We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Northern Trust (NTRS) Q1 Earnings Beat, Revenues Fall Y/Y
Read MoreHide Full Article
Northern Trust Corporation’s (NTRS - Free Report) first-quarter 2024 adjusted earnings per share (excluding the impact of loss on available-for-sale debt securities and FDIC special assessment fees) of $1.70 surpassed the Zacks Consensus Estimate of $1.47. The bottom line also increased 12.6% year over year.
Results have been aided by a rise in fee income. Also, an increase in total assets under custody (AUC) and assets under management (AUM) balances supported financials. However, a fall in net interest income (NII) and elevated expenses were the major headwinds.
Net income was $214.7 million, down 35.8% year over year.
Revenues Fall & Expenses Rise
Quarterly total revenues (GAAP basis) of $1.65 billion were down 5.6% year over year. The top line also missed the Zacks Consensus Estimate of $1.79 billion.
NII was $535.4 million in the quarter under review, down 1.7% year over year. The net interest margin was 1.61%, falling from 1.62% in the prior-year quarter.
Trust, investment and other servicing fees totaled $1.14 billion, up 7.5% from the year-ago quarter. Other non-interest loss was $24.2 million against the income of $149.8 million in the prior-year quarter.
Non-interest expenses increased 6.2% to $1.36 billion in the reported quarter. The uptick stemmed from an elevation in all components except occupancy costs.
AUM and AUC Rise
As of Mar 31, 2024, Northern Trust’s total AUC increased 16.3% year over year to $12.8 trillion. Also, total AUM rose 12.8% to $1.5 trillion.
Credit Quality Deteriorates
Total allowance for credit losses was $201.5 million, decreasing 5.4% year over year. Total non-accrual assets decreased 24.3% to $37 million as of Mar 31, 2024.
NTRS released provisions for credit losses of $8.5 million in the first quarter against the provision of $15 million in the year-ago quarter.
Capital Ratios Unchanged, Profitability Declines
Under the Standardized Approach, as of Mar 31, 2024, the Common Equity Tier 1 capital ratio and the total capital ratio were 11.4% and 14.2%, respectively, remaining unchanged from the prior-year quarter. The Tier 1 leverage ratio was 7.8% compared with 8.1% in the prior-year quarter.
Return on average assets was 0.60%, down from 0.92% in the year-ago quarter. Also, the return on average common equity was 7.3% compared with the year-earlier quarter’s 12.4%.
Capital Deployment Activities
In the reported quarter, Northern Trust returned $285.4 million to shareholders through share repurchases and dividends.
Our Viewpoint
NTRS’ first-quarter performance was aided by a rise in fee income. Its increasing AUC and AUM balances are likely to support financials. Nonetheless, a decline in NII and escalating expenses may threaten the company’s profitability in the upcoming quarters.
Northern Trust Corporation Price, Consensus and EPS Surprise
Wells Fargo & Company’s (WFC - Free Report) first-quarter 2024 adjusted earnings per share of $1.26 surpassed the Zacks Consensus Estimate of $1.10. The adjusted figure excludes the impacts of expenses from the FDIC special assessment. In the prior-year quarter, the company reported earnings per share of $1.23.
Results have benefited from higher non-interest income. An improvement in capital ratios and a decline in provisions were other positives. However, the decrease in NII and loan balances and an increase in expenses were the undermining factors for WFC.
Citigroup Inc.’s (C - Free Report) first-quarter 2024 net income from continuing operations per share of $1.58 surpassed the Zacks Consensus Estimate of $1.13. However, the metric declined 28% from the year-ago quarter. However, C witnessed declines in total loans and deposits in the quarter. Also, a decline in revenues and deteriorating credit quality are near-term woes.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Northern Trust (NTRS) Q1 Earnings Beat, Revenues Fall Y/Y
Northern Trust Corporation’s (NTRS - Free Report) first-quarter 2024 adjusted earnings per share (excluding the impact of loss on available-for-sale debt securities and FDIC special assessment fees) of $1.70 surpassed the Zacks Consensus Estimate of $1.47. The bottom line also increased 12.6% year over year.
Results have been aided by a rise in fee income. Also, an increase in total assets under custody (AUC) and assets under management (AUM) balances supported financials. However, a fall in net interest income (NII) and elevated expenses were the major headwinds.
Net income was $214.7 million, down 35.8% year over year.
Revenues Fall & Expenses Rise
Quarterly total revenues (GAAP basis) of $1.65 billion were down 5.6% year over year. The top line also missed the Zacks Consensus Estimate of $1.79 billion.
NII was $535.4 million in the quarter under review, down 1.7% year over year. The net interest margin was 1.61%, falling from 1.62% in the prior-year quarter.
Trust, investment and other servicing fees totaled $1.14 billion, up 7.5% from the year-ago quarter. Other non-interest loss was $24.2 million against the income of $149.8 million in the prior-year quarter.
Non-interest expenses increased 6.2% to $1.36 billion in the reported quarter. The uptick stemmed from an elevation in all components except occupancy costs.
AUM and AUC Rise
As of Mar 31, 2024, Northern Trust’s total AUC increased 16.3% year over year to $12.8 trillion. Also, total AUM rose 12.8% to $1.5 trillion.
Credit Quality Deteriorates
Total allowance for credit losses was $201.5 million, decreasing 5.4% year over year. Total non-accrual assets decreased 24.3% to $37 million as of Mar 31, 2024.
NTRS released provisions for credit losses of $8.5 million in the first quarter against the provision of $15 million in the year-ago quarter.
Capital Ratios Unchanged, Profitability Declines
Under the Standardized Approach, as of Mar 31, 2024, the Common Equity Tier 1 capital ratio and the total capital ratio were 11.4% and 14.2%, respectively, remaining unchanged from the prior-year quarter. The Tier 1 leverage ratio was 7.8% compared with 8.1% in the prior-year quarter.
Return on average assets was 0.60%, down from 0.92% in the year-ago quarter. Also, the return on average common equity was 7.3% compared with the year-earlier quarter’s 12.4%.
Capital Deployment Activities
In the reported quarter, Northern Trust returned $285.4 million to shareholders through share repurchases and dividends.
Our Viewpoint
NTRS’ first-quarter performance was aided by a rise in fee income. Its increasing AUC and AUM balances are likely to support financials. Nonetheless, a decline in NII and escalating expenses may threaten the company’s profitability in the upcoming quarters.
Northern Trust Corporation Price, Consensus and EPS Surprise
Northern Trust Corporation price-consensus-eps-surprise-chart | Northern Trust Corporation Quote
Currently, Northern Trust sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Major Banks
Wells Fargo & Company’s (WFC - Free Report) first-quarter 2024 adjusted earnings per share of $1.26 surpassed the Zacks Consensus Estimate of $1.10. The adjusted figure excludes the impacts of expenses from the FDIC special assessment. In the prior-year quarter, the company reported earnings per share of $1.23.
Results have benefited from higher non-interest income. An improvement in capital ratios and a decline in provisions were other positives. However, the decrease in NII and loan balances and an increase in expenses were the undermining factors for WFC.
Citigroup Inc.’s (C - Free Report) first-quarter 2024 net income from continuing operations per share of $1.58 surpassed the Zacks Consensus Estimate of $1.13. However, the metric declined 28% from the year-ago quarter.
However, C witnessed declines in total loans and deposits in the quarter. Also, a decline in revenues and deteriorating credit quality are near-term woes.