Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying those that can fulfill their potential is challenging [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Northern Trust Corporation (NTRS) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being particularly desirable as it indicates strong future prospects [3] - Northern Trust's projected EPS growth for the current year is 9.9%, surpassing the industry average of 9.7% [4] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, allowing them to expand without relying on external funding [5] - Northern Trust's year-over-year cash flow growth is 14.4%, significantly higher than the industry average of -3.4% [5] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements [7] - Northern Trust has seen a 4.8% increase in current-year earnings estimates over the past month [8] Group 5: Overall Assessment - Northern Trust has achieved a Growth Score of B and a Zacks Rank 2, indicating it is a solid choice for growth investors [10]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) [Registrant Information](index=1&type=section&id=Registrant%20Information) Northern Trust Corporation filed its Form 10-Q for the quarterly period ended June 30, 2025. The company is a large accelerated filer and has filed all required reports - Registrant: **NORTHERN TRUST CORPORATION**, Delaware incorporation, (312) 630-6000[2](index=2&type=chunk) Registered Securities | Title of each class | Trading Symbol | Name of each exchange on which registered | | :------------------ | :------------- | :---------------------------------------- | | Common Stock, $1.66 2/3 Par Value | NTRS | The NASDAQ Stock Market LLC | | Depositary Shares, each representing 1/1,000th interest in a share of Series E Non-Cumulative Perpetual Preferred Stock | NTRSO | The NASDAQ Stock Market LLC | - The registrant is a **large accelerated filer** and has filed all required reports during the preceding 12 months[3](index=3&type=chunk)[4](index=4&type=chunk) - As of June 30, 2025, **191,233,304 shares** of common stock, $1.66 2/3 par value, were outstanding[4](index=4&type=chunk) [Table of Contents](index=2&type=section&id=TABLE%20OF%20CONTENTS) [Consolidated Financial Highlights (Unaudited)](index=3&type=section&id=CONSOLIDATED%20FINANCIAL%20HIGHLIGHTS) [Condensed Income Statements](index=3&type=section&id=Condensed%20Income%20Statements) Northern Trust Corporation reported a significant decrease in net income for both the three and six months ended June 30, 2025, primarily driven by a substantial decline in noninterest income, despite growth in net interest income Condensed Income Statements ($ Million) | CONDENSED INCOME STATEMENTS ($ Million) | 2025 (Three Months) | 2024 (Three Months) | % CHANGE (Three Months) | 2025 (Six Months) | 2024 (Six Months) | % CHANGE (Six Months) | | :---------------------------------------- | :------------------ | :------------------ | :---------------------- | :---------------- | :---------------- | :-------------------- | | Noninterest Income | $1,387.4 | $2,192.6 | (37)% | $2,759.3 | $3,311.3 | (17)% | | Net Interest Income | 610.5 | 522.9 | 17 | 1,178.6 | 1,051.0 | 12 | | Total Revenue | 1,997.9 | 2,715.5 | (26) | 3,937.9 | 4,362.3 | (10) | | Provision for Credit Losses | 16.5 | 8.0 | N/M | 17.5 | (0.5) | N/M | | Noninterest Expense | 1,416.6 | 1,533.9 | (8) | 2,834.2 | 2,898.6 | (2) | | Income before Income Taxes | 564.8 | 1,173.6 | (52) | 1,086.2 | 1,464.2 | (26) | | Provision for Income Taxes | 143.5 | 277.5 | (48) | 272.9 | 353.4 | (23) | | Net Income | $421.3 | $896.1 | (53)% | $813.3 | $1,110.8 | (27)% | Per Common Share | PER COMMON SHARE | 2025 (Three Months) | 2024 (Three Months) | % CHANGE (Three Months) | 2025 (Six Months) | 2024 (Six Months) | % CHANGE (Six Months) | | :--------------- | :------------------ | :------------------ | :---------------------- | :---------------- | :---------------- | :-------------------- | | Net Income — Basic | $2.14 | $4.35 | (51)% | $4.05 | $5.30 | (24)% | | — Diluted | 2.13 | 4.34 | (51) | 4.03 | 5.28 | (24) | | Cash Dividends Declared Per Common Share | 0.75 | 0.75 | — | 1.50 | 1.50 | — | | Book Value — End of Period (EOP) | 62.65 | 58.38 | 7 | 62.65 | 58.38 | 7 | | Market Value — EOP | 126.79 | 83.98 | 51 | 126.79 | 83.98 | 51 | [Selected Balance Sheet Data](index=3&type=section&id=Selected%20Balance%20Sheet%20Data) The company's balance sheet showed growth in total assets, earning assets, and deposits as of June 30, 2025, compared to December 31, 2024, and the prior-year quarter, indicating an expansion of its financial base Selected Balance Sheet Data ($ Million) | SELECTED BALANCE SHEET DATA ($ Million) | JUNE 30, 2025 | DECEMBER 31, 2024 | % CHANGE | | :---------------------------------------- | :------------ | :---------------- | :------- | | End of Period: | | | | | Total Assets | $171,883.6 | $155,508.4 | 11 % | | Earning Assets | 159,485.5 | 142,228.0 | 12 | | Deposits | 137,053.7 | 122,482.7 | 12 | | Stockholders' Equity | 12,866.5 | 12,788.4 | 1 | Average Balances ($ Million) | Average Balances: | 2025 (Three Months) | 2024 (Three Months) | % CHANGE (Three Months) | 2025 (Six Months) | 2024 (Six Months) | % CHANGE (Six Months) | | :---------------- | :------------------ | :------------------ | :---------------------- | :---------------- | :---------------- | :-------------------- | | Total Assets | $157,719.2 | $148,001.2 | 7 % | $154,011.3 | $146,559.8 | 5 % | | Earning Assets | 145,822.0 | 135,401.1 | 8 | 141,936.5 | 134,608.9 | 5 | | Deposits | 122,377.8 | 113,341.6 | 8 | 119,166.3 | 112,852.2 | 6 | | Stockholders' Equity | 12,612.1 | 12,358.8 | 2 | 12,608.1 | 12,071.3 | 4 | [Client Assets](index=3&type=section&id=Client%20Assets) Client assets under custody/administration (AUC/A) and assets under management (AUM) both increased significantly as of June 30, 2025, compared to December 31, 2024, reflecting favorable market conditions and net new business Client Assets ($ Billion) | CLIENT ASSETS ($ Billion) | JUNE 30, 2025 | DECEMBER 31, 2024 | % CHANGE | | :---------------------------- | :------------ | :---------------- | :------- | | AUC/A | $18,068.3 | $16,788.0 | 8 % | | AUC | 14,243.7 | 13,349.2 | 7 | | AUM | 1,697.7 | 1,610.4 | 5 | [Selected Ratios and Metrics](index=4&type=section&id=Selected%20Ratios%20and%20Metrics) Key financial ratios show a decrease in return on average common equity and an increase in dividend payout ratio, while net interest margin improved. Capital ratios remained strong, exceeding regulatory minimums for a 'well-capitalized' institution Financial Ratios | Financial Ratios: | 2025 (Three Months) | 2024 (Three Months) | 2025 (Six Months) | 2024 (Six Months) | | :---------------- | :------------------ | :------------------ | :---------------- | :---------------- | | Return on Average Common Equity | 14.2 % | 31.2 % | 13.6 % | 19.6 % |\ | Dividend Payout Ratio | 35.2 | 17.3 | 37.2 | 28.4 |\ | Net Interest Margin | 1.69 | 1.57 | 1.69 | 1.59 | Capital Ratios: Northern Trust Corporation | Capital Ratios: Northern Trust Corporation | June 30, 2025 (Standardized) | Dec 31, 2024 (Standardized) | June 30, 2025 (Advanced) | Dec 31, 2024 (Advanced) | WELL CAPITALIZED RATIOS | MINIMUM CAPITAL RATIOS | | :--------------------------------------- | :--------------------------- | :-------------------------- | :----------------------- | :---------------------- | :---------------------- | :--------------------- | | Common