Financial Performance - Total revenue for Q1 2025 increased to $1.94 billion, an 18% increase from $1.65 billion in Q1 2024[14] - Net income for Q1 2025 was $392.0 million, representing an 83% increase compared to $214.7 million in Q1 2024[14] - Noninterest income rose to $1.37 billion, a 23% increase from $1.12 billion in the previous year[8] - Net interest income increased to $568.1 million, an 8% rise from $528.1 million in Q1 2024[14] - Noninterest expense for Q1 2025 was $1.42 billion, a 4% increase from $1.36 billion in Q1 2024[14] - Return on average common equity improved to 13.0% in Q1 2025, up from 7.3% in Q1 2024[9] Asset Management - Total Assets Under Custody/Administration reached $16,924.0 billion, a 1% increase from the prior quarter and a 3% increase year-over-year[27] - Total Assets Under Management stood at $1,607.8 billion, unchanged from the prior quarter but up 7% from the prior-year quarter[32] - Wealth Management fee income rose due to favorable markets, with Global Family Office fee income increasing from asset inflows[22] - Total Asset Servicing Trust, Investment and Other Servicing Fees increased to $1,213.8 million in Q1 2025, up 6% from $1,142.9 million in Q1 2024[19] Credit and Provisioning - Provision for credit losses was $1.0 million, compared to a negative provision of $8.5 million in the prior-year quarter[16] - The negative Provision for Credit Losses was $0.9 million for the quarter ended March 31, 2025, compared to a negative $1.7 million in the prior-year quarter[81] - Net recoveries in the current quarter were $0.2 million, compared to $10.4 million net charge-offs in the prior-year quarter[58] Liquidity and Capital - The Common Equity Tier 1 capital ratio for Northern Trust Corporation was 12.9% as of March 31, 2025, up from 12.4% at December 31, 2024[127] - Northern Trust's liquidity position remained strong, with 66% of total assets consisting of highly liquid assets as of March 31, 2025, compared to 62% at December 31, 2024[131] Interest Income and Rates - Net Interest Income (NII) for Q1 2025 was $568.1 million, an increase from $528.1 million in Q1 2024, reflecting a year-over-year growth of 7.5%[152] - The average interest rate on Loans decreased to 5.68% from 6.34% in the prior-year quarter[46] - Average Interest-Bearing Deposits rose by $3.3 billion, or 4%, to $99.0 billion compared to the prior-year quarter[55] Market Performance - The S&P 500 index increased by 18% year-over-year, contributing positively to the Corporation's results[24] - Other Noninterest Income totaled $158.1 million, a significant increase from a loss of $24.2 million in the prior year[38] Cash Flow - Net cash provided by operating activities for the three months ended March 31, 2025, was $2,749.8 million, a significant improvement from a net cash used of $1,452.6 million in the same period of 2024[116][117] - Net cash used in investing activities rose to $10,285.4 million for the three months ended March 31, 2025, compared to $4,793.4 million in the same period of 2024, indicating increased investment activity[119][120] Securities and Investments - Total Debt Securities amounted to $51.3 billion as of March 31, 2025, with 87% rated AAA and 8% rated AA[95] - The total available for sale debt securities amounted to $29,001.5 million as of December 31, 2024, with U.S. Government securities comprising 96% of the total[96] Other Income - Total Other Noninterest Income for Q1 2025 was $158.1 million, a significant increase of $182.3 million compared to a loss of $24.2 million in Q1 2024[38] - Foreign Exchange Trading Income rose to $58.7 million, reflecting a 3% increase from $57.0 million in the prior year[38]

