Northern Trust Corp. is officially no longer “bailed out.”
Chicago’s largest bank announced today that it has repaid the federal government $1.58 billion, repurchasing the preferred shares it issued last fall as part of the Troubled Asset Relief Program, or TARP. Northern is one of 10 big U.S. banks exiting the TARP program today.
Northern CEO Rick Waddell said in a news release that the program “played a necessary role in helping to stabilize the financial system during a period of crisis, and Northern Trust was proud to participate in the program as a strong, well-capitalized bank. . . .We would like to take this opportunity to once again acknowledge the taxpayers’ support of the financial system during these difficult times.”
Northern isn’t off the hook, however. The Treasury Department still has warrants to buy up to 3.8 million shares of Northern stock at $61.81 per share over the next decade. Northern has informed the department of its desire to repurchase those warrants.
Redemption of the preferred shares will reduce Northern’s second-quarter net income by about $68.6 million, the company said.
Shares of Northern Trust closed down $1.58, or 3%, at $51.15.
Steve Daniels is a reporter at Crain's Chicago Business, a sister publication of Pensions & Investments
