NORTHERN TRUST CORP (NTRS)

Items 2. and 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures about Market Risk

The following is management’s discussion and analysis of the financial condition and results of operations (MD&A) of Northern Trust Corporation (Corporation) for the first quarter of 2026. The following should be read in conjunction with the consolidated financial statements and related footnotes included in this report as well as the Annual Report on Form 10-K for the year ended December 31, 2025. Investors also should read the section titled “Forward-Looking Statements.”

Certain terms used in this report are defined in the Glossary included in our Annual Report on Form 10-K for the year ended December 31, 2025.

CONSOLIDATED RESULTS OF OPERATIONS

General

The Corporation is a leading provider of asset servicing, wealth management, asset management and banking solutions to corporations, institutions, families and individuals. The Corporation focuses on managing and servicing client assets through its two client-focused reporting segments: Asset Servicing and Wealth Management. Asset management and related services are provided to Asset Servicing and Wealth Management clients primarily by the Asset Management business. Except where the context requires otherwise, the terms “Northern Trust,” “we,” “us,” “our,” “its,” or similar terms mean the Corporation and its subsidiaries on a consolidated basis.

Overview of Financial Results

TABLE 1: FINANCIAL HIGHLIGHTS

N/M - Not meaningful

3

CONSOLIDATED RESULTS OF OPERATIONS (continued)

Overview of Financial Results (continued)

Three Months Ended March 31, 2026 highlights:

•Revenue for the three months ended March 31, 2026 increased from the prior-year quarter to $2.2 billion, reflecting:

◦Trust, Investment and Other Servicing Fees increased to $1.3 billion in the current quarter primarily due to favorable markets, net new business, and favorable currency movement.

◦Other Noninterest Income increased to $210.2 million in the current quarter primarily due to higher Foreign Exchange Trading Income and Securities Commissions and Trading Income mainly driven by higher volumes resulting from market volatility. Securities Commissions and Trading Income also increased from the prior-year due to growth in outsourced trading activity.

◦Net Interest Income increased to $654.0 million in the current quarter primarily driven by higher deposit levels, partially offset by lower interest rates.

•Noninterest Expense increased to $1.5 billion in the current quarter primarily due to higher Compensation and Benefits and Equipment and Software expense.

•In the current quarter, there was a negative Provision for Credit Losses of $3.0 million, as compared to a Provision for Credit Losses of $1.0 million in the prior-year quarter. For additional information, refer to the Provision for Credit Losses within the “Consolidated Results of Operations” section.

Trust, Investment and Other Servicing Fees

Trust, Investment and Other Servicing Fees are based primarily on the market value of assets held in custody, managed or serviced; the volume of transactions; securities lending volume and spreads; and fees for other services rendered. Certain market value calculations on which fees are based are performed on a monthly or quarterly basis in arrears.

The components of Trust, Investment and Other Servicing Fees are provided below.

TABLE 2: TRUST, INVESTMENT AND OTHER SERVICING FEES

Asset Servicing

Custody and Fund Administration fees, the largest component of Asset Servicing fees, are driven primarily by values of client assets under custody/administration (AUC/A), transaction volumes and the number of accounts. The asset values used to calculate these fees vary depending on the individual fee arrangements negotiated with each client. Custody fees related to asset values are client-specific and are priced based on month-end market values, quarter-end market values, or the average of month-end market values for the quarter. The fund administration fees that are asset-value-related are priced using month-end, quarter-end, or average daily balances. Investment Management fees are based generally on market values of client AUM throughout the period. Typically, the asset values used to calculate fee revenue are based on a one-month or one-quarter lag. Securities Lending revenue is affected by market values; the demand for securities to be lent, which drives volumes; and the interest rate spread earned on the investment of cash deposited by investment firms as collateral for securities they have borrowed. The Other fee category in Asset Servicing includes products such as investment risk and analytical services, benefit payments, and other services. Revenue from these products is based generally on the volume of services provided or a fixed fee.

Custody and Fund Administration fees increased from the prior-year quarter primarily driven by favorable markets, favorable currency movements and net new business.

