01—Abstract
Summary
Summary of the 10-Q filed April 30, 2026. Cited figures are marked; the original filing is the authoritative source.
Northern Trust Corporation reported first-quarter 2026 net income of $525.5 milliona, up from $392.0 million in the prior-year quarter, with diluted EPS of $2.71 versus $1.90.
Total revenue rose 14% to $2.21 billionb, driven by Trust, Investment and Other Servicing Fees, which increased 11% to $1.34 billion on favorable markets, net new business and favorable currency movement. Net interest income increased 15% to $654.0 million on higher deposit levels, partially offset by lower interest rates, and noninterest expense rose 6% to $1.51 billion, mainly from compensation and equipment and software costs. A negative provision for credit losses of $3.0 million was recorded, compared with a $1.0 million provision a year earlier.
Client assets were modestly lower at quarter-end: AUC/A was $18.55 trillionc, down 1% from December 31, 2025, and AUM was $1.78 trillion, also down 1%, as market performance and currency were negative in the quarter even though net AUM inflows were $13.7 billion. Total assets declined to $174.6 billion from $177.1 billion, and deposits fell to $139.7 billion from $142.8 billion. Capital ratios declined from year-end levels but remained above well-capitalized thresholds; for Northern Trust Corporation, the standardized CET1 ratio was 12.0% versus 12.6% at December 31, 2025.
The company repurchased 2,488,148 common shares for $358.9 milliond during the quarter. Operating cash flow was negative $320.0 million, primarily due to higher net collateral deposited with derivative counterparties. Management noted that nonaccrual loans fell to $55.0 million from $76.7 million, and the company disclosed a $4.6 billion receivable for cash not received as expected on overnight repurchase agreements, which was received the following business day.
02—Key points
Key Highlights
- Net income rose 34% to $525.5 million; diluted EPS was $2.71 versus $1.90 a year earlier.
- Total revenue increased 14% to $2,205.6 million, with noninterest income up 13% to $1,551.6 million and net interest income up 15% to $654.0 million.
- Trust, Investment and Other Servicing Fees grew 11% to $1,341.4 million, citing favorable markets, net new business and favorable currency movement.
- Noninterest expense rose 6% to $1,508.0 million, driven by Compensation and Benefits and Equipment and Software.
- Total AUC/A of $18,553.9 billion and AUM of $1,784.9 billion were each down 1% from December 31, 2025, though AUM net inflows were $13.7 billion for the quarter.
- Return on average common equity was 17.4% versus 13.0%, and the dividend payout ratio was 29.5% versus 39.5%.
- The company repurchased 2,488,148 common shares for $358.9 million and declared $0.80 per common share in dividends, versus $0.75 a year earlier.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 30, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.34B$1.21B | +10.5% |
| Net Income | $525.50M$392.00M | +34.1% |
| EPS (Basic) | $2.72$1.91 | +42.4% |
| EPS (Diluted) | $2.71$1.90 | +42.6% |
| Shares Outstanding (Basic) | 185.50M195.19M | −5.0% |
| Shares Outstanding (Diluted) | 186.54M196.12M | −4.9% |
05—Questions
Frequently Asked Questions
What drove the increase in Northern Trust's first-quarter 2026 earnings?
Net income increased 34% to $525.5 million, reflecting a 14% rise in total revenue to $2.21 billion. Fee income grew 11% on favorable markets, net new business and currency movement, and net interest income rose 15% on higher deposit levels, partly offset by lower interest rates. Expenses rose 6%, and the provision for credit losses was a $3.0 million benefit.
How did client assets change during the quarter?
AUC/A ended March 31, 2026 at $18,553.9 billion, down 1% from December 31, 2025, and AUM ended at $1,784.9 billion, also down 1%. The filing attributes the AUM decline to total market performance, currency and other factors of negative $32.0 billion, partly offset by net inflows of $13.7 billion.
How strong are Northern Trust's regulatory capital ratios?
The filing states that capital ratios remained strong and exceeded the requirements to be classified as well-capitalized. For Northern Trust Corporation under the standardized approach, Common Equity Tier 1 was 12.0% at March 31, 2026, compared with 12.6% at December 31, 2025, and Total Capital was 15.3% compared with 16.1%.
Why was operating cash flow negative this quarter?
Net cash used in operating activities was $320.0 million, primarily attributable to higher net collateral deposited with derivative counterparties, partially offset by period earnings and other operating activities. This compares with net cash provided by operating activities of $2.7 billion in the prior-year quarter.
Did the company disclose any unusual balance sheet items at quarter-end?
The filing discloses a $4.6 billion receivable recorded in Other Assets as of March 31, 2026, arising from cash not received as expected on executed repurchase agreements tied to a payment processing issue with a cash custodian for certain FICC sponsored member clients. The filing states that cash was received the following business day and the overnight repurchase agreements unwound in the normal course.
06—Continue