NORTHERN TRUST CORP
For the period ended Dec 31, 2025. Filed Feb 24, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 24, 2026
NTRS$172.76+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-24.
0000073124-25-000105
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-24.
0000073124-26-000016
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 549 previous paragraphs and 550 current paragraphs.
361 unchanged; 133 reworded; 53 added; 49 removed; 6 previous and 3 current paragraphs rearranged.
Tables are not compared: 46 previous and 46 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (53)
Current report
(2)2025 Noninterest Income includes a $19.2 million expense related to mark-to-market activity associated with existing Visa Class B swap agreements. 2024 Noninterest Income includes an $878.4 million net gain related to Northern Trust's participation in a Visa Exchange Offer, a $189.3 million loss on AFS debt securities sold in conjunction with a repositioning of the portfolio, a $68.1 million gain related to the sale of an equity investment, a $12.8 million expense of mark-to-market activity associated with existing Visa Class B swap agreements, a $7.6 million charge for investment impairments, and a $6.5 million loss recognized as a result of a securities repositioning related to the supplemental pension plan. 2023 Noninterest Income includes a $169.5 million loss on AFS debt securities sold in conjunction with a repositioning of the portfolio.
Current report
(3)2025 Noninterest Expense includes a $58.8 million severance-related charge and a $15.9 million release of the Federal Deposit Insurance Corporation (FDIC) special assessment reserve, including a $9.5 million released during the fourth quarter. 2024 Noninterest Expense includes an $85.2 million severance-related charge, a $70.0 million charitable contribution, a $16.4 million charge for software accelerations and dispositions, a $14.7 million expense related to the FDIC special assessment, and a $10.6 million expense related to a legal settlement. 2023 Noninterest Expense includes an $84.6 million expense related to the FDIC special assessment, a $38.7 million severance-related charge, a $25.6 million charge related to the write-off of an investment in a client capability, and a $12.8 million occupancy charge.
Current report
Revenue in 2025 decreased $204.0 million from 2024, reflecting:
Current report
•Trust, Investment and Other Servicing Fees increased $290.0 million in 2025 compared to 2024, primarily due to favorable markets, net new business, and favorable currency movements.
Current report
•Noninterest Income, excluding Trust, Investment and Other Servicing Fees, decreased $727.9 million in 2025 compared to 2024 primarily due to lower Other Operating Income driven by a $896.7 million gain related to Northern Trust’s participation in a Visa Exchange Offer in the prior year, partially offset by lower losses recognized on investment securities and higher Security Commissions and Trading Income.
Current report
•Net Interest Income on a fully taxable equivalent (FTE) basis in 2025 of $2.4 billion increased $230.6 million, or 10%, from $2.2 billion in 2024, primarily due to higher deposits and lower funding costs, partially offset by lower yields on interest-earning assets.
Current report
(4)Excluding the impact of netting, the average interest rate on Federal Funds Sold and Securities Purchased under Agreements to Resell would be approximately 4.33% and 5.29% in 2025 and 2024, respectively. It includes balances and rates for FICC reverse repurchase agreements, Non-FICC reverse repurchase agreements and federal funds sold of ($64.4 billion / 4.35%), ($0.9 billion / 2.67%), and ($0.8 million / 4.54%) for 2025 and ($62.5 billion / 5.30%), ($0.7 billion / 4.35%), and ($0.4 million / 5.40%) for 2024, respectively.
Current report
(7) Excluding the impact of netting, the average interest rate on Securities Sold under Agreements to Repurchase would be approximately 4.26% and 5.21% in 2025 and 2024, respectively. It includes balances and rates for FICC repurchase agreements and Non-FICC repurchase agreements of ($64.3 billion / 4.26%) and ($0.5 billion / 3.98%) for 2025 and ($62.5 billion / 5.21%) and ($0.5 billion / 4.90%) for 2024, respectively.
Current report
Net Interest Income, stated on an FTE basis, increased from 2024, primarily driven by higher deposits and lower funding costs, partially offset by lower yields on interest-earning assets.
Current report
Net interest margin on an FTE basis in 2025 increased from 2024, primarily driven by lower funding costs, partially offset by lower yields on interest-earning assets.
Current report
Interest-earning deposits includes Federal Reserve and Other Central Bank Deposits and Interest-Bearing Due from and Deposits with Banks. Interest-earning deposits in 2025 increased 7% from 2024, primarily driven by higher client deposits.
Current report
Average Securities in 2025 increased 8%, from 2024, reflecting higher client deposits resulting in strategic purchases of investment securities primarily in the AFS portfolio. Average taxable Securities were $45.9 billion in 2025 and $43.9 billion in 2024. Average nontaxable Securities, which represent securities that are primarily exempt from U.S. federal and state income taxes, were $8.2 billion in 2025 and $6.2 billion in 2024. For additional discussions relating to the securities portfolio, refer to the “Asset Quality” section and to Note 4, “Securities,” provided in Item 8, “Financial Statements and Supplementary Data.”
Current report
Average Interest-Bearing Deposits in 2025 increased 6% from 2024, primarily due to increased client activity and higher liquidity as a result of market volatility. Average Non-U.S. Offices Interest-Bearing Deposits comprised 66% and 67% of total average Interest-Bearing Deposits for the years ended December 31, 2025 and 2024, respectively.
Current report
Employee Benefits
Current report
Employee Benefits expense in 2025 increased from 2024, primarily driven by higher medical costs and higher payroll taxes.
Current report
REPORTING SEGMENTS AND RELATED INFORMATION
Current report
Effective January 2025, certain operations support activities were moved out of Asset Servicing and Wealth Management in connection with the formation of the Enterprise Chief Operating Office. The Enterprise Chief Operating Office provides operational support to Asset Servicing and Wealth Management. Its expenses are included within Other and are fully allocated to Asset Servicing and Wealth Management. Prior-year segment results have been recast, where practical, to reflect the organizational changes.
Current report
(3) The current $58.8 million and prior-year $85.2 million severance-related charges, as well as, the prior-year $16.4 million software amortization acceleration and dispositions, and $6.5 million loss on securities repositioning related to the supplemental pension plan, are allocated to the Reporting Segments based on the nature of the item.
Current report
(1) Financial measures stated on an FTE basis. The FTE adjustment was $28.5 million, $31.8 million, and $57.5 million for 2025, 2024, and 2023, respectively, and is eliminated within “Other” in order for “Total Consolidated” to reconcile with the Consolidated Statement of Income.
Current report
(3) Current year includes the $19.2 million expense related to mark-to-market activity associated with existing Visa Class B swap agreements and the $15.9 million release of a Federal Deposit Insurance Corporation (FDIC) special assessment reserve. Prior-year includes the $878.4 million net gain related to Northern Trust’s participation in a Visa Exchange Offer, a $68.1 million gain related to the sale of an equity investment, partially offset by a $189.3 million loss on available for sale debt securities sold in conjunction with a repositioning of the portfolio.
