Northern Trust Corporation
NTRS · Nasdaq
Next quarter
Reports Oct 21, 2026, before the open.
Consensus is $2.82 EPS for Sep 2026 across 4 estimates, ranging $2.73 to $2.89.
NTRS Jun 2026
- 10.82%
- -0.40%
- $2.68
- $2.97
- —
- $1.35B
Reported results
- $1.35B
- $792.20M
Highlights
- Adjusted earnings: EPS was $2.97 excluding notable items, $0.29 above the $2.68 consensus estimate, an 10.82% surprise; GAAP diluted EPS was $4.23.
- Visa drove the headline: Northern Trust recorded a $525.4 million pretax gain from its participation in the second Visa exchange offer, partly offset by a $73.9 million securities-sale loss.
- Core revenue growth: Total revenue rose 22% sequentially to $2.70 billion and 35% year over year, while trust, investment and servicing fees increased 1% sequentially and 10% year over year to $1.35 billion.
- Net interest income: FTE net interest income increased 3% sequentially and 11% year over year to $683.1 million; FTE net interest margin expanded to 1.81% from 1.75% in Q1 and 1.69% a year ago.
- Operating leverage: Noninterest expense rose 9% sequentially and 16% year over year to $1.64 billion, including $145.6 million of notable charges; management reported more than 700 basis points of operating leverage for the second straight quarter.
- Client assets reached records: Assets under custody or administration rose 8% sequentially and 11% year over year to $20.0 trillion, while assets under management increased 10% and 16%, respectively, to $2.0 trillion.
- Credit remained benign: Northern Trust recorded a $5.3 million negative provision for credit losses versus a $16.5 million provision a year ago; ending allowance for credit losses was $190.3 million and nonaccrual loans were $71.3 million.
- Capital return and dividend: The company returned $499.4 million to common shareholders in the quarter through $350.6 million of repurchases and $148.8 million of dividends, while the board approved a $0.08, or 10%, quarterly dividend increase.
Analysis
Northern Trust’s second quarter was a substantial beat on adjusted earnings, although the GAAP result was heavily influenced by the Visa exchange offer. Adjusted EPS of $2.97 exceeded the $2.68 consensus by 10.82%, while GAAP diluted EPS rose to $4.23 from $2.71 in Q1 and $2.13 a year ago. Net income increased 51% sequentially to $792.2 million and 88% year over year; total revenue reached $2.70 billion, up from $2.21 billion in Q1 and $2.00 billion in Q2 2025.
The underlying print combined a favorable market and client backdrop with better funding economics. Trust, investment and other servicing fees rose 10% year over year, supported by markets, inflows and new business, while FX and trading income benefited from client activity and volatility. FTE net interest income grew 11% year over year as lower funding costs lifted the margin to 1.81%. Cost growth was elevated by $145.6 million of one-time charges, but management still reported more than 700 basis points of operating leverage. The main qualification is earnings quality: the $525.4 million pretax Visa gain accounted for most of the gap between reported and adjusted EPS.
Visa exchange offer
The quarter’s headline earnings uplift came from a nonrecurring Visa-related gain rather than the operating businesses. Northern Trust recognized a $525.4 million pretax, $396.4 million after-tax gain in Other Operating Income from the second Visa exchange offer. It also recorded a $73.9 million pretax, $54.4 million after-tax loss from selling available-for-sale securities as part of a portfolio repositioning. Together with $145.6 million of pretax expense items, these notable items reduced earnings by $232.1 million after tax, or approximately $1.26 per diluted share, reconciling GAAP EPS of $4.23 with adjusted EPS of about $2.97.
Fee franchise momentum
The recurring fee franchise continued to benefit from rising markets and client activity. Trust, investment and other servicing fees increased to $1.35 billion, up 1% from Q1 and 10% from Q2 2025. Asset Servicing fees rose 2% sequentially and 9% year over year to $757.4 million, led by custody and fund administration fees of $512.3 million and securities lending fees of $29.4 million, up 46% year over year. Wealth Management fees declined 1% sequentially to $592.1 million but increased 10% year over year.
Client balances provide support for future fee revenue. Total assets under custody or administration reached $20.0 trillion, up 8% sequentially and 11% year over year, while assets under management rose to $2.0 trillion, up 10% and 16%, respectively. Management attributed the increases primarily to favorable markets and net client inflows.
Funding and net interest income
Net interest income improved despite a modest sequential decline in average deposits. FTE net interest income was $683.1 million, up from $661.6 million in Q1 and $615.2 million a year earlier. The FTE margin expanded 6 basis points sequentially and 12 basis points year over year to 1.81%, primarily because of lower funding costs and a more favorable deposit mix.
Average interest-bearing deposits increased 3% year over year to $108.3 billion, while average loans rose 1% to $41.6 billion. Northern Trust also continued shifting liquidity into securities: average debt securities increased 17% year over year to $61.4 billion, contributing to the broader balance-sheet repositioning.
Costs and segment earnings
Reported expense growth was inflated by restructuring and technology items. Noninterest expense rose to $1.64 billion, up 9% sequentially and 16% year over year. Compensation and benefits increased 18% year over year to $868.0 million, including $51.0 million of severance and a $33.1 million broad-based equity grant; equipment and software expense rose 29% to $378.5 million, including a $61.5 million software-disposition charge.
Asset Servicing pretax income rose 19% year over year to $323.3 million, while Wealth Management pretax income increased 8% to $333.5 million. The Other category generated $415.5 million of pretax income, compared with a $4.7 million loss a year earlier, primarily reflecting the Visa gain and securities-sale loss.
Credit and capital
Credit trends were supportive of earnings. The company recorded a $5.3 million negative credit-loss provision, versus a $3.0 million negative provision in Q1 and a $16.5 million provision in Q2 2025. Management cited a stronger macroeconomic outlook and improved credit quality in commercial real estate and commercial and institutional portfolios, partly offset by higher individual reserves for a small number of nonperforming loans. Nonaccrual loans declined to $71.3 million from $76.7 million at year-end, and the allowance for credit losses ended at $190.3 million.
Capital remained strong while shareholder distributions accelerated. Northern Trust repurchased 2.13 million shares for $350.6 million and paid $148.8 million of common dividends in the quarter. The corporation’s standardized CET1 ratio was 12.2%, and it returned more than $1 billion of capital to shareholders during the first half, including dividends and repurchases.
