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Northern Trust 8-K Report, Financial Results (Jan 18, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed January 18, 2024
Period End
January 18, 2024
Securities
NTRSNTRSO
In the record · 2016–202610-K1110-Q338-K118

NTRS filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 118 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · May ’22May ’22
  2. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed January 18, 2024. Cited figures are marked; the original filing is the authoritative source.

Northern Trust Corporation reported fourth-quarter 2023 net income of $113.1 milliona, or $0.52 per diluted common share, compared with $327.8 million ($1.49 per share) in the third quarter of 2023 and $155.7 million ($0.71 per share) in the fourth quarter of 2022.

The quarter included a $176.4 millionb pre-tax loss on available-for-sale debt securities sold in a portfolio repositioning and an $84.6 million pre-tax FDIC special assessment. Total revenue (FTE) was $1,563.3 million, down from $1,739.7 million in the prior quarter but up from $1,534.5 million a year earlier. Noninterest expense rose to $1,388.5 million from $1,278.2 million in the third quarter.

Trust, investment and other servicing fees were $1,090.0 millionc, and assets under custody/administration reached $15.40 trillion at year-end. For full-year 2023, net income was $1,107.3 million, or $5.08 per diluted share, versus $1,336.0 million ($6.14) in 2022. Total assets were $150.78 billion at December 31, 2023, and the company returned approximately $302.4 million to common shareholders in the quarter through dividends and share repurchases.

Capital ratios remained above well-capitalized thresholds, with a standardized Common Equity Tier 1 ratio of 11.4%d at year-end. The company stated that client assets and capital ratios for the quarter are preliminary until its Form 10-K is filed.

The 8-K furnishes the earnings press release (Exhibit 99.1), presentation materials (Exhibit 99.2) and a financial trends report (Exhibit 99.3), and states that the information is furnished rather than filed under Section 18 of the Exchange Act. Management said it is focused on accelerating profitable organic growth, maintaining expense discipline and improving operating model resiliency.

02—Key points

Key Highlights

  1. Q4 2023 diluted EPS was $0.52, down from $1.49 in Q3 2023 and $0.71 in Q4 2022; net income was $113.1 million.
  2. Q4 2023 results included a $176.4 million pre-tax investment security loss from a portfolio repositioning and an $84.6 million pre-tax FDIC special assessment.
  3. Noninterest expense rose to $1,388.5 million in Q4 2023 from $1,278.2 million in Q3 2023, driven largely by the FDIC assessment in other operating expense.
  4. Full-year 2023 net income was $1,107.3 million, or $5.08 per diluted share, compared with $1,336.0 million, or $6.14, in 2022.
  5. Total assets under custody/administration were $15,404.9 billion ($15.40 trillion) at December 31, 2023, and assets under management were $1,434.5 billion.
  6. Net interest margin (FTE) was 1.59% in Q4 2023, up from 1.45% in Q3 2023 but down from 1.63% in Q4 2022.
  7. The company returned approximately $302.4 million to common shareholders in Q4 2023 through dividends and repurchases of 1,957,885 shares.

03—Questions

Frequently Asked Questions

  1. Why did Northern Trust's fourth-quarter 2023 earnings fall so sharply?

    Net income fell to $113.1 million from $327.8 million in the third quarter. The filing attributes this largely to a $176.4 million pre-tax loss on available-for-sale debt securities sold in a portfolio repositioning and an $84.6 million pre-tax FDIC special assessment, and to higher noninterest expense of $1,388.5 million.

  2. How did client assets change during the quarter?

    Total assets under custody/administration rose to $15,404.9 billion from $14,164.7 billion at September 30, 2023, and assets under management rose to $1,434.5 billion from $1,333.3 billion. The company notes that current-quarter client assets are preliminary until the Form 10-K is filed.

  3. How is Northern Trust's capital position?

    At December 31, 2023, the company's standardized Common Equity Tier 1 capital ratio was 11.4%, and its Tier 1 capital ratio was 12.3%, with both the company and The Northern Trust Company exceeding well-capitalized requirements. The company states these ratios are preliminary until the Form 10-K is filed.

  4. What did the company say about its outlook for 2024?

    Chairman and CEO Michael O'Grady said the company is squarely focused on accelerating profitable organic growth, maintaining expense discipline, and driving greater resiliency and efficiency in its operating model. The filing does not provide specific 2024 financial guidance.

04—Continue

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