Northern Trust third-quarter profit rises to $642.9 million from a year earlier

Northern Trust Corporation (NTRS) said Wednesday its net income for the third quarter of 2026 rose to $642.9 million, or $3.40 per diluted share, from $457.6 million a year earlier, according to a regulatory filing. Net income fell from $792.2 million in the second quarter.

The results were released in an earnings statement furnished as Exhibit 99.1 to a Form 8-K filed Wednesday with the Securities and Exchange Commission.

Here's how the company did:

• Diluted earnings per share: $3.40 vs. $2.29 a year earlier

• Total revenue (GAAP): $2,294.4 million vs. $2,025.4 million a year earlier

• Net income: $642.9 million vs. $457.6 million a year earlier

GAAP total revenue grew 13% from a year earlier. It fell 15% from the second quarter, when results included a $525.4 million gain tied to the Visa Exchange Offer.

The third quarter included $48.7 million in pre-tax notable items, or $36.8 million after tax. They were a $34.0 million pre-tax gain on the sale of the guardianship services business and a $14.7 million incremental gain tied to the company’s participation in the second Visa Exchange Offer.

“Northern Trust delivered strong third-quarter results, demonstrating continued progress against our One Northern Trust strategy,” Chairman and Chief Executive Officer Michael O’Grady said.

“Compared to the prior year and excluding notable items, revenues grew 11%, while disciplined expense management generated more than 600 basis points of positive operating leverage. As a result, pretax income increased 21% and earnings per share increased 40%.”

Trust, investment and other servicing fees rose 8% to $1,373.0 million from $1,265.5 million a year earlier. The company said the increase was primarily due to favorable markets.

Other noninterest income was $250.0 million, down 63% from $673.0 million in the second quarter. It was up 48% from $169.1 million a year earlier.

Net interest income was $671.4 million on a GAAP basis, up 14% from $590.8 million a year earlier. The company said the increase was driven by higher deposits, a favorable deposit mix and lower funding costs.

Net interest margin on a fully taxable equivalent basis was 1.83%, compared with 1.70% a year earlier.

Noninterest expense was $1,492.5 million, down 9% from $1,638.6 million in the second quarter and up 5% from $1,422.9 million a year earlier. The second quarter included a $51.0 million severance-related charge, a $33.1 million Invested as One equity grant and $61.5 million in software dispositions.

Compensation and benefits fell 12% to $761.1 million from $868.0 million. Equipment and software expense was $319.9 million, down from $378.5 million in the prior quarter.

Other operating expense rose 15% from the second quarter to $106.3 million. The company said the increase reflected higher account servicing costs.

The provision for credit losses was a $5.4 million charge. The company said it reflected the charge-off of one commercial and institutional loan. Net charge-offs were $11.0 million.

The effective tax rate was 19.3%, compared with 26.1% a year earlier. The company cited a lower net tax impact from international operations, including a reduction in a valuation allowance attributable to U.S. foreign tax credits.

Asset Servicing pre-tax income was $405.2 million, up 38% from $294.4 million a year earlier. Wealth Management pre-tax income was $391.6 million, up 14% from $342.4 million. The guardianship services gain is included entirely within Wealth Management.

Assets under custody and administration were $19.9 trillion at September 30, down 1% from June 30 and up 9% from a year earlier. Assets under management were $1,963.0 billion, up 11% from a year earlier. The company said the current-quarter client asset figures are preliminary until its Form 10-Q is filed.

The company returned $514.2 million to common shareholders in the quarter. That comprised $161.9 million in dividends and $352.3 million to repurchase 1,901,679 shares at an average price of $185.27.

The company raised its quarterly cash dividend to $0.88 per share from $0.80. It also declared $16.2 million in preferred stock dividends.

The standardized common equity Tier 1 capital ratio was 12.4%, the same as a year earlier and up from 12.2% at June 30.

For the fourth quarter of 2026, the company’s presentation guides to net interest income growth of 8% to 9% and total revenue growth of 6% to 7%, both compared with the fourth quarter of 2025. Operating leverage targets also appear in the presentation, but those figures are not legible in the filed copy.

For the first nine months of 2026, net income was $1,960.6 million, up 54% from $1,270.9 million a year earlier. Diluted earnings per share were $10.33, compared with $6.32.

The company had 23,800 full-time equivalent employees at the end of the quarter, up from 23,600 a year earlier.

The filing does not name the buyer of the guardianship services business or disclose the sale price.