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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 Rise
Quarterly 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 Rise
As 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 Deteriorates
Total 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 Improve
Under 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 Activities
In the reported quarter, Northern Trust returned $435.4 million to shareholders through share repurchases and dividends.