01—Abstract
Summary
Summary of the 10-Q filed October 29, 2024. Cited figures are marked; the original filing is the authoritative source.
Northern Trust Corporation reported net income of $464.9 milliona, or $2.22 per diluted share, for the third quarter of 2024, up from $327.8 million, or $1.49 per diluted share, in the prior-year quarter.
Total revenue rose 14% to $1.97 billionb, driven by a $68.1 million pre-tax gain on the sale of an equity investment, while Trust, Investment and Other Servicing Fees increased 8% to $1.20 billion, primarily due to favorable markets. Net interest income increased 23% to $562.3 million, and noninterest expense rose 6% to $1.36 billion. Return on average common equity was 15.4% for the quarter and 18.2% for the nine months.
For the nine months ended September 30, 2024, net income was $1.58 billionc, or $7.51 per diluted share, up 59%. Results were lifted by a $878.4 million net gain related to the Visa transactions in the second quarter, partly offset by a $189.4 million loss on the sale of available for sale debt securities in the first quarter. Noninterest expense increased 9% to $4.26 billion, reflecting higher severance-related charges, a $70.0 million charitable contribution and a $14.7 million FDIC special assessment accrual.
Assets under custody/administration reached $17.42 trilliond, up 13% from year-end 2023 and assets under management reached $1.62 trillion, up 13%. Total assets were $155.75 billion, and deposits were $121.18 billion.
Regulatory capital ratios remained above well-capitalized thresholds at September 30, 2024, with the Corporation's Common Equity Tier 1 ratio at 12.6% on the standardized approach. The company repurchased 3,463,546 shares in the quarter at a total cost of $301.4 million.
02—Key points
Key Highlights
- Third-quarter net income of $464.9 million, or $2.22 per diluted share, versus $327.8 million, or $1.49 per diluted share, a year earlier.
- Total revenue of $1.97 billion, up 14%, including a $68.1 million pre-tax gain on the sale of an equity investment.
- Net interest income of $562.3 million, up 23%, driven by higher deposits, securities repositioning and other items.
- Nine-month net income of $1.58 billion, up 59%, aided by a $878.4 million net gain from Visa transactions in the second quarter.
- Assets under custody/administration of $17.42 trillion and assets under management of $1.62 trillion, each up 13% from December 31, 2023.
- Provision for credit losses was $8.0 million for the quarter versus $14.0 million a year earlier; nonaccrual assets fell to $39.3 million.
- Common Equity Tier 1 capital ratio of 12.6% (standardized approach) at September 30, 2024, with the company repurchasing $301.4 million of common stock in the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 29, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $1.20B$1.11B | +7.6% |
| Net Income | $464.90M$327.80M | +41.8% |
| EPS (Basic) | $2.23$1.49 | +49.7% |
| EPS (Diluted) | $2.22$1.49 | +49.0% |
| Shares Outstanding (Basic) | 199.94M207.02M | −3.4% |
| Shares Outstanding (Diluted) | 200.55M207.25M | −3.2% |
05—Questions
Frequently Asked Questions
What drove the increase in Northern Trust's third-quarter earnings?
Net income rose 42% to $464.9 million. Revenue increased 14% to $1.97 billion, led by higher net interest income (up 23%) and Trust, Investment and Other Servicing Fees (up 8%), plus a $68.1 million pre-tax gain on the sale of an equity investment. Noninterest expense rose 6%.
How did the Visa transactions affect the nine-month results?
The filing states that a $878.4 million net gain related to the Visa transactions in the second quarter of 2024 drove much of the increase in Other Noninterest Income. Separately, a $189.4 million loss on sale of available for sale debt securities in the first quarter partly offset this gain.
What were the key expense drivers?
Noninterest expense for the nine months rose 9% to $4.26 billion, primarily due to higher severance-related charges, higher Other Operating Expense (including a $70.0 million charitable contribution and a $10.6 million legal settlement in the second quarter, and $14.7 million for the FDIC special assessment), and higher Equipment and Software expense.
Is the company's capital position sound?
The filing states that the capital ratios of Northern Trust Corporation and The Northern Trust Company remained strong at September 30, 2024 and exceeded the requirements for classification as well-capitalized. The Corporation's Common Equity Tier 1 ratio was 12.6% on the standardized approach, compared with a 4.5% minimum.
06—Continue