Northern Trust Corporation · NASDAQ:NTRS
Northern Trust — BancAnalysts Association of Boston 26th Annual Fall Conference 2007
28 slides from Northern Trust's conference presentation, Nov 7, 2007
Slide 1: Northern Trust: Managing the Down Cycle
NORTHERN TRUST CORPORATION EXHIBIT 99.1 Northern Trust “Managing the Down Cycle” BancAnalysts Association of Boston - 26th Annual Fall Conference November 8, 2007 Boston, Massachusetts Steven L. Fradkin Executive Vice President & Chief Financial Officer © 2007 Northern Trust Corporation northerntrus
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation may include forward-looking statements such as statements that relate to Northern Trust’s financial goals, dividend policy, expansion and business development plans, anticipated expense levels and projected profit improvements, business prospects and posit
Slide 3: Conference Theme: Managing the Down Cycle
NORTHERN TRUST CORPORATION Conference Theme: “Managing the Down Cycle” 3
Slide 4: Northern Trust: Managing the Business Through All Cycles
NORTHERN TRUST CORPORATION Northern Trust: “Managing the Business Through All Cycles” 4
Slide 5: 20 Years of History: Economic Shocks & Cycles
20 Years of History: Economic Shocks & Cycles 2000: Y2K financial infrastructure scare; Start of 2-year stock 9/30/07 bear market 2004-05: S&P 500: Disastrous 1526.75 2003: hurricane Second seasons 1998: Persian LTCM collapse; Gulf War Russian debt default; (Iraq) Global currency crisis 1991: Soviet
Slide 6: 20 Years of History: Successfully Navigated by NTRS
20 Years of History: Successfully Navigated by NTRS NTRS Net Income ($ millions) 2000: $665 Y2K financial infrastructure scare; Start of 2-year stock 9/30/07 bear market 2004-05: $584 S&P 500: Disastrous 1526.75 2003: hurricane Second seasons 1998: Persian LTCM collapse; $506 Russian debt default; $
Slide 7: Macroeconomic Environment: A Current Perspective
NORTHERN TRUST CORPORATION Macroeconomic Environment: A Current Perspective How have financial institutions managed the recent exceptionally challenging macroeconomic environment? 7
Slide 8: Securities Write-downs
Securities Write-downs $7.9 billion on CDOs and subprime mortgages $3.6 billion on investments due to subprime crisis $2.2 billion in debt and equity trading operations, including mortgage‐backed securities and structured products $1.56 billion on loans and subprime mortgages $1 billion on mortgage-
Slide 9: Charge-offs on Illiquid Leveraged Loans
Charge-offs on Illiquid Leveraged Loans $1.5 billion $1.3 billion $1.35 billion $940 million $869 million $463 million $402 million $250 million 9 Giving Our Clients the Freedom to Focus on What Really Matters
Slide 10: Credit Quality Challenges
Credit Quality Challenges Credit costs increased nearly $3 billion due to a $740 million increase in credit losses and a $2.2 billion charge to increase loan loss reserves Nonperforming assets up 23% and provision for credit losses up 17% over last quarter Nonperforming assets up 50% over last quart
Slide 11: Tumultuous Third Quarter: Successfully Navigated by NTRS
Tumultuous Third Quarter: Successfully Navigated by NTRS NTRS’ No securities or leveraged loan write-downs Third Credit quality improved: nonperforming assets Quarter decreased and reserve ratios improved 2007: EPS: 11th consecutive quarter of double-digit, year- over-year growth Common Equi
Slide 12: Success Achieved Through Enduring Principles and Strategies
Success Achieved Through Enduring Principles and Strategies 9 Attractive Demographic Markets 9 Focused and Conservative Strategy 9 Client Centricity 9 Excellence in Execution 9 Consistent Leadership and Philosophy 12 Giving Our Clients the Freedom to Focus on What Really Matters
Slide 13: Northern Trust: Managing the Business Through All Cycles
NORTHERN TRUST CORPORATION Northern Trust: “Managing the Business Through All Cycles” 13
Slide 14: PFS: Extensive Reach in High Growth Affluent Market
Attractive Demographic Markets PFS: Extensive Reach in High Growth Affluent Market 85 Offices in 18 States Projected Annual Over 50% of millionaire market resides within Household Growth Rates a 45-minute drive of Northern Trust offices. 2006 - 2011 15.0% Washington (1) Minnesota (1) Michigan 10.4%
Slide 15: C&IS: A World of Vast and Growing Opportunities
Attractive Demographic Markets C&IS: A World of Vast and Growing Opportunities Europe $40 Trillion Total World United States Capital Market: $140 Trillion (1) $50 Trillion $28 Trillion Japan, Total Assets Under China Custody Worldwide: & India $22 $72 Trillion (2) Trillion Latin America, Mid-East &
