NTRS

CHICAGO, July 29, 2026--(BUSINESS WIRE)--Global equity markets reached new highs during the second quarter of 2026 as investors focused on strong corporate profits and resilient earnings momentum despite geopolitical concerns in Iran and supply chain disruptions tied to shipping bottlenecks in the Strait of Hormuz. The Northern Trust All Funds Over $100 Million plan universe reported a median return of 6.6% for the quarter. The Northern Trust Universe tracks the performance of 368 large U.S. institutional investment plans, with combined assets of approximately $1.6 trillion, which subscribe to performance measurement services as part of Northern Trust’s asset servicing offerings. All major institutional plan types posted positive results during the quarter. The Northern Trust Corporate (ERISA) universe returned 4.5% at the median during the quarter, while the Northern Trust Public Funds universe reported a 6.6% median return, and the Northern Trust Foundation and Endowment (F&E) universe posted a 7.0% median return. U.S. equity markets advanced sharply during the second quarter, supported by continued strength in large-cap technology stocks, including AI hardware companies. As the quarter progressed, the rally broadened to include mid- and small-cap stocks. The S&P 500 rose 15.2% for the quarter and gained 22.3% over the one-year period. The Northern Trust US Equity program universe posted a 14.9% median return for the quarter and 22.2% for the year, while the Northern Trust Non-US Equity program universe had a median return of 11.7% in the quarter. Nadia Cobalovic, global head of Integrated Portfolio Services at Northern Trust Asset Servicing, said: "Institutional investors benefited from strong market performance across both U.S. and international equities during the second quarter. Broad participation across sectors and regions helped support portfolio returns, while ongoing market uncertainty reinforced the value of maintaining diversified, long-term investment strategies." Fixed income markets generated modest positive returns during the quarter. Following the June Federal Open Market Committee meeting, the Federal Reserve maintained the federal funds target range at 3.50% to 3.75%, while signaling a more restrictive policy outlook amid rising inflation indicators. Against this backdrop, the Northern Trust US Fixed Income universe posted a median return of 1.1% for the quarter and 4.4% over the trailing year, compared with 0.6% and 3.8%, respectively, for the Bloomberg US Aggregate Bond Index. ERISA plan one, three, and five‑year median returns were 9.4%, 7.4%, and 2.1%, respectively. Within the Northern Trust ERISA universe, U.S. fixed income remained the largest allocation, rising to more than 56%, its highest level on record for the universe. Public Funds universe median returns for the one, three, and five‑year periods were 13.5%, 11.2%, and 6.8%, respectively. U.S. equity remains the largest allocation within Public Funds, with a median allocation of 28.4%, reflecting a 1.5 percentage point market-driven increase from the prior year. In the Foundations & Endowments universe, median one, three, and five‑year returns stood at 15.0%, 12.3%, and 7.0%, respectively. The median allocation to private equity declined to below 25%, reflecting the relative strength of public equity markets during the quarter. About Northern Trust Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking services to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2026, Northern Trust had assets under custody/administration of US$20.0 trillion, and assets under management of US$2.0 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on northerntrust.com. Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn. Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/terms-and-conditions. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729015315/en/ Contacts Media Contacts Europe, Middle East, Africa & Asia-Pacific:Camilla Greene+44 (0) 20 7982 [email protected] Simon Ansell+ 44 (0) 20 7982 [email protected] US & Canada:John O'Connell+1 312 444 2388John_O'[email protected] http://www.northerntrust.com

Northern Trust Corporation has reported past second-quarter 2026 results, with net interest income rising to US$675.5 million and net income to US$792.2 million, while also boosting its quarterly dividend and rolling out an employee stock award program to broaden ownership. The combination of stronger earnings, higher fee and interest income, and initiatives to align employees with long-term value creation has sharpened investor focus on how durable Northern Trust’s recent performance improvements may be. We’ll now examine how this earnings beat, underpinned by higher net interest income, might reshape Northern Trust’s existing investment narrative and assumptions. Explore 26 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. Northern Trust appeals most to investors who believe in its core franchise in asset servicing and wealth management, supported by disciplined capital return and steady, high quality earnings. The latest quarter’s jump in net interest income and net income reinforces that thesis in the near term, but also sharpens attention on whether higher margins and fee growth can be maintained, while the biggest current risk remains any sustained pressure on client activity or assets under management. Among recent announcements, the 10% increase in the quarterly dividend to US$0.88 per share stands out as most relevant, because it sits alongside the strong second quarter earnings beat and improved returns on equity. Together with the new Invested as One employee stock award program, it underlines how the current earnings strength is being paired with broader ownership, which could matter if higher fee income and net interest income remain key catalysts. Yet behind the strong dividend signal, one risk investors should be aware of is how quickly client asset levels could change if... Read the full narrative on Northern Trust (it's free!) Northern Trust's narrative projects $10.0 billion revenue and $2.3 billion earnings by 2029. Uncover how Northern Trust's forecasts yield a $179.35 fair value, in line with its current price. Two members of the Simply Wall St Community currently estimate Northern Trust’s fair value between US$179.35 and US$205.18, highlighting how widely individual views can differ. Against that backdrop, the recent earnings beat driven by higher net interest income raises fresh questions about how durable today’s margin profile and growth in fee based assets might prove, so it is worth weighing several alternative scenarios before forming a view on the stock. Explore 2 other fair value estimates on Northern Trust - why the stock might be worth as much as 15% more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Northern Trust research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. Our free Northern Trust research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Northern Trust's overall financial health at a glance. Don't miss your shot at the next 10-bagger. Our latest stock picks just dropped: Outshine the giants: these 16 early-stage AI stocks could fund your retirement. The latest GPUs need a type of rare earth metal called Neodymium and there are only 29 companies in the world exploring or producing it. Find the list for free. We've uncovered the 7 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NTRS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, July 22, 2026 at 9:00 a.m. ET Chairman and Chief Executive Officer - Mike O'Grady Chief Financial Officer - Dave Fox Controller - John Landers Head of Investor Relations - Stephen Carroll Investor Relations - Trace Stedman Operator: Good day, welcome to the Northern Trust Corporation second quarter 2026 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Stephen Carroll, head of investor relations. Please go ahead. Stephen Carroll: Thank you, operator. Good morning, everyone, welcome to Northern Trust Corporation's second quarter 2026 earnings conference call. Joining me on our call this morning is Mike O'Grady, our chairman and CEO, Dave Fox, our chief financial officer, John Landers, our controller, and Trace Stedman from our investor relations team. Our second quarter earnings press release and financial trends report are both available on our website at northerntrust.com. Also on our website, you will find our quarterly earnings review presentation, which we will use to guide today's conference call. This July 22nd call is being webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be made available on our website through August 22nd. Northern Trust disclaims any continuing accuracy of the information provided in this call after today. Stephen Carroll: Please refer to our safe harbor statement regarding forward-looking statements in the back of the accompanying presentation, which will apply to our commentary on this call. During today's question and answer session, please limit your initial query to one question and one related follow-up. This will allow us to move through the queue and enable as many people as possible the opportunity to ask questions as time permits. Thank you again for joining us today. Let me turn the call over to Mike O'Grady. Mike O'Grady: Thank you, Steve, good morning, everyone. Let me join in welcoming you to our second quarter 2026 earnings call. Our results this quarter reflect strong execution of our One Northern Trust strategy and a very constructive market environment. We delivered an eighth consecutive quarter of positive organic fee growth and generated significant positive operating leverage, underscoring both the strength of our diversified business model and the discipline with which we are managing the firm. As we've discussed, our strategy is centered on driving sustainable organic growth, improving productivity, and strengthening resiliency. Across each of these priorities, we continue to see clear proof points and are demonstrating our ability to perform consistently across a range of market environments. In the quarter, we participated in the second tranche of the Visa Class B common stock exchange offer, positioning us to recognize a pre-tax gain of nearly $525 million. Mike O'Grady: Reported results also include approximately $220 million in restructuring charges and other notable items, which Dave will discuss in more detail. Excluding notable items, earnings per share increased 40% year-over-year. Total revenue increased 13%, driven by 10% growth in trust fees, 11% growth in net interest income, and 69% growth in capital markets revenues, including foreign exchange trading and