Financial Data and Key Metrics Changes - The company reported a first quarter net income of $392 million and earnings per share (EPS) of $1.90, with a return on average common equity of 13% [22][24] - EPS, excluding notable items, increased by 13% year-over-year, while expenses rose by 3% sequentially and 4.8% year-over-year [8][26][34] - The company generated a return on common equity of 13% and returned $435 million to shareholders through dividends and stock repurchases [8][38] Business Line Data and Key Metrics Changes - Trust investment and other servicing fees totaled $1.2 billion, reflecting a 1% sequential decline but a 6% increase compared to the previous year [24] - Asset servicing fees amounted to $672 million, with custody and fund administration fees up 4% year-over-year [27][28] - Wealth management assets under management were $447 billion, up 6% year-over-year, with trust investment and other servicing fees increasing by 8% [30] Market Data and Key Metrics Changes - Assets under custody and administration increased by 1% sequentially and 3% year-over-year, while assets under management were flat sequentially but up 7% year-over-year [24][29] - The company experienced a healthy increase in deposit levels as clients adopted a risk-off approach, leading to positive liquidity flows [15][32] Company Strategy and Development Direction - The company is focused on optimizing growth through collaboration between business units and advancing enterprise-wide growth initiatives, particularly in alternative investment solutions and family office services [10][11] - The launch of Family Office Solutions aims to enhance service offerings for ultra-high-net-worth clients, targeting individuals with over $100 million in net worth [13][60] - The company is also investing in technology to improve operational efficiency and productivity, including the deployment of machine learning and automation [100][101] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a challenging macroeconomic environment, highlighting the strength of the balance sheet and the ability to meet evolving client needs [20][19] - The company anticipates continued strong deposit levels and stable deposit mix, raising its full-year net interest income guidance from low single-digit growth to low to mid-single-digit growth [39][40] Other Important Information - The company reported a common equity Tier 1 ratio of 12.9%, indicating strong capital levels well above regulatory minimums [37] - The unrealized pretax loss on available-for-sale securities was $527 million, with a payout ratio of 116% reflecting the company's commitment to returning capital to shareholders [38] Q&A Session Summary Question: NII guidance and deposit beta assumptions - Management indicated that deposit betas remain stable, with institutional business closer to 100% and wealth business around 60-70% [44][45] Question: Fee outlook and expense management - Management reaffirmed the commitment to keep expense growth below 5%, with flexibility to adjust discretionary spending as needed [47][48] Question: Capital markets activity and its continuation - Management noted that increased market volatility has driven capital markets activity, particularly in foreign exchange and brokerage services [55][56] Question: Family Office Solutions and its market potential - Management highlighted the large addressable market for ultra-high-net-worth clients and the ongoing hiring to support growth in this segment [80][81] Question: Impact of market volatility on new business and client attrition - Management acknowledged that market volatility can influence client decision-making, but noted no significant impacts observed yet [136][137]

Core Viewpoint - Northern Trust Corporation (NTRS) reported strong first-quarter 2025 adjusted earnings per share (EPS) of $1.90, exceeding the Zacks Consensus Estimate of $1.85, and up from $1.70 in the prior-year quarter [1][2] Financial Performance - NTRS's net income on a GAAP basis was $392 million, reflecting an 82.5% increase from the prior-year quarter [2] - Total revenues on a GAAP basis reached $1.94 billion, a 17.6% year-over-year increase, although it slightly missed the Zacks Consensus Estimate by 0.3% [3] - Net interest income (NII) was $573.7 million, up 7% year over year, with a net interest margin of 1.69%, an increase of 8 basis points from the prior-year quarter [3] - Trust, investment, and other servicing fees totaled $1.21 billion, marking a 6% year-over-year increase [3] Non-Interest Income and Expenses - Other non-interest income was $158.1 million, a significant recovery from a loss of $24.2 million in the year-ago quarter, driven by increases in all components except for other operating income [4] - Non-interest expenses rose 4% to $1.42 billion, primarily due to increases in compensation, employee benefits, and equipment and software expenses [4] Assets Under Custody and Management - As of March 31, 2025, total assets under custody (AUC) increased 4% year over year to $13.3 trillion, while total assets under management (AUM) rose 7% to $1.6 trillion [5] Credit Quality - The total allowance for credit losses was $207.3 million, up 3% year over year, with total non-accrual assets increasing to $73.1 million from $37 million in the prior-year period [6] - Provisions for credit losses were reported at $1 million in the first quarter, compared to a negative provision of $8.5 million in the year-ago quarter [6] Capital and Profitability Ratios - The Common Equity Tier 1 capital ratio improved to 12.9% from 11.4% in the prior-year quarter, while the total capital ratio rose to 15.7% from 14.2% [7] - The Tier 1 leverage ratio increased to 8% from 7.8%, and the return on average common equity was 13%, compared to 7.3% in the year-earlier quarter [7] Capital Distribution - In the reported quarter, Northern Trust returned $435.4 million to shareholders through share repurchases and dividends [8] Overall Assessment - The rise in fee income and NII contributed positively to the company's performance, with increasing AUC and AUM likely to support future financials. However, concerns remain regarding weakening asset quality and rising expenses [9][10]

NORTHERN TRUST CORPORATION First Quarter 2025 Quarterly Earnings Review northerntrust.com / © 2025 Northern Trust 135 years of strength, stability & stewardship Disciplined, client-centric strategy Highest standards of client service Product leadership & innovative services Solutions-focused technology & integrated operating platform northerntrust.com / © 2025 Northern Trust 2 FINANCIAL HIGHLIGHTS northerntrust.com / © 2023 Northern Trust northerntrust.com / © 2025 Northern Trust 33 Financial Highlights & K ...

