Northern Trust Q1 Earnings Top Estimates on Higher NII & Fee Income

Northern Trust Corporation’s NTRS first-quarter 2025 adjusted earnings per share (EPS) of $1.90 beat the Zacks Consensus Estimate of $1.85. In the prior-year quarter, the company reported an EPS of $1.70.NTRS results benefited from a rise in net interest income (NII) and other fee income. Also, an increase in total assets under custody (AUC) and assets under management (AUM) balances supported the financials. Strong capital ratios were other positives. However, a rise in expenses and weak asset quality were concerning.Net income (GAAP basis) was $392 million, up 82.5% from the prior-year quarter.NTRS’ Revenues & Expenses RiseQuarterly total revenues (GAAP basis) of $1.94 billion increased 17.6% year over year. The top line missed the Zacks Consensus Estimate by 0.3%.NII on a fully taxable equivalent basis was $573.7 million in the quarter under review, up 7% year over year. The net interest margin was 1.69%, up 8 basis points from the prior-year quarter.Trust, investment and other servicing fees totaled $1.21 billion, up 6% year over year.Other non-interest income was $158.1 million against a loss of $24.2 million in the year-ago quarter. The rise was driven by increases in all components of other non-interest income, except for other operating income.Non-interest expenses rose 4% to $1.42 billion in the reported quarter. The rise primarily stemmed from increases in compensation, employee benefits, equipment and software expenses.Northern Trust’s AUC & AUM RiseAs of March 31, 2025, Northern Trust’s total AUC increased 4% year over year to $13.3 trillion. Also, total AUM rose 7% to $1.6 trillion.NTRS’ Credit Quality DeterioratesTotal allowance for credit losses was $207.3 million, up 3% year over year. Total non-accrual assets increased to $73.1 million as of March 31, 2025, from $37 million in the year-ago period. NTRS reported provisions for credit losses of $1 million in the first quarter against a negative provision for credit losses of $8.5 million in the year-ago quarter.Northern Trust’s Capital & Profitability Ratios ImproveUnder the Standardized Approach, as of March 31, 2025, the Common Equity Tier 1 capital ratio was 12.9%, up from 11.4% in the prior-year quarter. The total capital ratio was 15.7%, up from 14.2% in the year-ago quarter. The Tier 1 leverage ratio was 8%, up from 7.8% in the prior-year quarter.The return on average common equity was 13% compared with the year-earlier quarter’s 7.3%.NTRS’ Capital Distribution ActivitiesIn the reported quarter, Northern Trust returned $435.4 million to shareholders through share repurchases and dividends.Our View on Northern TrustA rise in fee income and NII drove the company’s first-quarter performance. Its increasing AUC and AUM balances are likely to support financials. However, weakening asset quality and a rise in expenses will likely impede growth.Northern Trust Corporation Price, Consensus and EPS Surprise  Northern Trust Corporation price-consensus-eps-surprise-chart | Northern Trust Corporation QuoteCurrently, Northern Trust carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksComerica Incorporated CMA reported first-quarter 2025 adjusted earnings per share of $1.25, beating the Zacks Consensus Estimate of $1.14. In the prior-year quarter, the company registered an EPS of $1.29. (See the Zacks Earnings Calendar to stay ahead of market-making news.)CMA’s results benefited from solid fee income and NII growth. A strong capital position and a decline in expenses were added positives. Yet, a decrease in loan and deposit balances, and weak asset quality were concerning.Fifth Third Bancorp FITB posted first-quarter 2025 adjusted earnings per share of 73 cents, surpassing the Zacks Consensus Estimate of 70 cents. In the prior-year quarter, the company recorded an EPS of 76 cents.FITB’s results benefited from a rise in NII and loan balances. A decline in expenses was another positive. Decreased fee income and weak asset quality were headwinds. 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 Fifth Third Bancorp (FITB): Free Stock Analysis Report Comerica Incorporated (CMA): Free Stock Analysis Report Northern Trust Corporation (NTRS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks