Why Is Northern Trust (NTRS) Up 0.8% Since Last Earnings Report?

Core Viewpoint - Northern Trust Corporation (NTRS) reported a positive earnings performance in Q3 2025, with earnings per share (EPS) of $2.29, surpassing estimates, but faced challenges with rising costs and declining non-interest income [2][4]. Financial Performance - Q3 2025 EPS of $2.29 exceeded the Zacks Consensus Estimate of $2.26 and was up from $2.22 in the prior-year quarter [2]. - Net income on a GAAP basis was $457.6 million, reflecting a 1.6% decrease from the previous year [3]. - Total revenues for the quarter were $2.02 billion, a 2.8% year-over-year increase, but fell short of the Zacks Consensus Estimate by nearly 1% [4]. - Net interest income (NII) rose to $596.3 million, a 4.7% increase year-over-year, with a net interest margin of 1.70%, up 2 basis points from the prior year [4]. - Trust, investment, and other servicing fees totaled $1.26 billion, marking a 5.7% increase year-over-year [4]. - Non-interest income decreased by 19.3% to $169.1 million, primarily due to a drop in other operating income [5]. - Non-interest expenses increased by 4.7% year-over-year to $1.42 billion, driven by higher costs across most components [5]. Asset Management - As of September 30, 2025, total assets under custody (AUC) rose by 4.7% year-over-year to $14.4 trillion, while total assets under management (AUM) increased by 9.3% to $1.8 trillion [6]. Credit Quality - The total allowance for credit losses was $206.7 million, down 6% year-over-year, while total non-accrual assets increased to $78.8 million from $73.1 million in the prior year [7]. Capital and Profitability - The Common Equity Tier 1 capital ratio was 12.4%, down from 12.6% in the prior-year quarter, and the total capital ratio decreased to 15.1% from 15.6% [8]. - The return on average common equity was 14.8%, compared to 15.4% in the previous year [8]. Shareholder Returns - In the reported quarter, Northern Trust returned $431.3 million to shareholders through share repurchases and dividends [10]. Market Outlook - Following the earnings release, there has been a downward trend in estimates for the stock, indicating a potential shift in market sentiment [11]. - Northern Trust holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [13].