NORTHERN TRUST CORP
For the period ended Mar 31, 2026. Filed Apr 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 30, 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-Q
Period ended 2025-09-30; filed 2025-10-30.
0000073124-25-000247
Items 2 and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures about Market RiskCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0000073124-26-000035
Items 2 and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures about Market RiskThe 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 323 previous paragraphs and 273 current paragraphs.
195 unchanged; 59 reworded; 18 added; 54 removed; 15 previous and 1 current paragraphs rearranged.
Tables are not compared: 33 previous and 30 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 (18)
Current report
◦Other Noninterest Income increased to $210.2 million in the current quarter primarily due to higher Foreign Exchange Trading Income and Securities Commissions and Trading Income mainly driven by higher volumes resulting from market volatility. Securities Commissions and Trading Income also increased from the prior-year due to growth in outsourced trading activity.
Current report
◦Net Interest Income increased to $654.0 million in the current quarter primarily driven by higher deposit levels, partially offset by lower interest rates.
Current report
(1)Beginning in Q1 2026, Treasury Management Fees are included within Other Operating Income. The prior period has been revised to conform to the current year presentation.
Current report
For the three months ended March 31, 2026, Foreign Exchange Trading Income increased compared to the prior-year quarter primarily due to higher volumes driven by market volatility.
Current report
For the three months ended March 31, 2026 Other Operating Income increased compared to the prior-year quarter primarily due to a market value increase in supplemental compensation plans and lower expense associated with the Visa Class B swaps.
Current report
(2)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.
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 3.76% and 4.46% in 2026 and 2025, respectively. It includes balances and rates for FICC reverse repurchase agreements, Non-FICC reverse repurchase agreements and federal funds sold of ($88.1 billion / 3.77%), ($1.1 billion / 3.02%), and ($0.4 million / 3.85%) for 2026 and ($62.1 billion / 4.46%), ($0.3 billion / 4.34%), and ($1.3 million / 4.61%) for 2025, respectively.
Current report
(7) Excluding the impact of netting, the average interest rate on Securities Sold under Agreements to Repurchase would be approximately 3.68% and 4.37% in 2026 and 2025, respectively. It includes balances and rates for FICC repurchase agreements and Non-FICC repurchase agreements of ($88.1 billion / 3.69%) and ($0.5 billion / 3.35%) for 2026 and ($62.1 billion / 4.37%) and ($0.4 billion / 4.11%) for 2025, respectively.
Current report
(8)Other Borrowings primarily includes advances from the Federal Home Loan Bank of Chicago.
Current report
Average Loans of $40.9 billion was relatively flat compared to the prior-year quarter, primarily driven by a decrease in Subscription Finance loans, partially offset by an increase in Fund Finance loans. For additional discussion relating to the revised loan classes within the Commercial loan segment, refer to Note 5- Loans to the consolidated financial statements provided in Item 1. Consolidated Financial Statements (unaudited).
Current report
REPORTING SEGMENTS (continued)
Current report
(2)Other Segment Items include Occupancy, Equipment & Software and Other Operating Expense.
Current report
Foreign Exchange Trading Income increased$27.0 million, or 42%, from the prior-year quarter primarily driven by higher volumes due to market volatility.
Current report
REPORTING SEGMENTS (continued)
Current report
(1) Loan classes that do not have a non-accrual balance are excluded from the table.
Current report
As of January 1, 2026, Northern Trust refined the presentation of its commercial loan segment to enhance the alignment of segment reporting with business needs, risk characteristics, and management’s approach to monitoring and managing credit performance. As part of this refinement, Subscription Finance and Fund Finance were introduced as separate loan classes. Subscription Finance includes loans to private equity funds that are secured by investors’ contractual commitments to fund capital calls. Fund Finance includes loans and credit lines to all other collective investment funds and to investment managers primarily established for short-term liquidity needs. These borrowers generally maintain highly diversified portfolios of liquid securities. Prior period disclosures have been revised to conform to the current period presentation.
Current report
Net cash provided by investing activities of $3.5 billion for the three months ended March 31, 2026 was primarily attributable to decreased levels of Federal Reserve and other central bank deposits, partially offset by net purchases of AFS and HTM debt securities and a $4.6 billion receivable for cash not received as expected on executed repurchase agreements. Refer to Note 22- Securities Sold Under Agreements to Repurchase to the consolidated financial statements provided in Item 1. Consolidated Financial Statements (unaudited).
