Group 1 - The global stock markets have positively impacted custody banks' earnings, with Northern Trust Corporation benefiting from increased asset-based fees [1] - Northern Trust Corporation's earnings per share have risen due to the favorable market conditions [1]

Core Insights - Global stock markets have experienced significant growth, positively impacting investors' portfolios and benefiting custody banks' earnings [1] - Northern Trust Corporation (NTRS) has capitalized on this trend, with increased asset-based fees contributing to a rise in earnings per share [1] Company Performance - Northern Trust Corporation has seen a boost in earnings per share due to favorable market conditions [1] - The bank's performance is linked to the overall buoyancy in the stock market, which has enhanced its revenue from asset-based fees [1]

Core Viewpoint - Northern Trust Corporation (NTRS) has shown strong performance over the past year, with a share price increase of 34% attributed to rising markets and elevated interest rates [1] Company Performance - The trust and custody bank has benefited from favorable market conditions, which have positively impacted its operations and financial performance [1] Investment Strategy - The article highlights a contrarian investment approach based on macro views and stock-specific turnaround stories, aiming for outsized returns with a favorable risk/reward profile [1]

Core Insights - Northern Trust Corporation (NTRS) reported a revenue of $2.12 billion for the quarter ended December 2025, marking an 8.3% year-over-year increase and exceeding the Zacks Consensus Estimate of $2.07 billion by 2.41% [1] - The company's earnings per share (EPS) for the same period was $2.69, up from $2.26 a year ago, representing a surprise of 13.44% compared to the consensus estimate of $2.37 [1] Financial Performance Metrics - Tier 1 Leverage Ratio stood at 7.8%, surpassing the four-analyst average estimate of 7.6% [4] - Net interest margin (FTE) was reported at 1.8%, higher than the estimated 1.7% by four analysts [4] - Average balance of total earning assets was $143.04 billion, exceeding the three-analyst average estimate of $142.52 billion [4] - Nonaccrual loans and leases amounted to $76.7 million, compared to the average estimate of $64.77 million based on two analysts [4] Wealth Management and Servicing Fees - Wealth Management Trust, Investment and Other Servicing Fees for Global Family Office reached $107.3 million, slightly below the estimated $107.62 million but reflecting a 6.6% year-over-year increase [4] - Total Wealth Management Trust, Investment and Other Servicing Fees were $577.8 million, compared to the estimated $580.74 million, showing a 5.7% year-over-year increase [4] - Asset Servicing Trust, Investment and Other Servicing Fees for Custody and Fund Administration were $496.4 million, exceeding the average estimate of $488.71 million, with an 8.7% year-over-year change [4] - Total Asset Servicing Trust, Investment and Other Servicing Fees reached $729.6 million, slightly above the estimated $720.83 million, representing an 8% year-over-year increase [4] - Securities Lending fees were reported at $23.1 million, surpassing the average estimate of $21.54 million, with a year-over-year increase of 13.2% [4] - Other Asset Servicing Trust fees were $44.3 million, compared to the estimated $43.18 million, reflecting a 7.3% year-over-year increase [4] - Investment Management fees were $165.8 million, slightly below the estimated $167.41 million, with a year-over-year increase of 5.7% [4] - Net Interest Income (FTE Adjusted) was reported at $654.3 million, exceeding the average estimate of $604.24 million based on four analysts [4] Stock Performance - Shares of Northern Trust have returned +2.6% over the past month, outperforming the Zacks S&P 500 composite's +0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - The company has implemented significant operational changes to enhance efficiency and scalability, including a client-centric operating model that standardizes processes and promotes AI-driven automation [1][5] - Financial performance for the full year showed a 7% increase in revenue and a 5% increase in expenses, resulting in a 30% pretax margin and a 14.8% return on equity [3][19] - The company returned $1.9 billion to shareholders in 2025, including a record $1.3 billion in share repurchases, reducing the share count by 5% [3][32] Operational Enhancements - The chief operating officer's organization increased managerial spans of control by over 35% and reduced management layers by over 20%, improving speed and accountability [1] - The deployment of AI in high-volume activities has led to productivity savings representing more than 4% of the expense base, with plans to increase productivity targets by 10% for 2026 [5] - The company has strengthened its risk technology and operational foundations, enhancing cybersecurity and modernizing key software platforms [5] Business Unit Performance - Wealth management showed strong momentum, particularly in the global family office (GFO) segment, achieving record new business and a 15% increase in international contributions [6][20] - Asset servicing ended the year with improved organic growth and profitability, with assets under custody and administration increasing by 11% year over year [22][23] - Capital markets performed well, with private markets revenue up 18% over the prior year, solidifying the company's position with hedge fund managers [9] Financial Results - In the fourth quarter, net income was $466 million, with earnings per share of $2.42 and a return on average common equity of 15.4% [15] - Trust, investment, and other servicing fees totaled $1.3 billion, reflecting a 7% year-over-year increase, while net interest income reached a record $654 million, up 14% from the previous year [17] - The effective tax rate for the fourth quarter was 26.5%, with expectations for a similar rate in 2026 [18] Strategic Focus - The company aims to maintain a pretax margin of 33% and a return on equity in the mid-teens, with a focus on generating attractive returns on capital and double-digit EPS growth [13][31] - There is a commitment to organic growth, with potential for selective acquisitions to bolster the asset management business [49][58] - The company is focused on enhancing its product offerings, particularly in alternatives and customized investment solutions, to meet client demand [11][12]