Investment Management fees increased from the prior-year quarter primarily due to favorable markets and net new business.

4

FIRST QUARTER CONSOLIDATED RESULTS OF OPERATIONS (continued)

Trust, Investment and Other Servicing Fees (continued)

Securities Lending increased from the prior-year quarter primarily due to higher volumes.

Wealth Management

Wealth Management fee income is calculated primarily based on market values and is impacted by both one-month and one-quarter lagged asset values.

Fee income in the regions (Central, East and West) increased from the prior-year quarter primarily due to favorable markets and new business.

Global Family Office fee income increased from the prior-year quarter primarily due to favorable markets and client inflows.

Market Indices

The following tables present selected market indices and the percentage changes year-over-year to provide context regarding equity and fixed income market impacts on the Corporation’s results.

TABLE 3: EQUITY MARKET INDICES

TABLE 4: FIXED INCOME MARKET INDICES

Client Assets

As noted above, AUC/A and AUM are two of the primary drivers of our Trust, Investment and Other Servicing Fees. For the purposes of disclosing AUC/A, to the extent that both custody and administration services are provided, the value of the assets is included only once in this amount. The following table presents AUC/A by reporting segment.

TABLE 5: ASSETS UNDER CUSTODY / ADMINISTRATION BY REPORTING SEGMENT

The following table presents Northern Trust’s assets under custody, a component of AUC/A, by reporting segment.

TABLE 6: ASSETS UNDER CUSTODY BY REPORTING SEGMENT

Total assets under custody/administration and assets under custody increased from the prior-year quarter primarily driven by favorable markets.

5

FIRST QUARTER CONSOLIDATED RESULTS OF OPERATIONS (continued)

Trust, Investment and Other Servicing Fees (continued)

The following table presents the allocation of Northern Trust’s custodied assets by reporting segment.

TABLE 7: ALLOCATION OF ASSETS UNDER CUSTODY

The following table presents Northern Trust’s assets under custody by investment type.

TABLE 8: ASSETS UNDER CUSTODY BY INVESTMENT TYPE

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[Excerpt truncated for page length; source filing is linked above.]

ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of the financial condition and results of operations (MD&A) of Northern Trust Corporation (Corporation) for the year ended December 31, 2025. The following should be read in conjunction with the consolidated financial statements and related footnotes included in this report. Investors also should read the section titled “Forward-Looking Statements.”

BUSINESS OVERVIEW

The Corporation is a leading provider of wealth management, asset servicing, asset management and banking solutions to corporations, institutions, families and individuals. The Corporation focuses on managing and servicing client assets through its two client-focused reporting segments: Asset Servicing and Wealth Management. Asset management and related services are provided to Asset Servicing and Wealth Management clients primarily by the Asset Management business.

The Corporation conducts business through various U.S. and non-U.S. subsidiaries, including The Northern Trust Company (the Bank). The Corporation was formed as a holding company for the Bank in 1971. The Corporation has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. Except where the context requires otherwise, the terms “Northern Trust,” “we,” “us,” “our,” “its,” or similar terms refers to the Corporation and its subsidiaries on a consolidated basis.

FINANCIAL OVERVIEW

TABLE 3: FINANCIAL HIGHLIGHTS

(1) Percentage calculations are based on actual balances rather than the rounded amounts presented in the table above.

(2)2025 Noninterest Income includes a $19.2 million expense related to mark-to-market activity associated with existing Visa Class B swap agreements. 2024 Noninterest Income includes an $878.4 million net gain related to Northern Trust's participation in a Visa Exchange Offer, a $189.3 million loss on AFS debt securities sold in conjunction with a repositioning of the portfolio, a $68.1 million gain related to the sale of an equity investment, a $12.8 million expense of mark-to-market activity associated with existing Visa Class B swap agreements, a $7.6 million charge for investment impairments, and a $6.5 million loss recognized as a result of a securities repositioning related to the supplemental pension plan. 2023 Noninterest Income includes a $169.5 million loss on AFS debt securities sold in conjunction with a repositioning of the portfolio.