Current report
In March 2026, the U.S. banking agencies issued a revised proposal, which is currently out for comment, to implement the final components of the Basel III regulatory capital framework. The revised proposal would eliminate the existing standardized and advanced approach methodologies for determining Risk-Weighted Assets for Category I and Category II institutions and replace it with a new expanded risk based approach. Based upon a preliminary assessment, Northern Trust estimates the proposal will result in a modest decrease in Risk-Weighted Assets. However, the potential impacts on the Corporation and the Bank of a final rule and the timing associated with it remain uncertain.
Removed paragraphs (54)
Previous report
(1) For the three months ended September 30, 2024, Other Noninterest Income included a $68.1 million pre-tax gain related to the sale of an equity investment, recorded in Other Operating Income. For the nine months ended September 30, 2024, Other Noninterest Income included a $878.4 million net gain related to Northern Trust’s participation in the Visa Exchange Offer, a $7.6 million impairment charge taken on certain investments and a $6.5 million loss recognized as a result of a securities repositioning related to the supplemental pension plan, all recorded to Other Operating Income, as well as a $189.3 million loss on available for sale debt securities sold in conjunction with a repositioning of the portfolio, recorded in Investment Security Gains (Losses), net.
Previous report
(2) For the nine months ended September 30, 2024, Noninterest Expense included severance-related charges of $85.2 million, of which $81.8 million was recorded to Compensation expense and $3.4 million was recorded to Outside Services, a $70.0 million charitable contribution to the Northern Trust Foundation, recorded in Other Operating Expense, $16.4 million of software amortization acceleration and dispositions, recorded to Equipment and Software expense, as well as a $14.7 million increase to the Federal Deposit Insurance Corporation (FDIC) special assessment and a $10.6 million legal settlement, both recorded to Other Operating Expense.
Previous report
◦Other Noninterest Income decreased to $169.1 million in the current quarter primarily driven by the $68.1 million gain on the sale of an equity investment in the prior-year quarter, partially offset by lower expenses in the current quarter associated with existing Visa Class B swap agreements.
Previous report
◦Net Interest Income increased to $590.8 million in the current quarter primarily driven by lower funding costs.
Previous report
•The Provision for Income Taxes in the current quarter totaled $161.9 million, representing an effective tax rate of 26.1%. The Provision for Income Taxes in the prior-year quarter totaled $136.2 million, representing an effective tax rate of 22.7%.
Previous report
Nine Months Ended September 30, 2025 highlights:
Previous report
•Revenue for the nine months ended September 30, 2025 decreased from the prior-year period to $6.0 billion, reflecting:
Previous report
◦Trust, Investment and Other Servicing Fees increased to $3.7 billion in the current period primarily driven by favorable markets and net new business.
Previous report
◦Other Noninterest Income decreased to $483.5 million in the current period primarily driven by the $878.4 million net gain related to Northern Trust’s participation in the Visa exchange program and a $68.1 million gain on the sale of an equity investment, partially offset by a $189.3 million AFS debt security loss, a $7.6 million charge for investment impairments and a $6.5 million loss recognized as a result of security repositioning related to the supplemental pension plan, all recorded in the prior-year period.
Previous report
◦Net Interest Income increased to $1.8 billion in the current period primarily due to the favorable impact of higher deposits, lower funding costs and higher foreign exchange swap activity executed by our Treasury department.
Previous report
•There was a $0.5 million Provision for Credit Losses in the current period, as compared to a $7.5 million Provision for Credit Losses in the prior-year period. For additional information, refer to the Provision for Credit Losses within “Consolidated Results of Operations” section.
Previous report
•The Provision for Income Taxes for the current period totaled $434.8 million, representing an effective tax rate of 25.5%. The Provision for Income Taxes for the prior-year period totaled $489.6 million, representing an effective tax rate of 23.7%.
Previous report
For the three months ended September 30, 2025 Other Operating Income decreased compared to the prior-year quarter primarily driven by the $68.1 million gain on the sale of an equity investment in the prior-year quarter, partially offset by lower expenses in the current quarter associated with existing Visa Class B swap agreements. For the nine months ended September 30, 2025, Other Operating Income decreased compared to the prior-year period primarily driven by the $878.4 million gain related to Northern Trust’s participation in the Visa exchange program and a $68.1 million gain on the sale of an equity investment, partially offset by 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, all recorded in the prior-year period.