Core Insights - Northern Trust Corporation (NTRS) reported revenue of $1.94 billion for Q1 2025, a year-over-year increase of 17.8% and an EPS of $1.90 compared to $1.70 a year ago [1] - The revenue was slightly below the Zacks Consensus Estimate of $1.95 billion, resulting in a surprise of -0.34%, while the EPS exceeded the consensus estimate of $1.85 by +2.70% [1] Financial Performance Metrics - Tier 1 Leverage Ratio was reported at 8%, slightly below the estimated 8.1% [4] - Net interest margin (FTE) was in line with estimates at 1.7% [4] - Average balance of total earning assets was $138.01 billion, exceeding the estimate of $134.09 billion [4] - Nonaccrual loans and leases were reported at $73.10 million, higher than the average estimate of $55.64 million [4] Wealth Management and Servicing Fees - Wealth Management Trust, Investment and Other Servicing Fees for Global Family Office were $103.80 million, a +9% year-over-year change, exceeding the estimate of $100.76 million [4] - Total Wealth Management Trust, Investment and Other Servicing Fees were $541.90 million, representing a +7.7% change year-over-year, slightly above the estimate of $539.37 million [4] - Asset Servicing Trust, Investment and Other Servicing Fees for Custody and Fund Administration were $453.30 million, a +3.8% year-over-year change, surpassing the estimate of $447.04 million [4] - Total Asset Servicing Trust, Investment and Other Servicing Fees were $671.90 million, reflecting a +5.1% year-over-year change, above the estimate of $667.50 million [4] Stock Performance - Northern Trust shares have returned -14.5% over the past month, compared to the Zacks S&P 500 composite's -8.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Northern Trust (NTRS) Q1 2025 Earnings Call April 22, 2025 09:00 AM ET Company Participants Jennifer Childe - Senior VP & Director of Investor RelationsMichael O'grady - Chairman & CEODavid Fox - Chief Financial OfficerSteven Chubak - Managing DirectorBetsy Graseck - Managing DirectorMike Mayo - Managing DirectorEbrahim Poonawala - Managing Director - Head of North American Banks ResearchGerard Cassidy - Managing DirectorDavid Smith - Vice President Equity ResearchAlex Blostein - Managing Director Conferenc ...

Core Viewpoint - Northern Trust Corporation reported quarterly earnings of $1.90 per share, exceeding the Zacks Consensus Estimate of $1.85 per share, and showing an increase from $1.70 per share a year ago, indicating a positive earnings surprise of 2.70% [1] Financial Performance - The company posted revenues of $1.94 billion for the quarter ended March 2025, which was slightly below the Zacks Consensus Estimate by 0.34%, but an increase from $1.65 billion year-over-year [2] - Over the last four quarters, Northern Trust has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Northern Trust shares have declined approximately 15.3% since the beginning of the year, compared to a decline of 12.3% for the S&P 500 [3] - The current Zacks Rank for Northern Trust is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2 on revenues of $1.95 billion, and for the current fiscal year, it is $7.88 on revenues of $7.79 billion [7] - The estimate revisions trend for Northern Trust is mixed, and future changes in estimates will be closely monitored following the recent earnings report [6][7] Industry Context - The Banks - Major Regional industry, to which Northern Trust belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Northern Trust Corporation reported a net income of $392.0 million for Q1 2025, a decrease of 17% compared to the previous year[4]. - Basic earnings per share (EPS) for Q1 2025 was $1.91, down from $2.27 in Q1 2024, reflecting a decline of 16%[4]. - The return on average common equity for Q1 2025 was 13.0%, compared to 17.4% in Q1 2024, indicating a significant drop in profitability[4]. - Total revenue for Q1 2025 reached $1,945.6 million, an increase of 18% compared to $1,654.1 million in Q1 2024[5]. - Net income surged to $392.0 million, reflecting an 83% increase from $214.7 million in the same quarter last year[5]. - Earnings per share (EPS) increased significantly to $1.91, up 99% from $0.96 in Q1 2024[5]. - Total revenue (GAAP) for 2023 was $6,773.5 million, compared to $6,761.2 million in 2022, indicating a slight increase[28]. - Income before income taxes (GAAP) for 2023 was $1,464.8 million, down from $1,766.3 million in 2022, representing a decrease of about 17.1%[28]. Revenue Composition - Noninterest income as a percentage of total revenue was 70.5% in Q1 2025, down from 73.5% in Q1 2024[4]. - Trust fees accounted for 62.4% of total revenue in Q1 2025, a decrease from 65.1% in Q1 2024[4]. - Total Noninterest Income for 2023 was $4,791.5 million, compared to $4,874.0 million in 2022, indicating a decline of approximately 1.7%[7]. - Noninterest income to total revenue is expected to be 73.7% GAAP in 2024, up from 70.7% in 2023[32]. Tax and Expenses - The effective tax rate for Q1 2025 was 24.8%, slightly up from 24.5% in the previous quarter[4]. - Total taxes (FTE) increased by 62% to $135.0 million, compared to $83.2 million in Q1 2024[5]. - Provision for income taxes (FTE) for 2023 was $415.0 million, compared to $475.9 million in 2022, showing a decrease of approximately 12.8%[28]. - Total Noninterest Expense for 2023 was $5,284.2 million, an increase from $4,982.9 million in 2022, indicating a rise of approximately 6.1%[7]. Capital and Equity - The total capital ratio for Q1 2025 was 15.7%, up from 15.1% in Q4 2024, indicating improved capital strength[4]. - Cash dividends declared per common share remained steady at $0.75 for Q1 2025, with a dividend payout ratio of 39%[4]. - Common equity increased by 7% to $11,993.6 million compared to $11,216.9 million last year[11]. - Total stockholders' equity grew by 6% to $12,878.5 million from $12,101.8 million[11]. Asset and Liability Management - Total assets increased by 6% to $165,071.2 million from $156,111.0 million year-over-year[11]. - Total liabilities rose by 6% to $152,192.7 million from $144,009.2 million[11]. - Loans decreased by 14% to $40,833.3 million, down from $47,342.6 million[11]. - Total interest-bearing deposits increased by 11% to $109,120.3 million from $98,614.8 million[11]. Future Outlook - The company expects Total Revenue to increase to $8,322.2 million by 2024, representing a projected growth of about 21.8%[7]. - The company anticipates an increase in Net Interest Income to $2,208.9 million in 2024, up from $2,039.5 million in 2023, reflecting a growth of about 8.3%[7]. - The company expects continued growth in Assets Under Management, projecting an increase to $16,472.5 billion in 2025[23]. - Future outlook includes continued focus on market expansion and potential new product developments[16]. Credit Quality - Provision for credit losses was $1.0 million, a significant improvement from a provision of $(8.5) million in Q1 2024[5]. - The allowance for credit losses was $(175.6) million in Q4 2024, slightly improved from $(192.9) million in Q4 2023[13]. - The total allowance for credit losses at the end of the first quarter of 2024 was $206.1 million, slightly down from $220.4 million at the end of 2023[21]. - The ratio of nonaccrual assets to loans and leases was 0.39% in the first quarter of 2024, compared to 0.31% in the previous quarter[21].

