Financial Data and Key Metrics Changes - The company reported third quarter net income of USD 458 million and earnings per share of USD 2.29, with a return on average common equity of 14.8% [17] - Revenue increased by 6% year-over-year, while expenses rose by 4.7%, resulting in a pre-tax margin expansion of 200 basis points [19][25] - Year-to-date, the company returned 110% of earnings to shareholders, contributing to a 5% decrease in shares outstanding [5][25] Business Line Data and Key Metrics Changes - **Wealth Management**: Assets under management increased to USD 493 billion, up 11% year-over-year, with trust investment and other servicing fees rising to USD 559 million, a 5% increase [20] - **Asset Management**: The company launched 11 new ETF strategies, with liquidity remaining strong, reporting 11 consecutive quarters of positive flows [11][21] - **Asset Servicing**: Assets under custody and administration reached USD 17 trillion, reflecting a 4% year-over-year increase, with asset servicing fees totaling USD 707 million, a 6% increase [21][22] Market Data and Key Metrics Changes - The company experienced a 1% sequential increase in assets under custody and administration and a 5% year-over-year increase [18] - Average deposits were USD 116.7 billion, down 5% compared to the second quarter, reflecting typical seasonal patterns [24] Company Strategy and Development Direction - The company is focused on its "One Northern Trust" strategy, emphasizing organic growth and operational efficiency through AI and a client-centric operating model [5][8] - The Enterprise Growth Program is driving improvements in organic growth, particularly in private markets, with a focus on high-value client segments [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong financial performance despite potential economic challenges, emphasizing a disciplined execution of strategy [15][16] - The company anticipates continued growth in net interest income and expects operating expense growth to remain below 5% for the full year [26] Other Important Information - The company has embedded AI in over 150 use cases, enhancing efficiency and client service across various business lines [7][8] - The company is exploring opportunities in digital assets and tokenization, with a focus on enhancing operational efficiency and scalability [79] Q&A Session Summary Question: NII outlook and deposit trends - Management indicated that deposits performed in line with expectations and anticipated a slight pickup in Q4, with NII expected to grow mid to high single digits [31][32] Question: Challenges at the investment product level - Management noted pressure on index products due to asset allocation and pricing, and emphasized a focus on improving product performance and pricing [34][35] Question: AUCA growth and outflows - Management explained that AUCA growth was driven by specific clients, and outflows were due to restructuring rather than client losses [40][41] Question: Expense growth and operating leverage - Management reaffirmed commitment to keeping expense growth below 5% and highlighted ongoing efforts to improve productivity and efficiency [42][44] Question: Focus on profitability versus growth - Management confirmed a focus on profitability, allowing low-margin business to roll off while seeking accretive margins on new business [48][49] Question: AI's impact across business lines - Management stated that AI is enhancing efficiency across all areas, with specific applications in operations, technology, and client service [74][76] Question: Digital assets and stablecoin strategy - Management discussed the importance of innovation and regulation in the digital asset space, indicating a focus on tokenization rather than issuing a stablecoin [79][80]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported net income of $458 million and earnings per share of $2.29, with a return on average common equity of 14.8% [15] - Revenue increased by 6% year-over-year, while expenses rose by 4.7%, leading to a pre-tax margin expansion of 200 basis points [17] - The company returned nearly 100% of its earnings to shareholders, contributing to a 5% decrease in shares outstanding [4][24] Business Line Data and Key Metrics Changes - Wealth Management assets under management reached $493 billion, up 11% year-over-year, with trust investment and servicing fees increasing by 5% [18] - Asset Servicing assets under custody and administration grew to $17 trillion, reflecting a 4% year-over-year increase, with Asset Servicing fees totaling $707 million, up 6% [19][20] - Asset Management launched 11 new ETF strategies, with liquidity remaining a standout area, reporting its 11th consecutive quarter of positive flows [10][12] Market Data and Key Metrics Changes - The company experienced a 1% sequential increase in assets under custody and administration and a 4% increase in assets under management compared to the previous year [16] - Average deposits were $116.7 billion, down 5% compared to the second quarter, reflecting typical seasonal patterns [23] - The effective tax rate was 26.1%, up 70 basis points from the prior period due to higher tax impacts from international operations [17] Company Strategy and Development Direction - The company is focused on its "One Northern Trust" strategy, emphasizing organic growth and operational efficiency through AI and a client-centric operating model [4][5] - The Enterprise Growth Program is driving improvements in organic growth, particularly in private markets, with a focus on enhancing productivity and efficiency [5][6] - The company aims to deliver consistent financial performance and create enduring value for stakeholders, regardless of the broader economic environment [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges in the investment product level and emphasized a focus on profitability over top-line growth [31][44] - The company anticipates continued gradual improvement in margins and