Previous report
For the nine months ended September 30, 2024, Investment Security Gains (Losses), net reflects a $189.3 million available for sale debt security loss related to repositioning of the portfolio.
Previous report
(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
(3)Average balances include nonaccrual loans.
Previous report
(6)Other Borrowings primarily includes advances from the Federal Home Loan Bank of Chicago.
Previous report
(8)A reconciliation of Net Interest Income on a GAAP basis to Net Interest Income on an FTE basis is provided in “Reconciliation to Fully Taxable Equivalent” within this MD&A.
Previous report
Average Loans increased 4%, from the prior-year quarter, primarily driven by an increase in average Private Client loans.
Previous report
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.
Previous report
(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
(2)Includes the impact of balance sheet netting under master netting arrangements of approximately $62.2 billion and $62.5 billion for the nine months ended September 30, 2025 and 2024, respectively. Excluding the impact of netting for the nine months ended September 30, 2025 and 2024, the average interest rate on Federal Funds Sold and Securities Purchased under Agreements to Resell would be approximately 4.44% and 5.45%, respectively. Excluding the impact of netting for the nine months ended September 30, 2025 and 2024, the average interest rate on Securities Sold under Agreements to Repurchase would be approximately 4.36% and 5.37%, respectively. Northern Trust nets securities sold under repurchase agreements against those purchased under resale agreements when the GAAP requirements to net are met.
Previous report
(3)Average balances include nonaccrual loans.
Previous report
(6)Other Borrowings primarily includes advances from the Federal Home Loan Bank of Chicago.
Previous report
(8)A reconciliation of Net Interest Income on a GAAP basis to Net Interest Income on an FTE basis is provided in “Reconciliation to Fully Taxable Equivalent” within this MD&A.
Previous report
Net Interest Income for the nine months ended September 30, 2025, stated on an FTE basis, increased from the prior-year period, primarily driven by the favorable impact of higher deposits and lower funding costs.
Previous report
The net interest margin on an FTE basis increased from the prior-year period, primarily driven by the favorable impact of lower funding costs, partially offset by lower yields on interest-earning assets.
Previous report
Interest-earning deposits includes Federal Reserve and Other Central Bank Deposits and Interest-Bearing Due from and Deposits with Banks. Average Federal Reserve and Other Central Bank Deposits increased 6% from the prior-year period. Average Interest-Bearing Due from and Deposits with Banks increased 8% from the prior-year period. The increase in interest-earning deposits compared to the prior-year is primarily driven by higher client deposits.
Previous report
Average Loans increased 1%, from the prior-year period, primarily driven by an increase in average Private Client loans, partially offset by a decrease in average Commercial and Institutional loans.
Previous report
Average Interest-Bearing Deposits increased 6% from the prior-year period, 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% of total average interest-bearing deposits for both the nine months ended September 30, 2025 and 2024.
Previous report
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.
Previous report
For the nine months ended September 30, 2025, there was a Provision for Credit Losses of $0.5 million, as compared to a Provision for Credit Losses of $7.5 million in the prior-year period. The provision in the current-year period was primarily due to an increase in specific reserves related to a small number of non-performing loans; partially offset by a decrease in the collective reserve driven by an improved outlook for the Commercial Real Estate (CRE) portfolio. The provision in the prior-year period was primarily due to an increase in collective reserves, partially offset by a decrease in individual reserves. The increase in collective reserves was primarily driven by a small number of downgrades and extensions in the C&I portfolio and by expectations for weaker prices in the CRE portfolio. The decrease in individual reserves was driven by one C&I loan charge-off in the first quarter, partially offset by the default of one C&I loan in the third quarter.
Previous report
Net recoveries in the current-year period totaled $0.1 million, reflecting $2.6 million of recoveries and 2.5 million of charge-offs. The prior-year period included $7.9 million net charge-offs, reflecting $11.4 million of charge-offs and $3.5 million of recoveries.
Previous report
For the nine months ended September 30, 2025, Employee Benefits expense increased compared to the prior-year period primarily driven by higher medical costs.
Previous report
For the nine months ended September 30, 2025, Other Operating Expense decreased compared to the prior-year period primarily due to 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, all recorded in the prior year period.
Previous report
Income tax expense for the nine months ended September 30, 2025 was $434.8 million, representing an effective tax rate of 25.5%, compared to $489.6 million in the prior-year period, representing an effective tax rate of 23.7%. The effective tax rate increased compared to the prior-year period primarily due to favorable discrete tax benefits recognized in the prior year and a higher net tax impact from international operations.
Previous report
On July 4, 2025, The One Big Beautiful Bill Act (the “Bill”) was enacted into law. The significant provisions of the Bill include the permanent extension and modification of certain provisions of the Tax Cuts and Jobs Act, including international tax provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in later years. The Company evaluated the provisions of the Bill and determined that there is no material impact on our financial statements.
Previous 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.
Previous report
(3) Prior-year quarter includes a gain related to the sale of an equity investment.
Previous report
(3) Prior-year period items including severance-related charges, software amortization acceleration and dispositions, and a securities repositioning related to the supplemental pension plan, are allocated to the Reporting Segments based on the nature of the item.
Showing the first 40 of 54 passages. Open the source sections for the rest.
Reworded paragraphs (59)
Previous wording
The following is management’s discussion and analysis of the financial condition and results of operations (MD&A) of Northern Trust Corporation (Corporation) for the third quarter of 2025. The following should be read in conjunction with the consolidated financial statements and related footnotes included in this report as well as the Annual Report on Form 10-K for the year ended December 31, 2024. Investors also should read the section titled “Forward-Looking Statements.”
Current wording
The following is management’s discussion and analysis of the financial condition and results of operations (MD&A) of Northern Trust Corporation (Corporation) for the first quarter of 2026. The following should be read in conjunction with the consolidated financial statements and related footnotes included in this report as well as the Annual Report on Form 10-K for the year ended December 31, 2025. Investors also should read the section titled “Forward-Looking Statements.”
Previous wording
•Revenue for the three months ended September 30, 2025 increased from the prior-year quarter to $2.0 billion, reflecting:
Current wording
•Revenue for the three months ended March 31, 2026 increased from the prior-year quarter to $2.2 billion, reflecting:
Previous wording
◦Trust, Investment and Other Servicing Fees increased to $1.3 billion in the current quarter primarily due to favorable markets.
Current wording
◦Trust, Investment and Other Servicing Fees increased to $1.3 billion in the current quarter primarily due to favorable markets, net new business, and favorable currency movement.
Previous wording
•Noninterest Expense increased to $1.4 billion in the current quarter primarily due to higher Compensation and Equipment and Software expense.
Current wording
•Noninterest Expense increased to $1.5 billion in the current quarter primarily due to higher Compensation and Benefits and Equipment and Software expense.
Previous wording
•In the current quarter, there was a negative Provision for Credit Losses of $17.0 million, as compared to a Provision for Credit Losses of $8.0 million in the prior-year quarter. For additional information, refer to the Provision for Credit Losses within the “Consolidated Results of Operations” section.
Current wording
•In the current quarter, there was a negative Provision for Credit Losses of $3.0 million, as compared to a Provision for Credit Losses of $1.0 million in the prior-year quarter. For additional information, refer to the Provision for Credit Losses within the “Consolidated Results of Operations” section.
Previous wording
Custody and Fund Administration fees increased both from the prior-year quarter and from the prior-year period primarily driven by favorable markets, net new business, and favorable currency movements.
Current wording
Custody and Fund Administration fees increased from the prior-year quarter primarily driven by favorable markets, favorable currency movements and net new business.
Previous wording
Investment Management fees increased both from the prior-year quarter and from the from the prior-year period primarily due to favorable markets.
Current wording
Investment Management fees increased from the prior-year quarter primarily due to favorable markets and net new business.
Previous wording
Securities Lending increased from the prior-year period primarily due to higher loan volumes.
Current wording
Securities Lending increased from the prior-year quarter primarily due to higher volumes.
Previous wording
Fee income in the regions (Central, East and West) increased both from the prior-year quarter and from the prior-year period, primarily due to favorable markets.
Current wording
Fee income in the regions (Central, East and West) increased from the prior-year quarter primarily due to favorable markets and new business.
Previous wording
Global Family Office fee income increased from the prior-year period, primarily due to favorable markets.
Current wording
Global Family Office fee income increased from the prior-year quarter primarily due to favorable markets and client inflows.
Previous wording
Total assets under custody/administration and assets under custody increased from the prior-year quarter primarily driven by favorable markets and favorable currency translation, partially offset by asset outflows.
Current wording
Total assets under custody/administration and assets under custody increased from the prior-year quarter primarily driven by favorable markets.
Previous wording
Total assets under management increased compared to the prior-year quarter primarily reflecting favorable markets and net new business.