Current report
Foreign Exchange Trading Income for 2025 increased from 2024, primarily driven by higher trading volumes from growth in outsourced client activity, partially offset by an unfavorable impact from higher foreign exchange swap activity executed by our Treasury department that is allocated to Asset Servicing.
Current report
Asset Servicing Other Noninterest Income
Current report
Other Noninterest Income for 2025 increased from 2024, primarily due to Security Commissions and Trading Income due to growth in outsourced trading activity.
Current report
Asset Servicing Net Interest Income
Current report
Wealth Management Foreign Exchange Trading Income (Loss)
Current report
Foreign Exchange Trading Income for 2025 decreased from 2024, primarily driven by an unfavorable impact from higher foreign exchange swap activity executed by our Treasury department that is allocated to Wealth Management.
Current report
Net Interest Income on an FTE basis for 2025 increased from 2024, primarily due to lower funding costs, partially offset by a decline in loan yields. Net interest margin on an FTE basis increased to 2.71% for 2025 from 2.63% in 2024.
Current report
Moody's downgraded the long-term credit rating of the U.S. from Aaa to Aa1 in May 2025. As a result, government sponsored agency securities are now AA rated in the table dated December 31, 2025 above.
Current report
The components of capital expenditures are provided in the following table.
Current report
TABLE 33: CAPITAL EXPENDITURES
Current report
Northern Trust’s technology investments support infrastructure modernization including the use of external cloud technologies, increased operational efficiency, increased resiliency, and development of capabilities to enable growth with the delivery of secure and innovative solutions to our clients across the globe.
Current report
In 2023, the U.S. banking agencies issued the Basel III Endgame Proposal. The Federal Reserve announced in September 2024 that it would publish a re-proposal of its regulations finalizing the Basel III standards. That re-proposal is expected in early 2026. The potential impacts on the Corporation and the Bank of a final rule remain uncertain until a final rule is published.
Current report
In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (ASU 2025-06). ASU 2025-06 changes the cost capitalization threshold by removing the accounting consideration given to software project development stages and replaces it with the following criteria that must be met for entities to begin capitalizing software costs: (1) management has authorized and committed to funding the project and (2) it is ‘probable’ the project will be completed and the software used to perform its intended function (referred to as the ‘probable-to-complete’ threshold). In addition, ASU 2025-06 specifies that entities must apply the disclosure requirements in ASC 360-10, Property, Plant, and Equipment—Overall to capitalized internal-use software and related amortization, regardless of how the internal-use software is classified on the balance sheet. ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027, although early adoption is permitted. Northern Trust is currently assessing the impacts upon adoption of ASU 2025-06.
Current report
Other accounting pronouncements that were issued by the FASB but not yet adopted as of December 31, 2025 are not expected to have a material impact on Northern Trust’s consolidated balance sheets or consolidated statements of income upon adoption.
Current report
The Technology and Operations Committee assists in oversight of the technology and operations of the Corporation including related strategies, investments, and risks. The Technology and Operations Committee’s responsibility for oversight of relevant risks complements, but does not supersede, the oversight responsibility of the Risk Committee of the Board, which has primary responsibility for the risk management framework.
Current report
Independent Review and Verification
Current report
Independent review and risk control is provided through Model Risk Management, Credit Review, and Global Compliance Testing. Model Risk Management administers the enterprise-wide model risk framework, including independent validation and ongoing review of new and existing models used to support risk management, capital estimation, financial reporting and disclosures, valuation and pricing, and portfolio management. The framework also applies to artificial intelligence, machine learning, and other advanced analytics models, which are subject to risk-based governance, independent validation, and ongoing monitoring commensurate with their complexity, materiality, and use.
Current report
•AI Risk Program -a program to identify, assess, and monitor risks from the use of AI, ensuring AI technologies operate safely, responsibly, and within Northern Trust’s risk appetite.
Current report
Technology and Cyber Risk
Current report
Technology risk is an event that may cause an adverse impact on the integrity or availability of Northern Trust’s critical data, business processes, and/or other functions which may arise from the failure of: (a) integrity and availability of critical data; (b) resiliency of technology infrastructure and applications; (c) risks from internal system disruptions, change management failures, and technology governance gaps. Cyber risk is the risk of financial loss or adverse impact to the confidentiality integrity, and availability of Northern Trust’s electronic information, computer/communication systems, or technical infrastructure resulting from breaches or attacks on information systems and control which may arise from: (a) threats to confidentiality, integrity, and availability of information; (b) breaches, malware, and exploitation of vulnerabilities; (c) failure of identity and access management, threat monitoring, and incident response. Additional information regarding the manner in which cyber risk is managed can be found in Item 1C, “Cybersecurity.”
Showing the first 40 of 53 passages. Open the source sections for the rest.
Removed paragraphs (49)
Previous report
Revenue in 2024 of $8.3 billion increased $1.5 billion, or 22%, from $6.8 billion in 2023, primarily driven by higher Other Operating Income, Trust, Investment and Other Servicing Fees, and Net Interest Income. Noninterest Income represented 74% and 71% of total revenue in 2024 and 2023, respectively, and totaled $6.1 billion in 2024, which increased $1.3 billion, or 28%, from $4.8 billion in 2023.
Previous report
Noninterest Income in 2024 increased primarily due to higher Other Operating Income as well as Trust, Investment and Other Servicing Fees. Other Operating Income of $1.2 billion in 2024 increased $928.7 million from $228.7 million in the prior year, primarily driven by a $896.7 million gain related to Northern Trust’s participation in an exchange offer related to shares of a class of Visa, Inc. common stock and a $68.1 million gain on the sale of an equity investment, partially offset by mark-to-market activity on existing swap agreements related to shares of a class of Visa, Inc. common stock, including a $12.8 million expense related to litigation escrow funding, as well as losses recognized as a result of a securities repositioning related to the supplemental pension plan and impairment charges taken on certain investments. Please refer to Note 24, “Commitments and Contingent Liabilities” included under Item 8, “Financial Statements and Supplementary Data,” for additional details related to the exchange offer. Trust, Investment and Other Servicing Fees of $4.7 billion in 2024 increased $366.0 million, or 8%, from $4.4 billion in 2023, primarily due to favorable markets and net new business. Investment Security Gains (Losses), net reflects $189.3 million of losses in 2024 as compared to $169.5 million of losses in 2023, both due to repositionings of the available for sale debt securities portfolio in each year.
Previous report
Net Interest Income on a fully taxable equivalent (FTE) basis in 2024 of $2.2 billion increased $169.4 million, or 8%, from $2.0 billion in 2023, primarily due to higher deposits and higher average interest rates, partially offset by an unfavorable balance sheet mix. The net interest margin on an FTE basis increased to 1.64% in 2024 from 1.56% in 2023, primarily due to higher average interest rates and a favorable funding mix shift. Average earning assets increased $3.6 billion, or 3%, from $130.8 billion in 2023 to $134.4 billion in 2024, primarily due to higher client deposits, partially offset by lower borrowing activity, the net of which resulted in higher funding of earning assets.
