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Northern Trust 8-K Report, Financial Results (Jul 17, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed July 17, 2024
Period End
July 17, 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 July 17, 2024. Cited figures are marked; the original filing is the authoritative source.

Northern Trust Corporation reported second-quarter 2024 net income of $896.1 milliona, or $4.34 per diluted common share, compared with $214.7 million ($0.96 per diluted share) in the first quarter of 2024 and $331.8 million ($1.56 per diluted share) in the second quarter of 2023.

The results were heavily affected by a $878.4 millionb net gain related to the Visa transaction, which was partly offset by $196.3 million of restructuring charges and other notable items, including $85.2 million of severance-related charges and a $70.0 million charitable commitment to the Northern Trust Foundation. Total revenue on a fully taxable equivalent basis rose to $2.72 billion from $1.65 billion in the prior quarter, while noninterest expense increased to $1.53 billion from $1.36 billion. Excluding the notable items, the underlying picture was steadier.

Trust, investment and other servicing fees were $1.17 billionc, up 2% sequentially and 6% from the prior-year quarter, driven primarily by favorable markets. Net interest income on a fully taxable equivalent basis was $529.8 million, and the net interest margin fell to 1.57% from 1.61% in the first quarter due to an unfavorable deposit mix. Total assets under custody/administration reached $16.57 trillion and assets under management reached $1.53 trillion as of June 30, 2024.

The company's Common Equity Tier 1 ratio under the standardized approach was 12.6%, and it returned approximately $405.1 milliond to common shareholders through dividends and share repurchases. The filing furnishes the earnings press release, a presentation and a financial trends report under Regulation FD and Item 2.02, and these materials are not deemed filed under Section 18 of the Exchange Act. The company also held a live earnings conference call and webcast on July 17, 2024.

02—Key points

Key Highlights

  1. Net income of $896.1 million, or $4.34 per diluted share, versus $214.7 million ($0.96) in Q1 2024 and $331.8 million ($1.56) in Q2 2023, driven by a $878.4 million net gain from the Visa transaction.
  2. Restructuring charges and other notable items totaled $196.3 million, including $85.2 million of severance-related charges and a $70.0 million charitable commitment to the Northern Trust Foundation.
  3. Trust, investment and other servicing fees rose to $1,166.1 million, up 2% sequentially and 6% year over year, primarily on favorable markets.
  4. Noninterest expense increased to $1,533.9 million from $1,364.7 million in Q1 2024, with Other Operating Expense up 74% sequentially.
  5. Net interest margin on a fully taxable equivalent basis declined to 1.57% from 1.61% in Q1 2024, reflecting an unfavorable deposit mix.
  6. Common Equity Tier 1 ratio (standardized approach) was 12.6% at June 30, 2024, up from 11.4% at March 31, 2024.
  7. Assets under custody/administration reached $16,567.4 billion and assets under management reached $1,527.1 billion at June 30, 2024.

03—Questions

Frequently Asked Questions

  1. How much of the quarter's earnings came from the Visa transaction?

    The filing reports a $878.4 million net gain related to the Visa transaction in Q2 2024. Net income was $896.1 million, so this gain was the dominant driver of the quarter's reported results, partly offset by $196.3 million of restructuring charges and other notable items.

  2. What were the main one-time charges in the quarter?

    The company recorded $85.2 million of severance-related charges, a $70.0 million charitable commitment to the Northern Trust Foundation, a $10.6 million legal settlement, $16.4 million of software accelerations and dispositions, and $7.6 million of investment impairments, among other items.

  3. How did client assets and fee revenue trend?

    Total assets under custody/administration rose to $16,567.4 billion, up 1% from March 31, 2024 and 14% from June 30, 2023. Trust, investment and other servicing fees were $1,166.1 million, up 2% sequentially and 6% year over year.

  4. How did the company's capital position change?

    The Common Equity Tier 1 ratio under the standardized approach was 12.6% at June 30, 2024, compared with 11.4% at March 31, 2024. The company returned approximately $405.1 million to common shareholders through dividends and share repurchases during the quarter, including 3,001,216 shares repurchased at a total cost of $250.8 million.

  5. What is the status of the accompanying materials?

    The filing furnishes the July 17, 2024 earnings press release as Exhibit 99.1, presentation materials as Exhibit 99.2, and a financial trends report as Exhibit 99.3. Under Item 9.01, this information is not deemed filed under Section 18 of the Exchange Act.

04—Continue

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