securities commissions and trading income. Non-interest expense was up 5% as we continue to balance disciplined cost management with ongoing investments in the business. Importantly, strong revenue growth combined with expense discipline drove positive operating leverage of over 700 basis points, excluding notable items. We returned almost $500 million to shareholders during the quarter. Year-to-date, we've returned over $1 billion to shareholders. Excluding notable items, this represents a payout ratio of 95% through the first half of the year. Mike O'Grady: Overall, these results demonstrate solid progress on our financial objectives and reinforce the strength and durability of our business model. Turning to wealth management, the business delivered another solid quarter, with trust fees increasing 10% year-over-year, reflecting continued client engagement and strong execution across the franchise. Assets under management were up 7% sequentially and 14% year-over-year. We also continue to make progress against our strategic growth priorities. Our differentiated capabilities continue to support growth in global family office and the ultra-high net worth segment. GFO revenue increased 9% in the first half of 2026, and continued momentum internationally. Revenue from wealthy individuals and families with more than $100 million in assets outpaced the broader portfolio. Family Office Solutions is an important part of this success as we extend our proven GFO playbook to clients that can benefit from an outsourced family office model. Mike O'Grady: Talent remains one of the most important drivers of wealth management growth. We're making solid progress adding revenue-generating professionals, particularly critical producer roles, where pending hires and active recruiting give us confidence in the trajectory of the second half of the year. This is a competitive market for the best talent, but we believe Northern Trust offers a differentiated platform, an excellent brand, deep fiduciary expertise, strong banking capabilities, and a compelling position in the upper tiers of the market. We also continue to expand our alternatives offering and deepen adoption across our client base. During the quarter, we added funds to our platform across secondaries, buyout, venture, and growth strategies, while also expanding our custom fund of one offering. Capital raised in the first half of the year or currently in process is approaching 80% of last year's full-year total. Mike O'Grady: Finally, we're generating more leads through our digital channel through the introduction of our lead lab, which is helping us better qualify and prioritize opportunities. In the first half of the year, marketing qualified leads were up over 50% from the same period last year. This is driving increased activity that can ultimately be translated into durable organic growth. Overall, wealth management continues to deliver on its differentiated value proposition, and we're making solid progress against the strategic priorities that should support stronger growth over time. Turning to asset servicing, the business delivered another strong quarter, with revenues up 16% year-over-year and a pre-tax margin of over 30%, excluding notable items. The results benefited from a constructive market and rate environment, but also reflect the progress we're making against our strategy. Alternatives remain an important growth area. Mike O'Grady: Assets under administration across hedge funds, private capital, and semi-liquid structures now exceed $1 trillion. We added two semi-liquid mandates during the quarter. The number of new product launches from existing hedge fund clients increased approximately 50% quarter-over-quarter, highlighting continued demand for institutional-grade servicing as clients launch and scale more complex vehicles. Banking and capital markets continued to perform well. Favorable market conditions supported higher client activity. We're also expanding the underlying business through new client wins and continued adoption of our solutions. For example, revenues from our outsourced capital markets solutions, such as Complete FX and Integrated Trading Solutions, were up almost 50% year-over-year. Momentum in these scalable businesses deepen client relationships beyond core custody and fund administration. Finally, we continue to progress our digital assets capabilities as institutional clients look for trusted providers to support the evolution of tokenized markets. Mike O'Grady: Our approach remains targeted and disciplined, focused on areas where Northern Trust can bring institutional standards of control, servicing, and risk management to both traditional and digital markets. Overall, asset servicing's performance reflects the continued execution of a focused strategy, deepening relationships with sophisticated clients, scaling high-value capabilities, and investing in the areas where clients' needs are evolving. Turning to asset management, NTAM continued to build momentum in the second quarter, with diversified asset gathering across several priority areas. Starting with ETFs, we had another strong quarter, marking our fifth consecutive quarter of positive flows. Quarterly asset flows were particularly strong in U.S. quality large cap, U.S. equity factor tilt, and tax-efficient fixed income strategies, reflecting the investments we've made in the ETF platform and the benefits of a One Northern Trust approach, particularly our collaboration across asset management and wealth management to address specific client needs. Mike O'Grady: Liquidity was also a standout area. We had a record quarter for liquidity flows, extending our streak to 14 consecutive quarters of positive organic liquidity flows while continuing to gain market share across both the U.S. and EMEA. As a top 10 money market fund manager in the U.S., we continue to benefit from the breadth of our global liquidity platform and clients' confidence in our risk discipline and service model. Tax Alpha remains another important growth area. We continue to build on our position as a top three direct indexer and are growing our long/short tax alpha strategies, expanding the range of solutions we can offer larger taxable clients seeking more sophisticated after-tax outcomes. Finally, our alternatives platform continues to progress with ongoing fundraising momentum and continued demand for custom alternatives solutions. Over the past several quarters, the conversation around AI has moved from experimentation to execution. Mike O'Grady: Across the industry, firms are positioning AI around many of the same benefits: productivity, scale, and efficiency. Those are important. They will not be enough on their own. At the same time, clients are asking a more fundamental question: how will AI change the relationship they have with the institutions they trust? They do not want judgment, accountability, or personal service handed over to a machine. They want AI to sharpen and elevate the people, advice, and standards they already rely on. That is how we're organizing our approach at Northern Trust. Across our businesses, we're aiming AI not simply at baseline improvements, but at the qualities that have always made Northern Trust uniquely valuable to our clients, our service, expertise, and integrity. These principles have defined Northern Trust for more than 135 years and remain core to our One Northern Trust strategy. Mike O'Grady: We view AI as augmented intelligence, a force multiplier that can help us deliver on those commitments with greater speed, insight, and consistency while keeping our people and clients at the center. Service is becoming hyper-personalized, more predictive, and adaptive, creating experiences built around each client's unique needs at scale. One clear proof point is the use of client action plan agents that help relationship managers quickly synthesize data to drive more meaningful client engagement. Expertise is being amplified, delivering knowledge, insights, and advice with greater speed, precision, and impact. In our asset management business, for example, we're using AI to enhance our investment research and idea generation, uncovering signals that may be overlooked by traditional industry approaches. These capabilities are embedded most directly in our adaptive equity quant strategies. Mike O'Grady: Integrity is extending beyond individual judgment and being embedded into our data practices, models, and controls to strengthen the rigor and resiliency of how we operate. A tangible example of this is horizon scanning agents that enhance our vulnerability detection and strengthen cybersecurity capabilities. This technological rigor is built on a foundation of human oversight and accountability. We're especially pleased with how quickly our partners have embraced AI in their daily work. That momentum is helping us turn AI from a set of tools into a true force multiplier, strengthening our service, expertise, and integrity in ways that create lasting value for our stakeholders. More broadly, we also launched Invested as One, a new employee ownership initiative that provides eligible employees with Northern Trust shares. Together with our employee stock purchase plan, it strengthens employee ownership and reinforces our culture of shared accountability for performance and long-term value creation. Mike O'Grady: Looking ahead, the macro environment remains dynamic. We remain confident in our ability to deliver consistent performance as our strategy is designed to perform across a range of conditions. We remain focused on execution, driving organic growth, maintaining disciplined expense management, and continuing to invest in the capabilities that strengthen our competitive position. With that, let me turn it over to Dave to take you through the financial results in more detail. Dave Fox: Thanks, Mike. Let me join Steve and Mike in welcoming you to our second quarter 2026 earnings call. Let's discuss the financial results of the quarter. This morning, we reported second quarter net income of $792.2 million, earnings per share of $4.23, and return on average common equity of 25.9%. Pre-tax income was $1.1 billion, and our pre-tax margin was 39.6%. Our results reflect strong underlying momentum across the franchise, including continued organic fee growth, disciplined expense management, and meaningful operating leverage. Our reported results included a $525 million pre-tax gain in other operating income related to our participation in the second Visa Inc. exchange offer. That gain was partially offset by a $74 million pre-tax loss in other non-interest income associated with the strategic