Previous report
Additional information regarding Northern Trust’s revenue by type is provided in the following table.
Previous report
At December 31, 2024, AUC/A increased from December 31, 2023, primarily reflecting favorable markets and asset inflows, partially offset by unfavorable currency translation.
Previous report
Consolidated assets under custody increased from the prior year, primarily reflecting favorable markets and asset inflows, partially offset by unfavorable currency translation.
Previous report
Foreign Exchange Trading Income
Previous report
Northern Trust provides foreign exchange services in the normal course of business as an integral part of its custody services. Active management of currency positions, within conservative limits, also contributes to foreign exchange trading income. Foreign Exchange Trading Income in 2024 increased from 2023, primarily driven by higher trading volumes.
Previous report
(7)Other Borrowings primarily includes advances from the Federal Home Loan Bank of Chicago.
Previous report
Net Interest Income in 2024 increased from 2023. Net Interest Income, stated on an FTE basis, increased from 2023, due to a higher net interest margin and higher levels of average earning assets. Average earning assets in 2024 increased from 2023, primarily due to higher client deposits, partially offset by lower borrowing activity, the net of which resulted in higher funding of earning assets.
Previous report
The net interest margin in 2024 increased from 2023. The net interest margin on an FTE basis in 2024 increased from 2023, primarily due to higher average interest rates and a favorable funding mix shift.
Previous report
Federal Reserve and Other Central Bank Deposits averaged $35.2 billion in 2024, which increased $4.0 billion, or 13%, from $31.2 billion in 2023, due to deposit inflows. Interest-Bearing Due From and Deposits with Banks averaged $4.8 billion in 2024 and $4.3 billion in 2023. Average Securities were $50.1 billion and increased $0.2 billion, or 0%, from $49.9 billion in 2023. Average taxable Securities were $43.9 billion in 2024 and $46.8 billion in 2023. Average nontaxable Securities, which represent securities that are primarily exempt from U.S. federal and state income taxes, were $6.2 billion in 2024 and $3.1 billion in 2023.
Previous report
Loans averaged $40.9 billion in 2024, which decreased $1.2 billion, or 3%, from $42.2 billion in 2023, primarily reflecting lower levels of commercial and institutional and non-U.S. loans, partially offset by higher levels of commercial real estate and private client loans. Commercial and institutional loans averaged $11.1 billion in 2024 and decreased $1.3 billion, or 11%, from $12.4 billion for 2023. Non-U.S. loans averaged $3.0 billion in 2024 and decreased $360.9 million, or 11%, from $3.4 billion for 2023. Residential real estate loans averaged $6.4 billion in both 2024 and 2023. Commercial real estate loans averaged $5.3 billion in 2024 and increased $316.8 million, or 6%, from $5.0 billion for 2023. Private client loans averaged $14.2 billion in 2024 and increased $171.0 million, or 1%, from $14.0 billion for 2023.
Previous report
Northern Trust utilizes a diverse mix of funding sources. Average Interest-Bearing Deposits increased $8.4 billion, or 10%, to $95.9 billion in 2024 from $87.5 billion in 2023. Interest expense for Interest-Bearing Deposits in the current year was driven by higher interest rates and higher balances. Average Non-U.S. Offices Interest-Bearing Deposits comprised 67% and 69% of total average Interest-Bearing Deposits for the years ended December 31, 2024 and 2023, respectively. Average Total Interest-Bearing Liabilities increased $4.2 billion, or 4%, to $112.9 billion in 2024 from $108.7 billion in 2023. The balances within short-term borrowing classifications vary based on funding requirements and strategies, interest rate levels, changes in the volume of lower-cost deposit sources, and the availability of collateral to secure these borrowings. Average net noninterest-bearing funds decreased $0.6 billion, or 3%, to $21.5 billion in 2024 from $22.1 billion in 2023, primarily resulting from lower levels of Demand and Other Noninterest-Bearing Deposits. Average Demand and Other Noninterest-Bearing Deposits decreased $1.0 billion, or 5%, to $16.8 billion in 2024 from $17.7 billion in 2023. The average rate on total source of funds was 5.65% in 2024 and 4.07% in 2023.
Previous report
Stockholders’ Equity averaged $12.3 billion in 2024, compared with $11.5 billion in 2023. The increase in average Stockholders’ Equity of $803.0 million, or 7%, was primarily due to higher Retained Earnings. During the year ended December 31, 2024, the Corporation maintained its quarterly common stock dividend at $0.75 per share. During the year ended December 31, 2024, the Corporation, through common stock dividends and repurchases of 10,489,770 shares of common stock, returned $1.5 billion in capital to common stockholders. During the year ended December 31, 2023, the Corporation, through common stock dividends and repurchases of 4,384,678 shares of common stock, returned $977.7 million in capital to common stockholders.
Previous report
Outside Services
Previous report
Outside Services expense in 2024 increased from 2023, primarily reflecting higher consulting services and higher technical services.
Previous report
Occupancy
Previous report
Occupancy expense in 2024 decreased from 2023, primarily due to charges related to early lease exists recorded during the prior-year period.
Previous report
REPORTING SEGMENTS AND RELATED
Previous report
INFORMATION
Previous report
(2)Other Segment Items include Occupancy, Equipment & Software and Other Operating Expense.
Previous report
(1)Other Segment Items include Occupancy, Equipment & Software and Other Operating Expense.
Previous report
Foreign Exchange Trading Income for 2024 increased from 2023, primarily driven by higher client volumes.
Previous report
Asset Servicing Noninterest Expense
Previous report
Wealth Management Other Noninterest Income
Previous report
Other Noninterest Income for 2024 decreased from 2023, primarily due to lower credit-related fees and swap fees; partially offset by an increase in core brokerage related fees.
Previous report
TABLE 26: SELECT AVERAGE CONSOLIDATED BALANCE SHEET INFORMATION
Previous report
Average balances are considered to be a better measure of balance sheet trends, as period-end balances can be impacted by the timing of deposit and withdrawal activity involving large client balances. Average earning assets increased from the prior year primarily due to higher client deposits, partially offset by lower borrowing activity, the net of which resulted in higher funding of earning assets.
Previous report
Stockholders’ Equity. The increase in average Stockholders’ Equity was primarily due to higher Retained Earnings.
Previous report
(2)The ratio reflects a charge-off in the third quarter of 2022 in association with a sale of the last lease remaining in Northern Trust’s lease portfolio. As of December 31, 2024, December 31, 2023 and December 31, 2022, there were no leases outstanding.
Previous report
The allowance evaluated on an individual basis for Loans decreased $10.2 million from $13.4 million at December 31, 2023 to $3.2 million at December 31, 2024, primarily attributable to a commercial loan charge-off in 2024.
Previous report
Capital expenditures for 2024 totaled $745.5 million, of which $644.0 million was for software, $49.3 million was for computer hardware, $45.0 million was for building and leasehold improvements, and $7.2 million was for furnishings.