Slide 16: C&IS: Positioned Globally for Growth
Attractive Demographic Markets C&IS: Positioned Globally for Growth Positioned to serve clients locally and capitalize on global opportunities. Chicago Toronto New Dublin Guernsey London Amsterdam Luxembourg (Corporate York Headquarters) Jersey Tokyo Beijing Hong Kong Bangalore Singapore Melbourne 1
Slide 17: Client-centric and Highly Focused
Focused and Conservative Client-centric and Highly Focused Northern Trust Clients Institutional Personal Clients Two Client Channels Clients Pension Funds Large Corporations Individuals Investment Management Firms Families Foundations / Endowments / Healthcare Insurance Companies Gov
Slide 18: Client-centric and Highly Focused
Focused and Conservative Client-centric and Highly Focused Northern Trust Clients Institutional Personal Two Client Some of the businesses we are Clients Clients Channels not in: •Sub-Prime Mortgage Pension Funds Underwriting Large Corporations Individuals •Credit Cards Investment Management
Slide 19: PFS: Our Focus on the Affluent Market is Unmatched
Focused and Conservative PFS: Our Focus on the Affluent Market is Unmatched Private Client Revenues (As a Percentage of Total Company Revenues, 2006) 45% 35% 28% 17% 13% 11% 11% 11% 8% 5% 5% Northern Merrill Wilmington Charles Mellon Goldman Citigroup Bank of Bank of JP Morgan Wachovia Trust Lynch T
Slide 20: C&IS: Significant Presence in Our Target Segments
Focused and Conservative C&IS: Significant Presence in Our Target Segments Pension Plans Public Funds / Taft-Hartley Northern Northern Of the Top Serves Of the Top Serves 100 U.S. Corporate Plans 40% 25 Taft-Hartley Funds 32% 200 U.S. Funds 37% 100 U.S. Public Funds 35% 200 U.K. Funds 27% U.K. Local
Slide 21: Prudent Balance Sheet Management
Focused and Conservative Prudent Balance Sheet Management Securities Portfolio – High Quality and Short Duration 96% of Northern Trust’s total securities portfolio was composed of AAA rated securities as of September 30, 2007. 75% of Earning Assets reprice or mature within one year. Top 20 Bank
Slide 22: The Northern Trust Difference
Client Centricity The Northern Trust Difference Clients are at the center of everything we do Unparalleled client service Innovative Leading-edge product technology leadership Client Solutions Sharp Culture business and focus heritage Consistent financial strength and stability 22 Giving Our Clients
Slide 23: PFS: Comprehensive Array of Solutions for Clients
Client Centricity PFS: Comprehensive Array of Solutions for Clients Private Banking Financial Planning Wealth Management Group Personal Credit Lines and Swing Retirement Planning Family Office Support Loans Estate Planning Multi-generational Wealth Management Real Estate Development Loan
Slide 24: C&IS: Extensive Suite of Product Solutions for Clients
Client Centricity C&IS: Extensive Suite of Product Solutions for Clients Cash Manager of Managers Asset Active Foreign Exchange Asset Management Passive Transition Management Management Securities Lending Commission Management Asset Risk Attribution Analysis Compliance Monitoring
Slide 25: NTGI: A Continuum of Proprietary & External Solutions
Client Centricity NTGI: A Continuum of Proprietary & External Solutions Multi-Advisor Funds PRODUCT BREADTH Hedge Funds Private Equity Canadian & UK Programs Active Investment Management Int’l/US Equity Manager of Managers Growth & Value Equity Minority and Emerging Managers Investment Program Sol
Slide 26: NTRS: Outstanding Financial Performance in 2007
Excellence in Execution NTRS: Outstanding Financial Performance in 2007 Year-to-Date % Growth 9/30/07 2006 to 2007 Trust, Inv. & Other Servicing Fees $1,530 Million +15% Other Non-Interest Income $421 Million +16% Net Interest Income $647 Million +10% Total Revenues $2,599 Million +14% Non-Interest
Slide 27: Well Positioned for Growth
Consistent Leadership and Philosophy Well Positioned for Growth Rich History 118 Year Heritage — Undiluted by Mergers & Acquisitions Focused and Conservative Strategy Exclusively Focused on the Management and Administration of Client Assets Attractive Demographic Markets Serving highly a
Slide 28: Northern Trust: Managing the Business Through All Cycles
NORTHERN TRUST CORPORATION Northern Trust “Managing the Business Through All Cycles” BancAnalysts Association of Boston - 26th Annual Fall Conference November 8, 2007 Boston, Massachusetts Steven L. Fradkin Executive Vice President & Chief Financial Officer © 2007 Northern Trust Corporation northern
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