repositioning of the available-for-sale securities portfolio. Dave Fox: The repositioning improved the portfolio's earnings profile while maintaining a relatively short duration, a neutral liquidity position, and the flexibility to adapt as the rate environment evolves. Additionally, expense in the quarter included a $62 million pre-tax charge related to software dispositions, a $51 million pre-tax severance charge associated with a reduction in force, and a $33 million pre-tax compensation expense related to a one-time equity grant. In aggregate, these notable items had an approximately $306 million favorable pre-tax income impact and an approximately $232 million favorable impact to net income in the quarter. Similar to our approach to the first Visa Inc. monetization, the exchange offer provided an opportunity to realize value from a long-held asset, while the offsetting actions we took this quarter support future positioning of the business. Excluding notable items in all periods, total revenue was up 2% sequentially and up 13% year-over-year. Dave Fox: Total expenses were down 1% sequentially and up 5% year-over-year, and we delivered over 700 basis points of operating leverage. Currency movements were immaterial to revenue and expense growth in both the sequential and prior-year comparisons. Trust, investment, and other servicing fees totaled $1.3 billion, up 1% sequentially and up 10% compared to the prior year as favorable markets benefited fees, and we delivered our eighth consecutive quarter of positive organic fee growth. Excluding notable items, other non-interest income was up 42% year-over-year, with elevated client activity and higher-value trading flows, particularly in Asia Pacific, driving strong FX trading and securities commission and trading income. Our assets under custody and administration were $20 trillion, up 8% sequentially and up 11% year-over-year. Our assets under management were $2 trillion, up 10% sequentially and up 16% year-over-year. Dave Fox: Overall, our credit quality remains very strong. In the quarter, we recorded a $5 million reserve release reflecting improved portfolio quality, primarily in the commercial and institutional book, and an improving macroeconomic outlook. Our effective tax rate was 25.6%, up 60 basis points from the prior quarter and up 20 basis points from the prior year. We continue to expect the full-year effective tax rate to be approximately 26%-26.5%. Turning to our wealth management business on page eight. Wealth management delivered another solid quarter, where success with ultra-high net worth clients and an expanding capability set drove double-digit fee growth. Trust, investment, and other servicing fees for wealth management clients were $592 million, up 10% from the prior-year quarter. Assets under management for our wealth management clients were $534 billion at quarter end, up 7% sequentially and 14% year-over-year. Dave Fox: Average deposits within wealth management were $26.7 billion, up 1% sequentially, while average loans were $35.8 billion, also up 1%. Pre-tax income was $334 million, generating a pre-tax margin of 37%. As discussed in the second quarter of 2025, we reorganized wealth management to better drive growth and client coverage. Our financial disclosures continue to reflect the legacy structure. As of the second quarter of 2026, we have updated our disclosures to align with how we operate the business today, consolidating the regions into private wealth. This creates consistency with how we manage the business and the rest of our disclosures for wealth management, including assets under management. Moving to our asset servicing results on page nine. Asset servicing also performed well in the quarter, driven by adding scalable new business, executing our enterprise liquidity strategy, and continued strength in capital markets-related activity. Dave Fox: Assets under custody and administration for asset servicing clients were $18.6 trillion at quarter end, up 10% from the prior-year quarter. Asset servicing fees totaled $757 million, up 9% from a year ago. Custody and fund administration fees were $512 million, up 9% year-over-year. Assets under management for asset servicing clients were $1.4 trillion, up 17% year-over-year. Investment management fees were $172 million, up 10% from the prior-year quarter, driven largely by favorable markets and growth in liquidity solutions, partially offset by price compression in select index mandates. Securities lending income was $29 million, up 46% year-over-year, driven by elevated demand for U.S. equities, robust borrowing of Asia Pacific, and IPO-related securities, among other factors. Average deposits were $101 billion, down 1% sequentially, while average loans were $5.8 billion, up 3% sequentially. Dave Fox: Pre-tax income was $323 million, generating a pre-tax margin of 24%. Excluding notables, asset servicing's 8-point margin expansion year-over-year reflects the disciplined execution across new business economics, deepening relationships with existing clients, and a favorable macro environment backdrop. Turning to our balance sheet and net interest income trends on page 10. Our average earning assets were $151 billion, down 2% sequentially, as lower deposits drove a decrease in money market assets. The fixed percentage of the securities portfolio was 52%, consistent with the prior quarter, including the impact of swaps. The duration of the securities portfolio was 1.4 years, and the duration of our total balance sheet remained under one year. Average deposits were $128 billion, down 1% sequentially, reflecting slight normalization following elevated short-term institutional deposits in the first quarter. Dave Fox: Within the deposit base, interest-bearing deposits decreased 2% sequentially, while non-interest-bearing deposits increased 4%, representing 15% of the overall mix. Net interest income on an FTE basis was $683 million, up 3% sequentially and up 11% from a year ago. Sequentially, NII was favorably impacted by an improved deposit mix, higher yields from securities repositioning mentioned earlier, and one additional day in the quarter. Our net interest margin on an FTE basis was 1.81%, up 6 basis points sequentially, reflecting a favorable deposit mix in the second quarter. The sequential comparison also benefited from the reversal of NIM compression in the first quarter due to the impact of elevated short-term institutional deposits. Turning to our expenses on page 11. Non-interest expense was $1.6 billion, up 9% sequentially and up 16% year-over-year. Excluding notables, non-interest expense was down 1% sequentially and up 5% year-over-year. Dave Fox: The year-over-year increase was driven primarily by compensation and benefits, reflecting higher incentive compensation tied to improved financial performance, while outside services spend was muted. Excluding notables, our expense-to-trust fee ratio improved to less than 111%, compared to 115% in the prior-year quarter. Turning to capital on page 12. Our capital position remained strong in the second quarter, and we continue to operate at levels well above our required regulatory minimums. Our common equity Tier 1 ratio under the standardized approach was 12.2%, up 20 basis points from the prior quarter. The Visa transaction, partially offset by notable expense items and higher RWA, was the primary driver of the improvement. Our Tier 1 leverage ratio was 7.6%, up 30 basis points from the prior quarter. At quarter end, our unrealized after-tax loss on available-for-sale securities was $373 million. Dave Fox: We returned $499 million to common shareholders in the quarter through common stock dividends declared of $148.8 million and common stock repurchases of $350.6 million. This represented a 63% payout ratio on a reported basis. Excluding notable items, the payout ratio was approximately 90%, consistent with our ongoing commitment to disciplined capital return while preserving flexibility to support clients, invest in growth, and manage through a range of environments. Finally, based on the 2026 CCAR results, our stressed capital buffer remains at the 2.5% minimum requirement. The board also approved an $0.08 or 10% increase to our quarterly common dividend, reflecting our strong capital position, the durability of our business model, and our continued confidence in the firm's earnings power. Turning to our guidance. Dave Fox: For the full year, assuming a relatively stable market environment and interest rate backdrop, we now expect net interest income to be up 9%-10% year-over-year. This is an increase from our previous guide up mid to high single digits. We now expect total revenue to grow by 9%-10% year-over-year, which is an increase from our previous guide of up mid single digits. Excluding notable items, we now expect to deliver approximately 400 basis points of operating leverage for the full year. With that, operator, please open the line for questions. Question-and-Answer Session Operator: Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Again, press star one to ask a question. We'll pause for just a moment to assemble the queue. We will take our first question from Glenn Schorr with Evercore. Glenn Schorr: Hi. Thanks very much. Dave Fox: Sure. Glenn Schorr: Maybe we'll start right where you left off. The 400 basis points for positive operating leverage is great. You were a lot better than that in the first half. Maybe you could help with the right perspective on the jumping-off point for expenses because there were some moving parts this quarter, and what right things should we be considering on the top-line side that bring down the operating leverage? There's seasonality, FX trading was really high. Just maybe square that circle for us in terms of the right perspective on the second-half operating leverage. Thanks. Dave Fox: Sure. You kind of gave part of my answer for me there. It's more revenue-driven than expense-driven. At the end of the day, from our perspective, the year-over-year comparisons get a bit tougher in the second half of the year. The S&P really had a pretty good run from Q2 to Q4 in 2025, was up 20%. As we get into Q3 and Q4, it's going to be a tougher year-over-year comparison. It still implies solid growth and positive operating leverage in our business going forward. It's just we do feel, as you mentioned, there'll be some normalization of foreign exchange, capital markets, securities lending from particularly elevated flows that we had in the quarter. We also had some very large deposits that came in Q1 and actually also came in Q2, which was unexpected. Dave Fox: Those deposits are not expected