Northern Trust's third-quarter profit climbed from a year earlier as fee income and net interest income advanced, but the $642.9 million result trailed the prior quarter after a sizable Visa-related gain there.
Northern Trust said in an earnings release included as an exhibit to a Form 8-K filed with the SEC Wednesday that net income increased 40% from a year earlier. Diluted earnings per common share were $3.40, compared with $2.29 a year earlier.
On a GAAP basis, revenue advanced 13% to $2.29 billion, while noninterest expenses rose 5% to $1.49 billion. Fees for trust, investment and servicing work gained 8% to $1.37 billion. GAAP net interest income increased 14% to $671.4 million; the company also reported $679.1 million on an FTE basis. Northern Trust attributed the year-over-year increase in FTE net interest income to higher deposits, a favorable deposit mix and lower funding costs.
Assets under custody or administration totaled $19.9 trillion at Sept. 30, up 9% from a year earlier. Northern Trust pointed to favorable markets and incoming client assets as the main contributors. It said the Sept. 30 client-asset totals remain preliminary pending its Form 10-Q.
Net income fell 19% from the second quarter's $792.2 million. That quarter included a $525.4 million gain from a Visa exchange offer, partly offset by a $73.9 million loss on securities sales. Third-quarter pretax gains totaled $48.7 million: $34 million from the sale of the guardianship services business and $14.7 million from the Visa exchange offer.
Chairman and Chief Executive Officer Michael O'Grady said each of the company's three businesses posted organic growth in trust fees. Northern Trust returned $514.2 million to common shareholders through dividends and buybacks during the quarter, as detailed alongside its shareholder-return plans.
Northern Trust lists its fourth-quarter earnings call for Jan. 21, 2027, at 9 a.m. ET.