Current wording
Total assets under management increased compared to the prior-year quarter primarily reflecting favorable markets and net client inflows.
Previous wording
For the nine months ended September 30, 2025, Security Commissions and Trading Income increased compared to the prior-year period primarily driven by higher revenue from core brokerage.
Current wording
For the three months ended March 31, 2026, Security Commissions and Trading Income increased compared to the prior-year quarter primarily due to higher volumes due to market volatility and growth in outsourced trading activity.
Previous wording
Net interest margin is the difference between what we earn on our assets and what we pay for deposits and other sources of funding relative to average interesting-earning assets. The direction and level of interest rates are important factors in our earnings. Net interest margin is calculated by dividing annualized Net Interest Income by average interest-earning assets.
Current wording
Net interest margin is the difference between what we earn on our assets and what we pay for deposits and other sources of funding relative to average interest-earning assets. The direction and level of interest rates are important factors in our earnings. Net interest margin is calculated by dividing annualized Net Interest Income by average interest-earning assets.
Previous wording
The following tables present an analysis of average daily balances and interest rates changes affecting Net Interest Income and an analysis of Net Interest Income changes for the three months ended September 30, 2025.
Current wording
The following tables present an analysis of average daily balances and interest rates changes affecting Net Interest Income and an analysis of Net Interest Income changes for the three months ended March 31, 2026 and three months ended March 31, 2025.
Previous wording
(7)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
(2)Includes the impact of balance sheet netting under master netting arrangements of approximately $62.7 billion and $64.3 billion for the three months ended September 30, 2025 and 2024, respectively. Excluding the impact of netting for the three months ended September 30, 2025 and 2024, the average interest rate on Federal Funds Sold and Securities Purchased under Agreements to Resell would be approximately 4.41% and 5.43%, respectively. Excluding the impact of netting for the three months ended September 30, 2025 and 2024, the average interest rate on Securities Sold under Agreements to Repurchase would be approximately 4.37% and 5.34%, respectively. Northern Trust nets securities sold under repurchase agreements against those purchased under resale agreements when the GAAP requirements to net are met.
Current wording
(3)Includes the impact of balance sheet netting under master netting arrangements of approximately $88.1 billion and $62.0 billion in 2026 and 2025, 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
(4)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
(5)Cash and Due from Banks and Other Central Bank Deposits includes the noninterest-bearing component of Federal Reserve and Other Central Bank Deposits on the consolidated balance sheets.
Current wording
(6)Cash and Due from Banks and Other Central Bank Deposits includes the noninterest-bearing component of Federal Reserve and Other Central Bank Deposits on the consolidated balance sheets.
Previous wording
Net Interest Income for the three months ended September 30, 2025, stated on an FTE basis, increased from the prior-year quarter, primarily driven by lower funding costs.
Current wording
Net Interest Income for the three months ended March 31, 2026, stated on an FTE basis, increased from the prior-year quarter, primarily driven by higher deposits, partially offset by lower interest rates
Previous wording
The net interest margin on an FTE basis increased from the prior-year quarter, primarily driven by lower funding costs, partially offset by lower yield on interest-earning assets.
Current wording
The net interest margin on an FTE basis increased from the prior-year quarter, primarily driven by lower funding costs.
Previous wording
Interest-earning deposits includes Federal Reserve and Other Central Bank Deposits and Interest-Bearing Due from and Deposits with Banks. Interest-earning deposits decreased 5%, from the prior-year quarter, primarily due to reinvesting into the securities portfolio.
Current wording
Interest-earning deposits includes Federal Reserve and Other Central Bank Deposits and Interest-Bearing Due from and Deposits with Banks. Interest-earning deposits increased 16%, from the prior-year quarter, primarily driven by higher client deposits.
Previous wording
Average Securities increased 10% from the prior-year quarter, reflecting strategic purchases of investment securities primarily in the AFS portfolio with modest duration and reinvesting maturities at higher yields Average taxable Securities were $46.9 billion in the current quarter and $44.0 billion in the prior-year quarter. Average nontaxable Securities, which represent securities that are primarily exempt from U.S. federal and state income taxes, were $8.3 billion in the current quarter and $6.3 billion in the prior-year quarter. For additional discussion relating to the securities portfolio, refer to the “Asset Quality” section in this MD&A and to Note 4-Securities to the consolidated financial statements provided in Item 1. Consolidated Financial Statements (unaudited).