to last into the third quarter, which tends to be our weakest quarter in terms of overall average deposits. From that perspective, those are sort of the issues we looked at. We're assuming a flat market as well. We're not assuming any additional uplift from the market, and we're assuming stable interest rates and all of that. If you do all the math, it's roughly a 5% to 7% increase in total revenues during that period. We feel like the operating leverage number is manageable at around 400 when you do all the math. Glenn Schorr: I appreciate that. That's very good. One tiny little follow-up. Within the one-time items, there is the software write-down. I appreciate taking advantage of the Visa gain. Very cool with it. I'm just curious what software you took a look at, you wrote down how that decision was made, and then what you replace with it. Are you building something on your own? I'm just curious for obvious reasons. Thanks. Dave Fox: Well, first of all, I would say it's not necessarily timed with anything in particular. It was a periodic review that we do as part of our capital planning and investment planning during the course of the year. As you probably know, the pace of change that's going on today with AI and project lengths have shortened significantly. So some of our longer-term projects, we have to take a look at. We just don't keep funding them ad infinitum. This in particular was a subset of an existing fund administration project that we had going on. When we looked at our operating model and infrastructure, we just decided that it didn't hit the appropriate ROI compared to other opportunities that we had to invest in. Dave Fox: We just took advantage of that opportunity to sort of declassify or take a certain amount of work in progress and say, "We're not going to complete that portion of it." It really was not a wholesale part of it. It was just a certain portion of that particular fund administration infrastructure that we decided to change. We're not expecting to do that again anytime soon. Glenn Schorr: I appreciate. You are not exactly vibe coding a whole new infrastructure. I appreciate that. Thanks. Dave Fox: Right. Operator: We will take our next question from Ken Usdin with Autonomous Research. Ken Usdin: Hi, good morning. Dave Fox: Morning. Ken Usdin: Just wanted to follow up on the deposit point, Dave, and the NII. I mean, it makes sense that the implied new guide would be for a little bit lower run rate than the second quarter. These deposits are proving stickier. I guess, can you just walk through what you see happening in the environment with regards to deposit generation and that related activity that you cited? Why wouldn't these deposits outside of seasonality prove to be more sticky in terms of a run rate? Thanks. Dave Fox: Well, listen, I mean, average deposits are higher, which is why we have growth in NII for the year. I do think we have some very large institutional clients that, in the first and second quarters, decided to put substantial amounts on our balance sheet. We don't view those as being permanent. As I guided you last quarter, we were about $4 billion above where we normally would have been. I guided you down, obviously we had a second quarter event, related to a different client, a different situation. In that case, it was at good, better economics as well. That also arrived during the second quarter, and those are idiosyncratic. You can't really predict those. We try to really distinguish between what we consider to be operational deposits, sticky deposits, and ones that are more one-time. Dave Fox: In this particular case, in Q2, it had to do with a particular fund that was liquidating. They had to, as part of that transition, put that cash on our balance sheet for a certain period of time. Ken Usdin: Okay. Second question, just on the wealth management business. Obviously, we knew about the lag from the first quarter, slight market decline, so wealth management fees were down a little bit. That obviously should pick up with the baked-in lag we have for the third quarter. Just wanted to just ask, outside of the markets, was there anything else that pulled down wealth management fees a little bit sequentially in terms of either activity or flows, or should we just expect a better trajectory from here? Thanks. Dave Fox: Sure. I just would like to say on the top end that the fundamental business activity is strong, pipeline's strong, flows are good. We have these quarterly aberrations, what I would call them, and having run the family office business for a long time, I usually had to explain quarter over quarter what was going on because a lot of the change, sequential distortion comes from GFO. When you think a little bit about 70% of their fees being on a lag basis and the fact that the S&P went up 1,000 points during the quarter, you do get a disconnect between AUM growth, which was up, and fee growth, which was moderately down. The other thing I would say, particularly as it relates to GFO, is the billing in GFO is different than core wealth. Core wealth is pretty straightforward. Dave Fox: You've got advisory fees and product fees. GFO is a potpourri of different types of services that we provide to clients. The fee structures we have are much more customized and sometimes take longer and/or have true-ups. They also have a much higher allocation to alternatives. When you think about alternatives, those are valued much less frequently, and also done a lot manually. You're going to have situations there where you're going to have some inconsistencies between quarters. I tend to look at the wealth management business more on a run-rate basis, and six months is a better indicator of where we're going. I would take your last sentence and say that's absolutely true. What you're going to see is better sequential results from wealth in the third quarter. Dave Fox: You also have things like one-time fees, like estate settlement, as well. We have seen a little bit of price compression as it relates to some of our liquidity products. We had some seasonal tax-related outflows, which we typically have. When you add all that together, it does create some distortion in the numbers and a disconnect between the assets going up and the fees going down. Ken Usdin: Thanks for all that, Dave. Operator: We will take our next question from Mike Mayo with Wells Fargo Securities. Mike Mayo: Hey, just another question on wealth. If you could just give an update in terms of extending the GFO approach to a wider swath of your higher-end net worth clients. Also, to what degree are you at some kind of disadvantage because you don't have IPOs that you offer to your high net worth clients? Maybe you do, and I don't know about it, but some talk about net new assets really getting a lift from some of the IPOs that they've done. Thanks. Dave Fox: Sure. I'll take both of those. To your point, one of our areas of focus is taking that set of GFO capabilities to the ultra-high net worth segment of the market. That's what we call Family Office Solutions. I would say that's going very well in the sense that offering is resonating extremely well with new clients where we're pitching on new business and prospects. Also with some existing clients where we're moving them into that offering. It's going very well. If anything, it's just a matter of our ability to scale that offering up, and be able to make sure that we have the teams and talent to be able to provide that offering. Very encouraged by the market reception to that and the progress we're making. Just want to do it faster. On your second point, you're right. Dave Fox: I mean, we're set up differently than the wealth management firms that are attached to an investment bank. When you have very robust IPO markets and capital markets activity like that, we're not going to have the same type of referral opportunities that are going to come from that. That said, that doesn't mean that we don't work with clients and don't prospect for that type of wealth. Frankly, we try to get out in front of it. Even with some of the recent offerings, the notable recent offerings, we benefited from those because we were working with some of the executives over five years ago, with how they can manage their wealth. Mike O'Grady: Once again, being a holistic provider, there were things that we could do with them when it came to banking that was valuable to them at that point. They're now clients, we benefit as their company goes public and some of that wealth gets monetized. It's still a positive for us, but we are positioned definitely differently than the investment banks. Mike Mayo: Maybe a related question to that. When we talk about the top of the funnel and your new client growth, what's your main key areas for that driver? Mike O'Grady: It's a combination of things. You're exactly right. We're trying to drive more at the top of the funnel, of course, higher conversion as well. On the top of the funnel, one driver is certainly just talent overall. We talk about both revenue-generating roles, but also specifically producer roles. We are trying to hire more people that would enable us to prospect more and put more through the top of the funnel on that front. It's a competitive market for talent. We think we have an attractive value proposition for that talent, but it takes time to build that out. That's one. Two is we work very closely with centers of influence. Think about estate planning attorneys and accountants and those type of service providers that are working with high net worth, but more ultra-high net worth clients with family offices. Mike O'Grady: They're almost like a client base to us and the focus that we have on them. Often they're going to get the first call, or they've been working with the family or the prospect in advance of when they begin to work with one of the wealth managers. Third is around marketing and specifically digital marketing. I made a couple comments in the opening remarks about really trying to ramp that up further. The key there is not only utilizing the latest technology and AI to be able to more aggressively determine where there are prospects that meet our profile or potential prospects on that front, but then trying to get them converted and do so at an attractive cost per lead. Mike O'Grady: A lot of effort on that, both, I'll say, internal team, but then the data sources that we're using and the technology to be able to increase the number of leads that we get, and then likewise, increase the conversion rate. Mike Mayo: Thank you. Mike O'Grady: Sure. Operator: We will take our next question from Brennan Hawken with BMO Capital