Northern Trust (NTRS) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $464.9M, up 42% year-over-year, with EPS of $2.22 and a return on average common equity of 15.4%.

• Revenue increased 14% year-over-year to $1.98B, driven by higher trust, investment, and servicing fees, and a $68.1M gain on an equity investment sale.

• Trust fees rose 8% and net interest income increased 21% year-over-year.

• Organizational changes included a new CFO, President of Wealth Management, and COO to drive operational efficiency.

• Over $450M was returned to shareholders through dividends and share repurchases.

Financial highlights

• Net interest income (FTE) reached $569.4M, up 21% year-over-year and 7% sequentially.

• Assets under custody/administration rose 23% year-over-year to $17.4T; assets under management up 22% to $1.62T.

• Wealth management AUM was $444B, up 20% year-over-year.

• Revenue increased 3% sequentially and 10% year-over-year; expenses up 6% year-over-year.

• Notable items included a $68.1M pre-tax gain from an equity investment sale and a $12.8M mark-to-market loss on Visa Class B swaps.

Outlook and guidance

• Q4 net interest income expected in the $550–560M range, slightly down due to anticipated rate cuts.

• Total operating expenses projected to rise approximately 2% in Q4 versus Q3.

• Expense growth targeted below 5% for 2025, with a focus on driving positive operating leverage.

• Management expects continued revenue growth, supported by favorable markets and new business, but notes ongoing expense pressures from compensation and technology investments.

• Regulatory capital requirements are expected to increase under the Basel III Endgame Proposal, with phased implementation starting July 2025.