Previous report
Capital expenditures for 2023 totaled $675.8 million, of which $559.3 million was for software, $56.4 million was for computer hardware, $56.0 million was for building and leasehold improvements, and $4.1 million was for furnishings.
Previous report
Northern Trust’s technology investments support our core objectives to modernize the infrastructure, enhance resiliency, and develop capabilities so that we continue to deliver secure and innovative solutions to clients across the globe.
Previous report
In July 2023, the U.S. banking regulators issued the Basel III Endgame Proposal, which would change how risk-based capital requirements are determined for banking organizations, including Northern Trust. The proposal would eliminate the existing advanced approach methodologies for determining RWA and replace it with a new expanded risk-based approach. The proposed rule has not been finalized and U.S. regulators have indicated their intent to revise and reissue the proposal. No time table has been provided for the re-proposal or its effective date.
Previous report
In November 2024, the FASB issued ASU No. 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” (ASU 2024-04). The amendments in ASU 2024-04 provide additional guidance for determining whether certain settlements of convertible debt instruments with conversion terms that differ from the instruments’ preexisting terms should be accounted for as an induced conversion or extinguishment of convertible debt. ASU 2024-04 is effective for interim and annual periods beginning after December 15, 2025, although early adoption is permitted. Upon adoption, ASU 2024-04 is not expected to have a significant impact on Northern Trust’s consolidated balance sheets or consolidated statements of income.
Previous report
The Capital Governance Committee assists the Board of Directors in discharging its oversight duties with respect to capital management and resolution planning activities. Among other responsibilities, the Capital Governance Committee oversees Northern Trust’s capital management assessments, forecasting, and stress testing processes and activities, including the annual CCAR exercise, and challenges management, as appropriate, on various elements of such processes and activities. Accordingly, the Capital Governance Committee provides oversight with respect to Northern Trust’s linkage of material risks to the capital adequacy assessment process.
Previous report
The Model Risk Oversight Committee (MROC)is responsible for providing management attention, direction, and oversight of the model risk management framework and model risk within Northern Trust.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Reworded paragraphs (133)
Previous wording
(1) Net Interest Income stated on a GAAP basis. Net Interest Income on an FTE basis includes FTE adjustments of $31.8 million, $57.5 million, and $45.6 million for 2024, 2023, and 2022, respectively. A reconciliation of total consolidated revenue, Net Interest Income and net interest margin on a GAAP basis to revenue, Net Interest Income and net interest margin on an FTE basis, respectively, (each of which is a non-GAAP financial measure) is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section.
Current wording
(1) Net Interest Income stated on a GAAP basis. Net Interest Income on an FTE basis includes FTE adjustments of $28.5 million, $31.8 million, and $57.5 million for 2025, 2024, and 2023, respectively. A reconciliation of total consolidated revenue, Net Interest Income and net interest margin on a GAAP basis to revenue, Net Interest Income and net interest margin on an FTE basis, respectively, (each of which is a non-GAAP financial measure) is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section.
Previous wording
Asset Servicing Trust, Investment and Other Servicing Fees are primarily attributable to services related to custody, fund administration, investment management, and securities lending. Custody and Fund Administration fees, are driven primarily by values of client AUC/A, transaction volumes and the number of accounts. The asset values used to calculate these fees vary depending on the individual fee arrangements negotiated with each client. Custody fees related to asset values are client specific and are priced based on month-end market values, quarter-end market values, or the average of month-end market values for the quarter. The fund administration fees that are asset-value-related are priced using month-end, quarter-end, or average daily balances. Investment Management fees are based generally on market values of client AUM management throughout the period. Typically, the asset values used to calculate fee revenue are based on a one-month or one-quarter lag.
Current wording
Asset Servicing Trust, Investment and Other Servicing Fees are primarily attributable to services related to custody, fund administration, investment management, and securities lending. Custody and Fund Administration fees are driven primarily by values of client AUC/A, transaction volumes and the number of accounts. The asset values used to calculate these fees vary depending on the individual fee arrangements negotiated with each client. Custody fees related to asset values are client specific and are priced based on month-end market values, quarter-end market values, or the average of month-end market values for the quarter. The fund administration fees that are asset-value-related are priced using month-end, quarter-end, or average daily balances. Investment Management fees are based generally on market values of client AUM throughout the period. Typically, the asset values used to calculate fee revenue are based on a one-month or one-quarter lag.
Previous wording
Custody and Fund Administration fees increased in 2024 from 2023 primarily due to favorable markets and net new business. Investment Management fees increased in 2024 from 2023 primarily due to favorable markets and net new business. Securities Lending decreased in 2024 from 2023 primarily due to lower spreads. Other fees increased from the prior-year, primarily due to new business.
Current wording
Custody and Fund Administration fees increased in 2025 from 2024 primarily due to favorable markets, net new business, and favorable currency movements. Investment Management fees increased in 2025 from 2024 primarily due to favorable markets and net new business. Securities Lending increased in 2025 from 2024 primarily due to higher volumes. Other fees increased from the prior-year, primarily due to net new business.
Previous wording
Cash and other assets deposited by investment firms as collateral for securities borrowed from custody clients are managed by Northern Trust and are included in assets under custody and assets under management. This securities lending collateral totaled $176.2 billion and $167.4 billion at December 31, 2024 and 2023, respectively.
Current wording
(1)Cash and other assets deposited by investment firms as collateral for securities borrowed from custody clients are managed by Northern Trust and are included in assets under custody and assets under management
Previous wording
Wealth Management fee income is calculated primarily based on market values and is impacted by both one-month and one-quarter lagged asset values. Fee income in the regions increased in 2024 from 2023 primarily due to favorable markets. Global Family Office fee income increased in 2024 from 2023 primarily due to favorable markets and asset inflows.
Current wording
Wealth Management fee income is calculated primarily based on market values of client AUC/A and AUM and is impacted by both one-month and one-quarter lagged asset values. Fee income in the regions increased in 2025 from 2024 primarily due to favorable markets. Global Family Office fee income increased in 2025 from 2024 primarily due to favorable markets and asset inflows.
Previous wording
The Wealth Management regions shown are comprised of the following: Central includes Illinois, Michigan, Minnesota, Missouri, Ohio and Wisconsin; East includes Connecticut, Delaware, Florida, Georgia, Massachusetts, New York, Pennsylvania, and Washington, D.C.; West includes Arizona, California, Colorado, Nevada, Texas, and Washington. Global Family Office provides customized services, including but not limited to investment consulting, global custody, fiduciary, private banking, family office consulting, and technology solutions, to meet the complex financial and reporting needs of ultra-high-net-worth individuals and family offices across the globe.
Current wording
The Wealth Management regions shown are comprised of the following: Central includes Illinois, Michigan, Minnesota, Missouri, Ohio and Wisconsin; East includes Connecticut, Delaware, Florida, Georgia, Massachusetts, New York, Pennsylvania, and Washington, D.C.; West includes Arizona, California, Colorado, Nevada, Texas, and Washington. Global Family Office provides customized services, including but not limited to investment consulting, global custody, fiduciary, private banking, family office consulting, and technology solutions, to meet the complex financial and reporting needs of family offices across the globe.
