Northern Trust Corporation

Good day and welcome to the Northern Trust Corporation third quarter 2026 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Steve Carroll, head of investor relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Northern Trust Corporation's third 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 controller, and Trace Stegman from our investor relations team. Our third quarter earnings press release and financial trends report are both available on our website at northerntrust.com. Also on our website, you will find our quarterly earnings review presentation, which we will use to guide today's conference call. This October 21st call is being webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be made available on our website through November 21st. 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 all 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 Grady.

Thank you, Steve, and good morning, everyone. Let me join in welcoming you to our third quarter 2026 earnings call. Northern Trust had a strong third quarter in a macroeconomic environment that remained constructive but evolving. Excluding notable items, revenue grew 11%, supported by 8% growth in trust fees, 14% growth in net interest income, and 38% growth in capital markets revenues, which include foreign exchange trading, securities commissions, and other trading activities. Expenses were well managed and increased 5%. generating more than 600 basis points of positive operating leverage and demonstrating the scalability of our business. Pre-tax income rose 21% and earnings per share increased 40% year over year. Our return on equity, pre-tax margin, and expense to trust fee ratio were all at or slightly better than our medium term targets and all three businesses generated organic trust fee growth. Our capital position remains strong. Thank you for joining us today. We continue collaborating across the company to bring more of the firm to our clients and capture more of the opportunity within our existing and prospective relationships.