Core Viewpoint - Northern Trust Corporation (NTRS) is expected to report improved revenues and earnings for the first quarter of 2025, with a positive earnings surprise history and a consensus estimate indicating growth compared to the previous year [1][2][3]. Financial Performance Expectations - The Zacks Consensus Estimate for NTRS' first-quarter earnings is $1.85 per share, reflecting an 8.8% increase year-over-year [3]. - The consensus estimate for revenues is $1.95 billion, indicating an 18.2% year-over-year rise [3]. Key Factors Influencing Results - Net Interest Income (NII) is estimated at $561.3 million, showing a sequential decline of 0.5% due to higher funding costs amid unchanged interest rates [4]. - Average earning assets are projected at $134.1 billion, indicating a marginal rise from the previous quarter [6]. Non-Interest Income Insights - Custody and fund administration fees are estimated at $447 million, reflecting a 2% sequential decline, while investment management fees are pegged at $153 million, indicating a decline of 1.9% [7]. - Total wealth management fees are estimated at $543.4 million, showing a sequential fall of 1.3% [8]. Expense and Asset Quality Considerations - Expenses are expected to be high due to increased compensation and investments in equipment and software [9]. - Non-performing assets are estimated at $65.1 million, indicating a 16.2% rise sequentially [10]. Earnings Prediction Model - The current model does not predict an earnings beat for Northern Trust, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [11][12].

Core Insights - Northern Trust Corporation (NTRS) has consistently beaten earnings estimates, with an average surprise of 12.59% over the last two quarters [1][2] - The company reported earnings of $2.26 per share for the most recent quarter, exceeding the expected $2.02 per share, resulting in a surprise of 11.88% [2] - For the previous quarter, Northern Trust reported $1.96 per share against an estimate of $1.73 per share, achieving a surprise of 13.29% [2] Earnings Estimates and Predictions - Estimates for Northern Trust have been trending higher due to its history of earnings surprises, indicating positive analyst sentiment [5] - The stock has a positive Zacks Earnings ESP of +1.90%, suggesting analysts are optimistic about the company's earnings prospects [8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) indicates a strong possibility of another earnings beat in the upcoming report [8] Earnings ESP and Market Behavior - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [6] - The Earnings ESP metric compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [7] - A negative Earnings ESP does not necessarily indicate an earnings miss, but it does reduce predictive power [9]