Northern Trust (NTRS) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 19, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Northern Trust Corporation Second Quarter 2023 Earnings Conference Call. Today’s conference is being recorded.

At this time, I’d like to turn the conference over to Jennifer Childe, Director of Investor Relations. Please go ahead ma'am.

Jennifer Childe

Thank you, Jenny and good morning, everyone. Welcome to Northern Trust Corporation's second quarter 2023 earnings conference call. Joining me on our call this morning is Mike O'Grady, our Chairman and CEO; Jason Tyler, our Chief Financial Officer; Lauren Allnut, our Controller, and Grace Higgins from our Investor Relations team.

Our second 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 July 19 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 August 19.

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 on Page 12 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 Mike O'Grady.

Mike O'Grady

Thank you, Jennifer. Let me join and welcome you to our second quarter 2023 earnings call.

Our results for the second quarter reflect solid sequential performance. Trust fees and assets under custody and management increased sequentially, which included positive organic growth in each business. Net interest income was down modestly on a linked quarter basis, reflecting higher funding costs associated with the highly competitive deposit backdrop. Expenses excluding the neutral items are well controlled, reflecting the rigor of our cost discipline, as well as the impact of various productivity initiatives. We reported $64 million in charges in the second quarter associated with these steps.

Our wealth management business modestly grew assets under custody and management and trust fees on a sequential basis. We continue to see strength in the higher wealth tiers and within our global family office segment, where we captured several marquee wins.