Financial Data and Key Metrics Changes - In Q4 2025, net income was $466 million, with earnings per share (EPS) of $2.42 and a return on average common equity of 15.4% [15] - Trust, investment, and other servicing fees totaled $1.3 billion, reflecting a 7% year-over-year increase [15] - Net interest income increased by 14% year-over-year to $654 million, marking a record high [16] - For the full year, revenue rose by 7%, while expenses grew by 5%, resulting in a pre-tax margin of 30% and a 14.4% return on equity [24] Business Line Data and Key Metrics Changes - Wealth Management saw assets under management reach $507 billion, up 13% year-over-year, with trust fees increasing by 6% in Q4 [18] - Asset Servicing reported assets under custody and administration of $17.4 trillion, an 11% year-over-year increase, with asset servicing fees totaling $730 million, up 8% [20] - Asset Management (NTAM) maintained strong liquidity, with liquidity AUM reaching nearly $340 billion, marking the 12th consecutive quarter of positive flows [12] Market Data and Key Metrics Changes - The Global Family Office (GFO) segment achieved record new business in 2025, with international contributions up 15% [8] - Capital markets activities were robust, contributing to strong performance in asset servicing [20] - The company experienced favorable currency movements that positively impacted revenue growth by approximately 90 basis points [15] Company Strategy and Development Direction - The company is focused on its "One Northern Trust" strategy, aiming for optimized growth, productivity improvements, and enhanced resiliency [4][6] - Plans for 2026 include raising productivity targets by 10% and continuing to invest in AI-driven automation [7] - The company aims to maintain a pre-tax margin of 33% and return on equity in the mid-teens as part of its medium-term financial targets [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver consistent high performance and achieve financial targets, citing strong market conditions [4][29] - The effective tax rate is expected to remain stable at approximately 26%-26.5% in 2026 [16] - Management highlighted the importance of maintaining flexibility in expense growth while focusing on positive operating leverage [26] Other Important Information - The company returned $1.9 billion to shareholders in 2025, including a record $1.3 billion in share repurchases [5][25] - The company recorded $69 million in net unfavorable notable items in Q4, impacting overall financial results [17] Q&A Session Summary Question: Can you speak to your conviction in driving change across the organization? - Management expressed high conviction in seeing changes across the company and expects continued high performance as a result of executing the strategy [28] Question: Can you speak to what drove the lower cost on the IB side? - Management noted that the growth in non-interest-bearing deposits was influenced by seasonal factors and cash stockpiling due to the government shutdown [30] Question: What does that imply for fee growth this year? - Management anticipates mid-single-digit revenue growth for 2026, driven by strong performance in the Global Family Office segment and asset servicing [34] Question: How do you think about the split between the two businesses? - Management indicated that while asset servicing margins need improvement, wealth management has attractive margins and is expected to grow faster [55]