(3)2025 Noninterest Expense includes a $58.8 million severance-related charge and a $15.9 million release of the Federal Deposit Insurance Corporation (FDIC) special assessment reserve, including a $9.5 million released during the fourth quarter. 2024 Noninterest Expense includes an $85.2 million severance-related charge, a $70.0 million charitable contribution, a $16.4 million charge for software accelerations and dispositions, a $14.7 million expense related to the FDIC special assessment, and a $10.6 million expense related to a legal settlement. 2023 Noninterest Expense includes an $84.6 million expense related to the FDIC special assessment, a $38.7 million severance-related charge, a $25.6 million charge related to the write-off of an investment in a client capability, and a $12.8 million occupancy charge.

N/M - Not meaningful

40 2025 ANNUAL REPORT | NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CONSOLIDATED RESULTS OF OPERATIONS

The following information summarizes our consolidated results of operations for 2025 compared to 2024. For a discussion related to the consolidated results of operations for 2024 compared to 2023, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2024 (2024 Form 10-K), which was filed with the United States Securities and Exchange Commission on February 24, 2025.

Revenue

Northern Trust generates the majority of its revenue from Noninterest Income that primarily consists of Trust, Investment and Other Servicing Fees. Net Interest Income comprises the remainder of revenue and consists of Interest Income generated by earning assets, net of Interest Expense on deposits and borrowed funds.

TABLE 4: REVENUE

(1) Net Interest Income stated on a GAAP basis. Net Interest Income on an FTE basis includes FTE adjustments of $28.5 million, $31.8 million, and $57.5 million for 2025, 2024, and 2023, respectively. A reconciliation of total consolidated revenue, Net Interest Income and net interest margin on a GAAP basis to revenue, Net Interest Income and net interest margin on an FTE basis, respectively, (each of which is a non-GAAP financial measure) is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section.

Revenue in 2025 decreased $204.0 million from 2024, reflecting:

•Trust, Investment and Other Servicing Fees increased $290.0 million in 2025 compared to 2024, primarily due to favorable markets, net new business, and favorable currency movements.

•Noninterest Income, excluding Trust, Investment and Other Servicing Fees, decreased $727.9 million in 2025 compared to 2024 primarily due to lower Other Operating Income driven by a $896.7 million gain related to Northern Trust’s participation in a Visa Exchange Offer in the prior year, partially offset by lower losses recognized on investment securities and higher Security Commissions and Trading Income.

•Net Interest Income on a fully taxable equivalent (FTE) basis in 2025 of $2.4 billion increased $230.6 million, or 10%, from $2.2 billion in 2024, primarily due to higher deposits and lower funding costs, partially offset by lower yields on interest-earning assets.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Trust, Investment and Other Servicing Fees

Trust, Investment and Other Servicing Fees are based primarily on the market value of assets held in custody, managed or serviced; the volume of transactions; number of accounts; securities lending volume and spreads; and fees for other services rendered. Certain market value calculations on which fees are based are performed on a monthly or quarterly basis in arrears.

The components of Trust, Investment and Other Servicing Fees are provided in the following table.

TABLE 5: TRUST, INVESTMENT AND OTHER SERVICING FEES

Asset Servicing

Asset Servicing Trust, Investment and Other Servicing Fees are primarily attributable to services related to custody, fund administration, investment management, and securities lending. Custody and Fund Administration fees are driven primarily by values of client AUC/A, transaction volumes and the number of accounts. The asset values used to calculate these fees vary depending on the individual fee arrangements negotiated with each client. Custody fees related to asset values are client specific and are priced based on month-end market values, quarter-end market values, or the average of month-end market values for the quarter. The fund administration fees that are asset-value-related are priced using month-end, quarter-end, or average daily balances. Investment Management fees are based generally on market values of client AUM throughout the period. Typically, the asset values used to calculate fee revenue are based on a one-month or one-quarter lag.

Securities Lending revenue is affected by market values; the demand for securities to be lent, which drives volumes; and the interest rate spread earned on the investment of cash deposited by investment firms as collateral for securities they have borrowed. The Other fee category in Asset Servicing includes products such as investment risk and analytical services, benefit payments, and other services. Revenue from these products is based generally on the volume of services provided or a fixed fee.