Markets. Brennan Hawken: Good morning. Thanks for taking my questions. Mike O'Grady: Sure. Brennan Hawken: The Visa gains this quarter were pretty substantial. I don't believe you touched on this. Apologies if you did, but could you give us your updated thoughts on how you plan to use these proceeds? Should we be thinking about reinvestment in the business, return of capital? What's the best way to think about this? Mike O'Grady: Brennan, the answer is yes, in the sense of how we think about it. It's a capital gain for you, for us as David went through. There are certain areas where we can, I'll say, invest it immediately. Repositioning the investment portfolio, it gives us the ability to do that and take advantage of the shape of the yield curve right now as one example. Second, though, is to your point, if we can deploy that capital in the business through deployment of RWA, then we would look to do that. If we were to do something inorganic, it gives us the capital to be able to deploy it that way. Finally, it strengthened our capital ratios now. That just puts us in a position to be able to buy back more stock. Mike O'Grady: If you recall, a couple of years ago when we had the Visa gain, similarly, we had an increase in our capital ratio, our CET1 ratio, then over time, we brought it back down into our target range of 11%-12%. It gives us that flexibility in how we want to be able to deploy it best. Brennan Hawken: Okay, great. Thank you. I assume the order that you went through those is significant. If that's wrong, Mike, just let me know. Is that fair? Mike O'Grady: That's fair. Brennan Hawken: Great. Thank you. Follow up, asset servicing, 24% pre-tax margin here in the quarter. It was down a bit from late 2025, although had some good year-over-year revenue growth. Previously, you talked about maybe letting some of the lower-margin business roll off to help drive the servicing margins into the high twenties. Could you provide maybe color in the pacing of that, how that's going? Is that presenting a headwind to fee revenue in that business and how we should think about the pre-tax margins in servicing going forward? Thank you. Mike O'Grady: Sure. I'll start, and Dave may want to add to this, but this has been the strategy for that business. Scalable growth and profitable growth and increasing the margin in the business. Very favorable environment without a doubt, but also we're seeing progress on that. We have been, I'll say, very selective in the new business that we're taking on, ensuring that it will provide not only profitable business for us, but quicker to the levels of profitability that we like to have for those businesses. We've seen success with our asset owners business in the Americas. Similarly, in Europe, meaningful wins that many of them are just coming on board or being transitioned in right now. That's very positive. Mike O'Grady: I would also say with our asset manager clients, it's trying to not only work with those clients where we already have a strong existing relationship, but doing more with them. Doing it in ways that makes that relationship more profitable. A great example of that is our Integrated Trading Solutions, so outsourced trading. There's more and more examples, what we would consider One Northern Trust examples, where we're providing that service now to the asset manager, amongst other things. Currency management for them as well. Those are higher-margin services for us. You're seeing the strategy come together with a favorable environment, and as a result, the margin going up. Dave Fox: I think, Brennan, the pre-tax margin you quoted actually includes the notables. If you take the notable items out, the pre-tax margin is much higher, closer to 30%. We continue to see, given what's going on in the capital market side of the business too, which is growing double digits, that the asset servicing margins are continuing to go up. You just need to take that notable item and put it to the side. Brennan Hawken: Great. Thanks for clarifying. Operator: We will take our next question from Steven Chubak with Wolfe Research. Sharnice Williams: Hi. Good morning. This is actually Sharnice Williams filling in for Steven Chubak. We saw some really encouraging deposit remixing trends in the interest-bearing versus non-interest-bearing. Looks like you guys have been more focused on managing the deposit costs and maintaining very disciplined pricing. I heard what you said about expecting some of the recent deposit strengths to kind of reverse in the third quarter, but I was wondering if you could talk about your outlook for the deposit mix. If we do see some rate hikes from the Fed, what are you anticipating in terms of deposit beta? Dave Fox: Let's talk a little bit about what we benefited from in the quarter. You're right, our non-interest-bearing deposits did go up substantially. We obviously took advantage of the fact that we did some deposit repricing last year, and we still haven't wrapped all that. We have the lag benefit of that. We had lower wholesale funding costs as well. That obviously helped. Then we had some fixed asset repricing, which obviously we do almost every quarter from that perspective. When you think about the NIM going forward, the NIM was negatively impacted in Q1 by some of those very large deposits. It kind of normalized back up in this quarter to what I think is going to be a more sustainable NIM level. If anything, as rates go up, that's good for us. Dave Fox: When you think about the betas, two-thirds of our deposits are in U.S. dollars, right? If it's a Fed increase, that's one thing that will have a bigger impact. The beta we like to say is a combination of the wealth. Beta is much lower than the institutional beta. We round it out to about 80% in total on dollars. Other currencies are a little bit different, but they're much less a percentage of the overall picture. Sharnice Williams: Okay, perfect. Just staying on the topic of balance sheet, can you just talk about how much of a benefit you're anticipating from the balance sheet restructuring and redeploying some of those proceeds at higher rates? Dave Fox: Yeah. It should add about $30-plus million to NII annually, the repositioning that we just did. Sharnice Williams: Okay, perfect. Thank you so much. Operator: We will take our next question from Manan Gosalia with Morgan Stanley. Manan Gosalia: Hi. Good morning. My question is around, I guess the wealth pre-tax margin. We're already at 37%. You're saying you should have a better quarter in wealth next quarter. As we go through this, some of the investment spend on the wealth side, how do you expect the wealth margins to trend from here? Mike O'Grady: As you heard from my discussion of the strategy there, we are definitely investing in the wealth business for growth. It right now has an attractive pre-tax margin to it. Really, I believe we're in the right range for that business, meaning that it can go up a little bit depending on the conditions, but it also can go down as a result of the investments we're making. Bracket it by a few hundred basis points on both sides is kind of the range that I would expect as we go forward. Manan Gosalia: Got it. Maybe just on the hiring and talent side. I know you said that you're seeing some momentum there. Can you talk about, I guess how much success you've had on the hiring front and also any competitive dynamics you're seeing in the upper tier of wealth? Mike O'Grady: Yeah. It is a very competitive market, as I mentioned, for talent. I would say that we've seen good progress in our goals for the year on the hiring front. It's something where we're going to continue to have to keep at pace in order to achieve those goals. As I mentioned, I think we offer a proposition to advisors and other roles that's different than others in the market. That's the good news. It also means that it takes time to be able to recruit the right people into that model because it is different than most other models, I would say, out in the marketplace. You're doing more very targeted hiring as opposed to just broadly anybody who's in the wealth management business. That doesn't fit our overall profile. It takes time to build that up. Manan Gosalia: Great. Thank you. Mike O'Grady: Sure. Operator: We will take our next question from David Smith with Truist Securities. David Smith: Hey, good morning. Mike O'Grady: Good morning. Dave Fox: Morning. David Smith: On capital, you're running around 95% payout ratio on adjusted basis the first half of this year. Is 100% still the right benchmark we should be thinking about for the full year, adjusting out those notable items? Dave Fox: The 100% number isn't sort of a hell-or-high-water for us. It's sort of the, when we start planning at the beginning of the year, obviously we're ahead of pace in terms of how much we've returned for the first half because we're making more money, obviously, and have more capacity to do that. As Mike mentioned earlier, while we still have aspirations to continue to have very healthy return on capital, at the same token, we want to have that flexibility to be able to obviously cover the dividend, et cetera. We have inorganic, we've got balance sheet issues and things of that nature. You've heard me talk about our balance sheet being open to our clients and being a liability-driven institution. We don't like to commit specifically. Dave Fox: It's really hard to land on the head of a pin as it relates to payout. I would say it's consistent with what we were trying to do at the beginning of the year. We take a look at it on a very dynamic basis. Absolute capital levels matter, stakeholder issues matter, clients matter as you look at that. I would just say that we're squarely within the range we wanted to be in, and we're actually ahead of ourselves in terms of what would've been 100% when we started the year. David Smith: On the inorganic front, are you looking mostly at smaller tuck-in type acquisitions, or would you consider something larger too, if the opportunity set was right? Mike O'Grady: We're looking for opportunities that can accelerate the organic strategy that we have. If you just go along the lines of what we've talked about as to where we're focused and what we're trying to achieve, if there's ways that we can accelerate that inorganically, we would consider that. It would have to obviously meet all the other parameters, both cultural fit, business fit, and also financial profile of that. That's how we consider inorganic opportunities. David Smith: Thank you. Mike O'Grady: Sure. Operator: We will take our next question from Gerard Cassidy with RBC Capital