01—Abstract
Summary
Summary of the 10-Q filed July 30, 2026. Cited figures are marked; the original filing is the authoritative source.
Northern Trust Corporation reported a strong second quarter of 2026, with net income of $792.2 milliona, up 88% from $421.3 million in the prior-year quarter, and diluted earnings per share of $4.23 versus $2.13.
Total revenue rose 35% to $2.70 billionb, driven primarily by Other Noninterest Income of $673.0 million, which included a $525.4 million pre-tax gain from Northern Trust's participation in the second Visa, Inc. Exchange Offer. Trust, Investment and Other Servicing Fees increased 10% to $1.35 billion on favorable markets, net client inflows and net new business, and net interest income rose 11% to $675.5 million. Results were partly offset by a $73.9 million pre-tax loss on available for sale securities sold in a portfolio repositioning, and by noninterest expense that rose 16% to $1.64 billion, including a $61.5 million software disposal charge, $51.0 million of severance and a $33.1 million Invested as One equity grant.
Client assets continued to grow, with assets under custody/administration reaching $20.00 trillionc at June 30, 2026, up 7% from December 31, 2025, and assets under management reaching $1.97 trillion, up 9%. Return on average common equity was 25.9% for the quarter compared with 14.2% a year earlier. Book value per common share increased to $68.41 and the Corporation repurchased $350.6 million of common stock during the quarter.
Capital ratios remained above well-capitalized thresholds, with a Common Equity Tier 1 ratio of 12.2% on the standardized approach for the Corporation. Credit quality remained stable, with a negative provision for credit losses of $5.3 milliond for the quarter, nonaccrual loans of $71.3 million, and a nonaccrual loan ratio of 0.16% of total loans. Operating cash flow was negative for the six months, at $384.9 million used, mainly due to higher net collateral deposited with derivative counterparties.
02—Key points
Key Highlights
- Net income of $792.2 million for the quarter, up 88% from $421.3 million; diluted EPS of $4.23 versus $2.13.
- Total revenue of $2.70 billion, up 35%, boosted by a $525.4 million pre-tax gain from the second Visa Exchange Offer.
- Trust, Investment and Other Servicing Fees rose 10% to $1.35 billion on favorable markets, net client inflows and net new business.
- Noninterest expense increased 16% to $1.64 billion, including a $61.5 million software disposal charge, $51.0 million of severance and a $33.1 million Invested as One equity grant.
- Assets under custody/administration reached $20.00 trillion and assets under management reached $1.97 trillion at June 30, 2026.
- Return on average common equity was 25.9% for the quarter versus 14.2% a year earlier; book value per common share was $68.41.
- Common Equity Tier 1 capital ratio (standardized approach) was 12.2% for the Corporation, and the Corporation repurchased $350.6 million of common stock in the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 30, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.35B$1.23B | +9.6% |
| Net Income | $792.20M$421.30M | +88.0% |
| Shares Outstanding (Basic) | 183.99M192.75M | −4.5% |
| Shares Outstanding (Diluted) | 184.89M193.37M | −4.4% |
05—Questions
Frequently Asked Questions
What drove the sharp increase in second-quarter 2026 net income?
Net income rose to $792.2 million from $421.3 million, mainly because Other Noninterest Income increased to $673.0 million, primarily due to a $525.4 million pre-tax gain tied to Northern Trust's participation in the second Visa Exchange Offer. Fee income and net interest income also grew, partly offset by higher noninterest expense.
Were there any one-time charges in the quarter?
Yes. The filing reports a $61.5 million pre-tax charge for software dispositions in Equipment and Software expense, $51.0 million of severance-related charges and a $33.1 million expense for the Invested as One equity grant to eligible employees, both in Compensation and Benefits. It also reports a $73.9 million pre-tax loss on available for sale debt securities sold in a portfolio repositioning.
How did client asset levels change?
Assets under custody/administration were $20,000.2 billion at June 30, 2026, up from $18,716.1 billion at December 31, 2025, and assets under management were $1,969.9 billion, up from $1,803.2 billion. The filing attributes the increases primarily to favorable markets and net client inflows.
How is credit quality trending?
The quarter recorded a negative provision for credit losses of $5.3 million, reflecting a decrease in the collective reserve partly offset by individual reserves on a small number of non-performing loans. Nonaccrual loans were $71.3 million, or 0.16% of total loans, compared with $76.7 million at December 31, 2025.
Is the Corporation's capital position sound, and is it returning capital to shareholders?
The filing states that capital ratios remained strong and exceeded well-capitalized requirements at June 30, 2026. The standardized Common Equity Tier 1 ratio for the Corporation was 12.2%. The Corporation declared common dividends of $0.80 per share for the quarter and repurchased $350.6 million of common stock, with $1,286 million remaining under its $2.5 billion repurchase authorization.
06—Continue