Northern Trust Q2 2026 Earnings Call: Complete Transcript

On Wednesday, Northern Trust (NASDAQ: NTRS ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

2 million and a 13% year-over-year revenue increase driven by growth in trust fees, net interest income, and capital markets revenues. The company participated in the Visa Class B common stock exchange offer, recognizing a $525 million pre-tax gain, and incurred notable restructuring charges totaling approximately $220 million. Wealth management delivered a 10% year-over-year increase in trust fees, with assets under management up 14%. The company is expanding its Global Family Office and ultra high net worth client services.

Asset servicing revenues increased 16% year-over-year, with a focus on scalable growth and deepening client relationships. The business recorded over $1 trillion in assets under administration in alternatives. The company continues to invest in AI technology to enhance service, expertise, and integrity, viewing it as a force multiplier rather than a replacement for human judgment. Capital return to shareholders was nearly $500 million for the quarter, with a 95% payout ratio excluding notable items.

A dividend increase was approved, reflecting confidence in the firm's earnings power. Guidance for the full year includes expectations of 9-10% revenue growth and approximately 400 basis points of operating leverage, assuming a stable market environment. Full Transcript OPERATOR Good day and welcome to the Northern Trust Corporation second quarter 2026 earnings conference call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Steve Carroll, Head of Investor Relations. Please go ahead. Steve Carroll, Head of Investor Relations Thank you, operator. Good morning, everyone, and welcome to Northern Trust Corporation's second quarter 2026 earnings conference call.

Joining me on our call this morning is Michael O'Grady, our Chairman and CEO; Dave Fox, our Chief Financial Officer; John Landers, our Comptroller; and Trace Stedgeman from our Investor Relations team. com. Also on our website you will find our quarterly earnings review presentation, which we will use to guide today's conference call. com.

The only authorized rebroadcast of this call is the replay that will be made available on our website through August 22nd. Northern Trust disclaims any continuing accuracy of the information provided in this call after today. Please refer to our safe harbor statement regarding forward-looking statements in the back of the accompanying presentation, which will apply to our commentary on this call. During today's question and answer session, please limit your initial query to one question and one related follow-up.

This will allow us to move through the queue and enable as many people as possible the opportunity to ask questions as time permits. Thank you again for joining us today. Let me turn the call over to Michael O'Grady. Fredrick Wilson, Chief Executive Officer Thank you, Steve, and good morning, everyone.

Let me join in welcoming you to our second quarter 2026 earnings call. Our results this quarter reflect strong execution of our One Northern Trust strategy and a very constructive market environment. We delivered an eighth consecutive quarter of positive organic fee growth and generated significant positive operating leverage, underscoring both the strength of our diversified business model and the discipline with which we are managing the firm. As we've discussed, our strategy is centered on driving sustainable organic growth, improving productivity, and strengthening resiliency.

Across each of these priorities, we continue to see clear proof points and are demonstrating our ability to perform consistently across a range of market environments. In the quarter, we participated in the second tranche of the Visa Class B common stock exchange offer, positioning us to recognize a pre-tax gain of nearly $525 million. Reported results also include approximately $220 million in restructuring charges and other notable items, which Dave will discuss in more detail. Excluding notable items, earnings per share increased 40% year over year.

Total revenue increased 13%, driven by 10% growth in trust fees, 11% growth in net interest income, and 69% growth in capital markets revenues, including foreign exchange, securities commissions, and trading income. Noninterest expense was up 5% as we continue to balance disciplined cost management with ongoing investments in the business. Importantly, strong revenue growth combined with expense discipline drove positive operating leverage of over 700 basis points. Excluding notable items, we returned almost $500 million to shareholders during the quarter and, year to date, we've returned over $1 billion to shareholders, excluding notable items.

This represents a payout ratio of 95% through the first half of the year. Overall, these results demonstrate solid progress on our financial objectives and reinforce the strength and durability of our business model. Turning to wealth management, the business delivered another solid quarter with trust fees increasing 10% year over year, reflecting continued client engagement and strong execution across the franchise. Assets under management were up 7% sequentially and 14% year over year.

We also continue to make progress against our strategic growth priorities. Our differentiated capabilities continue to support growth in Global Family O