Northern Trust (NTRS) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income surged to $896.1 million, up 170% year-over-year, driven by a $878.4 million net gain from the Visa transaction and offset by restructuring and notable charges.

• Earnings per diluted share were $4.34, with return on average common equity at 31.2% and return on average assets at 2.44%.

• Trust fees increased 6% year-over-year, with Wealth Management trust fees up 9% and strong new business momentum.

• Assets under custody/administration reached $16.6 trillion, up 14% year-over-year; assets under management hit $1.53 trillion, up 12%.

• Noninterest expense rose 15% year-over-year, reflecting $196.3 million in restructuring and notable charges, including $85.2 million in severance and a $70 million charitable commitment.

Financial highlights

• Total revenue for Q2 2024 was $2.72 billion, up 55% year-over-year, mainly due to the Visa gain.

• Net interest income was $530 million, up 1% year-over-year; net interest margin (FTE) was 1.57%.

• Trust, investment, and other servicing fees totaled $1.17 billion, up 6% year-over-year.

• Noninterest income surged to $2.19 billion, up 76% year-over-year, mainly from the Visa gain.

• Return on average common equity was 31.2%, up from 12.4% a year ago.

Outlook and guidance

• Sequential expense growth (adjusted for notable items) expected to be up ~1% in Q3; equipment and software expenses projected at $270–$275 million.

• Full-year expense growth target of 5% is unlikely for 2024 due to market-driven and resiliency investments, but remains a long-term goal.

• Fee operating leverage expected in the second half of the year; total operating leverage more likely in Q4.

• Management expects continued revenue growth, supported by strong client asset inflows and favorable market conditions.

• The company is monitoring the Basel III Endgame Proposal, which could increase risk-weighted assets by 5–15% when phased in from July 2025.