Northern Trust

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Northern Trust Corporation
Public company
Traded as NASDAQNTRS
S&P 500 Index component
Industry Financial services
Founded 1889; 129 years ago (1889)
Founder Byron Laflin Smith
Headquarters Chicago, Illinois, U.S.
Key people
Frederick H. Waddell
(Chairman)
Michael G. O'Grady
(President and CEO)
Products Private banking
Investment management
Wealth management
Revenue Increase $5.38 billion (2017)
Increase $1.20 billion (2017)
AUM Increase $1.161 trillion (2017)
Total assets Increase $138.590 billion (2017)
Total equity Increase $10.216 billion (2017)
Number of employees
18,100 (2017)
Website www.northerntrust.com
Footnotes / references
[1]
The company's headquarters building at 50 South LaSalle Street in the Financial District of Chicago

Northern Trust Corporation is a financial services company organized in Delaware and headquartered in Chicago, Illinois that caters to corporations, institutional investors, and high net worth individuals. The company has 85 offices in 18 US states and 20 countries. It is on the list of largest banks in the United States and the list of oldest banks in continuous operation. It is ranked 486th on the Fortune 1000.[2]

During its history of over 130 years, the company has only had 10 chief executive officers.

The company strives to give approximately 1.5% of its pre-tax profits to charities every year. In the 10 years preceding 2014, the company gave over $120 million in support of non-profit organizations.[3]

The company sponsors The Northern Trust, a PGA Tour event that is the first event in the FedEx Cup playoffs. For 9 years, until 2017, it was the sponsor of the Los Angeles Open PGA Tour event.

Current operations[edit]

Corporate and Institutional Services (C&IS)[edit]

C&IS is a global provider of custodian bank, fund administration, investment operations outsourcing, investment management, investment risk and analytical services, employee benefits services, securities lending, foreign exchange market, treasury management, brokerage firm services,; transition management services, banking, and cash management services to corporate and public pension funds, foundations, financial endowments, fund managers, insurance companies, sovereign wealth funds, and other institutional investors.[1]

Wealth Management[edit]

Over 20% of the wealthiest families in the United States are clients of the company's wealth management division. It provides personal trust, investment management, custodian bank, and philanthropic services; financial consulting; guardianship and estate administration; qualified retirement plans; and private and business banking. Wealth Management focuses on high-net-worth individuals and families, business owners, executives, professionals, retirees, and established privately held businesses in its target markets with assets typically exceeding $75 million. Wealth Management services are delivered through a network of 85 offices in 18 U.S. states as well as offices in London, Guernsey, and Abu Dhabi.[1]

Northern Trust Asset Management (NTAM)[edit]

Northern Trust Asset Management provides investment management services. Clients include institutional and individual separately managed accounts, bank common and collective funds, registered investment companies, non-U.S. collective investment funds and unregistered private investment funds. It offers both active management and passive management strategies for equity and fixed income investing, as well as alternative asset classes such as private equity and hedge funds and multi-manager products and services.

History[edit]

Northern Trust was founded in 1889 by Byron Laflin Smith in a one-room office in the Rookery Building in The Loop, Chicago, with a focus on providing trust and banking services for the city's prosperous citizens. It opened on Aug.12, 1889 with 7 accounts and $137,981.25 in deposits.[4] Smith provided 40% of the bank's original capitalization of $1 million, and the original 27 shareholders included such businessmen and civic leaders as Marshall Field, Martin A. Ryerson, and Philip D. Armour.

The company's headquarters building at 50 South LaSalle Street in the Financial District of Chicago was completed in 1905 and was designed by Frost and Granger.[5]

In March 1914, Byron Laflin Smith died and his son, Solomon Albert Smith, took over the bank.[6]

The company's conservative policies served it well during the 1920s and the company's assets actually grew during the Great Depression, while many other banks suffered from bank failure.[7][4]

By 1941, nearly half of all the bank's commercial accounts were drawn from outside the Chicago metropolitan area. During World War II, the company took part in the government's war bond drives and provided loans for manufacturing war materials under special government programs. The war created more opportunities for the bank; all sectors of its business expanded.[4]

During the 1950s, Northern spent heavily to develop automated banking services, including the first fully automated financial statements for trust clients.[4]

In October 1963, Solomon A. Smith died. Solomon Byron Smith became chairman of the executive committee and his brother, Edward Byron Smith, became chairman.[8]

In 1986, the bank acquired First Lake Forest Corporation for $61 million in cash.[9]

Edward Byron Smith retired as chief executive officer in 1979.[10] He was succeeded by E. Norman "Bud" Staub.[11] A few years later, Philip W. K. Sweet took over but he resigned in 1984.[12]

