Financial Trends

Fourth Quarter 2022

January 19, 2023

Please direct inquiries to:

Jennifer Childe

Senior Vice President, Director of Investor Relations (312) 444-3290 or jennifer.childe@ntrs.com

Briar Rose

Vice President, Investor Relations

(312) 557-5297 or briar.rose@ntrs.com

The historical financial results and trends reflected in this report are not indicative of future financial results and trends for Northern Trust Corporation. This report should be read in conjunction with the Corporation's Fourth Quarter 2022 earnings press release and periodic reports to the Securities and Exchange Commission, all of which contain additional information about factors that could affect the Corporation's future financial results and trends. The Corporation assumes no obligation to update this report.

TABLE OF CONTENTS

1

7

Financial Summary

Balance Sheet Mix Trends

2

8

Income Statement

Interest Rate Trends

3

9

Net Income Trends

Asset Quality

4

10

Fee Detail

Trust Assets

5

11

Balance Sheet (EOP)

Reconciliation to FTE

6

12

Balance Sheet Trends

Reconciliation to FTE (Ratios)

Northern Trust Corporation

FINANCIAL SUMMARY

($ in Millions except per share information)

2021

2022

2018

2019

2020

2021

2022

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Profitability:

$1,556.4

$1,492.2

$1,209.3

$1,545.3

$1,336.0

Net Income

$ 375.1

$ 368.1

$ 395.7

$ 406.4

$ 389.3

$ 396.2

$ 394.8

$ 155.7

1,489.9

1,428.9

1,141.0

1,490.6

1,282.4

Earnings Allocated to Common and Potential

355.2

360.2

376.5

398.7

370.0

388.3

375.4

148.7

Common Shares

$

6.68

$

6.66

$

5.48

$

7.16

6.64

6.63

5.46

7.14

35%

-%

(18%)

31%

16.2 %

14.9 %

11.2 %

13.9 %

1.27 %

1.27 %

0.88 %

0.99 %

33.3 %

32.4 %

27.1 %

31.5 %

25.9 %

24.4 %

19.7 %

23.8 %

72.3 %

72.0 %

75.9 %

78.2 %

62.5 %

63.1 %

65.1 %

67.1 %

20.5 %

23.2 %

25.7 %

23.1 %

22.1 %

24.5 %

27.2 %

24.5 %

12.9 %

12.7 %

12.8 %

11.9 %

14.1 %

14.5 %

13.9 %

12.9 %

16.1 %

16.3 %

15.6 %

14.1 %

8.0 %

8.7 %

7.6 %

6.9 %

13.7 %

13.2 %

13.4 %

13.2 %

15.0 %

15.0 %

14.5 %

14.3 %

16.9 %

16.8 %

15.9 %

15.3 %

8.0 %

8.7 %

7.6 %

6.9 %

7.0 %

7.6 %

8.6 %

8.2 %

$

1.94

$

2.60

$

2.80

$

2.80

29 %

39 %

51 %

39 %

$

83.59

$

106.24

$

93.14

$

119.61

12.6

16.0

17.1

16.8

$

6.16

Basic Earnings Per Share

$

1.71

$

1.73

$

1.81

$

1.92

$

1.78

$

1.86

$

1.80

$

0.71

6.14

Diluted Earnings Per Share

1.70

1.72

1.80

1.91

1.77

1.86

1.80

0.71

(14%)

Diluted EPS Growth over Previous Year

10%

18%

36%

70%

4%

8%

-%

(63%)

12.7 %

Return on Average Common Equity

13.7 %

13.7 %

13.7 %

14.5 %

14.2 %

15.7 %

14.9 %

5.9 %

0.88 %

Return on Average Assets

0.99 %

0.96 %

1.00 %

1.00 %

0.97 %

1.03 %

1.07 %

0.42 %

26.6 %

Profit Margin (pre-tax) (FTE)(1)

31.6 %

31.1 %

32.2 %

31.0 %

30.0 %

31.0 %

30.4 %

13.4 %

19.6 %

Profit Margin (after-tax) (FTE)(1)

23.6 %

23.2 %

24.1 %

24.2 %

22.6 %

22.3 %

22.3 %

10.1 %

71.6 %

Noninterest Income to Total Revenue (FTE)(1)

78.2 %

78.4 %

78.3 %

77.9 %

77.5 %

73.6 %

70.3 %

64.2 %

65.1 %

Trust Fees to Total Revenue (FTE)(1)

66.9 %

67.7 %

67.6 %

66.2 %

67.7 %

64.2 %

61.0 %

67.9 %

24.4 %

Effective Tax Rate (US GAAP)