Current wording
Average Securities increased 15% from the prior-year quarter, reflecting strategic purchases of investment securities with modest duration and higher client deposits. Average taxable Securities were $51.6 billion in the current quarter and $44.0 billion in the prior-year quarter. Average nontaxable Securities, which represent securities that are primarily exempt from U.S. federal and state income taxes, were $8.1 billion in the current quarter and $8.0 billion in the prior-year quarter. For additional discussion relating to the securities portfolio, refer to the “Asset Quality” section in this MD&A and to Note 4-Securities to the consolidated financial statements provided in Item 1. Consolidated Financial Statements (unaudited).
Previous wording
Average Other Interest-Earning Assets includes collateral deposits with certain securities depositories and clearing houses, certain community development investments, Federal Home Loan Bank stock, a money market investment, and Federal Reserve stock of $1.1 billion, $868.5 million, $342.7 million, $85.0 million, and $70.0 million respectively, which are recorded in Other Assets on the consolidated balance sheets.
Current wording
Average Other Interest-Earning Assets includes collateral deposits with certain securities depositories and clearing houses, certain community development investments, Federal Home Loan Bank stock, a money market investment, and Federal Reserve stock of $1.9 billion, $1.0 billion, $342.7 million, $85.0 million, and $69.2 million, respectively, which are recorded in Other Assets on the consolidated balance sheets.
Previous wording
Average Interest-Bearing Deposits increased 4% from the prior-year quarter, primarily due to increased client activity and higher liquidity as a result of market volatility. Average Non-U.S. Offices Interest-Bearing Deposits comprised 65% and 67% of total average Interest-Bearing Deposits for the three months ended September 30, 2025 and 2024, respectively.
Current wording
Average Interest-Bearing Deposits increased 11% from the prior-year quarter, primarily due to increased liquidity and client activity as a result of market volatility, and growth across institutional and personal clients. Average Non-U.S. Offices Interest-Bearing Deposits comprised 68% and 65% of total average Interest-Bearing Deposits for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
(2)Changes due to average balance and average rate include the impact of balance sheet netting as noted in Table 14: 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 $(17.5) million and $(161.6) 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 $(21.4) million and $(153.3) million, respectively.
Current wording
(2)Changes due to average balance and average rate include the impact of balance sheet netting as noted in Table 14: Average Consolidated Balance Sheets with Analysis of Net Interest Income. Excluding the impact of netting, the 2026 vs. 2025 change in Federal Funds Sold and Securities Purchased under Agreements to Resell attributed to the average balance and the average rate would be $260.8 million and $(120.7) million, respectively. Excluding the impact of netting, the 2026 vs. 2025 change in Securities Sold under Agreements to Repurchase attributed to the average balance and the average rate would be $248.6 million and $(117.4) million, respectively.
Previous wording
For the three months ended September 30, 2025, there was a negative Provision for Credit Losses of $17.0 million, as compared to a Provision for Credit Losses of $8.0 million in the prior-year quarter. The negative provision in the current quarter resulted from a decrease in collective reserves driven by improved macroeconomic factors primarily impacting the Commercial and Institutional (C&I) portfolio and improved projections for Residential Real Estate (RRE). The provision in the prior-year quarter resulted from an increase in collective reserves driven by a small number of downgrades and extensions in the C&I portfolio, as well as, an increase in individual reserves driven by the default of one C&I loan.
Current wording
For the three months ended March 31, 2026, there was a negative Provision for Credit Losses of $3.0 million, as compared to a Provision for Credit Losses of $1.0 million in the prior-year quarter. The negative provision in the current quarter resulted from a decrease in the collective reserve, partially offset by an increase in individual reserves. The decrease in the collective reserve was primarily driven by improved credit quality of the Commercial and Institutional (C&I) portfolio, partially offset by increased macroeconomic uncertainty. The increase in the individual reserve was driven by a small number of non-performing loans. The provision in the prior-year quarter resulted from an increase in the collective reserve, primarily driven by increased projected macroeconomic uncertainty, partially offset by sector and portfolio-specific improvements within the Commercial Real Estate portfolio.
Previous wording
Net charge-offs in the current quarter were $0.4 million, reflecting $2.1 million of charge-offs and $1.7 million of recoveries. The prior-year quarter included $2.4 million net recoveries, reflecting $2.4 million of recoveries and de minimus charge-offs.
Current wording
Net charge-offs in the current quarter were $0.1 million, reflecting $0.4 million of charge-offs and $0.3 million of recoveries. The prior-year quarter included $0.2 million net recoveries, reflecting $0.5 million of recoveries and $0.3 million of charge-offs.