Previous wording
AUM at the end of 2024 increased from 2023. The increase primarily reflected favorable markets and net asset inflows.
Current wording
At December 31, 2025, total AUC/A and AUC increased from the prior year primarily driven by favorable markets. AUM at the end of 2025 increased from 2024, primarily reflecting favorable markets and net asset inflows.
Previous wording
At December 31, 2024, Northern Trust managed $1.6 trillion in assets for personal and institutional clients, including $1.2 trillion for Asset Servicing clients and $450.7 billion for Wealth Management clients. The following table presents consolidated AUM as of December 31, 2024, 2023 and 2022 by investment type.
Current wording
The following table presents consolidated AUM as of December 31, 2025, 2024 and 2023 by investment type.
Previous wording
AUM increased at year-end 2024 from year-end 2023. The increase primarily reflected favorable markets and net asset inflows. The following table presents activity in consolidated AUM by product during the years ended December 31, 2024, 2023 and 2022.
Current wording
The following table presents activity in consolidated AUM by product during the years ended December 31, 2025, 2024 and 2023.
Previous wording
The components of Other Noninterest Income, and a discussion of significant changes during 2024 and 2023, are provided below.
Current wording
The components of Other Noninterest Income and a discussion of significant changes during 2025 are provided below.
Previous wording
Security Commissions and Trading Income, generated primarily from securities brokerage services provided by Northern Trust Securities, Inc., in 2024 increased from 2023, primarily driven by an increase in equity commissions from higher equity trading volumes.
Current wording
Security Commissions and Trading Income, generated primarily from securities brokerage services provided by Northern Trust Securities, Inc., increased in 2025 from 2024, primarily driven by higher revenue from growth in outsourced trading activity.
Previous wording
Other Operating Income in 2024 increased from 2023 primarily driven by a $896.7 million gain related to Northern Trust’s participation in an exchange offer related to shares of a class of Visa, Inc. common stock and a $68.1 million gain on the sale of an equity investment, partially offset by mark-to-market activity on existing swap agreements related to shares of a class of Visa, Inc. common stock, including a $12.8 million expense related to litigation escrow funding, as well as losses recognized as a result of a securities repositioning related to the supplemental pension plan and impairment charges taken on certain investments. Please refer to Note 18, “Other Operating Income” and Note 24, “Commitments and Contingent Liabilities” included under Item 8, “Financial Statements and Supplementary Data,” for additional details related to Other Operating Income and Visa, respectively.
Current wording
Other Operating Income in 2025 decreased from 2024 primarily driven by a $896.7 million gain related to Northern Trust’s participation in a Visa Exchange Offer and a $68.1 million gain on the sale of an equity investment, partially offset by higher expense associated with mark-to-market activity on existing Visa Class B swap agreements, all recorded in the prior year. Please refer to Note 18, “Other Operating Income” and Note 24, “Commitments and Contingent Liabilities” included under Item 8, “Financial Statements and Supplementary Data,” for additional details related to Other Operating Income and Visa, respectively.
Previous wording
Investment Security Gains (Losses), net reflects a $189.3 million loss on the sale of available for sale debt securities in the current period arising from a repositioning of the portfolio. In the prior year, there was $169.5 million of losses on sales of available for sale debt securities also arising from repositionings of the portfolio.
Current wording
Investment Security Gains (Losses), net reflects a $189.3 million loss on the sale of AFS debt securities in the prior year arising from a repositioning of the portfolio.
Previous wording
Net Interest Income is defined as the total of Interest Income and amortized fees on earning assets, less Interest Expense on deposits and borrowed funds, adjusted for the impact of interest-related hedging activity. Earning assets—including Federal Funds Sold, Securities Purchased under Agreements to Resell, Interest-Bearing Due from and Deposits with Banks, Federal Reserve and Other Central Bank Deposits, Securities, Loans and Leases, and Other Interest-Earning Assets—are financed by a large base of interest-bearing liabilities that include client deposits, short-term borrowings, Senior Notes and Long-Term Debt. Short-term borrowings include Federal Funds Purchased, Securities Sold Under Agreements to Repurchase, and Other Borrowings. Earning assets also are funded by noninterest-bearing funds, which include demand deposits and Stockholders’ Equity. Net Interest Income is subject to variations in the level and mix of earning assets and interest-bearing funds and their relative sensitivity to interest rates. In addition, the levels of nonaccruing assets and client compensating deposit balances used to pay for services impact Net Interest Income.
Current wording
Net Interest Income is defined as the total of Interest Income and amortized fees on earning assets, less Interest Expense on deposits and borrowed funds, adjusted for the impact of interest-related hedging activity. Earning assets—including Federal Funds Sold, Securities Purchased under Agreements to Resell, Interest-Bearing Due from and Deposits with Banks, Federal Reserve and Other Central Bank Deposits, Securities, Loans, and Other Interest-Earning Assets—are financed by a large base of interest-bearing liabilities that include client deposits, short-term borrowings, Senior Notes and Long-Term Debt. Short-term borrowings include Federal Funds Purchased, Securities Sold Under Agreements to Repurchase, and Other Borrowings. Earning assets also are funded by noninterest-bearing funds, which include demand deposits and Stockholders’ Equity. Net Interest Income is subject to variations in the level and mix of earning assets and interest-bearing funds and their relative sensitivity to interest rates. In addition, the levels of nonaccruing assets and client compensating deposit balances used to pay for services impact Net Interest Income.
Previous wording
TABLE 19: AVERAGE CONSOLIDATED BALANCE SHEETS WITH ANALYSIS OF NET INTEREST INCOME (INTEREST AND RATE ON A FULLY TAXABLE EQUIVALENT BASIS)(1)
Current wording
TABLE 21: AVERAGE CONSOLIDATED BALANCE SHEETS WITH ANALYSIS OF NET INTEREST INCOME (INTEREST AND RATE ON A FULLY TAXABLE EQUIVALENT BASIS)
Previous wording
(8)Rate calculations are based on actual balances rather than the rounded amounts presented in the table above.
Current wording
(1)Rate calculations are based on actual balances rather than the rounded amounts presented in the table above.
Previous wording
(3)Includes the impact of balance sheet netting under master netting arrangements of approximately $62.4 billion and $29.1 billion in 2024 and 2023, respectively. Excluding the impact of netting, the average interest rate on Securities Purchased under Agreements to Resell would be approximately 5.29% and 5.27% in 2024 and 2023, respectively. Excluding the impact of netting, the average interest rate on Securities Sold under Agreements to Repurchase would be approximately 5.21% and 5.22% in 2024 and 2023, respectively. Northern Trust nets securities sold under repurchase agreements against those purchased under resale agreements when there is a legally enforceable master netting arrangement.
