Northern Trust Co.'s earnings report Monday put to rest fears that the company would be hurt by a slowdown in the trust business.
Such fears were fanned by State Street Corp.'s earnings report and a conference call with analysts last week in which Boston-based State Street signaled a slowdown in revenues.
Northern Trust, which is based in Chicago, reported net income of $99.7 million, up 14% from a year earlier, and beat analysts estimates of 85 cents a share by a penny.
Northern Trust had fallen in tandem with State Street's, but the report helped lift the Chicago company's shares by 0.14%, to $90.5625, on a generally poor day for bank stocks.
"It was a very solid quarter," said Nancy Bush, a banking analyst with Ryan, Beck & Co. "They continue to have a strong pipeline of new business coming in."
Ms. Bush said that State Street and Northern Trust once were much more alike, but that State Street branched out into technology while Northern Trust embraced the personal, high-touch trust side of the business.
Northern Trust's chief financial officer, Perry Pero, did not mention State Street by name, but pointed out that unlike "another company" Northern Trust has a very large personal trust operation and that business accounted for 54% of revenues in the second quarter.
The earnings were satisfactory to analysts, who panned State Street's earnings report last week, saying the company was masking a slowdown in revenues with a one-time gain from another business area. State Street's shares rose 0.42%, to $74.8125. They were at $81 before the earnings announcement.
For the day, the market for bank stocks was mixed, with the Standard & Poor's bank index shedding 0.48% and the Dow Jones industrial average off 0.20%. The Nasdaq bank index was up 0.16%, and the S&P 500 added 0.78%.
Ms. Bush said concerns over banks' exposure internationally were undercutting stocks.
"It's a mixed bag," said Bradley S. Vander Ploeg, banking analyst with Everen Securities, Chicago. "We've seen another good quarter of earnings announcements, but it seems difficult to get investors motivated right now.
"The concern seems to be (that) we're very late in the credit cycle," Mr. Vander Ploeg said.
Shares of Wachovia Corp. performed well, gaining 0.85% to $81.6875.
The Winston-Salem, N.C., banking company's "strong revenue trends continued during the second quarter," with total revenues growing 13.3% from a year earlier, said David C. Stumpf, a banking analyst with A.G. Edwards & Sons. Wachovia issued its quarterly earnings report last week.
"We expect revenue levels to remain strong, due to strong loan demand in the Southeast, the company's aggressive business generation efforts within its markets, as well as the positive momentum in the capital markets business line," Mr. Stumpf said.