Financial Data and Key Metrics Changes - In Q4 2025, net income was $466 million, with earnings per share (EPS) of $2.42, and return on average common equity was 15.4% [18] - Trust fees grew by 7%, net interest income (NII) increased by 14%, and revenue was up 9% year-over-year, excluding notable items [5][21] - For the full year, revenue rose by 7%, expenses grew by 5%, resulting in a pre-tax margin of 30% and a 14.8% return on equity [5][29] Business Line Data and Key Metrics Changes - Wealth Management saw assets under management (AUM) reach $507 billion, up 13% year-over-year, with trust fees increasing by 6% [22] - Asset Servicing reported assets under custody and administration of $17.4 trillion, reflecting an 11% year-over-year increase, with fees totaling $730 million, an 8% increase [24] - Asset Management maintained strong liquidity flows, with AUM in liquidity reaching nearly $340 billion, marking the 12th consecutive quarter of positive flows [14][15] Market Data and Key Metrics Changes - The company experienced favorable currency movements, positively impacting revenue growth by approximately 90 basis points [18] - The effective tax rate increased to 26.5%, primarily due to higher tax impacts from international operations [19] Company Strategy and Development Direction - The company is focused on its "One Northern Trust" strategy, aiming for optimized growth, productivity improvements, and enhanced resiliency [5][9] - Significant investments in AI-driven automation and operational efficiency are expected to drive productivity savings and support future growth [9][10] - The company plans to enhance its Wealth Management and Asset Servicing businesses, particularly in the ultra-high net worth segment and capital markets [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving medium-term financial targets, citing strong market conditions and effective execution of strategic initiatives [5][17] - The company anticipates continued positive operating leverage and aims to return over 100% of earnings to shareholders [31] - Management acknowledged the need to adapt to changing market conditions while maintaining flexibility in expense management [31] Other Important Information - The company returned $1.9 billion to shareholders in 2025, including a record $1.3 billion in share repurchases [6][30] - The company aims to maintain a pre-tax margin of 33% and a return on equity in the mid-teens as part of its financial targets [17] Q&A Session Summary Question: Can you speak to your conviction in driving change across the organization? - Management expressed high conviction in the ongoing changes across the company, noting early signs of financial results from these efforts [34][35] Question: What drove the lower cost on the interest-bearing side? - Management indicated that the growth in non-interest-bearing deposits was influenced by seasonal factors and cash stockpiling due to the government shutdown [36][38] Question: What does the fee growth outlook look like for 2026? - Management expects mid-single-digit revenue growth for 2026, driven by strong performance in the Global Family Office segment and family office solutions [43][45] Question: How does the company view potential acquisitions in Asset Management? - Management remains focused on organic growth but is open to acquisitions that align with their strategy, particularly in alternatives and distribution [49][50] Question: What is the outlook for the expense-to-trust-fee ratio? - Management confirmed that they consider the expense-to-trust-fee ratio when pricing new business and continuously assess client profitability [62][64] Question: How sustainable is the NII growth outlook? - Management believes they can maintain a stable net interest margin (NIM) in the 170s for 2026, with various levers available to optimize the balance sheet [66]

Financial Data and Key Metrics Changes - In Q4 2025, net income was $466 million, with earnings per share (EPS) of $2.42 and a return on average common equity of 15.4% [18] - Trust fees grew by 7%, net interest income (NII) increased by 14%, and revenue was up 9% year-over-year, excluding notable items [5][21] - For the full year, revenue rose by 7%, expenses grew by 5%, resulting in a pre-tax margin of 30% and a 14.8% return on equity [5][29] Business Line Data and Key Metrics Changes - Wealth Management saw assets under management (AUM) reach $507 billion, up 13% year-over-year, with trust fees increasing by 6% [22] - Asset Servicing reported assets under custody and administration of $17.4 trillion, reflecting an 11% year-over-year increase, with asset servicing fees totaling $730 million, an 8% increase [24] - Asset Management (NTAM) maintained strong liquidity flows, with AUM in liquidity reaching nearly $340 billion, marking the 12th consecutive quarter of positive flows [14][15] Market Data and Key Metrics Changes - The company experienced strong market conditions, contributing to the growth in trust fees and net interest income [6] - The international markets contributed significantly to the growth, with the Global Family Office (GFO) segment seeing a 15% increase in contributions from international markets [10] Company Strategy and Development Direction - The company is focused on executing its "One Northern Trust" strategy, which aims to enhance collaboration across business units and improve operational efficiency through AI-driven automation [7][9] - The strategy includes expanding private markets and capital markets penetration, which now contributes over one-third of enterprise revenue [7] - The company plans to raise its productivity target by 10% for 2026, supported by ongoing initiatives and broader AI deployment [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain strong financial performance and achieve double-digit EPS growth through cycles [17] - The effective tax rate is expected to remain stable at approximately 26%-26.5% in 2026, with a focus on generating positive operating leverage [19][31] - Management highlighted the importance of maintaining a strong capital position while pursuing organic growth and selectively considering acquisitions [61] Other Important Information - The company returned $1.9 billion to shareholders in 2025, including a record $1.3 billion in share repurchases, reducing the share count by 5% [6][30] - The company recorded $69 million in net unfavorable notable items in Q4, impacting overall financial results [20] Q&A Session Summary Question: Can you speak to your conviction in driving change across the organization and the timing of financial results? - Management expressed high conviction in the ongoing changes and expects to see consistent high performance as a result of these efforts [34][36] Question: What drove the lower cost on the interest-bearing side? - Management noted that the growth in non-interest-bearing deposits was influenced by seasonal factors and cash stockpiling due to the government shutdown [38][39] Question: What does the fee growth outlook look like for 2026? - Management anticipates mid-single-digit revenue growth, driven by strong performance in the Global Family Office segment and family office solutions [44][46] Question: How does the company view potential acquisitions in asset management? - Management is open to acquisitions but primarily focused on organic growth, particularly in alternatives and expanding distribution [50][51] Question: What is the outlook for the expense-to-trust-fee ratio? - Management indicated that they consider the expense-to-trust-fee ratio when pricing new business and continuously assess client profitability [63][65] Question: How sustainable is the NII growth outlook? - Management believes they can maintain a stable net interest margin (NIM) in the 170s for 2026, with various levers available to optimize the balance sheet [66][68]