Equity Tier 1 Capital | 12.2 % | 12.4 % | 15.0 % | 14.5 % | N/A | 4.5 % | | Tier 1 Capital | 13.1 | 13.3 | 16.1 | 15.6 | 6.0 | 6.0 | | Total Capital | 14.8 | 15.1 | 17.9 | 17.4 | 10.0 | 8.0 | | Tier 1 Leverage | 7.6 | 8.1 | 7.6 | 8.1 | N/A | 4.0 | | Supplementary Leverage | N/A | N/A | 9.1 | 8.9 | N/A | 3.0 | Capital Ratios: The Northern Trust Company | Capital Ratios: The Northern Trust Company | June 30, 2025 (Standardized) | Dec 31, 2024 (Standardized) | June 30, 2025 (Advanced) | Dec 31, 2024 (Advanced) | WELL CAPITALIZED RATIOS | MINIMUM CAPITAL RATIOS | | :--------------------------------------- | :--------------------------- | :-------------------------- | :----------------------- | :---------------------- | :---------------------- | :--------------------- | | Common Equity Tier 1 Capital | 11.4 % | 11.4 % | 14.3 % | 13.6 % | 6.5 % | 4.5 % | | Tier 1 Capital | 11.4 | 11.4 | 14.3 | 13.6 | 8.0 | 6.0 | | Total Capital | 12.8 | 12.8 | 15.7 | 15.0 | 10.0 | 8.0 | | Tier 1 Leverage | 6.6 | 6.9 | 6.6 | 6.9 | 5.0 | 4.0 | | Supplementary Leverage | N/A | N/A | 7.9 | 7.5 | 3.0 | 3.0 | [PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Management's Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures about Market Risk](index=5&type=section&id=Items%202.%20and%203.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20and%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section provides management's perspective on Northern Trust Corporation's financial performance and condition for the second quarter of 2025, highlighting significant changes in revenue, expenses, and balance sheet items, along with disclosures on market risk management - Northern Trust is a leading provider of asset servicing, wealth management, asset management, and banking solutions, focusing on managing and servicing client assets through its Asset Servicing and Wealth Management segments[13](index=13&type=chunk) Total Revenue and Net Income ($ Million) | ($ Million) | 2025 (Three Months) | 2024 (Three Months) | CHANGE (Three Months) | 2025 (Six Months) | 2024 (Six Months) | CHANGE (Six Months) | | :-------------- | :------------------ | :------------------ | :-------------------- | :---------------- | :---------------- | :------------------ | | Total Revenue | $1,997.9 | $2,715.5 | $(717.6) (26)% | $3,937.9 | $4,362.3 | $(424.4) (10)% |\ | Net Income | $421.3 | $896.1 | $(474.8) (53)% | $813.3 | $1,110.8 | $(297.5) (27)% | - Revenue for the three months ended June 30, 2025, decreased to **$2.0 billion**, primarily due to lower Other Noninterest Income, which in the prior year included an **$878.4 million** net gain from the Visa exchange program[18](index=18&type=chunk)[14](index=14&type=chunk) - Net Interest Income increased to **$610.5 million** in Q2 2025, driven by higher deposits, lower funding costs, and foreign exchange swap activity[18](index=18&type=chunk) [Consolidated Results of Operations](index=5&type=section&id=CONSOLIDATED%20RESULTS%20OF%20OPERATIONS) Northern Trust experienced a significant decline in net income for Q2 2025 and the first six months of 2025, primarily due to a substantial decrease in other noninterest income compared to the prior year, which included a large one-time gain. Despite this, net interest income showed growth, driven by higher deposits and lower funding costs [Trust, Investment and Other Servicing Fees](index=7&type=section&id=Trust%2C%20Investment%20and%20Other%20Servicing%20Fees) Trust, Investment and Other Servicing Fees increased due to favorable markets and net new business, contributing to overall revenue growth - Trust, Investment and Other Servicing Fees increased by **6% to $1.23 billion** for Q2 2025 and **$2.44 billion** for the six months ended June 30, 2025, primarily due to favorable markets and net new business[18](index=18&type=chunk)[14](index=14&type=chunk) Trust, Investment and Other Servicing Fees ($ Million) | ($ Million) | 2025 (Three Months) | 2024 (Three Months) | CHANGE (Three Months) | 2025 (Six Months) | 2024 (Six Months) | CHANGE (Six Months) | | :-------------- | :------------------ | :------------------ | :-------------------- | :---------------- | :---------------- | :------------------ | | Custody and Fund Administration | $469.2 | $445.9 | $23.3 (5%) | $922.5 | $882.6 | $39.9 (5%) |\ | Investment Management | 157.3 | 145.7 | 11.6 (8%) | 309.8 | 285.7 | 24.1 (8%) |\ | Securities Lending | 20.2 | 16.5 | 3.7 (22%) | 38.1 | 34.4 | 3.7 (11%) |\ | Other | 45.1 | 42.5 | 2.6 (6%) | 93.3 | 87.5 | 5.8 (7%) |\ | **Total Asset Servicing** | **$691.8** | **$650.6** | **$41.2 (6%)** | **$1,363.7** | **$1,290.2** | **$73.5 (6%)** |\ | Central (WM) | $189.2 | $180.7 | $8.5 (5%) | $378.3 | $359.0 | $19.3 (5%) |\ | East (WM) | 139.3 | 132.7 | 6.6 (5%) | 280.3 | 262.6 | 17.7 (7%) |\ | West (WM) | 106.3 | 103.3 | 3.0 (3%) | 214.3 | 203.2 | 11.1 (5%) |\ | Global Family Office (WM) | 104.5 | 98.8 | 5.7 (6%) | 208.3 | 194.0 | 14.3 (7%) |\ | **Total Wealth Management** | **$539.3** | **$515.5** | **$23.8 (5%)** | **$1,081.2** | **$1,018.8** | **$62.4 (6%)** |\ | **Total Consolidated** | **$1,231.1** | **$1,166.1** | **$65.0 (6%)** | **$2,444.9** | **$2,309.0** | **$135.9 (6%)** | Market Indices (Daily Averages) | Market Indices (Daily Averages) | 2025 (Three Months) | 2024 (Three Months) | CHANGE | | :------------------------------ | :------------------ | :------------------ | :----- | | S&P 500 | 5,730 | 5,247 | 9 % |\ | MSCI EAFE (U.S. dollars) | 2,512 | 2,325 | 8 |\ | MSCI EAFE (local currency) | 1,549 | 1,516 | 2 | Client Assets Under Custody / Administration ($ Billion) | Client Assets Under Custody / Administration ($ Billion) | JUNE 30, 2025 | MARCH 31, 2025 | JUNE 30, 2024 | CHANGE Q2-25/Q1-25 | CHANGE Q2-25/Q2-24 | | :------------------------------------------------------- | :------------ | :------------- | :------------ | :----------------- | :----------------- | | Asset Servicing | $16,864.9 | $15,804.7 | $15,470.8 | 7 % | 9 % |\ | Wealth Management | 1,203.4 | 1,119.3 | 1,096.6 | 8 | 10 |\ | **Total Assets Under Custody / Administration** | **$18,068.3** | **$16,924.0** | **$16,567.4** | **7 %** | **9 %** | Client Assets Under Management ($ Billion) | Client Assets Under Management ($ Billion) | JUNE 30, 2025 | MARCH 31, 2025 | JUNE 30, 2024 | CHANGE Q2-25/Q1-25 | CHANGE Q2-25/Q2-24 | | :--------------------------------------------- | :------------ | :------------- | :------------ | :----------------- | :----------------- | | Asset Servicing | $1,229.2 | $1,160.9 | $1,107.3 | 6 % | 11 % |\ | Wealth Management | 468.5 | 446.9 | 419.4 | 5 | 12 |\ | **Total AUM** | **$1,697.7** | **$1,607.8** | **$1,526.7** | **6 %** | **11 %** | [Other Noninterest Income](index=10&type=section&id=Other%20Noninterest%20Income) Other Noninterest Income significantly decreased due to a prior-year one-time gain from the Visa Exchange Offer - Other Noninterest Income decreased significantly by **85% to $156.3 million** for Q2 2025 and **69% to $314.4 million** for the six months ended June 30, 2025, primarily due to the prior-year's **$878.4 million** net gain from the Visa Exchange Offer[18](index=18&type=chunk)[14](index=14&type=chunk)[41](index=41&type=chunk) Other Noninterest Income ($ Million) | ($ Million) | 2025 (Three Months) | 2024 (Three Months) | CHANGE (Three Months) | 2025 (Six Months) | 2024 (Six Months) | CHANGE (Six