overall growth, with a disciplined approach to managing expenses [13][40] - Looking ahead, management expects operating expense growth to remain below 5% for the full year and mid to high single-digit growth in net interest income [25] Other Important Information - The company has embedded AI in over 150 use cases, enhancing efficiency and client service across various business lines [6][67] - The introduction of a feeder fund structure by 50 South Capital provides Wealth clients direct access to top-tier alternative managers, reflecting ongoing innovation in investment offerings [9][78] - The company received recognition as the Best Administrator Overall Service Award and Custodian of the Year, validating its leadership in the industry [12] Q&A Session Summary Question: NII outlook and deposit trends - Management indicated that deposits performed in line with expectations and anticipated a slight pickup in Q4, with NII growth projected to be mid to high single digits [27][30] Question: Challenges at the investment product level - Management noted pressure on index products due to asset allocation and pricing, and emphasized a focus on improving product performance and pricing [31][32] Question: AUCA growth and outflows - Management explained that AUCA growth was driven by individual clients, with some outflows attributed to restructuring rather than client losses [35][36] Question: Expense growth and operating leverage - Management reaffirmed commitment to keeping expense growth below 5% and highlighted ongoing efforts to improve productivity and efficiency [39][40] Question: AI's impact across business lines - Management stated that AI is enhancing efficiency across all areas of the company, with specific applications in operations, technology, and client service [63][68] Question: Stablecoin and digital assets strategy - Management discussed the focus on tokenization rather than issuing a stablecoin, emphasizing the importance of interoperability and client demand in the digital asset space [70][71]

Financial Data and Key Metrics Changes - The company reported a third quarter net income of $458 million and earnings per share of $2.29, with a return on average common equity of 14.8% [20] - Revenue increased by 6% year-over-year, while expenses rose by 4.7%, leading to a pre-tax margin expansion of 200 basis points [25][24] - The company returned nearly 100% of its earnings to shareholders, contributing to a 5% decrease in shares outstanding [6][20] Business Line Data and Key Metrics Changes - Wealth Management assets under management reached $493 billion, up 11% year-over-year, with trust investment and other servicing fees increasing by 5% [25] - Asset Servicing assets under custody and administration grew to $17 trillion, reflecting a 4% year-over-year increase, with asset servicing fees totaling $700 million, up 6% [29] - The Asset Management segment launched 11 new ETF strategies, with positive flows in ETFs and custom SMAs [12][29] Market Data and Key Metrics Changes - The company experienced a 1% sequential increase in assets under custody and administration, and a 4% sequential increase in assets under management [22][23] - The effective tax rate was 26.1%, up 70 basis points from the prior period due to higher tax impacts from international operations [24] Company Strategy and Development Direction - The company is focused on its "One Northern Trust" strategy, emphasizing organic growth and operational efficiency through AI and a client-centric operating model [5][6] - There is a strong emphasis on expanding alternative investment offerings and enhancing the wealth management value proposition [10][12] - The company aims to improve profitability in its Asset Servicing business by allowing non-core and underperforming business to roll off as contracts expire [16][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong financial performance despite potential economic challenges, highlighting a disciplined execution of strategy [18] - The company anticipates continued gradual improvement in margins and overall growth, with a focus on maintaining operating expense growth below 5% [35][60] - Management noted that AI is becoming a significant driver of innovation and efficiency across the organization [7][96] Other Important Information - The company reported a $17 million release of the credit reserve in the third quarter, reflecting changes in macroeconomic projections [24] - The company has returned over $1.3 billion to shareholders year-to-date, reflecting a 110% payout ratio [34] Q&A Session Summary Question: NII outlook and deposit trends - Management indicated that deposits performed in line with expectations and anticipated a slight pickup in deposits in Q4, with NII expected to grow mid to high single digits [38][39] Question: Challenges at the investment product level - Management elaborated on pressures in the index and asset allocation areas, noting actions to enhance product performance and pricing [42][44] Question: AUCA growth and outflows - Management explained that AUCA growth was driven by individual clients, with some outflows attributed to restructuring rather than client losses [51][52] Question: Expense growth and operating leverage - Management reaffirmed commitment to maintaining expense growth below 5% and emphasized ongoing efforts to bend the cost curve down [58][60] Question: Focus on profitability in asset servicing - Management confirmed a focus on profitability over top-line growth, allowing low-margin business to roll off while improving margins in new business [65][66] Question: AI's impact across different business lines - Management stated that AI is being utilized across all areas of the company, enhancing efficiency and service delivery [96][93] Question: Stablecoin and digital assets strategy - Management discussed the focus on tokenization rather than issuing a stablecoin, emphasizing the importance of interoperability and client demand [102][103]