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    Northern Trust Corp (NTRS)

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    Northern Trust Corporation (NTRS) is a leading provider of wealth management, asset servicing, asset management, and banking solutions, operating globally through its principal subsidiary, The Northern Trust Company, and various other subsidiaries . The company is organized into two main client-focused reporting segments: Asset Servicing and Wealth Management. Northern Trust offers a range of services including custody, fund administration, investment operations outsourcing, trust, investment management, and philanthropic services, primarily targeting institutional investors and high-net-worth individuals .

    1. Asset Servicing - Provides a wide range of services including custody, fund administration, and investment operations outsourcing, primarily to institutional investors such as corporate and public retirement funds, foundations, and sovereign wealth funds.
    2. Wealth Management - Targets high-net-worth individuals and families, offering services such as trust, investment management, custody, and philanthropic services, including customized services through the Global Family Office for ultra-high-net-worth individuals and family offices.
    NamePositionStart DateShort Bio
    Michael G. O’GradyChairman of the Board, CEO, and President2011Michael G. O’Grady joined Northern Trust in 2011. He has served as Chairman of the Board since 2019, as CEO since 2018, and as President since 2017. Previously, he was EVP and President of Corporate & Institutional Services .
    Peter B. CherecwichExecutive Vice President and President of Asset Servicing2007Peter B. Cherecwich joined Northern Trust in 2007. He has served as EVP and President of Asset Servicing since 2017. Previously, he was President of Global Fund Services and COO of Corporate & Institutional Services .
    Daniel E. GambaExecutive Vice President and President of Asset ManagementApril 2023Daniel E. Gamba joined Northern Trust in April 2023. Before joining, he spent over two decades at Blackrock, Inc., serving in various roles including Co-Head of Fundamental Equities .
    Steven L. FradkinExecutive Vice President and President of Wealth Management1985Steven L. Fradkin joined Northern Trust in 1985. He has served as EVP and President of Wealth Management since 2014. Previously, he was President of Corporate & Institutional Services and CFO .
    Mark C. GossettExecutive Vice President and Chief Risk Officer1983Mark C. Gossett joined Northern Trust in 1983. He has served as EVP and Chief Risk Officer since 2020. Previously, he was Chief Credit Officer and Head of Market and Liquidity Risk .
    Jane B. KarpinskiExecutive Vice President and Global Head of Regulatory AffairsDecember 2023Jane B. Karpinski joined Northern Trust in 2006. She has served as EVP since 2016 and was appointed Global Head of Regulatory Affairs in December 2023. Previously, she was Chief Audit Executive .
    John P. LandersSenior Vice President and ControllerDecember 2023John P. Landers joined Northern Trust in 2003. He has served as SVP and Controller since December 2023. Previously, he was Chief Productivity Officer and CFO of Asset Servicing .
    Susan C. LevyExecutive Vice President and General Counsel2014Susan C. Levy joined Northern Trust in 2014. She has served as EVP and General Counsel since then. Previously, she was Corporate Secretary and Managing Partner at Jenner & Block .
    Teresa A. ParkerExecutive Vice President and President of EMEA1982Teresa A. Parker joined Northern Trust in 1982. She has served as EVP and President of EMEA since 2017. Previously, she was COO of Corporate & Institutional Services .
    Thomas A. SouthExecutive Vice President and Chief Information Officer1999Thomas A. South joined Northern Trust in 1999. He has served as EVP and CIO since 2018. Previously, he was Chief Business Architect and COO of Operations & Technology .
    Alexandria TaylorExecutive Vice President and Chief Human Resources OfficerOctober 2022Alexandria Taylor joined Northern Trust in October 2022. Previously, she spent nearly two decades at Bank of America, where she was head of HR for corporate, institutional, and wealth management businesses .
    Jason J. TylerExecutive Vice President and Chief Financial Officer2011Jason J. Tyler joined Northern Trust in 2011. He has served as EVP and CFO since 2020. Previously, he was CFO of Wealth Management and Global Head of Asset Management's Institutional Group .
    Peter B. CherecwichChief Operating OfficerOctober 1, 2024Peter B. Cherecwich became the Chief Operating Officer at Northern Trust on October 1, 2024. He has served in various roles, including President of Asset Servicing .
    Teresa A. ParkerPresident – Asset ServicingOctober 1, 2024Teresa A. Parker became President – Asset Servicing on October 1, 2024. She has served as EVP and President of EMEA since 2017 .
    Steven L. FradkinVice ChairmanOctober 1, 2024Steven L. Fradkin was appointed as Vice Chairman effective October 1, 2024. He has served in various leadership roles, including EVP and President of Wealth Management .
    Jason J. TylerPresident – Wealth ManagementOctober 1, 2024Jason J. Tyler assumed the role of President – Wealth Management on October 1, 2024. He has served as EVP and CFO since 2020 .
    David W. Fox, Jr.Chief Financial OfficerOctober 1, 2024David W. Fox, Jr. became the CFO of Northern Trust Corporation on October 1, 2024. Previously, he was President of the Global Family & Private Investment Offices Group .
    1. Given that expense growth is expected to be over 6% in 2024, exceeding your previous target of sub-5%, how do you plan to control expenses in 2025 to meet your commitment of sub-5% expense growth, especially with the recent management changes?
    2. With significant management changes across key positions, including CFO, COO, Head of Wealth, Head of Asset Servicing, and Head of Family Office all changing at the same time, how will the new leadership team drive better organic growth, and what specific strategies will they implement differently from before?
    3. Your stock price has lost its premium versus trust bank peers and trades below some competitors like Morgan Stanley; to what extent do you attribute this to business mix, environment, or execution, and what are your plans to address these challenges to improve shareholder value?
    4. How should investors measure the success of the One Northern Trust strategy, and can you provide specific metrics or KPIs that we can monitor to assess the effectiveness of this initiative compared to your peers using similar programs?
    5. Given the elevated level of capital returns through share buybacks, with about one-third of net income going to dividends and a CET1 ratio at the upper end of 12.5%, is this level of capital return sustainable in the longer term, and how do you plan to balance capital returns with maintaining your capital ratios?
    Program DetailsProgram 1
    Approval DateOctober 2021
    End Date/DurationNo expiration date
    Total additional amount25 million shares
    Remaining authorization amount13,300,150 shares (as of 2024-12-21)
    DetailsManage capital levels and use repurchased shares for general purposes, including stock option and incentive plans

