Northern Trust Reports Third-Quarter Profit of $642.9 Million
Key Facts
Northern Trust reported net income of $642.9 million for the third quarter of 2026, according to its earnings release filed with the U.S. Securities and Exchange Commission. Reported diluted earnings per common share were $3.40 for the period, which included gains from the sale of its custody services business and a Visa share exchange offer. The company posted U.S. GAAP revenue of $2,294.4 million, according to its official earnings presentation. On business performance, the chief executive said all three of the company's businesses delivered organic growth in trust fees. In comments published on its investor relations website, he added: "All three businesses delivered organic growth in trust fees."
Third-quarter results included a positive pretax impact of $48.7 million from notable items on noninterest income, according to the company's release. This included a pretax gain of $34.0 million from the sale of its custody services business among the items included in the period's results. Northern Trust also recorded an additional pretax gain of $14.7 million related to a Visa share exchange offer. In the previous quarter, the company's results had also included a Visa-related gain, alongside a securities loss. Notable items in that period also included charges related to software, severance and employee grants, according to the earnings disclosure.
In its services businesses, trust, investment and other servicing fees totaled $1,373.0 million in the third quarter of 2026, according to the earnings release. Net interest income was $679.1 million on a fully taxable-equivalent basis, the measure cited by the company in the release. Northern Trust attributed the improvement in interest income from the same period a year earlier to higher deposits at the company during the period. It also cited an improved deposit mix and lower funding costs as factors behind the year-over-year improvement. Explaining its interest income performance, the company said it benefited from "a favorable deposit mix and lower funding costs." Net interest margin, also on a fully taxable-equivalent basis, was 1.83% in the third quarter.
On costs, Northern Trust recorded noninterest expenses of $1,492.5 million in the third quarter, according to its release filed with the U.S. regulator. The company's effective tax rate was 19.3% for the same period, according to figures in the earnings release. At the end of September 2026, its common equity tier 1 capital ratio under the standardized approach was 12.4%, the official earnings presentation showed. In the stock's initial response following the results, Investing reported a 0.31% rise in premarket trading. The move was reported in the website's coverage published on October 21, 2026, after the company announced its third-quarter performance.
Alongside the financial performance announcement, the results showed continued returns of capital to common shareholders through cash dividends and share purchases. Northern Trust said it returned a total of $514.2 million to those shareholders during the third quarter of 2026. The total included cash payments to shareholders and amounts the company allocated to repurchasing its common shares during the period, according to the earnings release. Common share repurchases alone totaled $352.3 million, according to details in the company's official quarterly presentation. The quarterly cash dividend per common share was $0.88 following an increase, according to the earnings release filed with the U.S. Securities and Exchange Commission.
For the fourth quarter of 2026, Northern Trust expects continued year-over-year growth in net interest income, according to guidance in its official earnings presentation. The company set its expected growth range for this item at between 8% and 9% compared with the same period a year earlier. It also expects growth in total revenue in the fourth quarter, under guidance presented alongside its third-quarter results. Expected year-over-year growth in total revenue ranges between 6% and 7%, according to the company's official presentation. Northern Trust scheduled its fourth-quarter 2026 earnings call for January 21, 2027, at 08:00 a.m. U.S. Central Time, according to its investor relations calendar.