Current wording
(3)Includes the impact of balance sheet netting under master netting arrangements of approximately $64.3 billion and $62.4 billion in 2025 and 2024, respectively, primarily related to our involvement in FICC. Northern Trust nets securities sold under repurchase agreements against those purchased under resale agreements when the GAAP requirements to net are met.
Previous wording
(5) Other Interest-Earning Assets include certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank and Federal Reserve stock, and money market investments which are classified in Other Assets on the consolidated balance sheets.
Current wording
(5)Other Interest-Earning Assets include certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank and Federal Reserve stock, and money market investments which are classified in Other Assets on the consolidated balance sheets.
Previous wording
(3) Other Borrowings primarily includes advances from the Federal Home Loan Bank of Chicago.
Current wording
(8)Other Borrowings primarily includes advances from the Federal Home Loan Bank of Chicago.
Previous wording
(4)Average balances include nonaccrual loans.
Current wording
Average Loans of $41.1 billion in 2025 were relatively flat compared to average loans of $40.9 billion in 2024, primarily driven by higher private client loans, partially offset by lower commercial and institutional loans. Average balances include nonaccrual loans.
Previous wording
Average Other Interest-Earning Assets include certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank stock, money market investments, and Federal Reserve stock of $854.8 million, $1,369.3 million, $335.1 million, $92.3 million, and $70.0 million, respectively, which are recorded in Other Assets on the consolidated balance sheets.
Current wording
Average Other Interest-Earning Assets include certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank stock, money market investments, and Federal Reserve stock of $892.6 million, $1.2 billion, $342.7 million, $85.0 million, and $70.0 million, respectively, which are recorded in Other Assets on the consolidated balance sheets.
Previous wording
(2)Changes due to average balance and average rate include the impact of balance sheet netting as noted in Table 20: Average Consolidated Balance Sheets with Analysis of Net Interest Income. Excluding the impact of netting, the 2024 vs. 2023 change in Securities Purchased under Agreements to Resell attributed to the average balance and the average rate would be $1.8 billion and $4.1 million respectively. The 2023 vs. 2022 change attributed to the average balance and the average rate would be $1.2 billion and $294.9 million respectively. Excluding the impact of netting, the 2024 vs. 2023 change in Securities Sold under Agreements to Repurchase attributed to the average balance and the average rate would be $1.7 billion and $(3.7) million respectively. The 2023 vs. 2022 change attributed to the average balance and the average rate would be $1.2 billion and $246.6 million respectively.
Current wording
(2)Changes due to average balance and average rate include the impact of balance sheet netting as noted in Table 21: Average Consolidated Balance Sheets with Analysis of Net Interest Income. Excluding the impact of netting, the 2025 vs. 2024 change in Federal Funds Sold and Securities Purchased under Agreements to Resell attributed to the average balance and the average rate would be $111.3 million and $(622.3) million respectively. The 2024 vs. 2023 change attributed to the average balance and the average rate would be $1.8 billion and $4.1 million respectively. Excluding the impact of netting, the 2025 vs. 2024 change in Securities Sold under Agreements to Repurchase attributed to the average balance and the average rate would be $95.4 million and $(612.6) million respectively. The 2024 vs. 2023 change attributed to the average balance and the average rate would be $1.7 billion and $(3.7) million respectively.
Previous wording
Notes: Net Interest Income (FTE), a non-GAAP financial measure, includes adjustments to a fully taxable equivalent basis for Loans and Leases, Securities and Other Interest-Earning Assets. The adjustments are based on a federal income tax rate of 21.0%, where the rate is adjusted for applicable state income taxes, net of related federal tax benefit. Total taxable equivalent interest adjustments amounted to $31.8 million in 2024, $57.5 million in 2023 and $45.6 million in 2022. A reconciliation of Net Interest Income and net interest margin on a GAAP basis to Net Interest Income and net interest margin on an FTE basis (each of which is a non-GAAP financial measure) is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section. Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.
Current wording
Notes: Net Interest Income (FTE), a non-GAAP financial measure, includes adjustments to a fully taxable equivalent basis for Loans, Securities and Other Interest-Earning Assets. The adjustments are based on a federal income tax rate of 21.0%, where the rate is adjusted for applicable state income taxes, net of related federal tax benefit. Total taxable equivalent interest adjustments amounted to $28.5 million in 2025, $31.8 million in 2024 and $57.5 million in 2023. A reconciliation of Net Interest Income and net interest margin on a GAAP basis to Net Interest Income and net interest margin on an FTE basis (each of which is a non-GAAP financial measure) is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section. Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.
Previous wording
Interest revenue on cash collateral positions is reported above within Interest-Bearing Due from and Deposits with Banks, within Loans and Leases, and within Other Interest-Earning Assets. Interest expense on cash collateral positions is reported above within Non-U.S. Offices Interest-Bearing Deposits. Related cash collateral received from and deposited with derivative counterparties is recorded net of the associated derivative contract in Other Assets and Other Liabilities, respectively.
Current wording
Interest revenue on cash collateral positions is reported above within Interest-Bearing Due from and Deposits with Banks, within Loans, and within Other Interest-Earning Assets. Interest expense on cash collateral positions is reported above within Savings, Money Market and Other and in Non-U.S. Offices Interest-Bearing Deposits. Related cash collateral received from and deposited with derivative counterparties is recorded net of the associated derivative contract in Other Assets and Other Liabilities, respectively.
Previous wording
During the year ended December 31, 2023, the Corporation declared cash dividends totaling $630.2 million to common stockholders and repurchased 4,384,678 shares of common stock, including 378,130 shares withheld to satisfy tax withholding obligations related to share-based compensation, at a total cost of $347.5 million ($79.26 average price per share). During the year ended December 31, 2023, the Corporation declared cash dividends totaling $41.8 million to preferred stockholders.
Current wording
During the year ended December 31, 2025, the Corporation increased its quarterly common stock dividend to $0.80 per share from the previous $0.75 per share. The Corporation declared cash dividends totaling $600.5 million to common stockholders and repurchased 11,005,509 shares of common stock, including 450,486 shares withheld to satisfy tax withholding obligations related to share-based compensation, at a total cost of $1.3 billion ($115.72 average price per share). Through the common stock dividends and repurchases, the Corporation returned $1.9 billion in capital to common stockholders in 2025. During the year ended December 31, 2025, the Corporation declared cash dividends totaling $41.8 million to preferred stockholders.
Previous wording
During the year ended December 31, 2024, the Corporation declared cash dividends totaling $608.4 million to common stockholders and repurchased 10,489,770 shares of common stock, including 424,806 shares withheld to satisfy tax withholding obligations related to share-based compensation, at a total cost of $937.8 million ($89.41 average price per share). During the year ended December 31, 2024, the Corporation declared cash dividends totaling $41.8 million to preferred stockholders.