Months) | | :-------------- | :------------------ | :------------------ | :-------------------- | :---------------- | :---------------- | :------------------ | | Foreign Exchange Trading Income | $50.6 | $58.4 | $(7.8) (13)% | $109.3 | $115.4 | $(6.1) (5)% |\ | Treasury Management Fees | 9.7 | 9.0 | 0.7 (7%) | 19.3 | 18.3 | 1.0 (5%) |\ | Security Commissions and Trading Income | 39.6 | 34.3 | 5.3 (16%) | 78.7 | 72.2 | 6.5 (9%) |\ | Other Operating Income | 56.4 | 924.7 | (868.3) (94%) | 107.1 | 985.7 | (878.6) (89%) |\ | Investment Security Gains (Losses), net | — | 0.1 | 0.1 (N/M) | — | (189.3) | 189.3 (N/M) |\ | **Total Other Noninterest Income** | **$156.3** | **$1,026.5** | **$(870.2) (85)%** | **$314.4** | **$1,002.3** | **$(687.9) (69)%** | [Net Interest Income](index=10&type=section&id=Net%20Interest%20Income) Net Interest Income increased, driven by higher deposits, lower funding costs, and foreign exchange swap activity, leading to an improved net interest margin - Net Interest Income (FTE basis) increased by **17% to $615.2 million** for Q2 2025 and **12% to $1.19 billion** for the six months ended June 30, 2025, primarily due to higher deposits, lower funding costs, and foreign exchange swap activity[18](index=18&type=chunk)[51](index=51&type=chunk)[62](index=62&type=chunk) - The net interest margin on an FTE basis increased to **1.69%** for Q2 2025 and **1.69%** for the six months ended June 30, 2025, driven by lower funding costs, partially offset by lower yields on earning assets[9](index=9&type=chunk)[52](index=52&type=chunk)[63](index=63&type=chunk) Interest and Rate on a Fully Taxable Equivalent Basis ($ Million) | (INTEREST AND RATE ON A FULLY TAXABLE EQUIVALENT BASIS) | 2025 (Three Months) | 2024 (Three Months) | 2025 (Six Months) | 2024 (Six Months) | | :------------------------------------------------------ | :------------------ | :------------------ | :---------------- | :---------------- | | Total Interest-Earning Assets (Average Balance, $ Million) | $145,822.0 | $135,401.1 | $141,936.5 | $134,608.9 |\ | Total Interest-Bearing Liabilities (Average Balance, $ Million) | $122,575.2 | $114,237.2 | $119,193.5 | $113,350.7 |\ | Net Interest Income (FTE Adjusted, $ Million) | $615.2 | $529.8 | $1,188.9 | $1,065.2 |\ | Net Interest Margin (FTE Adjusted) | 1.69 % | 1.57 % | 1.69 % | 1.59 % | [Provision for Credit Losses](index=17&type=section&id=Provision%20for%20Credit%20Losses) Provision for Credit Losses increased due to higher specific reserves for non-performing loans and a worsening macroeconomic outlook, partially offset by CRE portfolio improvements - Provision for Credit Losses was **$16.5 million** for Q2 2025 and **$17.5 million** for the six months ended June 30, 2025, an increase from the prior year. This was due to increased specific reserves for non-performing loans and a worsening macroeconomic outlook, partially offset by improvements in the Commercial Real Estate (CRE) portfolio[18](index=18&type=chunk)[69](index=69&type=chunk) - Net recoveries in Q2 2025 were **$0.3 million**, reflecting **$0.4 million** of recoveries and **$0.1 million** of charge-offs. For the six months, net recoveries totaled **$0.5 million**[69](index=69&type=chunk) [Noninterest Expense](index=18&type=section&id=Noninterest%20Expense) Noninterest Expense decreased, primarily due to lower other operating and compensation expenses, influenced by prior-year one-time charges - Noninterest Expense decreased by **8% to $1.42 billion** for Q2 2025 and **2% to $2.83 billion** for the six months ended June 30, 2025, primarily due to lower Other Operating Expense and Compensation expense[18](index=18&type=chunk)[14](index=14&type=chunk) Noninterest Expense ($ Million) | ($ Million) | 2025 (Three Months) | 2024 (Three Months) | CHANGE (Three Months) | 2025 (Six Months) | 2024 (Six Months) | CHANGE (Six Months) | | :-------------- | :------------------ | :------------------ | :-------------------- | :---------------- | :---------------- | :------------------ | | Compensation | $614.8 | $665.2 | $(50.4) (8)% | $1,259.2 | $1,292.3 | $(33.1) (3)% |\ | Employee Benefits | 117.7 | 100.2 | 17.5 (17%) | 227.4 | 201.3 | 26.1 (13%) |\ | Outside Services | 247.0 | 260.9 | (13.9) (5%) | 492.2 | 490.2 | 2.0 (—) |\ | Equipment and Software | 293.7 | 277.5 | 16.2 (6%) | 574.6 | 530.2 | 44.4 (8%) |\ | Occupancy | 52.5 | 54.8 | (2.3) (4%) | 105.9 | 108.9 | (3.0) (3%) |\ | Other Operating Expense | 90.9 | 175.3 | (84.4) (48%) | 174.9 | 275.7 | (100.8) (37%) |\ | **Total Noninterest Expense** | **$1,416.6** | **$1,533.9** | **$(117.3) (8)%** | **$2,834.2** | **$2,898.6** | **$(64.4) (2)%** | - Compensation expense decreased due to a prior-year severance charge, partially offset by higher headcount and base pay adjustments in the current quarter[73](index=73&type=chunk) - Other Operating Expense decreased significantly due to a **$70 million** charitable contribution and a **$10.6 million** legal settlement recorded in the prior year[76](index=76&type=chunk) [Provision for Income Taxes](index=18&type=section&id=Provision%20for%20Income%20Taxes) Provision for Income Taxes decreased, with the effective tax rate increasing due to prior-year favorable discrete tax benefits - Provision for Income Taxes was **$143.5 million** for Q2 2025 (effective tax rate of **25.4%**) and **$272.9 million** for the six months ended June 30, 2025 (effective tax rate of **25.1%**)[18](index=18&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - The effective tax rate increased compared to the prior year primarily due to favorable discrete tax benefits recognized in the prior year related to state tax legislation and audit resolutions[77](index=77&type=chunk)[78](index=78&type=chunk) - The recently enacted 'The One Big Beautiful Bill Act' is not expected to have a material impact on consolidated financial statements[79](index=79&type=chunk) [Reporting Segments](index=19&type=section&id=REPORTING%20SEGMENTS) Northern Trust operates through two client-focused segments: Asset Servicing and Wealth Management, with asset management and support functions allocated to these segments. Segment results are presented on an internal management-reporting and FTE basis, reflecting organizational changes and allocation methodologies - Northern Trust is organized into two client-focused reporting segments: Asset Servicing and Wealth Management[81](index=81&type=chunk) - Segment financial information is presented on an internal management-reporting basis, incorporating an FTP methodology for asset/liability allocation and an FTE basis for net interest income[82](index=82&type=chunk) - Effective January 2025, certain operations support activities were moved to the Enterprise Chief Operating Office, with expenses fully allocated to Asset Servicing and Wealth Management[86](index=86&type=chunk) Segment Financial Information ($ Million) | ($ Million) | ASSET SERVICING (2025) | ASSET SERVICING (2024) | WEALTH MANAGEMENT (2025) | WEALTH MANAGEMENT (2024) | OTHER (2025) | OTHER (2024) | TOTAL CONSOLIDATED (2025) | TOTAL CONSOLIDATED (2024) | | :-------------- | :--------------------- | :--------------------- | :----------------------- | :----------------------- | :----------- | :----------- | :------------------------ | :------------------------ | | **THREE MONTHS ENDED JUNE 30,** | | | | | | | | |\ | Total Noninterest Income | 823.4 | 772.2 | 563.5 | 541.7 | 0.5 | 878.7 | 1,387.4 | 2,192.6 |\ | Net Interest Income (Expense) | 347.2 | 282.7 | 268.3 | 244.3 | (5.0) | (4.1) | 610.5 | 522.9 |\ | Revenue | 1,170.6 | 1,054.9 | 831.8 | 786.0 | (4.5) | 874.6 | 1,997.9 | 2,715.5 |\ | Provision for Credit Losses | 3.9 | 4.5 | 11.2 | 5.0 | 1.4 | (1.5) | 16.5 | 8.0 |\ | Total Noninterest Expense | 895.6 | 914.8 | 511.0 | 518.3 | 10.0 | 100.8 | 1,416.6 | 1,533.9 |\ | Income (Loss) before Income Taxes | 271.1 | 135.6 | 309.6 | 262.7 | (15.9) | 775.3 | 564.8 | 1,173.6 |\ | Provision for Income Taxes | 58.1 | 29.2 | 75.6 | 66.3 | 9.8 | 182.0 | 143.5 | 277.5 |\ | Net Income (Loss) | $213.0 | $106.4 | $234.0 | $196.4 | $(25.7) | $593.3 | $421.3 | $896.1 |\ | Percentage of Consolidated Net Income | 51 % | 12 % | 56 % | 22 % | (7)% | 66 % | 100 % | 100 % |\ | Average Assets | $117,044.6 | $108,290.3 | $39,094.5 | $38,828.7 | $1,580.1 | $882.2 | $157,719.2 | $148,001.2 |\ | Average Loans | $5,812.8 | $6,472.3 | $35,345.2 | $34,562.3 | $— | $— | $41,158.0 | $41,034.6 |\ | Average Deposits | $95,506.7 | $86,223.0 | $25,291.0 | $26,236.4 | $1,580.1 | $882.2 | $122,377.8 | $113,341.6 |\ | **SIX MONTHS ENDED JUNE 30,** | | | | | | | | |\ | Total Noninterest Income (Loss) | 1,627.8 | 1,542.4 | 1,133.7 | 1,080.6 | (2.2) | 688.3 | 2,759.3 | 3,311.3 |\ | Net Interest Income | 670.9 | 575.3 | 518.4 | 485.7 | (10.7) | (10.0) | 1,178.6 | 1,051.0 |\ | Revenue | 2,298.7 | 2,117.7 | 1,652.1 | 1,566.3 | (12.9) | 678.3 | 3,937.9 | 4,362.3 |\ | Provision for Credit Losses | 6.0 | (1.3) | 10.3 | 3.3 | 1.2 | (2.5) | 17.5 | (0.5) |\ | Total Noninterest Expense | 1,786.2 | 1,764.1 | 1,027.9 | 1,007.8 | 20.1 | 126.7 | 2,834.2 | 2,898.6 |\ | Income before Income Taxes | 506.5 | 354.9 | 613.9 | 555.2 | (34.2) | 554.1 | 1,086.2 | 1,464.2 |\ | Provision for Income Taxes | 108.9 | 77.7 | 150.1 | 139.9 | 13.9 | 135.8 | 272.9 | 353.4 |\ | Net Income | $397.6 | $277.2 | $463.8 | $415.3 | $(48.1) | $418.3 | $813.3 | $1,110.8 |\ | Percentage of Consolidated Net Income | 49 % | 25 % | 57 % | 37 % | (6)% | 38 % | 100 % | 100 % |\ | Average Assets | $113,432.9 | $107,563.3 | $39,121.2 | $38,502.4 | $1,457.2 | $494.1 | $154,011.3 | $146,559.8 |\ | Average Loans | $5,781.2 | $6,690.9 | $35,336.2 | $34,619.8 | $— | $— | $41,117.4 | $41,310.7 |\ | Average Deposits | $92,418.8 | $86,455.9 | $25,290.3 | $25,902.2 | $1,457.2 | $494.1 | $119,166.3 | $112,852.2 | [Consolidated Balance Sheets](index=23&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Northern Trust's consolidated balance sheet as of June 30, 2025, shows an increase in total assets, earning assets, and deposits compared to December 31, 2024, reflecting growth in Federal Reserve deposits and debt securities, while stockholders' equity remained stable Consolidated Balance Sheets ($ Billion) | ($ Billion) | JUNE 30, 2025 | DECEMBER 31, 2024 | CHANGE | % CHANGE | | :-------------- | :------------ | :---------------- | :----- | :------- | | **Assets** | | | | |\ | Federal Reserve and Other Central Bank Deposits | $52.3 | $38.8 | $13.5 | 35 % |\ | Interest-Bearing Due from and Deposits with Banks | 6.8 | 5.6 | 1.2 | 22 |\ | Federal Funds Sold and Securities Purchased under Agreements to Resell | 0.9 | 0.4 | 0.5 | 104 |\ | Total Debt Securities | 53.7 | 51.3 | 2.4 | 5 |\ | Loans | 43.3 | 43.4 | (0.1) | — |\ | Other Interest-Earning Assets | 2.5 | 2.7 | (0.2) | (8) |\ | **Total Earning Assets** | **159.5** | **142.2** | **17.3** | **12** |\ | **Total Assets** | **171.9** | **155.5** | **16.4** | **11** |\ | **Liabilities and Stockholders' Equity** | | | | |\ | Total Interest-Bearing Deposits | 111.9 | 98.1 | 13.8 | 14 |\ | Demand and Other Noninterest-Bearing Deposits | 25.1 | 24.4 | 0.7 | 3 |\ | Federal Funds Purchased | 2.4 | 2.2 | 0.2 | 11 |\ | Securities Sold under Agreements to Repurchase | 0.8 | 0.5 | 0.3 | 82 |\ | Other Borrowings | 6.5 | 6.5 | — | — |\ | **Total Stockholders' Equity** | **12.9** | **12.8** | **0.1** | **1** | - Average earning assets increased from the prior-year quarter and period, primarily driven by increased placements with the Federal Reserve and other central banks due to higher deposits[102](index=102&type=chunk) - Total Stockholders' Equity increased by **1% to $12.9 billion** as of June 30, 2025, from **$12.8 billion** at December 31, 2024[101](index=101&type=chunk) - The Corporation repurchased **3,374,980 common shares** for **$339.4 million** in Q2 2025 and **5,991,218 shares** for **$626.6 million** in the first six months of 2025[106](index=106&type=chunk) [Asset Quality](index=25&type=section&id=ASSET%20QUALITY) Northern Trust maintains a high-quality debt securities portfolio, with a significant portion rated A or higher. Nonaccrual loans increased, primarily due to downgrades across multiple segments, while the allowance for credit losses also increased to reflect a worsening macroeconomic outlook and specific non-performing loans - Northern Trust maintains a high-quality debt securities portfolio, with **87%** of total debt securities rated AAA as of June 30, 2025[110](index=110&type=chunk) Book Value of Debt Securities by Credit Rating ($ Million) | Book Value of Debt Securities by Credit Rating ($ Million) | AAA | AA | A | BBB | NOT RATED | TOTAL | | :--------------------------------------------- | :----------- | :--------- | :--------- | :--------- | :--------- | :----------- | | **Available for Sale** | | | | | | |\ | Total Available for Sale | $31,189.4 | $812.1 | $248.9 | $— | $— | $32,250.4 |\ | Percent of Total Available for Sale | 96 % | 3 % | 1 % | — % | — % | 100 % |\ | **Held to Maturity** | | | | | | |\ | Total Held to Maturity | $15,374.7 | $3,730.2 | $1,325.8 | $365.7 | $604.4 | $21,400.8 |\ | Percent of Total Held to Maturity | 72 % | 17 % | 6 % | 2 % | 3 % | 100 % |\ | **Total Debt Securities** | **$46,564.1**| **$4,542.3**| **$1,574.7**| **$365.7** | **$604.4** | **$53,651.2**|\ | Percent of Total Debt Securities | 87 % | 8 % | 3 % | 1 % | 1 % | 100 % | - Nonaccrual assets increased by **$36.8 million (66%) to $92.8 million** as of June 30, 2025, compared to December 31, 2024, primarily due to downgrades of a small number of loans[117](index=117&type=chunk) Nonaccrual Loans ($ Million) | Nonaccrual Loans ($ Million) | JUNE 30, 2025 | DECEMBER 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Total Nonaccrual Loans | $92.8 | $56.0 |\ | 90 Day Past Due Loans Still Accruing | $39.9 | $82.3 |\ | Nonaccrual Loans to Total Loans | 0.21 % | 0.13 % |\ | Allowance for Credit Losses Assigned to Loans to Nonaccrual Loans | 1.9 x | 3.0 x | - The Allowance for Credit Losses related to loans increased to **$180.5 million** as of June 30, 2025, from **$168.0 million** at December 31, 2024, reflecting an increase in specific reserves and a worsening macroeconomic outlook[123](index=123&type=chunk)[255](index=255&type=chunk) [Statements of Cash Flows](index=29&type=section&id=STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, Northern Trust generated significant net cash from operating activities, primarily due to lower net collateral deposited with derivative counterparties. Investing activities used substantial cash for Federal Reserve deposits and AFS debt securities, while financing activities provided cash through increased deposits Statements of Cash Flows ($ Million) | (In Millions) | 2025 (Six Months) | 2024 (Six Months) | | :------------ | :---------------- | :---------------- | | Net cash provided by (used in): | | |\ | Operating