Markets. Gerard Cassidy: Hi, Mike. Hi, Dave. Mike O'Grady: Hey. Dave Fox: Hey, Gerard. How you doing? Gerard Cassidy: Can you guys share with us, Mike, I think you touched on this, about IPOs, and I believe, Dave, in your prepared comments, you mentioned about stock loan was benefited partially from the IPO securities lending area. Besides the wealth management and in the stock loan, with this robust IPO market, are there other parts of the business that are benefiting from the IPOs, whether it's any of the servicing areas or the custody areas? Mike O'Grady: Absolutely. With that activity, Gerard, you're right. Even aside from wealth management, we see the impacts and the benefits from that. We've talked about liquidity. Broadly speaking, when there is greater capital raising, those dollars need to go somewhere initially. We've seen the specific benefits of that flowing into, whether it's the balance sheet, but also into our money market funds. Also as far as the capital markets activity. Once these stocks are out there and they're trading and the ability to potentially short the stocks or any other hedging activity, that's something where we see it in the lending part of the business. You saw that we had significantly higher volumes, but also it's the nature of the loans and the collateral for that. Just meaning if you have certain equities, you get a higher spread on those equities. Mike O'Grady: It's something that we've seen, I'll say, cut across the businesses. Gerard Cassidy: Then as a follow-up, I think, Dave Fox, you talked about some price compression on select index mandates. Can you give us any more detail on that? How does that compare, historically, you and your peers in the custody business have talked about pricing pressures. Is this something different than what you've seen in the past, or no, this is just a continuation of a trend that's been around a fair amount? Dave Fox: Yeah. Thanks, Gerard. I was referring specifically to liquidity product, not index, and retail liquidity product, going into the wealth space, competition around that, shorter-term strategies, not our long-term strategies. Not specific to custody. Gerard Cassidy: I'm sorry, go ahead, Mike. Dave Fox: No, I'm just saying, I wasn't relating it to custody and other broader fees. Gerard Cassidy: Got it. Okay. Thank you. Operator: There are no further questions at this time. I will now turn the conference back to Mr. Carroll for any additional or closing remarks. Stephen Carroll: Thank you for joining us, and we look forward to speaking with you again soon. Operator: This concludes today's call. Thank you for your participation. You may now disconnect. Before you buy stock in Northern Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Northern Trust wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $370,332!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,272,280!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 22, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Northern Trust (NTRS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Northern Trust Corporation (NTRS) came out with quarterly earnings of $2.97 per share, beating the Zacks Consensus Estimate of $2.68 per share. This compares to earnings of $2.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +10.82%. A quarter ago, it was expected that this company would post earnings of $2.37 per share when it actually produced earnings of $2.71, delivering a surprise of +14.35%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Northern Trust, which belongs to the Zacks Banks - Major Regional industry, posted revenues of $2.62 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 19.27%. This compares to year-ago revenues of $2 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Northern Trust shares have added about 35.5% since the beginning of the year versus the S&P 500's gain of 9.7%. While Northern Trust has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Northern Trust was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.78 on $2.23 billion in revenues for the coming quarter and $11.29 on $8.84 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Major Regional is currently in the top 12% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the broader Zacks Finance sector, First Internet Bancorp (INBK), is yet to report results for the quarter ended June 2026. The results are expected to be released on July 30. This internet bank is expected to post quarterly earnings of $0.03 per share in its upcoming report, which represents a year-over-year change of +50%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. First Internet Bancorp's revenues are expected to be $42.45 million, up 26.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Northern Trust Corporation (NTRS) : Free Stock Analysis Report First Internet Bancorp (INBK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Northern Trust Corporation NTRS second-quarter 2026 adjusted earnings per share (EPS) of $2.97 beat the Zacks Consensus Estimate of $2.68. The figure increased 40% from $2.13 in the prior-year quarter. NTRS’ results benefited from a rise in net interest income (NII) and trust, investment and other servicing fees. An increase in total assets under custody (AUC) and assets under management (AUM) balances also supported the financials. However, elevated expenses were concerning. Results excluded certain notable items. After considering this, net income (GAAP basis) was $792.2 million, up 88% from the prior-year quarter. Quarterly total revenues of $2.62 billion increased 31% year over year. The top line beat the Zacks Consensus Estimate of $2.20 billion by 19%. NII was $675.5 million in the quarter under review, up 11% year over year. The net interest margin was 1.79%, up 11 basis points from the prior-year quarter. Trust, investment and other servicing fees totaled $1.35 billion, up 10% year over year. Other non-interest income increased to $673 million from $156.3 million in the year-ago quarter. Non-interest expenses rose 16% year over year to $1.64 billion in the reported quarter. Asset Servicing income before income taxes (FTE basis) was $323.3 million, up 19% year over year. The segment’s pre-tax margin was 23.7% compared with 23.2% in the prior-year quarter. Wealth Management income before income taxes was $333.5 million, up 8% year over year. The segment’s pre-tax margin was 37.4% compared with 37.2% in the year-ago quarter. The Other segment recorded income before income taxes of $415.5 million against a loss of $11.5 million in the prior-year quarter. As of June 30, 2026, Northern Trust’s total AUC increased 12% year over year to $15.9 trillion. Also, total AUM increased 16% year over year to $1.9 trillion. The increase in AUC were primarily driven by favorable markets, partly offset by unfavorable currency translation. The rise in AUM mainly reflected favorable markets and net client inflows. Total allowance for credit losses was $190.3 million, down 15% year over year. Total non-accrual assets were $71.3 million as of June 30, 2026, compared with $92.8 million in the year-ago period. NTRS reported provision benefits of $5.3 million in the second quarter against provision for credit losses of $16.5 million in the year-ago quarter. The provision benefit reflected a decrease in the collective reserve, partly offset by an increase in individual reserves. Under the Standardized Approach, as of June 30, 2026, the Common Equity Tier 1 capital ratio was 12.2%, unchanged from the prior-year quarter. The total capital ratio was 15.5% compared with 14.8% in the year-ago quarter. The Tier 1 leverage ratio was 7.6%, unchanged from the prior-year quarter. The return on average common equity was 25.9% compared with the year-earlier quarter’s 14.2%. During the reported quarter, Northern Trust returned $499.4 million to common shareholders through share repurchases and dividends. The company repurchased 2.1 million shares for $350.6 million at an average price of $164.65 per share and paid $148.8 million in common stock dividends. Following the successful completion of the Federal Reserve’s 2026 stress test, Northern Trust’s board of directors approved an increase in the quarterly common stock dividend at its July 21, 2026 meeting. The quarterly dividend was raised by 10% to 88 cents per share from 80 cents. A rise in NII, trust fees and capital markets income drove Northern Trust’s performance, while increasing AUC and AUM balances are likely to support financials. The planned sale of its guardianship services business reflects its strategy of concentrating resources on wealth management, asset servicing and asset management. However, elevated expenses will likely impede growth. Northern Trust Corporation price-consensus-eps-surprise-chart | Northern Trust Corporation Quote Currently, NTRS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Regions Financial Corporation RF has posted adjusted second-quarter 2026 earnings of 68 cents per share, beating the Zacks Consensus Estimate of 64 cents. Also, this compares favorably with earnings of 60 cents in the year-ago quarter. Increases in net interest income, wealth management income, service charges and lower provisions supported RF’s results. However, higher non-interest expenses and securities losses played spoilsport. U.S. Bancorp USB has reported second-quarter 2026 earnings per share of $1.35, topping the Zacks Consensus Estimate by 5.5%. The bottom line increased 21.6% from $1.11 in the year-ago quarter. USB’s results were supported by higher net interest income, broad-based fee revenue growth and strong loan growth, while the company posted positive operating leverage of 400 basis points. The BTIG acquisition (completed in June 2026) also contributed to capital markets revenue growth and expanded the company’s institutional capabilities. However, a rise in provisions was concerning. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Northern Trust Corporation (NTRS) : Free Stock Analysis Report Regions Financial Corporation (RF) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Northern Trust Corporation (NTRS) reported $2.62 billion in revenue for the quarter ended June 2026, representing a year-over-year increase of 31.3%. EPS of $2.97 for the same period compares to $2.13 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $2.2 billion, representing a surprise of +19.27%. The company delivered an EPS surprise of +10.82%, with the consensus EPS estimate being $2.68. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Northern Trust performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Net interest margin (FTE): 1.8% versus the three-analyst average estimate of 1.8%. Average Balance - Total earning assets: $151.29 billion compared to the $150.19 billion average estimate based on three analysts. Tier 1 Leverage Ratio: 7.6% versus 7.5% estimated by three analysts on average. Nonaccrual Loans and Leases: $71.3 million versus $55.77 million estimated by two analysts on average. Asset Servicing Trust, Investment and Other Servicing Fees- Custody and Fund Administration: $512.3 million versus $505.57 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +9.2% change. Asset Servicing Trust, Investment and Other Servicing Fees- Investment Management: $172.2 million compared to the $173.45 million average estimate based on two analysts. The reported number represents a change of +9.5% year over year. Asset Servicing Trust, Investment and Other Servicing Fees- Securities Lending: $29.4 million versus $24.59 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +45.5% change. Wealth Management Trust, Investment and Other Servicing Fees- Total: $592.1 million versus the two-analyst average estimate of $598.9 million. The reported number represents a year-over-year change of +9.8%. Asset Servicing Trust, Investment and Other Servicing Fees- Total: $757.4 million versus $750.22 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +9.5% change. Wealth Management Trust, Investment and Other Servicing Fees- Global Family Office: $109.1 million compared to the $113.81 million average estimate based on two analysts. The reported number represents a change of +4.4% year over year. Asset Servicing Trust, Investment and Other Servicing Fees- Other: $43.5 million versus the two-analyst average estimate of $46.62 million. The reported number represents a year-over-year change of -3.6%. Net Interest Income - FTE Adjusted: $683.1 million compared to the $656.54 million average estimate based on three analysts. View all Key Company Metrics for Northern Trust here>>> Shares of Northern Trust have returned +5% over the past month versus the Zacks S&P 500 composite's +0.3% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Northern Trust Corporation (NTRS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Northern Trust Corporation? Here are five stocks we like better. Northern Trust posted a strong Q2, with net income of $792.2 million and EPS of $4.23, boosted by higher fee income, net interest income, and a $525 million pre-tax gain from its Visa holdings. Management also raised full-year guidance for revenue growth and net interest income. The company’s core businesses showed broad strength, including eighth straight quarter of positive organic fee growth, 16% year-over-year asset servicing revenue growth, and continued momentum in wealth management, ETF flows, and liquidity flows. Assets under custody and administration reached $18.6 trillion, while wealth AUM rose to $534 billion. Northern Trust returned more than $1 billion to shareholders year to date and increased its quarterly dividend by 10%. Management cautioned that some strong Q2 activity in FX, capital markets, securities lending, and large institutional deposits may not fully carry into Q3. Quiet BNY and Northern Trust Reward Patient Investors Northern Trust (NASDAQ:NTRS) reported sharply higher second-quarter 2026 earnings, helped by strong fee growth, higher net interest income and a sizable gain tied to its Visa Inc. holdings, while management raised its full-year outlook for revenue and net interest income. The Chicago-based financial services company reported net income of $792.2 million, or $4.23 per share, for the quarter. Return on average common equity was 25.9%, pre-tax income was $1.1 billion and the reported pre-tax margin was 39.6%, Chief Financial Officer Dave Fox said on the company’s earnings call. → Buyback Boom: These 3 Companies Are Betting Billions on Their Own Stocks Low Interest Rates Can Help These Commercial Banks Rally Higher Chairman and Chief Executive Officer Mike O’Grady said the quarter reflected “strong execution” of the company’s One Northern Trust strategy and a supportive market backdrop. He said the company delivered its eighth consecutive quarter of positive organic fee growth and generated more than 700 basis points of positive operating leverage, excluding notable items. Reported results included a $525 million pre-tax gain in other operating income from Northern Trust’s participation in the second tranche of the Visa Class B common stock exchange offer. Fox said that gain was partly offset by a $74 million pre-tax loss tied to repositioning the available-for-sale securities portfolio. → 3 Photonics Companies Making Quantum Tech Possible This Underrated Natural Gas Stock Could Rally Double-Digits Soon Expenses in the quarter also included several notable items: a $62 million pre-tax charge related to software dispositions, a $51 million pre-tax severance charge linked to a reduction in force and a $33 million pre-tax compensation expense tied to a one-time equity grant. In aggregate, Fox said the notable items had an approximately $306 million favorable pre-tax income impact and an approximately $232 million favorable impact to net income. Excluding notable items, O’Grady said earnings per share increased 40% year over year. Total revenue rose 13%, driven by 10% growth in trust fees, 11% growth in net interest income and 69% growth in capital markets revenue, including foreign exchange trading and securities commissions and trading income. Non-interest expense increased 5% excluding notable items. → AI Data Centers Need Power, and These 2 Industrials Are Cashing In Fox said the securities portfolio repositioning improved its earnings profile while keeping duration relatively short, maintaining a neutral liquidity position and preserving flexibility as the rate environment changes. In response to an analyst question, he said the balance sheet restructuring should add “about $30-plus million” to net interest income annually. O’Grady said the wealth management business delivered a solid quarter, with trust fees up 10% year over year. Assets under management in wealth management were $534 billion at quarter-end, up 7% sequentially and 14% from a year earlier. Wealth management pre-tax income was $334 million, producing a pre-tax margin of 37%. The company highlighted continued momentum in its global family office and ultra-high-net-worth businesses. O’Grady said global family office revenue increased 9% in the first half of 2026, and revenue from wealthy individuals and families with more than $100 million in assets outpaced the broader portfolio. Management also said Northern Trust is extending its global family office capabilities to more ultra-high-net-worth clients through its Family Office Solutions offering. O’Grady told analysts the offering is resonating with both new prospects and existing clients, though scaling it depends on hiring and building out teams. The company is also expanding its alternatives platform for wealth clients, adding funds during the quarter across secondaries, buyout, venture and growth strategies, while expanding its custom “fund of one” offering. O’Grady said capital raised in the first half of the year or currently in process is approaching 80% of last year’s full-year total. Asset servicing revenue rose 16% year over year, excluding notable items, and the business generated a pre-tax margin of more than 30% on that basis, according to O’Grady. Fox said asset servicing fees totaled $757 million, up 9% from a year ago, while assets under custody and administration for asset servicing clients reached $18.6 trillion, up 10% year over year. O’Grady said alternatives remain an important growth area, with assets under administration across hedge funds, private capital and semi-liquid structures now exceeding $1 trillion. The company added two semi-liquid mandates during the quarter, and new product launches from existing hedge fund clients increased approximately 50% from the prior quarter. Capital markets-related businesses also performed well. O’Grady said revenue from outsourced capital markets solutions, including Complete FX and Integrated Trading Solutions, was up almost 50% year over year. Fox said securities lending income was $29 million, up 46% year over year, driven by elevated demand for U.S. equities, robust borrowing in Asia Pacific and IPO-related securities. Northern Trust Asset Management continued to build momentum in the quarter, with O’Grady pointing to diversified asset gathering across ETFs, liquidity, tax alpha and alternatives. ETF flows were positive for the fifth consecutive quarter, with strength in U.S. quality large-cap, U.S. equity factor tilt and tax-efficient fixed income strategies. Liquidity flows reached a record level, extending the company’s streak to 14 consecutive quarters of positive organic liquidity flows. O’Grady said Northern Trust continues to gain market share in both the U.S. and EMEA and remains a top 10 money market fund manager in the U.S. The company also cited growth in tax alpha strategies, including direct indexing and long/short tax alpha offerings, and continued demand for custom alternatives solutions. Fox said Northern Trust now expects full-year net interest income to increase 9% to 10% year over year, up from prior guidance for mid- to high-single-digit growth. The company also raised its full-year total revenue growth outlook to 9% to 10%, compared with its prior view for mid-single-digit growth. Excluding notable items, management expects to deliver approximately 400 basis points of operating leverage for the full year. The company returned $499 million to common shareholders during the quarter through $148.8 million in declared dividends and $350.6 million in share repurchases. Year to date, O’Grady said Northern Trust has returned more than $1 billion to shareholders. Fox said the second-quarter payout ratio was 63% on a reported basis and approximately 90% excluding notable items. Northern Trust’s common equity Tier 1 ratio under the standardized approach was 12.2%, up 20 basis points from the prior quarter. The board approved an $0.08, or 10%, increase to the quarterly common dividend. During the question-and-answer session, management said the company expects some normalization in foreign exchange, capital markets and securities lending activity after a strong quarter. Fox also said certain large institutional deposits that supported net interest income in the first half are not expected to continue into the third quarter. O’Grady said the company remains focused on organic growth, disciplined expense management and investment in capabilities including artificial intelligence, which he described as “augmented intelligence” aimed at improving service, expertise and controls while keeping employees and clients at the center. Northern Trust Corporation (NASDAQ: NTRS) is a global financial services firm headquartered in Chicago that provides asset servicing, asset management and wealth management solutions to institutions, corporations and high-net-worth individuals. The company's core businesses include custody and fund administration, investment operations outsourcing, trust and fiduciary services, private banking, and retirement and defined contribution plan services. Northern Trust's product and service offerings span custody and fund accounting, portfolio and performance analytics, securities lending, cash management and foreign exchange, as well as discretionary and non-discretionary investment management. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Northern Trust Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Delivered an eighth consecutive quarter of positive organic fee growth, supported by a constructive market environment and the 'One Northern Trust' strategy. Achieved over 700 basis points of positive operating leverage, excluding notable items, by balancing disciplined cost management with targeted growth investments. Wealth Management growth was driven by the Global Family Office (GFO) segment and ultra-high net worth clients, with GFO revenue increasing 9% in the first half of 2026. Asset Servicing margins expanded to approximately 30% on an adjusted basis, reflecting a shift toward higher-margin, scalable services like outsourced trading and currency management. Asset Management momentum continued with 14 consecutive quarters of positive organic liquidity flows, positioning the firm as a top 10 U.S. money market fund manager. Management is pivoting AI strategy from experimentation to execution, focusing on 'augmented intelligence' to enhance hyper-personalized service and investment research precision. The Visa Class B exchange participation provided a $525 million pre-tax gain, which was partially utilized to fund strategic restructuring and balance sheet repositioning. Full-year net interest income (NII) guidance was raised to 9%-10% growth, assuming a stable interest rate backdrop and relatively consistent market conditions. Total revenue growth expectations for 2026 were increased to 9%-10%, though management anticipates tougher year-over-year comparisons in the second half. Operating leverage for the full year is projected at approximately 400 basis points, accounting for the normalization of elevated capital markets and securities lending activity. Wealth Management fee trajectory is expected to improve in Q3 as the lag effect of recent market appreciation begins to reflect in billing cycles. The strategic repositioning of the available-for-sale securities portfolio is expected to contribute approximately $30 million in incremental annual NII. Recognized a $525 million pre-tax gain from the Visa Class B common stock exchange offer, strengthening capital ratios. Incurred $220 million in restructuring charges, including a $51 million severance charge for a reduction in force and $62 million for software dispositions. Recorded a $74 million pre-tax loss related to the strategic repositioning of the available-for-sale securities portfolio to improve future earnings profiles. Implemented 'Invested as One', a new employee ownership initiative involving a $33 million one-time equity grant to eligible staff. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that the 400 basis point full-year target reflects tougher year-over-year equity market comparisons and the expected exit of temporary institutional deposits. Revenue normalization is anticipated in foreign exchange and securities lending following exceptionally high client activity in Q2. The charge resulted from a periodic review of a fund administration project where the projected ROI no longer met internal benchmarks due to rapid technological shifts. Management clarified this was a targeted declassification of specific work-in-progress rather than a wholesale abandonment of infrastructure. The sequential fee decline despite rising assets was attributed to the 70% lag-based billing in the GFO segment and seasonal tax-related outflows. Management expects better sequential results in Q3 as market gains from Q2 are captured in the next billing cycle. Primary uses for the realized capital include repositioning the investment portfolio and supporting organic growth through RWA deployment. Management remains open to inorganic opportunities that accelerate the existing strategy, while excess capital will support continued share repurchases.

This article first appeared on GuruFocus. Net Income: $792.2 million for Q2 2026. Earnings Per Share (EPS): $4.23, a 40% increase year-over-year excluding notable items. Return on Average Common Equity: 25.9%. Total Revenue: Increased 13% year-over-year. Trust Fees: Increased 10% year-over-year. Net Interest Income: Increased 11% year-over-year. Capital Markets Revenues: Increased 69% year-over-year. Non-Interest Expense: Up 5% year-over-year. Operating Leverage: Over 700 basis points, excluding notable items. Assets Under Management: $2 trillion, up 10% sequentially and 16% year-over-year. Assets Under Custody and Administration: $20 trillion, up 8% sequentially and 11% year-over-year. Pre-Tax Margin: 39.6%. Common Equity Tier 1 Ratio: 12.2%, up 20 basis points from the prior quarter. Shareholder Returns: $499 million returned to shareholders in Q2 2026. Dividend Increase: $0.08 or 10% increase to the quarterly common dividend. Warning! GuruFocus has detected 7 Warning Sign with NTRS. Is NTRS fairly valued? Test your thesis with our free DCF calculator. Release Date: July 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Northern Trust Corp (NASDAQ:NTRS) reported an eighth consecutive quarter of positive organic fee growth, demonstrating strong execution of their strategy. The company achieved a significant pre-tax gain of nearly $525 million from participating in the Visa Class B common stock exchange offer. Total revenue increased by 13% year-over-year, driven by 10% growth in trust fees, 11% growth in net interest income, and 69% growth in capital markets revenues. Assets under management in Wealth Management were up 7% sequentially and 14% year-over-year, reflecting strong client engagement. The company returned almost $500 million to shareholders during the quarter, with a payout ratio of 95% through the first half of the year, excluding notable items. Northern Trust Corp (NASDAQ:NTRS) incurred approximately $220 million in restructuring charges and other notable items, impacting overall financial results. Non-interest expense increased by 5% as the company balanced cost management with ongoing investments, which could pressure margins. The company experienced some price compression in select liquidity products, impacting revenue growth. The competitive market for talent poses challenges in hiring revenue-generating professionals, which could affect growth in Wealth Management. The macro environment remains dynamic, presenting uncertainties that could impact future performance. Q: Can you provide perspective on the 400 basis points of positive operating leverage guidance for the second half of the year? A: David Fox, CFO, explained that the year-over-year comparisons will be tougher in the second half due to a strong S&P performance in late 2025. He noted that some normalization in foreign exchange and capital markets is expected, along with a decrease in large deposits that were unexpected in Q1 and Q2. The guidance assumes a flat market and stable interest rates, projecting a 5% to 7% increase in total revenues. Q: What was the rationale behind the software write-down, and what are you replacing it with? A: David Fox, CFO, stated that the write-down was part of a periodic review of capital planning and investment. The decision was made to stop funding a subset of a fund administration project that did not meet the appropriate ROI compared to other opportunities. It was not a wholesale change but a strategic decision to focus resources elsewhere. Q: Can you discuss the deposit trends and expectations for the future, especially in light of potential Fed rate hikes? A: David Fox, CFO, noted that while average deposits are higher, some large institutional deposits in Q1 and Q2 are not expected to be permanent. The deposit mix improved with an increase in non-interest-bearing deposits. The bank expects a beta of about 80% on US dollar deposits, with a positive impact from potential Fed rate hikes. Q: How is the Wealth Management business performing, and what are the expectations for future growth? A: Michael O'Grady, CEO, highlighted strong fundamental business activity and a robust pipeline. He noted that the wealth management business is expected to show better sequential results in the third quarter. The focus is on extending GFO capabilities to ultra-high-net-worth clients and leveraging digital marketing to drive growth. Q: What are Northern Trust's plans for the proceeds from the Visa gains? A: Michael O'Grady, CEO, explained that the proceeds provide flexibility for reinvestment in the business, potential inorganic growth, and capital returns. The capital gain strengthens the bank's capital ratios, allowing for potential stock buybacks and strategic investments. Q: How is Northern Trust managing talent acquisition in a competitive market? A: Michael O'Grady, CEO, acknowledged the competitive market for talent and noted progress in hiring goals. The bank offers a differentiated value proposition, focusing on targeted hiring to align with its unique model, which takes time to build. Q: Can you elaborate on the impact of the IPO market on Northern Trust's business? A: Michael O'Grady, CEO, stated that the robust IPO market benefits Northern Trust beyond wealth management, impacting liquidity and capital markets activities. The bank sees increased volumes and spreads in securities lending due to IPO-related activities. Q: What is the outlook for asset servicing margins, and how is the strategy progressing? A: Michael O'Grady, CEO, emphasized the focus on scalable and profitable growth in asset servicing. The strategy involves selective new business acquisition and expanding relationships with existing clients, particularly through high-margin services like integrated trading solutions. David Fox, CFO, noted that excluding notable items, the pre-tax margin is closer to 30%. For the complete transcript of the earnings call, please refer to the full earnings call transcript.