NII & Fee Income to Support NTRS Q3 Earnings, High Costs to Hurt

Northern Trust Corporation NTRS is scheduled to release its third-quarter 2025 results on Oct. 22, before market open. The company’s quarterly earnings and revenues are expected to grow year over year.

In the last reported quarter, the bank recorded a positive earnings surprise, driven by a rise in net interest income (NII). Also, an increase in total assets under custody and assets under management balances was positive. However, higher expenses, weak asset quality and lower fee income were undermining factors.

Northern Trust has an impressive earnings surprise history. Its earnings beat estimates in the trailing four quarters, with an average positive surprise of 7.57%.

Northern Trust's Price and EPS Surprise

Northern Trust Corporation price-eps-surprise | Northern Trust Corporation Quote

The Zacks Consensus Estimate for NTRS’ third-quarter earnings has been revised upward over the past seven days to $2.26 per share. The figure indicates a 15.3% increase from the year-ago reported number.

The consensus estimate for revenues is pegged at $2.04 billion, indicating a year-over-year rise of 3.7%

Key Factors & Estimates for NTRS’ Q3 Results

NII & Loans: The Federal Reserve reduced interest rates by 25 basis points to 4.00–4.25% in September 2025. With rates remaining largely stable through most of the quarter, funding and deposit costs likely stabilized. As such, NTRS’ NII is expected to have witnessed growth in the to-be-reported quarter. The Zacks Consensus Estimate for NII is pegged at $588.3 million for the to-be-reported quarter, indicating a 4.6% rise on a year-over-year basis.

Also, per the Fed’s latest data, the lending scenario was robust in the third quarter despite uncertainties surrounding tariff policies. Thus, NTRS is likely to have witnessed growth in loan demand, which is expected to have supported its average interest-earning asset growth in the quarter under review.

The Zacks Consensus Estimate for average earning assets is pegged at $143.5 billion, indicating a 6.5% rise from the prior-year quarter.

Non-Interest Income: Northern Trust calculates its asset servicing and wealth management servicing fees using a lag effect, relying on prior-quarter end valuations for these computations. Asset servicing fees comprise custody and fund administration, investment management, securities lending, and other fees.

The equity market performance was decent in the third quarter. As such, NTRS is likely to have witnessed growth in custody and fund administration revenues, as well as its investment management fees.

The Zacks Consensus Estimate for custody and fund administration fees is pegged at $493.2 million, indicating an 8.8% rise on a year-over-year basis.

The Zacks Consensus Estimate for investment management fees is pegged at $167.3 million, indicating a 9.6% rise from the year-ago quarter.

The Zacks Consensus Estimate for total wealth management fees is pegged at $569.7 million, indicating a 7.5% rise from the year-earlier quarter.

For the third quarter of 2025, the Zacks Consensus Estimate for other operating income is pegged at $56.76 million, indicating a 49.2% decline on a year-over-year basis.

The Zacks Consensus Estimate for total fee income is pegged at $1.45 billion, indicating a 3.2% increase from the prior-year quarter.

Expenses: The company’s expenses are expected to have remained elevated in the third quarter of 2025, driven by higher compensation costs and continued investments in equipment and software to modernize its technology infrastructure and strengthen operational resiliency.

Asset Quality: As NTRS had maintained elevated reserves for potential loan losses in prior quarters, the company is less likely to have set aside massive provisions in the third quarter, given the Fed’s signal of two potential rate cuts and improving economic clarity.

The Zacks Consensus Estimate for non-performing assets in the third quarter of 2025 is pegged at $81.7 million, indicating a 12% decline on a sequential basis.

What the Zacks Model Reveals for NTRS

Our proven model does not predict an earnings beat for Northern Trust this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you can see below.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for NTRS is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank of 3.

Stocks Worth Considering

Here are some other stocks that you may want to consider, as our model shows that these have the right combination of elements to post earnings beat this time around.

The Earnings ESP for State Street Corporation STT is +0.13% and sports a Zacks Rank #1 at present. The company is slated to report third-quarter 2025 results on Oct. 17. You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past seven days, the Zacks Consensus Estimate for STT’s quarterly earnings has been revised upward to $2.62 per share.

The Earnings ESP for KeyCorp KEY is +3.68% and currently carries a Zacks Rank #3. The company is slated to report third-quarter 2025 results on Oct. 16.

Over the past seven days, the Zacks Consensus Estimate for KEY’s quarterly earnings has been unchanged at 38 cents per share.

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This article originally published on Zacks Investment Research (zacks.com).

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