Northern Trust Q2 Earnings Beat Estimates on Higher NII & AUM Growth

Northern Trust Corporation’s NTRS second-quarter 2025 adjusted earnings per share (EPS) of $2.13 beat the Zacks Consensus Estimate of $2.08. However, in the prior-year quarter, the company reported an EPS of $4.34.NTRS results benefited from a rise in net interest income (NII). Also, an increase in total assets under custody (AUC) and assets under management (AUM) balances supported the financials. However, elevated expenses, reduced other fee income and weak asset quality were concerning.Net income (GAAP basis) was $421.3 million, down 53% from the prior-year quarter.NTRS’ Revenues & Expenses DeclineQuarterly total revenues (GAAP basis) of $1.99 billion decreased 26.4% year over year. However, the top line beat the Zacks Consensus Estimate by 1%.NII on a fully taxable equivalent basis was $615.2 million in the quarter under review, up 16.1% year over year. The net interest margin was 1.69%, up 12 basis points from the prior-year quarter.Trust, investment and other servicing fees totaled $1.23 billion, up 5.6% year over year.Other non-interest income decreased 84.7% to $156.3 million from the year-ago quarter. The decline was driven by a decrease in foreign exchange trading income and other operating income.Non-interest expenses fell 7.6% year over year to $1.42 billion in the reported quarter. The decline primarily stemmed from decreases in compensation, outside services, occupancy, and other operating expenses.Northern Trust’s AUC & AUM RiseAs of June 30, 2025, Northern Trust’s total AUC increased 9.2% year over year to $14.2 trillion. Also, total AUM rose 11.2% year over year to $1.7 trillion.NTRS’ Credit Quality DeterioratesTotal allowance for credit losses was $224.1 million, up 6.9% year over year.Total non-accrual assets increased to $92.8 million as of June 30, 2025, from $38.5 million in the year-ago period. NTRS reported provisions for credit losses of $16.5 million in the second quarter compared with $8 million in the year-ago quarter.Northern Trust’s Capital & Profitability Ratios DeclineUnder the Standardized Approach, as of June 30, 2025, the Common Equity Tier 1 capital ratio was 12.2%, down from 12.6% in the prior-year quarter. The total capital ratio was 14.8%, down from 15.5% in the year-ago quarter. The Tier 1 leverage ratio was 7.6%, down from 8% in the prior-year quarter.The return on average common equity was 14.2% compared with the year-earlier quarter’s 31.2%.NTRS’ Capital Distribution ActivitiesIn the reported quarter, Northern Trust returned $485.6 million to shareholders through share repurchases and dividends.Our View on Northern TrustA rise in NII drove the company’s second-quarter performance. Its increasing AUC and AUM balances are likely to support financials. However, a decline in fee income, 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 sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Performance of Other BanksComerica Incorporated CMA has reported second-quarter 2025 adjusted EPS of $1.42, beating the Zacks Consensus Estimate of $1.23. In the prior-year quarter, the company reported an EPS of $1.53.CMA’s results benefited from a rise in NII and loan balance. Yet, lower deposit balances, decline in non-interest income and weak asset quality were concerning.Fifth Third Bancorp FITB reported second-quarter 2025 adjusted EPS of 9 cents, surpassing the Zacks Consensus Estimate of 87 cents. In the prior-year quarter, the company posted an EPS of 86 cents.FITB’s results benefited from a rise in NII, fee income and loan balances. However, higher expenses 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 the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.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