Previous wording
For the three months ended September 30, 2025, Compensation expense, the largest component of Noninterest Expense, increased compared to the prior-year quarter primarily due to base pay adjustments, increased headcount, and higher incentives.
Current wording
For the three months ended March 31, 2026, Compensation and Benefits expense, the largest component of Noninterest Expense, increased compared to the prior-year quarter primarily due to higher annual base pay adjustments, higher incentives, an increase in pension expense, and unfavorable currency movement.
Previous wording
For the three months ended September 30, 2025, Equipment and Software expense increased compared to the prior-year quarter primarily due to higher software amortization and higher software support and rental expense. For the nine months ended September 30, 2025, Equipment and Software expense increased compared to the prior-year period primarily due to higher software amortization and higher software support and rental expense, partially offset by $16.4 million of software acceleration and disposition charges recorded in the prior year.
Current wording
For the three months ended March 31, 2026 Equipment and Software expense increased compared to the prior-year quarter primarily due to higher software support expense and higher software amortization.
Previous wording
Income tax expense for the three months ended September 30, 2025 was $161.9 million, representing an effective tax rate of 26.1%, compared to $136.2 million in the prior-year quarter, representing an effective tax rate of 22.7%. The effective tax rate increased compared to the prior-year quarter primarily due to favorable discrete tax benefits recognized in the prior year and a higher net tax impact from international operations.
Current wording
Income tax expense for the three months ended March 31, 2026 was $175.1 million, representing an effective tax rate of 25.0%, compared to $129.4 million in the prior-year quarter, representing an effective tax rate of 24.8%.
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 an 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 an 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
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 $5.5 million and $15.8 million for the three and nine months ended September 30, 2025 respectively, and $7.1 million and $21.3 million for the three and nine months ended September 30, 2024, respectively, in order to reconcile the segment results that are reported on an internal management-reporting basis into consolidated results.
Current wording
In addition to income and expenses associated with non-recurring activities, Other includes expenses for the Chief Operating Office, 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 $7.6 million and $5.6 million for the three months ended March 31, 2026 and 2025, respectively, in order to reconcile the segment results that are reported on an internal management-reporting basis into consolidated results.
Previous wording
The following table presents the earnings contributions and average assets of Northern Trust’s reporting segments for the three- and nine- month periods ended September 30, 2025 and 2024.
Current wording
The following table presents the earnings contributions and average assets of Northern Trust’s reporting segments for the three month periods ended March 31, 2026 and 2025.
Previous wording
(1)Financial measures stated on an FTE basis. The FTE adjustment was $5.5 million and $7.1 million for three months ended September 30, 2025 and 2024, respectively, and is eliminated within “Other” in order for “Total Consolidated” to reconcile with the Consolidated Statement of Income.
Current wording
(1)Financial measures stated on an FTE basis. The FTE adjustment was $7.6 million and $5.6 million for the three months ended March 31, 2026 and 2025, respectively, and is eliminated within “Other” in order for “Total Consolidated” to reconcile with the Consolidated Statement of Income.
Previous wording
Other Noninterest Income increased$10.3 million, or 15%, from the prior-year quarter and increased $19.4 million, or 10% from the prior-year period, primarily driven by Security Commissions and Trading Income due to higher core brokerage income.
Current wording
Other Noninterest Income increased$16.3 million, or 24%, from the prior-year quarter primarily in Security Commissions and Trading Income due to higher volumes driven by market volatility and growth in outsourced trading activity.
Previous wording
Net Interest Income stated on an FTE basis increased $19.0 million, or 6%, from the prior-year quarter and increased $114.6 million, or 13% from the prior-year period, primarily due to the favorable impact of higher deposits and lower funding costs.
Current wording
Net Interest Income stated on an FTE basis increased $78.0 million, or 24%, from the prior-year quarter primarily due to the favorable impact of higher deposits and lower funding costs.
Previous wording
The negative Provision for Credit Losses for the three and nine months ended September 30, 2025, reflected a decrease in the collective reserve driven by improved macroeconomic factors primarily in the C&I portfolio.
Current wording
The negative Provision for Credit Losses for the three months ended March 31, 2026 reflected a decrease in the collective reserve driven by improved credit quality of the C&I portfolio, partially offset by an increase in macroeconomic uncertainty.