Custody and Fund Administration fees increased in 2025 from 2024 primarily due to favorable markets, net new business, and favorable currency movements. Investment Management fees increased in 2025 from 2024 primarily due to favorable markets and net new business. Securities Lending increased in 2025 from 2024 primarily due to higher volumes. Other fees increased from the prior-year, primarily due to net new business.

The following tables provide a breakdown of the Asset Servicing assets under custody and assets under management.

TABLE 6: ASSET SERVICING ASSETS UNDER CUSTODY

42 2025 ANNUAL REPORT | NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

TABLE 7: ASSET SERVICING ASSETS UNDER MANAGEMENT

(1) Cash and other assets deposited by investment firms as collateral for securities borrowed from custody clients are managed by Northern Trust and are included in assets under custody and assets under management

Wealth Management

Wealth Management fee income is calculated primarily based on market values of client AUC/A and AUM and is impacted by both one-month and one-quarter lagged asset values. Fee income in the regions increased in 2025 from 2024 primarily due to favorable markets. Global Family Office fee income increased in 2025 from 2024 primarily due to favorable markets and asset inflows.

The following tables provide a summary of Wealth Management assets under custody and assets under management.

TABLE 8: WEALTH MANAGEMENT ASSETS UNDER CUSTODY

TABLE 9: WEALTH MANAGEMENT ASSETS UNDER MANAGEMENT

The Wealth Management regions shown are comprised of the following: Central includes Illinois, Michigan, Minnesota, Missouri, Ohio and Wisconsin; East includes Connecticut, Delaware, Florida, Georgia, Massachusetts, New York, Pennsylvania, and Washington, D.C.; West includes Arizona, California, Colorado, Nevada, Texas, and Washington. Global Family Office provides customized services, including but not limited to investment consulting, global custody, fiduciary, private banking, family office consulting, and technology solutions, to meet the complex financial and reporting needs of family offices across the globe.

Asset Management

Asset Management, through the Corporation’s various subsidiaries, supports the Asset Servicing and Wealth Management reporting segments by providing a broad range of asset management and related services and other products to clients around the world. Investment solutions are delivered through separately managed accounts, bank common and collective funds, registered investment companies, exchange traded funds, non-U.S. collective investment funds, and unregistered private investment funds. Asset Management’s capabilities include active and passive equity; active and passive fixed income; cash management; multi-asset and alternative asset classes (such as private equity and hedge funds of funds); and multi-manager advisory services and products. Asset Management’s activities also include overlay services and other risk management services. Asset Management operates internationally through subsidiaries and distribution arrangements and its revenue and expense are allocated fully to Asset Servicing and Wealth Management.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Market Indices

The following tables present selected market indices and the percentage changes year-over-year to provide context regarding equity and fixed income market impacts on the Corporation’s results.

TABLE 10: EQUITY MARKET INDICES

TABLE 11: FIXED INCOME MARKET INDICES

Client Assets

Northern Trust, in the normal course of business, holds assets under custody/administration and management in a fiduciary or agency capacity for its clients. In accordance with GAAP, these assets are not assets of Northern Trust and are not included in its consolidated balance sheets. AUC/A and AUM are a driver of our Trust, Investment and Other Servicing Fees. For the purposes of disclosing AUC/A, to the extent that both custody and administration services are provided, the value of the assets is included only once in this amount.

At December 31, 2025, total AUC/A and AUC increased from the prior year primarily driven by favorable markets. AUM at the end of 2025 increased from 2024, primarily reflecting favorable markets and net asset inflows.

The following table presents AUC/A by reporting segment.

TABLE 12: ASSETS UNDER CUSTODY/ADMINISTRATION BY REPORTING SEGMENT

The following table presents assets under custody, a component of AUC/A, by reporting segment.

TABLE 13: ASSETS UNDER CUSTODY BY REPORTING SEGMENT

The following table presents the investment allocation of Northern Trust’s custodied assets by reporting segment.

