Northern Trust (NasdaqGS:NTRS) Q3 2025 Earnings Call October 22, 2025 09:00 AM ET Company ParticipantsJennifer Childe - Director of Investor RelationsMike Mayo - MD and Head of U.S. Large-Cap Bank ResearchMichael O'Grady - Chairman and CEODavid Fox - CFOConference Call ParticipantsBrennan Hawkin - Stock AnalystBetsy Graseck - Finance Research AnalystGlenn Schorr - MD and Senior Research AnalystSteven Alexopoulos - Bank AnalystEbrahim Poonawala - MD and Research AnalystDavid Smith - AnalystGerard Cassidy - R ...

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]

Northern Trust (NasdaqGS:NTRS) Q3 2025 Earnings Call October 22, 2025 09:00 AM ET Speaker0Good day, and welcome to the Northern Trust Corporation Third Quarter twenty twenty five Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jennifer Child, Director of Investor Relations. Please go ahead.Speaker1Thank you, operator, and good morning, everyone. Welcome to Northern Trust Corporation's third quarter twenty twenty five earnings conferen ...