activities | $4,619.3 | $1,537.7 |\ | Investing activities | (13,906.6) | (3,842.9) |\ | Financing activities | 10,340.6 | 4,298.2 |\ | Effect of Foreign Currency Exchange Rates on Cash | 692.9 | (217.5) |\ | Change in Cash and Due from Banks | $1,746.2 | $1,775.5 | - Net cash provided by operating activities increased to **$4.6 billion** for the six months ended June 30, 2025, primarily due to lower net collateral deposited with derivative counterparties and period earnings[133](index=133&type=chunk) - Net cash used in investing activities was **$13.9 billion**, mainly due to increased Federal Reserve deposits and net purchases of AFS debt securities[135](index=135&type=chunk) - Net cash provided by financing activities was **$10.3 billion**, primarily from increased total deposits, partially offset by increased share repurchases[137](index=137&type=chunk) [Regulatory Capital](index=30&type=section&id=REGULATORY%20CAPITAL) Northern Trust's capital ratios remained strong as of June 30, 2025, exceeding 'well-capitalized' requirements. The company is a Category II institution, adhering to stringent regulatory capital standards, including DFAST and ongoing monitoring of the Basel III Endgame Proposal - Capital ratios remained strong at June 30, 2025, exceeding the requirements for classification as **'well-capitalized'** under applicable U.S. regulatory requirements[139](index=139&type=chunk) - Northern Trust is a **Category II institution**, adhering to regulatory capital standards including daily LCR and Net Stable Funding Ratio calculations and annual stress testing (CCAR)[140](index=140&type=chunk)[151](index=151&type=chunk) Capital Ratios: Northern Trust Corporation | Capital Ratios: Northern Trust Corporation | June 30, 2025 (Standardized) | Dec 31, 2024 (Standardized) | June 30, 2025 (Advanced) | Dec 31, 2024 (Advanced) | WELL CAPITALIZED RATIOS | MINIMUM CAPITAL RATIOS | | :--------------------------------------- | :--------------------------- | :-------------------------- | :----------------------- | :---------------------- | :---------------------- | :--------------------- | | Common Equity Tier 1 Capital | 12.2 % | 12.4 % | 15.0 % | 14.5 % | N/A | 4.5 % |\ | Tier 1 Capital | 13.1 | 13.3 | 16.1 | 15.6 | 6.0 | 6.0 |\ | Total Capital | 14.8 | 15.1 | 17.9 | 17.4 | 10.0 | 8.0 |\ | Tier 1 Leverage | 7.6 | 8.1 | 7.6 | 8.1 | N/A | 4.0 |\ | Supplementary Leverage | N/A | N/A | 9.1 | 8.9 | N/A | 3.0 | - The 2025 DFAST results maintained Northern Trust's stress capital buffer and effective Common Equity Tier 1 capital ratio minimum requirement at **2.5%** and **7.0%**, respectively[141](index=141&type=chunk) [Recent Accounting Pronouncements and Developments](index=33&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS%20AND%20DEVELOPMENTS) Northern Trust is evaluating recent FASB ASUs, including ASU 2023-09 on Income Tax Disclosures and ASU 2024-03 on Expense Disaggregation Disclosures, which are expected to impact financial statement notes but not the consolidated balance sheets or income statements upon adoption - ASU No. 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024, will enhance income tax disclosures but is not expected to impact consolidated balance sheets or income statements[148](index=148&type=chunk) - ASU No. 2024-03, 'Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,' effective for annual periods beginning after December 15, 2026, will require disaggregated expense disclosures but is not expected to impact consolidated balance sheets or income statements[149](index=149&type=chunk) [Risk Management](index=33&type=section&id=RISK%20MANAGEMENT) Northern Trust actively manages liquidity risk, maintaining a highly liquid balance sheet, and market risk, using NII and MVE sensitivity analyses and a Value-at-Risk model for trading positions. The company's risk management practices are designed to mitigate potential impacts from interest rate movements and market volatility - Northern Trust maintains a highly liquid balance sheet, with cash, Federal Reserve deposits, money market assets, and investment securities comprising **66%** of total assets as of June 30, 2025[152](index=152&type=chunk) - **87%** of Northern Trust's securities portfolio consists of U.S. Treasury, government-sponsored agency, and other triple-A rated securities[152](index=152&type=chunk) - Market risk management focuses on interest rate risk (NII and MVE sensitivity) and trading risk (Value-at-Risk model)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) Net Interest Income Sensitivity ($ Million) | NET INTEREST INCOME SENSITIVITY (In Millions) | JUNE 30, 2025 | JUNE 30, 2024 | | :-------------------------------------------- | :------------ | :------------ | | Increase in Interest Rates Above Market Implied Forward Rates |\ | 100 Basis Points | $69 | $22 |\ | 200 Basis Points | 147 | 41 |\ | Decrease in Interest Rates Below Market Implied Forward Rates |\ | 100 Basis Points | $(89) | $(41) |\ | 200 Basis Points | (188) | (104) | Market Value of Equity Sensitivity ($ Million) | MARKET VALUE OF EQUITY SENSITIVITY (In Millions) | JUNE 30, 2025 | DECEMBER 31, 2024 | | :----------------------------------------------- | :------------ | :---------------- | | Increase in Interest Rates Above Market Implied Forward Rates |\ | 100 Basis Points | $(441) | $(374) |\ | 200 Basis Points | (930) | (808) |\ | Decrease in Interest Rates Below Market Implied Forward Rates |\ | 100 Basis Points | $627 | $508 |\ | 200 Basis Points | 1,130 | 951 | Value-at-Risk ($ Million) | VALUE-AT-RISK (In Millions) | Combined Trading Book VaR (Q2 2025) | Combined Trading Book VaR (Q2 2024) | FX VaR (Q2 2025) | FX VaR (Q2 2024) | IR VaR (Q2 2025) | IR VaR (Q2 2024) | | :-------------------------- | :---------------------------------- | :---------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | High | $0.6 | $1.6 | $0.6 | $2.0 | $0.3 | $0.3 |\ | Low | 0.3 | 0.2 | 0.2 | 0.1 | 0.1 | 0.1 |\ | Average | 0.4 | 0.6 | 0.3 | 0.5 | 0.2 | 0.1 |\ | Quarter-End | 0.3 | 0.8 | 0.2 | 0.8 | 0.1 | 0.1 | [Reconciliation to Fully Taxable Equivalent](index=36&type=section&id=RECONCILIATION%20TO%20FULLY%20TAXABLE%20EQUIVALENT) Northern Trust provides a reconciliation of GAAP financial measures to a fully taxable equivalent (FTE) basis for Interest Income, Net Interest Income, Net Interest Margin, and Total Revenue. This non-GAAP presentation facilitates comparative analysis of asset yields without impacting Net Income - FTE presentation facilitates analysis of asset yields and provides a clearer indication of net interest margins for comparative purposes, with no impact on Net Income[170](index=170&type=chunk) Reconciliation to Fully Taxable Equivalent ($ Million) | ($ Million) | 2025 (Three Months) | 2024 (Three Months) | 2025 (Six Months) | 2024 (Six Months) | | :-------------- | :------------------ | :------------------ | :---------------- | :---------------- | | Interest Income - GAAP | $2,212.8 | $2,506.5 | $4,353.7 | $4,952.1 |\ | Add: FTE Adjustment | 4.7 | 6.9 | 10.3 | 14.2 |\ | Interest Income (FTE) - Non-GAAP | $2,217.5 | $2,513.4 | $4,364.0 | $4,966.3 |\ | Net Interest Income - GAAP | $610.5 | $522.9 | $1,178.6 | $1,051.0 |\ | Add: FTE Adjustment | 4.7 | 6.9 | 10.3 | 14.2 |\ | Net Interest Income (FTE) - Non-GAAP | $615.2 | $529.8 | $1,188.9 | $1,065.2 |\ | Net Interest Margin - GAAP | 1.68 % | 1.55 % | 1.67 % | 1.57 % |\ | Net Interest Margin (FTE) - Non-GAAP | 1.69 % | 1.57 % | 1.69 % | 1.59 % |\ | Total Revenue - GAAP | $1,997.9 | $2,715.5 | $3,937.9 | $4,362.3 |\ | Add: FTE Adjustment | 4.7 | 6.9 | 10.3 | 14.2 |\ | Total Revenue (FTE) - Non-GAAP | $2,002.6 | $2,722.4 | $3,948.2 | $4,376.5 | [Forward-Looking Statements](index=37&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines various forward-looking statements regarding Northern Trust's financial results, capital adequacy, and market trends, emphasizing that these statements are based on current beliefs and expectations, subject to numerous risks and uncertainties that could cause actual results to differ materially - Forward-looking statements include projections on financial results, capital adequacy, dividend policy, accounting estimates, credit quality, and market trends[172](index=172&type=chunk) - These statements are subject to risks and uncertainties, including financial market disruptions, interest rate changes, operational risks (cybersecurity, data privacy), geopolitical risks, and regulatory changes[172](index=172&type=chunk)[174](index=174&type=chunk) - Northern Trust assumes no obligation to update its forward-looking statements, and actual results may differ materially from those expressed or implied[173](index=173&type=chunk) [Consolidated Financial Statements (Unaudited)](index=39&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20%28unaudited%29) This section presents Northern Trust Corporation's unaudited consolidated financial statements, including balance sheets, income statements, comprehensive income, changes in stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial instrument details [Consolidated Balance Sheets](index=39&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) The consolidated balance sheets detail Northern Trust's financial position, showing assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheets ($ Million) | (In Millions) | JUNE 30, 2025 | DECEMBER 31, 2024 | | :------------ | :------------ | :---------------- | | **ASSETS** | | |\ | Cash and Due from Banks | $6,423.4 | $4,677.2 |\ | Federal Reserve and Other Central Bank Deposits | 52,266.0 | 38,775.4 |\ | Total Debt Securities | 53,651.2 | 51,298.2 |\ | Total Loans | 43,323.4 | 43,390.6 |\ | Allowance for Credit Losses | (188.5) | (175.5) |\ | Goodwill | 714.6 | 694.9 |\ | Other Assets | 11,891.8 | 13,961.6 |\ | **Total Assets** | **$171,883.6**| **$155,508.4** |\ | **LIABILITIES** | | |\ | Total Deposits | 137,053.7 | 122,482.7 |\ | Federal Funds Purchased | 2,388.5 | 2,159.5 |\ | Securities Sold Under Agreements to Repurchase | 841.4 | 462.0 |\ | Other Borrowings | 6,532.9 | 6,521.0 |\ | Senior Notes | 2,835.2 | 2,769.7 |\ | Long-Term Debt | 4,089.8 | 4,081.3 |\ | Other Liabilities | 5,275.6 | 4,243.8 |\ | **Total Liabilities** | **159,017.1** | **142,720.0** |\ | **STOCKHOLDERS' EQUITY** | | |\ | Preferred Stock | 884.9 | 884.9 |\ | Common Stock | 408.6 | 408.6 |\ | Additional Paid-In Capital | 1,010.5 | 1,025.3 |\ | Retained Earnings | 16,112.7 | 15,614.7 |\ | Accumulated Other Comprehensive Loss | (699.2) | (814.0) |\ | Treasury Stock | (4,851.0) | (4,331.1) |\ | **Total Stockholders' Equity** | **12,866.5** | **12,788.4** |\ | **Total Liabilities and Stockholders' Equity** | **$171,883.6**| **$155,508.4** | [Consolidated Statements of Income](index=40&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The consolidated statements of income present Northern Trust's revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Income ($ Million Except Share Information) | (In Millions Except Share Information) | 2025 (Three Months) | 2024 (Three Months) | 2025 (Six Months) | 2024 (Six Months) | | :----------------------------------- | :------------------ | :------------------ | :---------------- | :---------------- | | **Noninterest Income** | | | | |\ | Trust, Investment and Other Servicing Fees | $1,231.1 | $1,166.1 | $2,444.9 | $2,309.0 |\ | Foreign Exchange Trading Income | 50.6 | 58.4 | 109.3 | 115.4 |\ | Treasury Management Fees | 9.7 | 9.0 | 19.3 | 18.3 |\ | Security Commissions and Trading Income | 39.6 | 34.3 | 78.7 | 72.2 |\ | Other Operating Income | 56.4 | 924.7 | 107.1 | 985.7 |\ | Investment Security Gains (Losses), net | — | 0.1 | — | (189.3) |\ | **Total Noninterest Income** | **1,387.4** | **2,192.6** | **2,759.3** | **3,311.3** |\ | **Net Interest Income** | | | | |\ | Interest Income | 2,212.8 | 2,506.5 | 4,353.7 | 4,952.1 |\ | Interest Expense | 1,602.3 | 1,983.6 | 3,175.1 | 3,901.1 |\ | **Net Interest Income** | **610.5** | **522.9** | **1,178.6** | **1,051.0** |\ | Provision for Credit Losses | 16.5 | 8.0 | 17.5 | (0.5) |\ | Net Interest Income after Provision for Credit Losses | 594.0 | 514.9 | 1,161.1 | 1,051.5 |\ | **Noninterest Expense** | | | | |\ | Compensation | 614.8 | 665.2 | 1,259.2 | 1,292.3 |\ | Employee Benefits | 117.7 | 100.2 | 227.4 | 201.3 |\ | Outside Services | 247.0 | 260.9 | 492.2 | 490.2 |\ | Equipment and Software | 293.7 | 277.5 | 574.6 | 530.2 |\ | Occupancy | 52.5 | 54.8 | 105.9 | 108.9 |\ | Other Operating Expense | 90.9 | 175.3 | 174.9 | 275.7 |\ | **Total Noninterest Expense** | **1,416.6** | **1,533.9** | **2,834.2** | **2,898.6** |\ | Income before Income Taxes | 564.8 | 1,173.6 | 1,086.2 | 1,464.2 |\ | Provision for Income Taxes | 143.5 | 277.5 | 272.9 | 353.4 |\ | **Net Income** | **$421.3** | **$896.1** | **$813.3** | **$1,110.8** |\ | Preferred Stock Dividends | 4.7 | 4.7 | 20.9 | 20.9 |\ | **Net Income Applicable to Common Stock** | **$416.6** | **$891.4** | **$792.4** | **$1,089.9** |\ | **Per Common Share** | | | | |\ | Net Income – Basic | $2.14 | $4.35 | $4.05 | $5.30 |\ | – Diluted | 2.13 | 4.34 | 4.03 | 5.28 | [Consolidated Statements of Comprehensive Income](index=40&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) The consolidated statements of comprehensive income report Northern Trust's net income and other comprehensive income (loss) components for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Comprehensive Income ($ Million) | (In Millions) | 2025 (Three Months) | 2024 (Three Months) | 2025 (Six Months) | 2024 (Six Months) | | :------------ | :------------------ | :------------------ | :---------------- | :---------------- | | Net Income | $421.3 | $896.1 | $813.3 | $1,110.8 |\ | **Other Comprehensive Income (Loss) (Net of Tax and Reclassifications)** | | | | |\ | Net Unrealized Gains (Losses) on Available for Sale Debt Securities | 45.9 | 43.4 | 116.9 | 256.8 |\ | Net Unrealized Gains (Losses) on Cash Flow Hedges | (0.1) | (0.1) | (0.6) | (0.8) |\ | Net Foreign Currency Adjustments | (7.7) | 7.0 | (3.0) | 11.6 |\ | Net Pension and Other Postretirement Benefit Adjustments | 2.2 | 2.3 | 1.5 | 5.3 |\ | **Other Comprehensive Income (Loss)** | **40.3** | **52.6** | **114.8** | **272.9** |\ | **Comprehensive Income (Loss)** | **$461.6** | **$948.7** | **$928.1** | **$1,383.7** | [Consolidated Statements of Changes in Stockholders' Equity](index=41&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS%27%20EQUITY) The consolidated statements of changes in stockholders' equity detail the movements in equity accounts, including net income, dividends, and share repurchases, for the six months ended June 30, 2025 Consolidated Statements of Changes in Stockholders' Equity ($ Million) | (In Millions) | PREFERRED STOCK | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | RETAINED EARNINGS | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | TREASURY STOCK | TOTAL | | :------------ | :-------------- | :----------- | :------------------------- | :---------------- | :-------------------------------------------- | :------------- | :---- | | **Balance at December 31, 2024** | **$884.9** | **$408.6** | **$1,025.3** | **$15,614.7** | **$(814.0)** | **$(4,331.1)** | **$12,788.4** |\ | Net Income | — | — | — | 392.0 | — | — | 392.0 |\ | Other Comprehensive Income (Loss) | — | — | — | — | 74.5 | — | 74.5 |\ | Dividends Declared: Common Stock | — | — | — | (148.2) | — | — | (148.2) |\ | Dividends Declared: Preferred Stock | — | — | — | (16.2) | — | — | (16.2) |\ | Stock Awards and Options Exercised | — | — | (28.3) | — | — | 105.1 | 76.8 |\ | Stock Purchased | — | — | — | — | — | (287.2) | (287.2) |\ | Excise Tax on Share Repurchases | — | — | — | — | — | (1.6) | (1.6) |\ | **Balance at March 31, 2025** | **$884.9** | **$408.6** | **$997.0** | **$15,842.3** | **$(739.5)** | **$(4,514.8)** | **$12,878.5** |\ | Net Income | — | — | — | 421.3 | — | — | 421.3 |\ | Other Comprehensive Income (Loss) | — | — | — | — | 40.3 | — | 40.3 |\ | Dividends Declared: Common Stock | — | — | — | (146.2) | — | — | (146.2) |\ | Dividends Declared: Preferred Stock | — | — | — | (4.7) | — | — | (4.7) |\ | Stock Awards and Options Exercised | — | — | 13.5 | — | — | 6.2 | 19.7 |\ | Stock Purchased | — | — | — | — | — | (339.4) | (339.4) |\ | Excise Tax on Share Repurchases | — | — | — | — | — | (3.0) | (3.0) |\ | **Balance at June 30, 2025** | **$884.9** | **$408.6** | **$1,010.5** | **$16,112.7** | **$(699.2)** | **$(4,851.0)** | **$12,866.5** | [Consolidated Statements of Cash Flows](index=42&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The consolidated statements of cash flows categorize Northern Trust's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows ($ Million) | (In Millions) | 2025 (Six Months) | 2024 (Six Months) | | :------------ | :---------------- | :---------------- | | **CASH FLOWS FROM OPERATING ACTIVITIES** | | |\ | Net Income | $813.3 | $1,110.8 |\ | Net Cash Provided by / (Used in) Operating Activities | 4,619.3 | 1,537.7 |\ | **CASH FLOWS FROM INVESTING ACTIVITIES** | | |\ | Net Cash (Used in) Investing Activities | (13,906.6) | (3,842.9) |\ | **CASH FLOWS FROM FINANCING ACTIVITIES** | | |\ | Net Cash Provided by Financing Activities | 10,340.6 | 4,298.2 |\ | Effect of Foreign Currency Exchange Rates on Cash | 692.9 | (217.5) |\ | Change in Cash and Due from Banks | 1,746.2 | 1,775.5 |\ | Cash and Due from Banks at Beginning of Period | 4,677.2 | 4,791.5 |\ | **Cash and Due from Banks at End of Period** | **$6,423.4** | **$6,567.0** |\ | **SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION** |

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Northern Trust Corporation (NTRS) - NTRS currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [3] Performance Metrics - Over the past week, NTRS shares increased by 1.6%, while the Zacks Banks - Major Regional industry saw a slight decline of 0.02% [5] - In a longer timeframe, NTRS shares rose by 4.71% over the past month, compared to the industry's performance of 6.12% [5] - Over the last quarter, NTRS shares surged by 35.62%, and over the past year, they increased by 46.35%, significantly outperforming the S&P 500, which rose by 16.43% and 18.63% respectively [6] Trading Volume - The average 20-day trading volume for NTRS is 1,868,366 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, five earnings estimates for NTRS have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $7.94 to $8.36 [9] - For the next fiscal year, six estimates have also moved higher, indicating a positive earnings outlook [9] Conclusion - Considering the positive momentum indicators and earnings revisions, NTRS is positioned as a strong buy candidate with a Momentum Score of B, making it a noteworthy option for investors seeking short-term gains [11]

Group 1 - Northern Trust Corporation reported quarterly earnings of $2.13 per share, exceeding the analyst consensus estimate of $2.01 per share [1] - The company achieved quarterly sales of $1.998 billion, surpassing the analyst consensus estimate of $1.955 billion [1] - Following the earnings announcement, Northern Trust shares increased by 3.7% to trade at $128.77 [1] Group 2 - Keefe, Bruyette & Woods analyst David Konrad reiterated an Underperform rating and lowered the price target from $120 to $118 [3] - Wells Fargo analyst Mike Mayo maintained an Equal-Weight rating and raised the price target from $111 to $120 [3] - Barclays analyst Jason Goldberg maintained an Equal-Weight rating and raised the price target from $128 to $136 [3] - Wolfe Research analyst Erik Suppiger upgraded Northern Trust from Underperform to Peer Perform [3]

Core Viewpoint - Northern Trust Corporation (NTRS) reported second-quarter 2025 adjusted earnings per share (EPS) of $2.13, surpassing the Zacks Consensus Estimate of $2.08, but down from $4.34 in the prior-year quarter. The results were supported by an increase in net interest income (NII) and growth in total assets under custody (AUC) and assets under management (AUM), although elevated expenses, reduced other fee income, and weak asset quality raised concerns [1][9]. Financial Performance - Net income on a GAAP basis was $421.3 million, reflecting a 53% decline from the prior-year quarter [2]. - Quarterly total revenues on a GAAP basis were $1.99 billion, down 26.4% year over year, but exceeded the Zacks Consensus Estimate by 1% [3]. - NII on a fully taxable equivalent basis was $615.2 million, marking a 16.1% increase year over year, with a net interest margin of 1.69%, up 12 basis points from the prior-year quarter [3]. - Trust, investment, and other servicing fees totaled $1.23 billion, up 5.6% year over year [3]. Income and Expenses - Other non-interest income decreased by 84.7% to $156.3 million compared to the year-ago quarter, primarily due to a decline in foreign exchange trading income and other operating income [4]. - Non-interest expenses fell 7.6% year over year to $1.42 billion, driven by reductions in compensation, outside services, occupancy, and other operating expenses [4]. Asset Management - As of June 30, 2025, Northern Trust's total AUC increased by 9.2% year over year to $14.2 trillion, while total AUM rose by 11.2% year over year to $1.7 trillion [5]. Credit Quality - The total allowance for credit losses was $224.1 million, up 6.9% year over year. Total non-accrual assets increased to $92.8 million from $38.5 million in the year-ago period, with provisions for credit losses reported at $16.5 million compared to $8 million in the prior-year quarter [6]. Capital and Profitability - As of June 30, 2025, the Common Equity Tier 1 capital ratio was 12.2%, down from 12.6% in the prior-year quarter. The total capital ratio was 14.8%, down from 15.5% in the year-ago quarter, and the Tier 1 leverage ratio was 7.6%, down from 8% [7]. - The return on average common equity was 14.2%, compared to 31.2% in the year-earlier quarter [7]. Capital Distribution - In the reported quarter, Northern Trust returned $485.6 million to shareholders through share repurchases and dividends [10].

Northern Trust shares fell as much as 6% after the bank’s management dismissed recent reports of takeover talks and said it doesn’t intend to sell the company https://t.co/lBj8lNaetI ...

