We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Northern Trust (NTRS) Q2 Earnings Beat on Increased Fee Income
Read MoreHide Full Article
Northern Trust Corporation’s (NTRS - Free Report) second-quarter 2024 earnings per share of $4.34 surpassed the Zacks Consensus Estimate of $1.75. The bottom line increased from $1.56 reported in the year-ago quarter.
Shares of the company lost 4% in the early market trading despite achieving better-than-expected results due to a broader market decline.
Results benefited from a rise in fee income. Also, an increase in total assets under custody (AUC) and assets under management (AUM) balances supported financials. Strong capital ratios were another positive. However, a rise in expenses and provisions were major headwinds.
Net income was $896.1 million compared with $331.8 million in the prior-year quarter.
Revenues & Expenses Rise
Quarterly total revenues (GAAP basis) of $2.72 billion jumped 54.6% year over year. The top line also beat the Zacks Consensus Estimate of $1.85 billion.
NII on a fully taxable equivalent basis was $529.8 million in the quarter under review, up nearly 1% year over year. The net interest margin was 1.57%, which remained unchanged from the prior-year quarter.
Trust, investment and other servicing fees totaled $1.17 billion, up 6.4% from the year-ago quarter.
Other non-interest income surged to $1.03 billion from $149.3 million in the prior-year quarter. The rise was primarily driven by the gain of $878.4 million related to the net impact of the Visa transaction. This was partially offset by a loss from the securities repositioning associated with the supplemental pension plan and impairment charges on certain investments.
Non-interest expenses increased 15.2% to $1.53 billion in the reported quarter. The uptick stemmed from an elevation in all components except employee benefits.
AUC and AUM Rise
As of Jun 30, 2024, Northern Trust’s total AUC increased 15.6% year over year to $13.04 trillion. Also, total AUM rose 11.8% to $1.53 trillion.
Credit Quality Deteriorates
Total allowance for credit losses was $209.6 million, increasing 6.1% year over year. Total non-accrual assets decreased 18.3% to $38.5 million as of Jun 30, 2024.
NTRS reported provisions for credit losses of $8 million in the second quarter against a provision benefit of $15.5 million in the prior-year quarter.
Capital and Profitability Ratios Improve
Under the Standardized Approach, as of Jun 30, 2024, the Common Equity Tier 1 capital ratio was 12.6%, up from 11.3% in the prior-year quarter. The total capital ratio was 15.5%, up from 14.4% year over year. The Tier 1 leverage ratio was 8% compared with 7.4% in the prior-year quarter.
Return on average assets was 2.44%, up from 0.91% in the year-ago quarter. Also, the return on average common equity was 31.2% compared with the year-earlier quarter’s 12.4%.
Capital Distribution Activities
In the reported quarter, Northern Trust returned approximately $405.1 million to shareholders through share repurchases and dividends.
Our Viewpoint
A surge in fee income uplifted the company’s second-quarter performance. Its increasing AUC and AUM balances are likely to support financials. Nonetheless, escalating expenses and provisions may threaten the company’s profitability in the upcoming quarters.
Northern Trust Corporation Price, Consensus and EPS Surprise
BOK Financial Corporation (BOKF - Free Report) is slated to report second-quarter 2024 results on Jul 22. It has a Zacks Rank #3 at present.
Over the past month, the Zacks Consensus Estimate for BOKF’s quarterly earnings per share has moved 2.7% north to $1.89.
Webster Financial Corporation (WBS - Free Report) is scheduled to release second-quarter 2024 earnings on Jul 23. The company carries a Zacks Rank #3 at present.
The consensus estimate for WBS’ quarterly earnings has moved 1.5% south to $1.34 per share over the past 30 days.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Northern Trust (NTRS) Q2 Earnings Beat on Increased Fee Income
Northern Trust Corporation’s (NTRS - Free Report) second-quarter 2024 earnings per share of $4.34 surpassed the Zacks Consensus Estimate of $1.75. The bottom line increased from $1.56 reported in the year-ago quarter.
Shares of the company lost 4% in the early market trading despite achieving better-than-expected results due to a broader market decline.
Results benefited from a rise in fee income. Also, an increase in total assets under custody (AUC) and assets under management (AUM) balances supported financials. Strong capital ratios were another positive. However, a rise in expenses and provisions were major headwinds.
Net income was $896.1 million compared with $331.8 million in the prior-year quarter.
Revenues & Expenses Rise
Quarterly total revenues (GAAP basis) of $2.72 billion jumped 54.6% year over year. The top line also beat the Zacks Consensus Estimate of $1.85 billion.
NII on a fully taxable equivalent basis was $529.8 million in the quarter under review, up nearly 1% year over year. The net interest margin was 1.57%, which remained unchanged from the prior-year quarter.
Trust, investment and other servicing fees totaled $1.17 billion, up 6.4% from the year-ago quarter.
Other non-interest income surged to $1.03 billion from $149.3 million in the prior-year quarter. The rise was primarily driven by the gain of $878.4 million related to the net impact of the Visa transaction. This was partially offset by a loss from the securities repositioning associated with the supplemental pension plan and impairment charges on certain investments.
Non-interest expenses increased 15.2% to $1.53 billion in the reported quarter. The uptick stemmed from an elevation in all components except employee benefits.
AUC and AUM Rise
As of Jun 30, 2024, Northern Trust’s total AUC increased 15.6% year over year to $13.04 trillion. Also, total AUM rose 11.8% to $1.53 trillion.
Credit Quality Deteriorates
Total allowance for credit losses was $209.6 million, increasing 6.1% year over year. Total non-accrual assets decreased 18.3% to $38.5 million as of Jun 30, 2024.
NTRS reported provisions for credit losses of $8 million in the second quarter against a provision benefit of $15.5 million in the prior-year quarter.
Capital and Profitability Ratios Improve
Under the Standardized Approach, as of Jun 30, 2024, the Common Equity Tier 1 capital ratio was 12.6%, up from 11.3% in the prior-year quarter. The total capital ratio was 15.5%, up from 14.4% year over year. The Tier 1 leverage ratio was 8% compared with 7.4% in the prior-year quarter.
Return on average assets was 2.44%, up from 0.91% in the year-ago quarter. Also, the return on average common equity was 31.2% compared with the year-earlier quarter’s 12.4%.
Capital Distribution Activities
In the reported quarter, Northern Trust returned approximately $405.1 million to shareholders through share repurchases and dividends.
Our Viewpoint
A surge in fee income uplifted the company’s second-quarter performance. Its increasing AUC and AUM balances are likely to support financials. Nonetheless, escalating expenses and provisions may threaten the company’s profitability in the upcoming quarters.
Northern Trust Corporation Price, Consensus and EPS Surprise
Northern Trust Corporation price-consensus-eps-surprise-chart | Northern Trust Corporation Quote
Currently, Northern Trust carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Finance Stocks
BOK Financial Corporation (BOKF - Free Report) is slated to report second-quarter 2024 results on Jul 22. It has a Zacks Rank #3 at present.
Over the past month, the Zacks Consensus Estimate for BOKF’s quarterly earnings per share has moved 2.7% north to $1.89.
Webster Financial Corporation (WBS - Free Report) is scheduled to release second-quarter 2024 earnings on Jul 23. The company carries a Zacks Rank #3 at present.
The consensus estimate for WBS’ quarterly earnings has moved 1.5% south to $1.34 per share over the past 30 days.