24.4 %

24.3 %

23.6 %

20.2 %

23.8 %

26.7 %

24.7 %

18.2 %

26.3 %

Effective Tax Rate (FTE)(1)

25.4 %

25.6 %

25.2 %

21.8 %

24.8 %

28.2 %

26.4 %

24.4 %

Capital Ratios:(2)

Standardized Approach

10.8 %

Common Equity Tier 1 Capital

12.0 %

12.0 %

11.9 %

11.9 %

11.4 %

10.5 %

10.1 %

10.8 %

11.8 %

Tier 1 Capital

13.0 %

13.1 %

12.9 %

12.9 %

12.4 %

11.5 %

11.1 %

11.8 %

13.9 %

Total Capital

14.5 %

14.5 %

14.3 %

14.1 %

13.6 %

12.6 %

12.2 %

13.9 %

7.1 %

Tier 1 Leverage

6.9 %

7.1 %

7.1 %

6.9 %

6.5 %

6.7 %

7.0 %

7.1 %

Advanced Approach

11.5 %

Common Equity Tier 1 Capital

12.8 %

13.1 %

13.0 %

13.2 %

12.1 %

11.6 %

11.4 %

11.5 %

12.5 %

Tier 1 Capital

14.0 %

14.2 %

14.1 %

14.3 %

13.2 %

12.7 %

12.5 %

12.5 %

14.5 %

Total Capital

15.2 %

15.5 %

15.4 %

15.3 %

14.2 %

13.7 %

13.5 %

14.5 %

7.1 %

Tier 1 Leverage

6.9 %

7.1 %

7.1 %

6.9 %

6.5 %

6.7 %

7.0 %

7.1 %

7.9 %

Supplementary Leverage (3) (4)

8.1 %

8.2 %

8.4 %

8.2 %

7.9 %

7.6 %

7.7 %

7.9 %

Per Share Information / Ratios:

$

2.90

Cash Dividends Declared Per Common Share

$

0.70

$

0.70

$

0.70

$

0.70

$

0.70

$

0.70

$

0.75

$

0.75

47 %

Dividend Payout Ratio

41 %

41 %

39 %

37 %

40 %

38 %

42 %

106 %

$

88.49

Market Value Per Share (End of Period)

$

105.11

$

115.62

$

107.81

$

119.61

$

116.45

$

96.48

$

85.56

$

88.49

14.4

Stock Price Multiple of Earnings

18.8

19.7

17.0

16.8

16.2

13.1

11.7

14.4

(based on trailing 4 quarters of diluted EPS)

$ 43.95

$ 46.82

$ 51.87

$ 53.58

$ 49.78

Book Value Per Common Share (End of Period)

$ 50.80

$ 52.49

$ 53.04

$ 53.58

$ 50.51

$ 48.87

$ 48.68

$ 49.78

  1. Fully taxable equivalent (FTE). Presentation on an FTE basis is a non-generally accepted accounting principle financial measure. Please refer to the Reconciliation to Fully Taxable Equivalent - Ratios on page 12 for further detail.
  2. Capital ratios for the current quarter are considered preliminary until the Form 10-K is filed with the Securities and Exchange Commission.
  3. Effective January 1, 2018, the Corporation and Bank are subject to a minimum supplementary leverage ratio of 3 percent.
  4. From April 1, 2020, through April 1, 2021, the Federal Reserve issued temporary Supplementary Leverage Ratio (SLR) relief that required Northern Trust to exclude U.S. Treasury balances from the SLR. Please see the Northern Trust Corporation Pillar 3 disclosures

for further SLR discussion.

1

Northern Trust Corporation

INCOME STATEMENT

($ in Millions except per share information)

TWELVE MONTHS

CHANGE

FOURTH QUARTER

CHANGE

2022

2021

$

%

2022

2021

$

%

$

2,496.3

$

2,487.3

$

9.0

- %

Asset Servicing Trust, Investment and Other Servicing Fees

$

588.0

$

625.1

$

(37.1)

(6)%

1,936.3

1,873.8

62.5

3 %

WM Trust, Investment and Other Servicing Fees

454.1

485.9

(31.8)

(7)%

4,432.6

4,361.1

71.5

2 %

Total Fees

1,042.1

1,111.0

(68.9)

(6)%

288.6

292.6

(4.0)

(1)%

Foreign Exchange Trading Income

65.4

76.9

(11.5)

(15)%

39.3

44.3

(5.0)

(11)%

Treasury Management Fees

8.3

10.6

(2.3)

(21)%

136.2

140.2

(4.0)

(3)%

Security Commissions and Trading Income

35.1

35.9

(0.8)

(2)%

191.3

243.9

(52.6)

(22)%

Other Operating Income

47.3

72.3

(25.0)