Financial Data and Key Metrics Changes - In Q4 2025, net income was $466 million, with earnings per share (EPS) of $2.42 and a return on average common equity of 15.4% [15] - Trust, investment, and other servicing fees totaled $1.3 billion, reflecting a 7% year-over-year increase [15] - Net interest income increased by 14% year-over-year to $654 million, marking a record high [16] - For the full year, revenue rose by 7%, while expenses grew by 5%, resulting in a pre-tax margin of 30% and a 14.4% return on equity [24] Business Line Data and Key Metrics Changes - Wealth Management saw assets under management reach $507 billion, up 13% year-over-year, with trust fees increasing by 6% in Q4 [18] - Asset Servicing reported assets under custody and administration of $17.4 trillion, an 11% year-over-year increase, with asset servicing fees totaling $730 million, up 8% [20] - Asset Management (NTAM) maintained strong liquidity, with liquidity AUM reaching nearly $340 billion, marking the 12th consecutive quarter of positive flows [12] Market Data and Key Metrics Changes - The Global Family Office (GFO) segment achieved record new business in 2025, with international contributions up 15% [8] - Capital markets activities were robust, contributing to strong performance in asset servicing [20] - The company experienced favorable currency movements that positively impacted revenue growth by approximately 90 basis points [15] Company Strategy and Development Direction - The company is focused on its "One Northern Trust" strategy, aiming for optimized growth, productivity improvements, and enhanced resiliency [4][6] - Plans for 2026 include raising productivity targets by 10% and continuing to invest in AI-driven automation [7] - The company aims to maintain a pre-tax margin of 33% and return on equity in the mid-teens as part of its medium-term financial targets [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver consistent high performance and achieve financial targets, citing strong market conditions [4][29] - The effective tax rate is expected to remain stable at approximately 26%-26.5% in 2026 [16] - Management highlighted the importance of maintaining flexibility in expense growth while focusing on positive operating leverage [26] Other Important Information - The company returned $1.9 billion to shareholders in 2025, including a record $1.3 billion in share repurchases [5][25] - The company recorded $69 million in net unfavorable notable items in Q4, impacting overall financial results [17] Q&A Session Summary Question: Can you speak to your conviction in driving change across the organization? - Management expressed high conviction in seeing changes across the company and expects continued high performance as a result of executing the strategy [28] Question: Can you speak to what drove the lower cost on the IB side? - Management noted that the growth in non-interest-bearing deposits was influenced by seasonal factors and cash stockpiling due to the government shutdown [30] Question: What does that imply for fee growth this year? - Management anticipates mid-single-digit revenue growth for 2026, driven by strong performance in the Global Family Office segment and asset servicing [34] Question: How do you think about the split between the two businesses? - Management indicated that while asset servicing margins need improvement, wealth management has attractive margins and is expected to grow faster [55]

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分组1 - Northern Trust Corporation (NTRS) reported quarterly earnings of $2.69 per share, exceeding the Zacks Consensus Estimate of $2.37 per share, and up from $2.26 per share a year ago, representing an earnings surprise of +13.44% [1] - The company posted revenues of $2.12 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 2.41%, and compared to year-ago revenues of $1.96 billion [2] - Northern Trust has outperformed the S&P 500, with shares increasing about 5.7% since the beginning of the year, while the S&P 500 gained 0.4% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $2.17 on revenues of $2.07 billion, and for the current fiscal year, it is $9.58 on revenues of $8.45 billion [7] - The Zacks Industry Rank for Banks - Major Regional is currently in the top 40% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]