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NTRS Q4 Earnings Beat on Y/Y NII & AUM Growth Despite High Costs

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Key Takeaways

  • NTRS posted Q4 EPS of $2.69, beating estimates as quarterly GAAP revenues rose 8.2% y/y.
  • Higher net interest income and growth in AUC and AUM supported NTRS' quarterly performance.
  • NTRS saw non-interest expenses climb 9% y/y, offsetting some operating gains.

Northern Trust Corporation’s (NTRS - Free Report)  fourth-quarter 2025 adjusted earnings per share (EPS) of $2.69 beat the Zacks Consensus Estimate of $2.37. In the prior-year quarter, the company reported an EPS of $2.26.

NTRS results benefited from a rise in net interest income (NII). Also, an increase in total assets under custody (AUC) and assets under management (AUM) balances supported the financials. However, elevated expenses were concerning.

Results excluded certain notable items. After considering this, net income (GAAP basis) was $466 million, up 2% from the prior-year quarter.

For 2025, EPS of $8.74 beat the Zacks Consensus Estimate of $8.69. In the prior-year quarter, the company reported an EPS of $9.77. Net income (GAAP basis) was $1.74 billion, down 14% from the prior-year quarter.

NTRS’ Revenues & Expenses Rise

Quarterly total revenues (GAAP basis) of $2.12 billion increased 8.2% year over year. The top line beat the Zacks Consensus Estimate by 2.41%.

For 2025, total revenues (GAAP basis) of $8.09 billion decline 2% year over year. The top line beat the Zacks Consensus Estimate of $8.03 billion.

NII was $641.6 million in the quarter under review, up 14% year over year. The net interest margin was 1.81%, up 10 basis points from the prior-year quarter.

Trust, investment and other servicing fees totaled $1.31 billion, up 7% year over year.

Other non-interest income increased marginally to $174.1 million from the year-ago quarter.

Non-interest expenses rose 9% year over year to $1.49 billion in the reported quarter.

Northern Trust’s AUC & AUM Rise

As of Dec. 31, 2025, Northern Trust’s total AUC increased 4.7% year over year to $14.4 trillion. Also, total AUM rose 9.3% year over year to $1.8 trillion.

NTRS’ Credit Quality: Mixed Bag

Total allowance for credit losses was $198.3 million, down 4% year over year.

Total non-accrual assets increased to $76.7 million as of Dec. 31, 2025, from $56 million in the year-ago period. NTRS reported provision benefits of $8 million in the fourth quarter compared with provision benefits of $10.5 million in the year-ago quarter.

Northern Trust’s Capital & Profitability Ratios Decline

Under the Standardized Approach, as of Dec. 31, 2025, the Common Equity Tier 1 capital ratio was 12.6%, up from 12.4% in the prior-year quarter. The total capital ratio was 16.1%, up from 15.1% in the year-ago quarter. The Tier 1 leverage ratio was 7.8%, down from 8.1% in the prior-year quarter.

The return on average common equity was 15.4% compared with the year-earlier quarter’s 15.3%.

NTRS’ Capital Distribution Activities

In the reported quarter, Northern Trust returned $521.6 million to shareholders through share repurchases and dividends.

Our View on Northern Trust

A rise in NII and fee income drove the company’s performance. Its increasing AUC and AUM balances are likely to support financials. However, a rise in expenses will likely impede growth.

Northern Trust Corporation Price, Consensus and EPS Surprise

 

Northern Trust Corporation Price, Consensus and EPS Surprise

Northern Trust Corporation price-consensus-eps-surprise-chart | Northern Trust Corporation Quote

Currently, NTRS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Banks

BOK Financial Corporation's (BOKF - Free Report) fourth-quarter 2025 adjusted net income per share of $2.48 surpassed the Zacks Consensus Estimate of $2.13. The bottom line increased 16.9% from the prior-year quarter.

BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans and deposit balances was another positive. However, the increase in operating expenses was a major undermining factor.

First Horizon Corporation’s (FHN - Free Report) fourth-quarter 2025 adjusted earnings per share of 52 cents surpassed the Zacks Consensus Estimate of 47 cents. This compares favorably with 43 cents in the year-ago quarter.

FHN’s results benefited from higher NII and a significant rise in non-interest income, along with the absence of provision for credit losses. However, the rise in expenses remains a headwind.


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