Core Insights - Northern Trust Corporation reported a net income of $421 million for Q2 2025, with earnings per share (EPS) of $2.13, reflecting a 20% increase excluding prior-year notables [4][40] - The company raised its return on average common equity (ROE) target to a range of 13%-15% from the previous 10%-15% [5][11] - Total revenue increased by 8% year over year, with favorable currency movements contributing approximately 90 basis points to revenue growth compared to the prior year [5][41] Financial Performance - Net interest income reached a record $615 million, up 7% sequentially and 16% year over year, although $10 million of this was attributed to nonrecurring FX swap activity [8][13] - Total expenses rose by 4.8% year over year, marking the lowest expense growth rate in the past six quarters when excluding notable items [6][52] - The asset servicing pretax margin increased over 10 points to 23.2%, with a 29% increase in pretax profit when excluding prior-year notables [6][47] Shareholder Returns - The company returned $486 million to shareholders, with a payout ratio of 117% and a board-approved 7% increase in the quarterly dividend [7][53] - Average deposits were $122 billion, up 6% sequentially, with interest-bearing deposits increasing by 7% [8][51] Growth Initiatives - The company reported approximately $2.5 billion raised in alternatives in the first half of 2025, with an additional $1 billion in advisory, reflecting a 66% year-over-year increase in alternatives advisory assets under advisement [9][25] - Northern Trust plans to launch 11 new fixed income ETFs in Q3 2025 to meet client demand for scalable exposures [10][31] - The firm is investing in new talent and leadership within Wealth Management to strengthen client coverage and accelerate new business generation [14][29] Strategic Focus - The "One Northern Trust" strategy emphasizes integration and momentum across its business segments, particularly in alternatives [11][20] - The company aims to centralize and automate core operational processes, leveraging AI and public blockchains to enhance client experience and internal productivity [16][22] - Management reaffirmed the company's commitment to independence, stating they have never entertained discussions regarding a sale [12][39]

Core Insights - Northern Trust Corporation (NTRS) reported $2 billion in revenue for Q2 2025, a year-over-year decline of 26.4%, while EPS increased to $2.13 from $1.78 a year ago, exceeding consensus estimates [1] - The revenue surpassed the Zacks Consensus Estimate of $1.97 billion, resulting in a surprise of +1.19%, and the EPS also showed a surprise of +2.4% against the consensus estimate of $2.08 [1] Financial Performance Metrics - Tier 1 Leverage Ratio was reported at 7.6%, slightly below the estimated 7.8% [4] - Net interest margin (FTE) remained stable at 1.7%, matching the average estimate [4] - Average Balance of Total earning assets was $145.82 billion, exceeding the estimated $139.18 billion [4] - Nonaccrual Loans and Leases amounted to $92.8 million, higher than the average estimate of $59.16 million [4] - Wealth Management Trust, Investment and Other Servicing Fees for Global Family Office reached $104.5 million, a +5.8% change year-over-year, slightly above the estimate of $104.02 million [4] - Total Wealth Management Trust, Investment and Other Servicing Fees were $539.3 million, reflecting a +4.6% year-over-year change, below the estimate of $548.23 million [4] - Asset Servicing Trust, Investment and Other Servicing Fees for Custody and Fund Administration were $469.2 million, a +5.2% change year-over-year, above the estimate of $464.2 million [4] - Total Asset Servicing Trust, Investment and Other Servicing Fees were reported at $691.8 million, a +6.3% year-over-year change, slightly above the estimate of $687.8 million [4] - Securities Lending fees were $20.2 million, a +22.4% year-over-year change, below the estimate of $21.34 million [4] - Other Asset Servicing Trust fees were $45.1 million, a +6.1% change year-over-year, below the estimate of $46.28 million [4] - Investment Management fees were $157.3 million, a +8% year-over-year change, slightly above the estimate of $156 million [4] - Net Interest Income (FTE Adjusted) was $615.2 million, exceeding the average estimate of $580.77 million [4] Stock Performance - Northern Trust shares returned +7.1% over the past month, outperforming the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - The company reported a net income of $421 million and earnings per share of $2.13, with a return on average common equity of 14.2% [29] - Revenue grew by 8% year-over-year, while expenses increased by 4.8%, resulting in a pretax margin improvement of 160 basis points [32] - Net interest income reached a record $615 million, up 7% sequentially and 16% year-over-year [30][39] Business Line Data and Key Metrics Changes - Asset Servicing fees totaled $692 million, reflecting a 6% increase year-over-year, with assets under custody and administration up 9% [34] - Wealth Management assets under management were $469 billion, up 12% year-over-year, with trust investment and other servicing fees increasing by 5% [36] - The Asset Servicing pretax profit nearly doubled year-over-year, with a pretax margin up more than 10 points to 23.2% [35] Market Data and Key Metrics Changes - The company’s assets under custody and administration were up 7% sequentially and 9% year-over-year [31] - Average deposits grew by 7% sequentially, contributing to the increase in net interest income [39] - The company reported strong transaction volumes in capital markets activities, which were up double digits over the prior year [33] Company Strategy and Development Direction - The "One Northern Trust" strategy focuses on optimizing growth, driving productivity, and strengthening resiliency while managing risk [10][11] - The company is expanding its alternatives investment platform and enhancing its wealth management offerings to meet evolving client needs [12][19] - Investments in AI tools are being accelerated to streamline processes and enhance decision-making [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit annual earnings per share growth and higher return on equity targets [26][27] - The company is committed to remaining independent and believes this strategy will provide the best returns for shareholders [27][70] - Management anticipates continued organic growth and improved margins, supported by a solid balance sheet [26][29] Other Important Information - The company returned $486 million to shareholders through dividends and share repurchases, reflecting a payout ratio of 117% [42] - The common equity Tier one ratio was reported at 12.2%, with capital levels remaining strong [41] - The company expects total operating expense growth to be below 5% for the full year [43] Q&A Session Summary Question: Inquiry about alternatives and fixed income ETFs - Management characterized the initiatives in alternatives as driven by client demand, with $2.5 billion raised in the first half of the year [51] - The upcoming fixed income ETFs are designed to meet specific client needs, including municipal securities and fixed income ladders [54] Question: Clarification on ROE target adjustment - The ROE target was adjusted to 13% to 15% due to consistent performance above the previous range and improved market conditions [61][62] Question: Discussion on mergers and acquisitions - Management emphasized a focus on organic growth but remains open to acquisitions that enhance the value proposition if they align strategically [70] Question: Considerations for buybacks - Buybacks are evaluated based on regulatory capital, earnings power, and overall financial health, not solely on stock price [74] Question: Scale and custody business - Management highlighted that scale does not necessarily equate to size, focusing on specific sectors and technology to achieve scale [83][84]

Financial Data and Key Metrics Changes - The company reported second quarter net income of $421 million and earnings per share of $2.13, with a return on average common equity of 14.2% [28] - Revenue grew by 8% year over year, while expenses increased by 4.8%, resulting in a pretax margin improvement of 160 basis points [31] - Net interest income reached a record $615 million, up 7% sequentially and 16% year over year [29][37] Business Line Data and Key Metrics Changes - The Asset Servicing business saw assets under custody and administration increase to $16.9 trillion, reflecting a 9% year-over-year increase [32] - Wealth Management assets under management rose to $469 billion, up 12% year over year, with trust investment and other servicing fees increasing by 5% [35] - The Asset Servicing pretax profit nearly doubled year over year, with a pretax margin up more than 10 points to 23.2% [34] Market Data and Key Metrics Changes - The company noted strong transaction volumes in capital markets activities, which were up double digits over the prior year [32] - Average deposits grew by 7% sequentially, contributing to the overall increase in net interest income [33][37] - The company experienced a favorable impact from currency movements on revenue growth, contributing approximately 90 basis points [29] Company Strategy and Development Direction - The "One Northern Trust" strategy focuses on optimizing growth, driving productivity, and strengthening resiliency while managing risk [6][8] - The company is leveraging AI tools to streamline processes and enhance decision-making, aiming for higher margins and better client experiences [9] - The firm is expanding its alternatives investment platform and has seen a record fundraising year, indicating a strong focus on private markets [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory, adjusting the return on equity target from 10-15% to 13-15% [25][26] - The company is committed to maintaining independence and believes this strategy will yield the best returns for shareholders [26][66] - Management highlighted the importance of executing their strategy effectively to continue delivering positive organic growth and operating leverage [28][31] Other Important Information - The company returned $486 million to shareholders through dividends and stock repurchases, reflecting a payout ratio of 117% [40] - The average earning assets increased by 6% on a linked quarter basis, driven by higher deposit levels [37] - The company is focused on maintaining a disciplined approach to cost management while investing in growth initiatives [21][24] Q&A Session Summary Question: Can you provide numbers on the alternatives initiatives and the new fixed income ETFs? - Management indicated that the alternatives initiatives raised approximately $2.5 billion in the first half, with an additional $1 billion from advisory services, highlighting strong client demand for private markets [49] Question: What is driving the decision to tighten the ROE range? - The tightening of the ROE range reflects the company's consistent performance above the previous target and confidence in the current capital framework [57][59] Question: Is there any scenario where M&A would make sense for the company? - Management emphasized a focus on organic growth but remains open to acquisitions that enhance their value proposition if they align with strategic goals [66][68] Question: How does the company plan to manage NII in a declining interest rate environment? - The company plans to reinvest securities rolling off its balance sheet and is focused on deposit pricing across various currencies to mitigate the impact of lower interest rates [97]