Northern Trust Corp. announced Tuesday that its first-quarter earnings more than doubled from a year earlier, to $385.2 million, or $1.71 a share, because of strong revenue gains and the sale of stock in Visa Inc.'s initial public offering.
The results for the Chicago investment banking company, which caters to affluent individuals an families, and institutions, included a gain of 68 cents a share from Visa's initial public offering last month.
Excluding the one-time gain from the initial public offering, Northern Trust's earnings rose 24.1%, to $231.7 million, or $1.03 a share.
The company's revenue increased 39%, to $1.15 billion from a year earlier.
The average of analysts' estimates called for earnings of 96 cents a share on $996 million of revenue, according to Thomson Financial Inc.
"The strong results were achieved in a very difficult economic environment for financial institutions and demonstrate the continued success of our focused business strategy," Frederick H. Waddell, Northern Trust's president and chief executive officer, said in a press release.
The "record" operating earnings were driven by "excellent growth in trust, investment and other servicing fees, foreign exchange trading income, and net interest income," Mr. Waddell said.
Return on equity, a key measure of profitability, rose to 33.63%.
Northern Trust added $20 million to its loan-loss provision, compared with none a year earlier. Nonperforming loans, or those near default, fell 21%, to $27.7 million, and net chargeoffs rose 10%, to $2.4 million.
Revenue from fees for trust, investment, and other servicing products rose 8%, to $526.8 million.
Foreign exchange trading revenue jumped 69%, to $113.2 million.
Northern Trust's asset management fees rose 4% as its assets under management increased 3%, to $778.6 billion.
The company's assets under custody increased 6%, to $4 trillion from a year earlier.
Northern Trust and its wealthy clientele have largely been able to avoid the writedowns and capital infusions that have hampered the results at large financial services companies.
Its one area of concern is money market funds invested in structured investment vehicles, which buy and make money off long-term debt using money made by issuing short-term debt.
Northern Trust said two months ago that it would provide up to $229 million to cover potential losses from investments in structured investment vehicles.
Consolidated revenue for the quarter soared 39%, to $1.15 billion.
By midday on Tuesday shares of Northern Trust had increased 4.57% from Monday's close, to $67.97 as the market was encouraged by its results.