Previous wording
Noninterest Expense increased $27.4 million, or 6%, from the prior-year quarter, primarily driven by higher indirect expense allocations for certain corporate support services.
Current wording
Noninterest Expense increased $56.5 million, or 6%, from the prior-year quarter, primarily driven by higher indirect expense allocations for certain corporate support services.
Previous wording
The negative Provision for Credit Losses for the three months ended September 30, 2025, reflected a decrease in the collective reserve driven by improved macroeconomic factors for the C&I portfolio and improved projections for RRE. The negative Provision for Credit Losses for the nine months ended September 30, 2025 reflected a decrease in collective reserves driven by an improved industry outlook for the CRE portfolio; partially offset by an increase in specific reserves related to a small number of non-performing loans.
Current wording
The Provision for Credit Losses for the three months ended March 31, 2026, reflected an increase in the individual reserve driven by a small number of non-performing loans, partially offset by a decrease in the collective reserve driven by improved credit quality of the C&I portfolio.
Showing the first 40 of 59 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(9)A reconciliation of Net Interest Income on a GAAP basis to Net Interest Income on an FTE basis 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.
Rearranged previous paragraphs (15)
Previous report — wording carried elsewhere
Average Other Interest-Earning Assets includes collateral deposits with certain securities depositories and clearing houses, certain community development investments, Federal Home Loan Bank stock, a money market investment, and Federal Reserve stock of $994.6 million, $879.7 million, $342.7 million, $85.0 million, and $70.0 million, respectively, which are recorded in Other Assets on the consolidated balance sheets.
Previous report — wording carried elsewhere
The following tables present an analysis of average daily balances and interest rate changes affecting Net Interest Income and an analysis of Net Interest Income changes for the nine months ended September 30, 2025.
Previous report — wording carried elsewhere
TABLE 15: AVERAGE CONSOLIDATED BALANCE SHEETS WITH ANALYSIS OF NET INTEREST INCOME
Previous report — wording carried elsewhere
(4)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 report — wording carried elsewhere
(5)Cash and Due from Banks and Other Central Bank Deposits includes the noninterest-bearing component of Federal Reserve and Other Central Bank Deposits on the consolidated balance sheets.
Previous report — wording carried elsewhere
(7)Rate calculations are based on actual balances rather than the rounded amounts presented in the table above.
Previous report — wording carried elsewhere
Average Securities increased 7%, from the prior-year period reflecting strategic purchases of investment securities primarily in the AFS portfolio. Average taxable Securities were $45.0 billion in the current period and $43.7 billion in the prior-year period. Average nontaxable Securities, which represent securities that are primarily exempt from U.S. federal and state income taxes, were $8.2 billion in the current period and $5.9 billion in the prior-year period. For additional discussion relating to the securities portfolio, refer to the “Asset Quality” section in this MD&A and to Note 4-Securities to the consolidated financial statements provided in Item 1. Consolidated Financial Statements (unaudited).
Previous report — wording carried elsewhere
TABLE 17: ANALYSIS OF NET INTEREST INCOME CHANGES DUE TO VOLUME AND RATE YTD(1)
Previous report — wording carried elsewhere
(1)Changes not due solely to average balance changes or rate changes are allocated proportionately to average balance and rate based on their relative absolute magnitudes.
Previous report — wording carried elsewhere
(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 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 $(7.1) million and $(479.4) 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 $(10.1) million and $(476.2) million, respectively.
Previous report — wording carried elsewhere
Notes: Net Interest Income (FTE Adjusted), 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. See Table 16: Average Consolidated Balance Sheets with Analysis of Net Interest Income which reflects the applied FTE adjustment. 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 “Reconciliation to Fully Taxable Equivalent” within this MD&A. Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.
Previous report — wording carried elsewhere
Interest revenue on cash collateral positions is reported above within Interest-Bearing Due from and Deposits with Banks, 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 report — wording carried elsewhere
(1)Financial measures stated on an FTE basis. The FTE adjustment was $15.8 million and $21.3 million for nine months ended September 30, 2025 and 2024, respectively, and is eliminated within “Other” in order for “Total Consolidated” to reconcile with the Consolidated Statement of Income.
Previous report — wording carried elsewhere
Net cash used in investing activities of $13.1 billion for the nine months ended September 30, 2025 was primarily attributable to increased levels of Federal Reserve and other central bank deposits and net purchases of AFS debt securities.
Previous report — wording carried elsewhere
In December 2023, the FASB issued 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.