An Open Letter to Northern Trust Shareholders, Clients and Staff:
February 24, 2009
In recent days, questions have been raised regarding Northern Trust's sponsorship of the Northern Trust Open, a PGA event that has raised millions of dollars for charities, along with client-focused events during the Open.
We understand this is a time of great anxiety and financial distress, and the question of supporting an event such as the Northern Trust Open is legitimate. We came to the conclusion that no public purpose would be served by canceling the Northern Trust Open and related events.
Here's why:
Northern Trust had net income last year of more than US$640 million, and paid for this event using normal operating funds.
No Capital Purchase Program funds were allocated for operating expenses, including marketing, advertising, corporate sponsorship or charitable activities.
Northern Trust did not seek the government's investment under the U.S. Treasury's Capital Purchase Program, but agreed to the government's goal of gaining the participation of all major banks in the United States.
Northern Trust pays dividends on Treasury's investment, and will continue to pay them until the capital is returned. Currently, Northern Trust pays the government US$78.8 million on an annual basis as a return on taxpayers' investment – almost US$20 million per quarter.
Capital Purchase Program funds are supporting high quality loan growth, benefiting both private and institutional clients. As of December 31, 2008, our loans and leases grew to more than US$30 billion, a 21% increase from December 31, 2007.
This is the second year of Northern Trust's five-year agreement to sponsor the Northern Trust Open. The tournament agreement was signed in 2007 and all associated contracts associated with client education and entertainment were signed months before the U.S. government’s Capital Purchase Program was contemplated.
During tournament week, more than 2,000 clients and prospects from around the globe participated in activities including three financial education seminars for our personal and institutional clients.
Over the past two years, Northern Trust has raised US$3 million dollars for the Los Angeles Junior Chamber of Commerce Charity Foundation and the many non-profit organizations it supports. Over its entire history, this tournament has raised more than US$50 million for the Los Angeles community.
At a time when economies worldwide are attempting to rise above current difficulties, it is important for healthy banks like Northern Trust to continue to invest in our clients and the communities we serve. We appreciate the support that you have given us and will continue to keep the lines of communication open.
Frederick H. Waddell
President and Chief Executive Officer
Northern Trust Corporation
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