors voted last week to succeed retiring chairman and chief executive officer David Fox.
Northern Trust, which has 45 offices in affluent and retirement communities in Illinois, California, Arizona, Florida, and Texas, would like to build an eastern stronghold somewhere between Boston and Washington, he said.
Competition is too rough for new branches, so Mr. Osborn would like to get in through acquisition.
"Things have not come together with something that's appropriate at this time," he said.
That's because the likeliest candidate, according to analysts, is the fiercely independent U.S. Trust Corp. in New York.
U.S. Trust, with $3 billion of assets and $227 billion under management, is the only company in the Northeast focusing on business lines that are small enough for Northern Trust to acquire.
Northern Trust is the nation's 37th-biggest banking company, with $18.6 billion in assets.
"There's nothing going on," said a U.S. Trust spokesman. "We're just reorganizing ourselves. We're selling some of our businesses to Chase (Manhattan Corp). We're not going to merge with Northern Trust."
Northern offers fiduciary, banking, and investment services, particularly master trust custody and global custody. It has more than $499 billion of trust assets under administration and more than $447 billion of pension and employee benefit assets under management.
Mr. Osborn said capturing business in the Northeast is not necessarily critical to growth, but he can't resist the idea that about one-third of the country's net worth is concentrated between Washington and Boston.
"That's an area you'd like to get into over time," he said. "Is it necessary to fuel growth? No. A lot of those people will migrate to the states we're in."
Mr. Osborn declined to comment on whom he might approach, except to say, "If you understand the character of our organization, you can determine the organization that would fit well with us."
Currently president and chief operating officer, Mr. Osborn will become CEO in June. Mr. Fox, 63, will retire in October on his 40th anniversary.
The bank bylaws require the chairman to step down by age 65. Mr. Osborn is 47.
As part of the succession plan, vice chairman Barry Hastings was promoted to chief operating officer.
If he is forced to sit on the sidelines in the Northeast, Mr. Osborn will have to drum up revenues somewhere else after a sluggish fourth quarter.
Trust revenues declined 4.1% at an annualized rate even though trust assets under management or administration grew by an annualized 3.7% in the same quarter.
Overhead expenses rose too, compelling executives to release a cost- cutting plan that involves slashing $50 million over the next three years.
Mr. Osborn said he plans to boost revenues on the private banking side with aggressive expansion in Northern's most profitable market, Florida, either through acquisitions or by opening new offices.