    Competitors mentioned in the company's latest 10K filing.

    • Other custodial banks
    • Investment counseling firms
    • Deposit-taking institutions
    • Asset management firms
    • Benefits consultants
    • Trust companies
    • Investment banking firms
    • Insurance companies
    • Financial technology companies, including software providers and data services firms
    NameStart DateEnd DateReason for Change
    KPMG LLP2002 PresentCurrent auditor

    Recent developments and announcements about NTRS.

    Financial Reporting

      Earnings Call

      ·
      Jan 23, 2025, 5:51 PM

      Northern Trust Corporation (NTRS) recently released its fourth-quarter 2024 earnings call transcript, providing key insights into its financial performance, strategic initiatives, and market outlook. Below is a summary of the key points:

      Financial Performance:

      • Revenue and Profitability: Fourth-quarter revenue increased by 13% year-over-year, with earnings per share (EPS) growing by over 50% compared to the prior year. For the full year, revenue was up 8%, and EPS grew by 24%.
      • Net Interest Income (NII): NII reached a record $574 million in Q4, up 15% year-over-year. For Q1 2025, NII is expected to range between $555 million and $575 million, with low single-digit growth anticipated for the full year.
      • Assets Under Management (AUM) and Custody (AUC): AUM grew by 12% year-over-year to $1.2 trillion, while AUC increased by 9% to $15.6 trillion, despite sequential declines due to unfavorable currency movements and weaker bond markets.
      • Shareholder Returns: The company returned $403 million to shareholders in Q4 and $1.5 billion for the full year, marking a five-year high.

      Strategic Initiatives:

      • One Northern Trust Strategy: This strategy focuses on optimizing growth, strengthening resiliency, and driving productivity. Key achievements include deepening client relationships, launching new products, and leveraging technology to enhance efficiency.
      • Global Family Office (GFO): The GFO segment experienced its strongest year ever, with high single-digit organic growth and a robust pipeline for 2025.
      • Technology Investments: The company is modernizing its infrastructure by adopting cloud technologies, automating processes, and integrating artificial intelligence to reduce manual tasks and improve service quality.