(35)%

(214.0)

(0.3)

(213.7)

N/M

Investment Security Gains (Losses), net

(213.7)

(0.3)

(213.4)

N/M

4,874.0

5,081.8

(207.8)

(4)%

Total Noninterest Income

984.5

1,306.4

(321.9)

(25)%

2,923.3

1,442.1

1,481.2

103 %

Interest Income (FTE*)

1,185.6

372.2

813.4

N/M

990.5

23.8

966.7

N/M

Interest Expense

635.6

1.6

634.0

N/M

1,932.8

1,418.3

514.5

36 %

Net Interest Income (FTE*)

550.0

370.6

179.4

48 %

6,806.8

6,500.1

306.7

5 %

Total Revenue (FTE*)

1,534.5

1,677.0

(142.5)

(8)%

12.0

(81.5)

93.5

N/M

Provision for Credit Losses

5.0

(11.5)

16.5

N/M

2,248.0

2,011.0

237.0

12 %

Compensation

584.3

510.2

74.1

15 %

437.4

431.4

6.0

1 %

Employee Benefits

103.6

107.9

(4.3)

(4)%

880.3

849.4

30.9

4 %

Outside Services

232.9

224.2

8.7

4 %

838.8

736.3

102.5

14 %

Equipment and Software

229.4

196.1

33.3

17 %

219.1

208.7

10.4

5 %

Occupancy

65.7

51.8

13.9

27 %

359.3

299.1

60.2

20 %

Other Operating Expense

107.7

78.7

29.0

37 %

4,982.9

4,535.9

447.0

10 %

Total Noninterest Expense

1,323.6

1,168.9

154.7

13 %

1,811.9

2,045.7

(233.8)

(11)%

Income before Income Taxes (FTE*)

205.9

519.6

(313.7)

(60)%

430.3

464.8

(34.5)

(7)%

Provision for Income Taxes

34.7

103.2

(68.5)

(66)%

45.6

35.6

10.0

28 %

Taxable Equivalent Adjustment

15.5

10.0

5.5

55 %

475.9

500.4

(24.5)

(5)%

Total Taxes (FTE*)

50.2

113.2

(63.0)

(56)%

$

1,336.0

$

1,545.3

$

(209.3)

(14)%

Net Income

$

155.7

$

406.4

$

(250.7)

(62)%

$

41.8

$

41.8

$

-

- %

Dividends on Preferred Stock

$

4.7

$

4.7

$

-

- %

11.8

12.9

(1.1)

(9)%

Earnings Allocated to Participating Securities

2.3

3.0

(0.7)

(26)%

1,282.4

1,490.6

(208.2)

(14)%

Earnings Allocated to Common and Potential Common Shares

148.7

398.7

(250.0)

(63)%

$

6.16

$

7.16

$

(1.00)

(14)%

Earnings Per Share - Basic

$

0.71

$

1.92

$

(1.21)

(63)%

$

6.14

$

7.14

$

(1.00)

(14)%

Earnings Per Share - Diluted

$

0.71

$

1.91

$

(1.20)

(63)%

208,309

208,076

Average Basic Shares (000s)

208,423

207,708

208,867

208,899

Average Diluted Shares (000s)

208,894

208,593

208,428

207,762

End of Period Shares Outstanding (000s)

208,428

207,762

N/M - Not meaningful

* Fully taxable equivalent (FTE). Presentation on an FTE basis is a non-generally accepted accounting principle financial measure. Please refer to the Reconciliation to Fully Taxable Equivalent on page 11 for further detail.

2

Northern Trust Corporation

NET INCOME TRENDS

($ in Millions except per share information)

2021

2022

2018

2019

2020

2021

2022

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

2,173.1

2,211.5

2,321.6

2,487.3

2,496.3

Asset Servicing Trust, Investment and Other Servicing Fees

620.5

611.5

630.2

625.1

662.4

642.7

603.2

588.0

1,580.6

1,640.6

1,673.4

1,873.8

1,936.3

WM Trust, Investment and Other Servicing Fees

443.2

463.9

480.8

485.9

506.0

500.7

475.5

454.1

3,753.7

3,852.1

3,995.0

4,361.1

4,432.6

Total Fees

1,063.7

1,075.4

1,111.0

1,111.0

1,168.4

1,143.4

1,078.7

1,042.1

307.2

250.9

290.4

292.6

288.6

Foreign Exchange Trading Income

78.7

70.6

66.4

76.9

80.9

77.6

64.7

65.4

51.8

44.5

45.4

44.3

39.3

Treasury Management Fees

11.2

11.3

11.2

10.6

11.1

10.6

9.3

8.3

98.3

103.6

133.2

140.2

136.2

Security Commissions and Trading Income

34.8

33.0

36.5

35.9

36.2

32.8

32.1

35.1

127.5

145.5

194.0

243.9

191.3

Other Operating Income

54.9

54.4

62.3

72.3

41.1

45.6

57.3

47.3

(1.0)