In 1984, Weston Christopherson, former CEO of Jewel, took the helm. He is credited with guiding the bank through a difficult period when sour loans to Latin American countries were hurting profits. When oil prices dropped suddenly in the early 1980s, many South American nations realized they could not pay off their enormous bank loans. The bank suffered uncharacteristically high losses. Aggressive management, loan reserves, and write-offs enabled the bank to restore its asset quality. During Christopherson's six years at Northern Trust, profits rose from $34 million to $113 million.[13] At the time of his retirement in 1990, the company was the 11th most profitable of the 100 largest banks in the United States.[14]

In 1990, company veteran David W. Fox became the 7th CEO of the ocmpany.[15]

William A. Osborn was named president and chief operating officer in 1993 and became chairman and chief executive officer, in addition to president, in 1995.[16][17]

Osbourne stepped down as president in 2006 and as CEO on January 1, 2008.[16][17] Frederick H. "Rick" Waddell then became president and CEO.[18]

Other than M&T Bank, Northern Trust was the only bank in the S&P 500 Index not to lower its dividend during the financial crisis of 2007–2008.[19]

In November 2008, the United States Department of the Treasury invested $1.5 billion in the company as part of the Troubled Asset Relief Program and in June 2009, the company repurchased the investment from the Treasury.[20] The company had been criticized for heavy spending on parties during a golf tournament that it sponsored, despite receiving government funds.[21]

On October 2, 2017, Northern Trust acquired UBS Asset Management’s fund administration servicing units in Switzerland and Luxembourg.[22]

Effective January 1, 2018, Michael O'Grady became chief executive officer of the company.[23]

References[edit]

  1. ^ a b c "Northern Trust Corporation 2017 Form 10-K Annual Report". U.S. Securities and Exchange Commission. 
  2. ^ "Fortune 500: Northern Trust". Fortune. 
  3. ^ Ochs, Alyssa (August 4, 2014). "Getting to Know Deborah Liverett and Northern Trust Grantmaking". Inside Philanthropy. 
  4. ^ a b c d "Gallery: Northern Trust celebrates 125 years in Chicago". Crain Communications. August 12, 2014. 
  5. ^ "Northern Trust Company Building". Chicago Architecture Info. 
  6. ^ "BYRON LAFLIN SMITH DEAD; Chicago Banker Succumbs to Heart Disease". The New York Times. March 23, 1914. (Subscription required (help)). 
  7. ^ "Business: Loop Flurry". Time. July 4, 1932. (Subscription required (help)). 
  8. ^ "Solomon Byron Smith, Retired Bank Official". Chicago Tribune. October 10, 1986. 
  9. ^ "Northern Trust". The New York Times. August 9, 1986. (Subscription required (help)). 
  10. ^ Potter, Will (July 2, 2002). "Edward Byron Smith, 93". Chicago Tribune. 
  11. ^ Jensen, Trevor (January 26, 2007). "E. Norman "Bud" Staub: 1916 - 2007". Chicago Tribune. 
  12. ^ Salpukas, Agis (April 18, 1984). "Chief to Step Down At Northern Trust". The New York Times. 
  13. ^ "Northern Trust Ceo Weston R. Christopherson". Chicago Tribune. June 1, 1994. 
  14. ^ "Weston Christopherson, Life Trustee". University of Chicago. June 9, 1994. 
  15. ^ Daniels, Steve (April 5, 2012). "David Fox Jr. joins Northern Trust". Crain Communications. 
  16. ^ a b Yue, Lorene (July 21, 2009). "Northern Trust's Osborn to retire". Crain Communications. 
  17. ^ a b Yerak, Becky (November 15, 2009). "William Osborn's 39-year career at Northern Trust Corp. comes to an end". Chicago Tribune. 
  18. ^ Daniels, Steve (November 20, 2008). "Northern Trust CEO elected to Chicago Fed board". Crain Communications. 
  19. ^ Engren, John (February 20, 2012). "M&T Bank's Bob Wilmers is Too Sharp to Fail". Institutional Investor. 
  20. ^ Daniels, Steve (June 17, 2009). "Northern Trust repays TARP $1.58B". Crain Communications. 
  21. ^ Weitzman, Hal (December 30, 2009). "Northern Trust says the party is over". Financial Times. 
  22. ^ "Northern Trust Completes Strategic Acquisition of UBS Asset Management's Fund Services Units in Luxembourg and Switzerland" (Press release). Business Wire. October 2, 2017. 
  23. ^ Cahill, Joe (October 20, 2017). "Northern Trust's biggest asset: dependability". Crain Communications. 

External links[edit]