Northern Trust Corporation’s NTRS fourth-quarter 2024  adjusted earnings per share (EPS) of $2.26 surpassed the Zacks Consensus Estimate of $2.02. In the prior-year quarter, the company reported earnings per share of 52 cents. 

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For 2024, adjusted EPS was $9.78, which beat the Zacks Consensus Estimate of $7.56. This compares unfavorably with $5.1 reported in the year-ago quarter.

NTRS results benefited from a rise in net interest income (NII) and other fee income. Also, an increase in total assets under custody (AUC) and assets under management (AUM) balances supported financials. Strong capital ratios were another positive. 

Net income (GAAP basis) was $455.4 million, up significantly from $113 million recorded in the prior-year quarter.

For 2024, the company reported net income (GAAP basis) of $2.03 billion, which increased 83.4% year over year.

NTRS’ Revenues Rise & Expenses Fall

Quarterly total revenues (GAAP basis) of $1.96 billion increased 26.8% year over year. The top line also beat the Zacks Consensus Estimate of $1.93 billion.

Full-year revenues were $8.3 billion, which increased 22.4% year over year. The top line beat the Zacks Consensus Estimate of $8.25 billion. 

NII on a fully taxable equivalent basis was $574.3 million in the quarter under review, up 14.6% year over year. The net interest margin (NIM) was 1.71%, up 12 basis points from the prior-year quarter.

Trust, investment and other servicing fees totaled $1.2 billion, up 12.1% year over year. 

Other non-interest income was $173.6 million against a loss of $27.8 million reported in the year-ago quarter. The rise was driven by an increase in all components of other non-interest income. 

Non-interest expenses decreased nearly 1% to $1.38 billion in the reported quarter. The fall stemmed from a decline in occupancy and other operating expense.

Northern Trust’s AUC and AUM Rise

As of Dec. 31, 2024, Northern Trust’s total AUC increased 12% year over year to $13.3 trillion. Also, total AUM rose 12.3% to $1.6 trillion.

NTRS’ Credit Quality Improves

Total allowance for credit losses was $206.1 million, down 6.5% year over year. 

Total non-accrual assets decreased 11.9% to $56 million as of Dec. 31, 2024. NTRS reported negative provisions for credit losses of $10.5 million in the fourth quarter compared with a negative provision for credit losses of $8.5 million in the year-ago quarter.

NTRS’ Capital and Profitability Ratios Improve

Under the Standardized Approach, as of Dec. 31, 2024, the Common Equity Tier 1 capital ratio was 12.4%, up from 11.4% reported in the prior-year quarter. The total capital ratio was 15.1%, up from 14.2% in the year-ago quarter. The Tier 1 leverage ratio was 8.1%, which remained unchanged from the prior-year quarter.

Return on average assets was 1.24%, up from 0.33% in the year-ago quarter. Also, the return on average common equity was 15.3% compared with the year-earlier quarter’s 4%.

NTRS’ Capital Distribution Activities

In the reported quarter, Northern Trust returned approximately $402.8 million to shareholders through share repurchases and dividends.

Our View on NTRS

A rise in fee income uplifted the company’s fourth-quarter performance. Its increasing AUC and AUM balances are likely to support financials. Improving credit quality was another positive. However, the uncertain global financial market and weak economic conditions could affect the bank’s businesses.

Currently, Northern Trust carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Comerica Incorporated CMA reported fourth-quarter 2024 adjusted EPS of $1.2, missing the Zacks Consensus Estimate of $1.25. In the prior-year quarter, the company reported an EPS of $1.46.

CMA’s results were negatively impacted due to a fall in NII and a weak asset quality. However, a rise in deposit balance, solid fee income growth and a strong capital position offered support. 

Fifth Third Bancorp FITB has reported fourth-quarter 2024 adjusted EPS of 90 cents, surpassing the Zacks Consensus Estimate of 87 cents. In the prior-year quarter, the company reported an EPS of 99 cents.

FITB’s results benefited from a rise in NII and loan balances. The strong capital position was another positive. A decline in fee income and weak asset quality were headwinds.

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