Northern Trust plans to use its capital for smaller acquisitions rather than larger "transformational" ones, Frederick Waddell, chief executive, said at a securities conference sponsored by Goldman Sachs.

Waddell said Northern Trust’s first priority for excess capital would be deals in markets it already serves, Reuters reported.

He cited the recent acquisition of Los Angeles investment advisory firm, Waterline Partners.

Northern Trust has been the subject of takeover speculation after its third-quarter results trailed rivals. Waddell stressed the company's fiduciary culture in his remarks, but gave only a partial answer to a question from the audience about whether his bank's culture would make it challenging for another bank to buy Northern Trust, according to the news service.

"That depends on their culture," Waddell said. "I think culture is important in any kind of acquisition."