Current wording
During the year ended December 31, 2024, the Corporation declared cash dividends totaling $608.4 million to common stockholders and repurchased 10,489,770 shares of common stock, including 424,806 shares withheld to satisfy tax withholding obligations related to share-based compensation, at a total cost of $937.8 million ($89.41 average price per share). Through the common stock dividends and repurchases, the Corporation returned $1.5 billion in capital to common stockholders in 2024. During the year ended December 31, 2024, the Corporation declared cash dividends totaling $41.8 million to preferred stockholders.
Previous wording
The Corporation’s current stock repurchase authorization to repurchase up to 25.0 million shares was approved by the Board of Directors in October 2021. Shares are repurchased by the Corporation to, among other things, manage the Corporation’s capital levels. Repurchased shares are used for general purposes, including the issuance of shares under stock option and other equity incentive plans. The repurchase authorization approved by the Board of Directors has no expiration date, thus the Corporation retains the ability to resume repurchases thereunder when circumstances warrant and applicable regulations permit. Please refer to Note 13, “Stockholders’ Equity,” provided in Item 8, “Financial Statements and Supplementary Data.”
Current wording
On July 22, 2025, the stock repurchase program was terminated and replaced with a new program, under which the Board of Directors authorized the Corporation to repurchase up to $2.5 billion of the Corporation’s common stock. Repurchases prior to July 22, 2025 were made pursuant to the stock repurchase authorization approved by the Board of Directors in October 2021. Shares are repurchased by the Corporation to, among other things, manage the Corporation’s capital levels. Repurchased shares are used for general purposes, including the issuance of shares under stock option and other equity incentive plans. The repurchase authorization approved by the Board of Directors has no expiration date, thus the Corporation retains the ability to repurchase when circumstances warrant and applicable regulations permit. Please refer to Note 13, “Stockholders’ Equity,” provided in Item 8, “Financial Statements and Supplementary Data.”
Previous wording
There was a negative Provision for Credit Losses of $3.0 million in 2024, as compared to a Provision for Credit Losses of $24.5 million in 2023. The negative provision during 2024 resulted from decreases in both individual and collective reserves. The decrease in individual reserves was driven by one Commercial loan charge-off. The decrease in collective reserves was primarily in held to maturity securities driven by methodology changes and improvements in portfolio quality partially offset by an increase in the Commercial Real Estate (CRE) portfolio, driven by deterioration in portfolio quality. The prior-year provision primarily reflected an increase in the reserve evaluated on a collective basis within the CRE portfolio, driven by an increase in the size and duration of the portfolio, weaker economic projections for the industry, methodology updates, and credit quality deterioration on a small number of loans.
Current wording
There was a negative Provision for Credit Losses of $7.5 million in 2025, as compared to a negative Provision for Credit Losses of $3.0 million in 2024. The negative provision during 2025 resulted primarily from a decrease in collective reserves for the Commercial Real Estate (CRE) portfolio driven by an improved industry outlook, partially offset by an increase in specific reserves related to a small number of non-performing loans. The prior-year negative provision primarily reflected a decrease in collective reserves driven by methodology changes and improvements in the held to maturity securities portfolio quality; partially offset by an increase in the CRE portfolio, driven by deterioration in portfolio quality.
Previous wording
Net charge-offs in 2024 totaled $11.3 million resulting from $15.5 million of charge-offs and $4.2 million of recoveries, compared to net charge-offs of $5.0 million in 2023 resulting from $8.7 million of charge-offs and $3.7 million of recoveries. For additional discussion of the Allowance for Credit Losses, refer to the “Asset Quality” section.
Current wording
Net charge-offs in 2025 totaled $0.3 million resulting from $3.9 million of charge-offs and $3.6 million of recoveries, compared to net charge-offs of $11.3 million in 2024 resulting from $15.5 million of charge-offs and $4.2 million of recoveries. For additional discussion of the Allowance for Credit Losses, refer to the “Asset Quality” section.
Previous wording
Noninterest Expense for 2024 increased from 2023, primarily reflecting increased Compensation, Equipment and Software, and Outside Services expense, partially offset by lower Other Operating Expense.
Current wording
Noninterest Expense for 2025 increased from 2024, primarily reflecting higher Compensation, Employee Benefits and Equipment and Software expense, partially offset by lower Other Operating Expense.
Previous wording
The components of Noninterest Expense and a discussion of significant changes during 2024 and 2023 are provided below.
Current wording
The components of Noninterest Expense and a discussion of significant changes during 2025 are provided below.
Previous wording
Compensation expense, the largest component of Noninterest Expense, increased in 2024 from 2023, primarily due to higher severance-related charges and an increase to base pay adjustments. Severance-related charges were $81.8 million in 2024 as compared to $36.7 million in 2023. Full-time equivalent employees totaled approximately 23,300 at December 31, 2024, up 1% from approximately 23,100 at December 31, 2023.
Current wording
Compensation expense, the largest component of Noninterest Expense, increased in 2025 from 2024, primarily driven by increased headcount and higher annual base pay adjustments. Full-time equivalent employees totaled approximately 23,800 at December 31, 2025, up 2% from approximately 23,300 at December 31, 2024.
Previous wording
Equipment and Software expense in 2024 increased from 2023, primarily due to higher software amortization and higher software support and rental expense.
Current wording
Equipment and Software expense in 2025 increased from 2024, primarily due to higher software amortization and higher software support expense, partially offset by $16.4 million of software acceleration and disposition charges recorded in the prior year.
Previous wording
Other Operating Expense in 2024 decreased from 2023 primarily due to an $84.6 million FDIC special assessment and a $25.6 million charge related to the write-off of an investment in a client capability, both recorded in the prior year, partially offset by a $70.0 million charitable contribution, a $10.6 million legal settlement, and $14.7 million of additional expense related to the FDIC special assessment, recorded in the current year. Please refer to Note 24, “Commitments and Contingent Liabilities” included under Item 8, “Financial Statements and Supplementary Data,” for additional details related to the FDIC special assessment.
Current wording
Other Operating Expense in 2025 decreased from 2024 primarily due to a $70.0 million charitable contribution, a $10.6 million legal settlement, $14.7 million of additional expense related to the FDIC special assessment, all recorded in the prior year, and a $15.9 million release of the FDIC special assessment reserve recorded in the current year.
Previous wording
The 2024 Provision for Income Taxes was $628.4 million, representing an effective rate of 23.6%. This compares with a Provision for Income Taxes of $357.5 million and an effective rate of 24.4% in 2023.
Current wording
The 2025 Provision for Income Taxes was $602.6 million, representing an effective rate of 25.8%. This compares with a Provision for Income Taxes of $628.4 million and an effective rate of 23.6% in 2024. For the year ended December 31, 2025, the increase in the effective tax rate was primarily driven by a higher net tax impact from international operations.