(1.4)

(0.4)

(0.3)

(214.0)

Investment Security Gains (Losses), net

-

-

-

(0.3)

-

-

(0.3)

(213.7)

4,337.5

4,395.2

4,657.6

5,081.8

4,874.0

Total Noninterest Income

1,243.3

1,244.7

1,287.4

1,306.4

1,337.7

1,310.0

1,241.8

984.5

1,663.9

1,710.7

1,477.6

1,418.3

1,932.8

Net Interest Income (FTE*)

346.7

343.9

357.1

370.6

387.7

469.8

525.3

550.0

6,001.4

6,105.9

6,135.2

6,500.1

6,806.8

Total Revenue (FTE*)

1,590.0

1,588.6

1,644.5

1,677.0

1,725.4

1,779.8

1,767.1

1,534.5

(14.5)

(14.5)

125.0

(81.5)

12.0

Provision for Credit Losses

(30.0)

(27.0)

(13.0)

(11.5)

2.0

4.5

0.5

5.0

1,806.9

1,859.0

1,947.1

2,011.0

2,248.0

Compensation

518.5

486.3

496.0

510.2

563.9

546.5

553.3

584.3

356.7

355.2

387.7

431.4

437.4

Employee Benefits

103.4

118.4

101.7

107.9

104.3

119.6

109.9

103.6

739.4

774.5

763.1

849.4

880.3

Outside Services

196.4

218.1

210.7

224.2

213.4

213.1

220.9

232.9

582.2

612.1

673.5

736.3

838.8

Equipment and Software

176.7

178.3

185.2

196.1

193.5

203.5

212.4

229.4

201.1

212.9

230.1

208.7

219.1

Occupancy

50.8

52.2

53.9

51.8

51.1

51.0

51.3

65.7

330.6

329.8

346.7

299.1

359.3

Other Operating Expense

71.7

67.5

81.2

78.7

79.7

89.9

82.0

107.7

4,016.9

4,143.5

4,348.2

4,535.9

4,982.9

Total Noninterest Expense

1,117.5

1,120.8

1,128.7

1,168.9

1,205.9

1,223.6

1,229.8

1,323.6

1,999.0

1,976.9

1,662.0

2,045.7

1,811.9

Income before Income Taxes (FTE*)

502.5

494.8

528.8

519.6

517.5

551.7

536.8

205.9

401.4

451.9

418.3

464.8

430.3

Provision for Income Taxes

120.8

118.4

122.4

103.2

121.5

144.4

129.7

34.7

41.2

32.8

34.4

35.6

45.6

Taxable Equivalent Adjustment

6.6

8.3

10.7

10.0

6.7

11.1

12.3

15.5

442.6

484.7

452.7

500.4

475.9

Total Taxes (FTE*)

127.4

126.7

133.1

113.2

128.2

155.5

142.0

50.2

$

1,556.4

$

1,492.2

$ 1,209.3

$

1,545.3

$

1,336.0

Net Income

$

375.1

$

368.1

$

395.7

$

406.4

$

389.3

$

396.2

394.8

$

155.7

$

6.68

$

6.66

$

5.48

$

7.16

$

6.16

Earnings Per Share - Basic

$

1.71

$

1.73

$

1.81

$

1.92

$

1.78

$

1.86

$

1.80

$

0.71

6.64

6.63

5.46

7.14

6.14

Earnings Per Share - Diluted

1.70

1.72

1.80

1.91

1.77

1.86

1.80

0.71

224,488

215,601

209,008

208,899

208,867

Average Diluted Shares (000s)

208,946

209,138

208,923

208,593

208,809

208,878

208,889

208,894

$

46.4

$

46.4

$

56.2

$

41.8

$

41.8

Preferred Dividends**

$

16.2

$

4.7

$

16.2

$

4.7

$

16.2

$

4.7

$

16.2

$

4.7

* Fully taxable equivalent (FTE). Presentation on an FTE basis is a non-generally accepted accounting principle financial measure. Please refer to the Reconciliation to Fully Taxable Equivalent on page 11 for further detail.

** Dividends on Preferred Stock in 2020 includes $11.5 million related to the difference between the redemption amount of the Corporation's Series C Non-Cumulative Perpetual Preferred Stock, which was redeemed in the first quarter of 2020, and its carrying value.

3

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Disclaimer

Northern Trust Corporation published this content on 19 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 January 2023 12:10:06 UTC.