      Market Conditions and Forward Guidance:

      • Expense Management: Northern Trust aims to keep expense growth at or below 5% in 2025, focusing on achieving positive operating leverage.
      • Deposit Trends: Noninterest-bearing deposits grew by 7% sequentially in Q4, with pricing adjustments aligning with market conditions.
      • Economic Outlook: The company anticipates a few rate cuts in 2025, which could impact NII. However, it remains focused on sustainable growth through organic initiatives and expense control.

      Analyst Questions and Management Responses:

      • Efficiency and Service Quality: Management highlighted efforts to maintain high service quality while reducing headcount through organizational changes and technology investments.
      • ROE and Margin Targets: Northern Trust aims for a balanced approach to growth and returns, targeting a pre-tax margin of 30% or higher over time.
      • Competition and Pricing: The company has been selective in pursuing new business opportunities, focusing on higher-margin deals to improve profitability.

      Key Takeaways:

      Northern Trust demonstrated strong financial performance in 2024, driven by revenue growth, operational efficiency, and strategic investments. The company remains committed to its long-term goals of sustainable growth, enhanced client service, and shareholder value creation. Looking ahead, it plans to navigate potential economic headwinds by focusing on expense management, organic growth, and technological advancements.

      For further details, the full earnings call transcript is available on Northern Trust's website.

      Earnings Report

      ·
      Jan 23, 2025, 12:26 PM

      Northern Trust Corporation (NTRS) Fourth Quarter 2024 Earnings Results

      Northern Trust Corporation has released its fourth quarter 2024 earnings results, showcasing significant financial performance improvements and strategic advancements. Below are the key highlights:

      Financial Performance

      • Net Income: $455.4 million, a substantial increase from $113.1 million in Q4 2023, though slightly down from $464.9 million in Q3 2024.
      • Diluted Earnings Per Share (EPS): $2.26, up from $0.52 in Q4 2023 and $2.22 in Q3 2024.
      • Total Revenue (FTE): $1,970.1 million, a 26% increase compared to $1,563.3 million in Q4 2023.
      • Net Interest Income (FTE): $574.3 million, a 15% increase from $501.1 million in Q4 2023.
      • Return on Average Common Equity: 15.3%, a significant improvement from 4.0% in Q4 2023.

      Key Revenue Drivers

      • Trust, Investment, and Other Servicing Fees: $1,222.2 million, up 12% year-over-year, driven by organic growth across all business lines.
      • Foreign Exchange Trading Income: $61.7 million, a 26% increase from Q4 2023, attributed to higher trading volumes.
      • Net Interest Margin (FTE): Improved to 1.71% from 1.59% in Q4 2023, reflecting lower funding costs and favorable asset mix.

      Expense Management

      • Total Noninterest Expense: $1,375.9 million, a slight 1% decrease from Q4 2023, reflecting cost control measures and the absence of prior-year FDIC special assessments.
      • Compensation Expense: Increased by 6% year-over-year due to base pay adjustments and higher headcount.

      Capital Actions

      • Shareholder Returns: $402.8 million returned to shareholders through dividends and share repurchases in Q4 2024.
      • Share Repurchases: 2,377,482 shares repurchased at an average price of $106.70 per share.

      Assets Under Management and Custody

      • Assets Under Management (AUM): $1,610.4 billion, a 12% increase year-over-year.
      • Assets Under Custody/Administration (AUC/A): $16,788.0 billion, up 9% year-over-year.

      CEO Commentary

      Michael O’Grady, Chairman and CEO, highlighted the company’s strong performance, stating:

      “Northern Trust finished the year with strong fourth quarter results, reflecting the progress we’ve achieved executing against our One Northern Trust strategy. We begin 2025 well-positioned to build on 2024’s accomplishments, focused on accelerating growth, making further progress on our productivity initiatives, and investing for the future”.

      Strategic Priorities for 2025

      • Accelerating growth with alternative investment managers and targeted asset owners.
      • Expanding banking and capital markets solutions globally.

      Conclusion

      Northern Trust Corporation’s Q4 2024 results demonstrate robust financial growth, effective cost management, and strategic advancements, positioning the company for continued success in 2025.

      Note: All financial figures are as of Q4 2024 and are based on the company’s earnings release dated January 23, 2025.