Previous wording
Reporting segment financial information, presented on an internal management-reporting basis, is determined by accounting systems used to allocate revenue and expense to each segment, and incorporates processes for allocating assets, liabilities, equity and the applicable interest income and expense utilizing a funds transfer pricing (FTP) methodology. Under the methodology, assets and liabilities receive a funding charge or credit that considers interest rate risk, liquidity risk, and other product characteristics on an instrument level. Additionally, segment information is presented on an FTE basis as management believes an FTE presentation provides a clearer indication of net interest income. The adjustment to an FTE basis has no impact on Net Income.
Current wording
Reporting segment financial information, presented on an internal management-reporting basis, is determined by accounting systems used to allocate revenue and expense to each segment, and incorporates processes for allocating assets, liabilities, equity and the applicable interest income and expense utilizing a funds transfer pricing (FTP) methodology. Under the methodology, assets and liabilities receive a funding charge or credit that considers interest rate risk, liquidity risk, and other product characteristics on an instrument level. Additionally, segment information is presented on an FTE basis as management believes an FTE presentation provides a clearer indication of net interest income. Income before Income Taxes on an FTE basis is the measure of segment profit or loss reviewed by the Chief Operating Decision Maker for purposes of assessing performance and allocating resources. The adjustment to an FTE basis has no impact on Net Income.
Previous wording
Equity is allocated to the reporting segments based on a variety of factors including, but not limited to, risk, regulatory considerations, and internal metrics. Allocations of equity and certain corporate expense may not be representative of levels that would be required if the segments were independent entities. The accounting policies used for management reporting are consistent with those described in Note 1, “Summary of Significant Accounting Policies.” Transfers of income and expense items are recorded at cost; there is no consolidated profit or loss on sales or transfers between reporting segments. Northern Trust’s presentations are not necessarily consistent with similar information for other financial institutions.
Current wording
Equity is allocated to the reporting segments based on a variety of factors including, but not limited to, risk, regulatory considerations, and internal metrics. Allocations of equity and certain corporate expense may not be representative of levels that would be required if the segments were independent entities. The accounting policies used for management reporting are consistent with those described in Note 1, “Summary of Significant Accounting Policies,” provided in Item 8, “Financial Statements and Supplementary Data.” Transfers of income and expense items are recorded at cost; there is no consolidated profit or loss on sales or transfers between reporting segments. Northern Trust’s presentations are not necessarily consistent with similar information for other financial institutions.
Previous wording
Revenues, expenses and average assets are allocated to Asset Servicing and Wealth Management, with the exception of non-recurring activities such as certain corporate transactions and costs incurred associated with acquisitions, divestitures, litigation, restructuring, and tax adjustments not directly attributable to a specific reporting segment, which are reported within the Other segment.
Current wording
Revenues, expenses and average assets are allocated to Asset Servicing and Wealth Management, with the exception of non-recurring activities such as certain corporate transactions and costs incurred associated with acquisitions, divestitures, litigation, restructuring, and tax adjustments not directly attributable to a specific reporting segment, which are reported within Other.
Previous wording
Reporting segment results are subject to reclassification when organizational changes are made. The results are also subject to refinements in revenue and expense allocation methodologies, which are typically reflected on a prospective basis.
Current wording
Reporting segment results are subject to reclassification when organizational changes are made. The results are also subject to refinements in revenue and expense allocation methodologies, which are typically reflected on a retrospective basis unless it is impractical to do so.
Previous wording
Net Interest Income on an FTE basis for 2024 increased from 2023, primarily due to the change in reporting segment allocation methodology beginning in 2024 noted above and higher deposit balances. Net interest margin on an FTE basis increased to 2.63% for 2024 from 2.20% in 2023.
Current wording
Net Interest Income on an FTE basis for 2025 increased from 2024, primarily due to the favorable impact of higher deposits and lower funding costs. Net interest margin on an FTE basis increased to 1.37% for 2025 from 1.26% in 2024.
Showing the first 40 of 133 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
In addition to income and expenses associated with non-recurring activities, Other includes expenses for Asset Management, corporate and other support functions not directly incurred by, but ultimately allocated back to Asset Servicing and Wealth Management. Other also includes the FTE adjustments of $28.5 million, $31.8 million, and $57.5 million for 2025, 2024, and 2023, respectively, in order to reconcile the segment results that are reported on an internal management-reporting basis into consolidated results.
Current report — wording carried from elsewhere
•Model Risk Management Program - a program that is responsible for the implementation and management of the enterprise-wide model risk framework and independently validating new models and reviewing and re-validating existing models.
Current report — wording carried from elsewhere
The Technology and Cyber Risk Management function provides oversight to the identification, assessment, measurement, monitoring, and reporting on technology and cyber risk matters. Technology and cyber risk is best managed at the source of the risk, and is mitigated through internal controls and risk management designed to identify, understand, and keep such risk at levels consistent with the organization’s overall risk appetite while also managing the inherent risk in supporting the organization’s growth and client preferences for interacting with technology. Each business is responsible for complying with all corporate policies and for establishing specific procedures to manage technology and cyber risk within the desired risk appetite.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Segment results are stated on an FTE basis which has no impact on Net Income. Net Interest Income on an FTE basis includes FTE adjustments of $31.8 million, $57.5 million, and $45.6 million for 2024, 2023, and 2022, respectively. A reconciliation of total consolidated revenue, Net Interest Income and net interest margin on a GAAP basis to revenue, Net Interest Income and net interest margin on an FTE basis, respectively, (each of which is a non-GAAP financial measure) is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section.
Previous report — wording carried elsewhere
Asset Servicing Noninterest Expense, which includes the direct expense of the reporting segment, indirect expense allocations for product and operating support, and indirect expense allocations for certain corporate support services, increased in 2024 from 2023. The increase primarily reflects higher expense allocations and an increase in Compensation expense due to higher severance related charges.
Previous report — wording carried elsewhere
(1) Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheets.
Previous report — wording carried elsewhere
(2) Other Interest-Earning Assets includes certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank and Federal Reserve stock, and money market investments which are classified in Other Assets on the consolidated balance sheets.
Previous report — wording carried elsewhere
Northern Trust’s non-U.S. activities are primarily related to its asset servicing, asset management, foreign exchange, cash management, and commercial banking businesses. The operations of Northern Trust are managed on a reporting segment basis and include components of both U.S and non-U.S. source assets. Non-U.S. source assets are not separately identified in Northern Trust’s internal management reporting system. However, Northern Trust is required to disclose non-U.S. activities based on the domicile of the customer. Due to the complex and integrated nature of Northern Trust’s activities, it is difficult to segregate with precision assets between U.S. and non-U.S.-domiciled customers. Therefore, certain subjective estimates and assumptions have been made to allocate assets between U.S. and non-U.S. operations.
Previous report — wording carried elsewhere
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (ASU 2023-09). ASU 2023-09 enhances disclosures by further disaggregating existing annual income tax disclosures related to the effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, although early adoption is permitted. Upon adoption, the impact of ASU 2023-09 will be limited to certain enhancements within the notes to the consolidated financial statements and therefore is not expected to have an impact on Northern Trust’s consolidated balance sheets or consolidated statements of income.