What drove fee revenue growth?

Trust, investment and other servicing fees were $1.22 billion, up 12% from the prior-year quarter. The filing attributes the increase in Asset Servicing fees primarily to favorable markets and net new business, and the increase in Wealth Management fees primarily to favorable markets and, in Global Family Office, asset inflows.

How did the balance sheet and client assets change?

Total assets were $155.51 billion at December 31, 2024, up 3% from a year earlier. Assets under custody/administration were $16.79 trillion, down 4% from September 30, 2024 but up 9% from December 31, 2023, and assets under management were $1.61 trillion. The company notes that current-quarter client assets are preliminary until its Form 10-K is filed.

How strong is the company's capital position?

The filing states that capital ratios for Northern Trust Corporation and The Northern Trust Company remained strong at December 31, 2024 and exceeded the minimum requirements for well-capitalized classification. Northern Trust Corporation's standardized Common Equity Tier 1 capital ratio was 12.4%, and its Tier 1 leverage ratio was 8.1%. These figures are preliminary until the Form 10-K is filed.

What are the company's medium-term financial targets?

The presentation materials list enterprise medium-term targets of an expense-to-trust-fee ratio of 105-110%, a pre-tax margin above 30%, and a return on equity of 10-15%. Full-year 2024 profit margin (pre-tax) on an FTE basis was 32.3%, and the expense-to-trust-fee ratio was 119%.

NTRS/NTRSO 8-K: Earnings & Results & Regulation FD

Q: How did Northern Trust perform in the fourth quarter of 2024?

Net income was $455.4 million, or $2.26 per diluted common share, compared with $464.9 million ($2.22 per diluted share) in the third quarter of 2024 and $113.1 million ($0.52 per diluted share) in the fourth quarter of 2023. Total revenue on an FTE basis was $1.97 billion, and noninterest expense was $1.38 billion.

01—Abstract

Summary

Summary of the 8-K filed January 23, 2025. Cited figures are marked; the original filing is the authoritative source.

Northern Trust Corporation reported fourth-quarter 2024 net income of $455.4 million^a, or $2.26 per diluted common share, compared with $464.9 million ($2.22 per diluted share) in the third quarter of 2024 and $113.1 million ($0.52 per diluted share) in the fourth quarter of 2023.

Chairman and CEO Michael O'Grady described the quarter as reflecting progress under the One Northern Trust strategy, noting fourth-quarter fee revenue grew substantially year over year, supported by organic growth across all three businesses, and that the company generated a 15.3% return on common equity. Total revenue on a fully taxable equivalent basis was $1.97 billion^b, flat sequentially and up 26% from the prior-year quarter, while noninterest expense was $1.38 billion. Full-year 2024 net income was $2.03 billion, or $9.77 per diluted share, compared with $1.11 billion in 2023.

Trust, investment and other servicing fees rose to $1.22 billion^c in the quarter, up 2% sequentially and 12% year over year, and total assets under custody/administration reached $16.79 trillion at December 31, 2024, while assets under management reached $1.61 trillion. Net interest income on an FTE basis was $574.3 million, with net interest margin of 1.71%, up from 1.59% a year earlier. The provision for credit losses was a negative $10.5 million, reflecting a decrease in both collective and individual reserves, and the company returned approximately $402.8 million to common shareholders through dividends and share repurchases during the quarter.

The filing furnishes three exhibits: the earnings press release, presentation materials covering a strategic update and the quarterly results, and a Financial Trends report with historical financial detail. The company's capital ratios at December 31, 2024 remained above the well-capitalized thresholds, with a standardized Common Equity Tier 1 ratio of 12.4%^d. The company's stated medium-term targets include a 10-15% return on equity, a pre-tax margin above 30%, and an expense-to-trust-fee ratio of 105-110%.

02—Key points

Key Highlights

Q4 2024 net income of $455.4 million, or $2.26 per diluted share, versus $0.52 per diluted share in Q4 2023
Full-year 2024 net income of $2.03 billion, or $9.77 per diluted share, versus $1.11 billion in 2023
Trust, investment and other servicing fees of $1.22 billion in Q4 2024, up 12% year over year and 2% sequentially
Assets under custody/administration of $16.79 trillion and assets under management of $1.61 trillion at December 31, 2024
Net interest margin (FTE) of 1.71% in Q4 2024, up from 1.59% in Q4 2023, with a 15.3% return on average common equity
Returned approximately $402.8 million to common shareholders in Q4 2024 through dividends and share repurchases, including repurchases of 2,377,482 shares at a total cost of $253.7 million
Negative provision for credit losses of $10.5 million in Q4 2024, driven by a decrease in collective and individual reserves

03—Questions

Frequently Asked Questions

How did Northern Trust perform in the fourth quarter of 2024?
Net income was $455.4 million, or $2.26 per diluted common share, compared with $464.9 million ($2.22 per diluted share) in the third quarter of 2024 and $113.1 million ($0.52 per diluted share) in the fourth quarter of 2023. Total revenue on an FTE basis was $1.97 billion, and noninterest expense was $1.38 billion.
What drove fee revenue growth?
Trust, investment and other servicing fees were $1.22 billion, up 12% from the prior-year quarter. The filing attributes the increase in Asset Servicing fees primarily to favorable markets and net new business, and the increase in Wealth Management fees primarily to favorable markets and, in Global Family Office, asset inflows.
How did the balance sheet and client assets change?
Total assets were $155.51 billion at December 31, 2024, up 3% from a year earlier. Assets under custody/administration were $16.79 trillion, down 4% from September 30, 2024 but up 9% from December 31, 2023, and assets under management were $1.61 trillion. The company notes that current-quarter client assets are preliminary until its Form 10-K is filed.
How strong is the company's capital position?
The filing states that capital ratios for Northern Trust Corporation and The Northern Trust Company remained strong at December 31, 2024 and exceeded the minimum requirements for well-capitalized classification. Northern Trust Corporation's standardized Common Equity Tier 1 capital ratio was 12.4%, and its Tier 1 leverage ratio was 8.1%. These figures are preliminary until the Form 10-K is filed.
What are the company's medium-term financial targets?
The presentation materials list enterprise medium-term targets of an expense-to-trust-fee ratio of 105-110%, a pre-tax margin above 30%, and a return on equity of 10-15%. Full-year 2024 profit margin (pre-tax) on an FTE basis was 32.3%, and the expense-to-trust-fee ratio was 119%.

04—Continue

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