July 16--Northern Trust Corp.'s second-quarter profit was dinged by $42.3 million in charges, including severance costs, but Chicago's biggest locally headquartered bank otherwise exceeded analysts' expectations for earnings.
The announcement provided no details about the severance costs. The company, which has been under pressure to cut expenses, will hold a call with analysts later this morning.
Net income was $181.9 million, or 75 cents a common share, in the second quarter, compared with $191.1 million, or 78 cents a share, in the same period last year.
Excluding the charge related to severance, as well as charges related to reducing its amount of office space and writing off software, Northern Trust would have earned $209.9 million, or 87 cents a share.
Analysts were expecting it to earn 84 cents a share.
Compensation expense, the company's biggest cost not related to interest, was $372.4 million in the quarter, up 14 percent from the same period a year ago. Full-time staffing was 15,100, up 4 percent from a year ago. In 2012, the company cut 700 jobs worldwide.
Revenue was $1.08 billion, up 6 percent.
Assets under custody and assets under management are primary drivers of Northern Trust's investment and servicing fees. Northern Trust had $924.4 billion in assets under management as of June 30, up 15 percent from the same period a year ago.
As a result, its trust, investment and servicing fees were up, primarily due to a hotter stock market and new business, but partly offset by Northern Trust waiving more customer fees due to persistently low interest rates.
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