TABLE 14: ALLOCATION OF ASSETS UNDER CUSTODY

44 2025 ANNUAL REPORT | NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table presents Northern Trust’s assets under custody by investment type.

TABLE 15: ASSETS UNDER CUSTODY BY INVESTMENT TYPE

The following table presents Northern Trust’s AUM by reporting segment.

TABLE 16: ASSETS UNDER MANAGEMENT BY REPORTING SEGMENT

The following table presents the investment allocation of Northern Trust’s AUM by reporting segment.

TABLE 17: ASSETS UNDER MANAGEMENT BY INVESTMENT TYPE

The following table presents consolidated AUM as of December 31, 2025, 2024 and 2023 by investment type.

TABLE 18: CONSOLIDATED ASSETS UNDER MANAGEMENT BY INVESTMENT TYPE

The following table presents activity in consolidated AUM by product during the years ended December 31, 2025, 2024 and 2023.

TABLE 19: ACTIVITY IN CONSOLIDATED ASSETS UNDER MANAGEMENT BY PRODUCT

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Other Noninterest Income

The components of Other Noninterest Income and a discussion of significant changes during 2025 are provided below.

TABLE 20: OTHER NONINTEREST INCOME

Security Commissions and Trading Income

Security Commissions and Trading Income, generated primarily from securities brokerage services provided by Northern Trust Securities, Inc., increased in 2025 from 2024, primarily driven by higher revenue from growth in outsourced trading activity.

Other Operating Income

Other Operating Income in 2025 decreased from 2024 primarily driven by a $896.7 million gain related to Northern Trust’s participation in a Visa Exchange Offer and a $68.1 million gain on the sale of an equity investment, partially offset by higher expense associated with mark-to-market activity on existing Visa Class B swap agreements, all recorded in the prior year. Please refer to Note 18, “Other Operating Income” and Note 24, “Commitments and Contingent Liabilities” included under Item 8, “Financial Statements and Supplementary Data,” for additional details related to Other Operating Income and Visa, respectively.

Investment Security Gains (Losses), Net

Investment Security Gains (Losses), net reflects a $189.3 million loss on the sale of AFS debt securities in the prior year arising from a repositioning of the portfolio.

Net Interest Income

Net Interest Income is defined as the total of Interest Income and amortized fees on earning assets, less Interest Expense on deposits and borrowed funds, adjusted for the impact of interest-related hedging activity. Earning assets—including Federal Funds Sold, Securities Purchased under Agreements to Resell, Interest-Bearing Due from and Deposits with Banks, Federal Reserve and Other Central Bank Deposits, Securities, Loans, and Other Interest-Earning Assets—are financed by a large base of interest-bearing liabilities that include client deposits, short-term borrowings, Senior Notes and Long-Term Debt. Short-term borrowings include Federal Funds Purchased, Securities Sold Under Agreements to Repurchase, and Other Borrowings. Earning assets also are funded by noninterest-bearing funds, which include demand deposits and Stockholders’ Equity. Net Interest Income is subject to variations in the level and mix of earning assets and interest-bearing funds and their relative sensitivity to interest rates. In addition, the levels of nonaccruing assets and client compensating deposit balances used to pay for services impact Net Interest Income.

Net interest margin is the difference between what we earn on our assets and what we pay for deposits and other sources of funding. The direction and level of interest rates are important factors in our earnings. Net interest margin is calculated by dividing annualized Net Interest Income by average interest-earning assets.

Net Interest Income stated on an FTE basis is a non-GAAP financial measure that facilitates the analysis of asset yields. Management believes an FTE presentation provides a clearer indication of net interest margins for comparative purposes. When adjusted to an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on Net Income. A reconciliation of Net Interest Income on a GAAP basis to Net Interest Income on an FTE basis is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section.

46 2025 ANNUAL REPORT | NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following tables present an analysis of average daily balances and interest rates affecting Net Interest Income and an analysis of Net Interest Income changes.

TABLE 21: AVERAGE CONSOLIDATED BALANCE SHEETS WITH ANALYSIS OF NET INTEREST INCOME (INTEREST AND RATE ON A FULLY TAXABLE EQUIVALENT BASIS)

(1) Rate calculations are based on actual balances rather than the rounded amounts presented in the table above.

