Northern Trust(NTRS) - 2024 Q1 - Quarterly Results

Financial Performance - Net income for Q1 2024 was $334.6 million, a decrease of 15% compared to Q4 2023[15] - The company's earnings per share (EPS) for Q1 2024 was $1.51, down 17% from Q4 2023[15] - Total revenue (FTE) decreased by 6% to $1,654.1 million from $1,757.8 million[16] - Net income fell by 36% to $214.7 million compared to $334.6 million in the previous quarter[16] - Earnings per share (diluted) decreased by 37% to $0.96 from $1.51[16] - The company reported a net income of $1,107.3 million for 2023, down from $1,336.0 million in 2022, indicating a decrease of about 17%[18] - Earnings per diluted share for 2023 were $5.08, compared to $6.14 in 2022, representing a decline of approximately 17.2%[18] - Profit margin (pre-tax) for 2023 is 21.6%, down from 26.1% in 2022[58] - Profit margin (after-tax) (GAAP) for 2023 is 16.3%, down from 19.8% in 2022[58] Revenue and Income Sources - Trust, investment, and other servicing fees for Q1 2024 totaled $315.2 million, reflecting a 16% decline from the previous quarter[15] - Total noninterest income decreased by 8% to $1,118.7 million from $1,213.4 million[16] - Total fees for 2023 amounted to $4,361.8 million, consistent with the previous year's figure of $4,432.6 million[18] - The company reported a total of $2,461.9 million in servicing trust, investment, and other servicing fees, reflecting a decrease from $2,496.3 million[20] - Noninterest income to total revenue (GAAP) decreased to 70.7% in 2023 from 72.1% in 2022[58] - Noninterest income to total revenue (FTE) decreased to 70.1% in 2023 from 71.6% in 2022[58] Assets and Liabilities - The total assets on the balance sheet as of Q1 2024 were $1,053.9 million, a decrease of 17% year-over-year[15] - Total assets increased to $156,111.0 million as of March 31, 2024, up from $151,108.0 million a year earlier, representing a 3% growth[21] - Total liabilities increased to $144,009.2 million, reflecting a 3% rise from $139,520.2 million[21] - Total liabilities decreased from $144,666.2 million in 2022 to $131,152.4 million in 2023, a decline of approximately 9.3%[32] Interest Income and Margins - The net interest margin for Q1 2024 was 0.92%, slightly down from 0.91% in Q4 2023[15] - Interest income (FTE) increased by 67% to $2,452.9 million from $1,468.6 million[16] - Net interest income for 2023 reached $2,039.5 million, up from $1,932.8 million in 2022, reflecting a growth of approximately 5.5%[18] - The net interest margin increased to 4.69% in 2023, up from 1.30% in 2022, reflecting a significant improvement in profitability[36] - The net interest spread (GAAP) decreased to 0.69% in 2023 from 1.15% in 2022[58] Credit Losses and Provisions - Provision for credit losses improved to $(8.5) million from $15.0 million, indicating a reduction in expected credit losses[16] - The company experienced a provision for credit losses of $24.5 million in 2023, compared to a release of $12.0 million in 2022[18] - The allowance for credit losses was reported at $(172.8) million in 2023, compared to $(154.1) million in 2022, indicating a higher provision for potential losses[32] - The ending allowance for credit losses was $220.4 million, with loans and leases accounting for $178.7 million of this total[45] Growth and Strategic Initiatives - The company anticipates a continued focus on market expansion and new product development in 2024[12] - The company plans to enhance its technology capabilities to improve service delivery and client engagement[12] - The firm anticipates continued growth in Wealth Management, projecting an increase in client assets driven by market expansion and new product offerings[48] - Future outlook includes strategic acquisitions to bolster market presence and expand service offerings in key regions[48] Market and Client Engagement - The company is focusing on enhancing its technology infrastructure to support asset servicing and improve client experience[48] - The company reported a total of $200.9 million in the beginning allowance for credit losses, indicating a proactive approach to risk management[44]