(2) Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheets.

(3) Includes the impact of balance sheet netting under master netting arrangements of approximately $64.3 billion and $62.4 billion in 2025 and 2024, respectively, primarily related to our involvement in FICC. Northern Trust nets securities sold under repurchase agreements against those purchased under resale agreements when the GAAP requirements to net are met.

(4) Excluding the impact of netting, the average interest rate on Federal Funds Sold and Securities Purchased under Agreements to Resell would be approximately 4.33% and 5.29% in 2025 and 2024, respectively. It includes balances and rates for FICC reverse repurchase agreements, Non-FICC reverse repurchase agreements and federal funds sold of ($64.4 billion / 4.35%), ($0.9 billion / 2.67%), and ($0.8 million / 4.54%) for 2025 and ($62.5 billion / 5.30%), ($0.7 billion / 4.35%), and ($0.4 million / 5.40%) for 2024, respectively.

(5) Other Interest-Earning Assets include certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank and Federal Reserve stock, and money market investments which are classified in Other Assets on the consolidated balance sheets.

(6) Cash and Due from Banks and Other Central Bank Deposits includes the noninterest-bearing component of Federal Reserve and Other Central Bank Deposits on the consolidated balance sheets.

(7) Excluding the impact of netting, the average interest rate on Securities Sold under Agreements to Repurchase would be approximately 4.26% and 5.21% in 2025 and 2024, respectively. It includes balances and rates for FICC repurchase agreements and Non-FICC repurchase agreements of ($64.3 billion / 4.26%) and ($0.5 billion / 3.98%) for 2025 and ($62.5 billion / 5.21%) and ($0.5 billion / 4.90%) for 2024, respectively.

(8) Other Borrowings primarily includes advances from the Federal Home Loan Bank of Chicago.

(9) A reconciliation of Net Interest Income on a GAAP basis to Net Interest Income on an FTE basis is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net Interest Income, stated on an FTE basis, increased from 2024, primarily driven by higher deposits and lower funding costs, partially offset by lower yields on interest-earning assets.

Net interest margin on an FTE basis in 2025 increased from 2024, primarily driven by lower funding costs, partially offset by lower yields on interest-earning assets.

Interest-earning deposits includes Federal Reserve and Other Central Bank Deposits and Interest-Bearing Due from and Deposits with Banks. Interest-earning deposits in 2025 increased 7% from 2024, primarily driven by higher client deposits.

Average Securities in 2025 increased 8%, from 2024, reflecting higher client deposits resulting in strategic purchases of investment securities primarily in the AFS portfolio. Average taxable Securities were $45.9 billion in 2025 and $43.9 billion in 2024. Average nontaxable Securities, which represent securities that are primarily exempt from U.S. federal and state income taxes, were $8.2 billion in 2025 and $6.2 billion in 2024. For additional discussions relating to the securities portfolio, refer to the “Asset Quality” section and to Note 4, “Securities,” provided in Item 8, “Financial Statements and Supplementary Data.”

Average Loans of $41.1 billion in 2025 were relatively flat compared to average loans of $40.9 billion in 2024, primarily driven by higher private client loans, partially offset by lower commercial and institutional loans. Average balances include nonaccrual loans.

Average Other Interest-Earning Assets include certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank stock, money market investments, and Federal Reserve stock of $892.6 million, $1.2 billion, $342.7 million, $85.0 million, and $70.0 million, respectively, which are recorded in Other Assets on the consolidated balance sheets.

Average Interest-Bearing Deposits in 2025 increased 6% from 2024, primarily due to increased client activity and higher liquidity as a result of market volatility. Average Non-U.S. Offices Interest-Bearing Deposits comprised 66% and 67% of total average Interest-Bearing Deposits for the years ended December 31, 2025 and 2024, respectively.

48 2025 ANNUAL REPORT | NORTHERN TRUST CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

TABLE 22: ANALYSIS OF NET INTEREST INCOME CHANGES DUE TO VOLUME AND RATE(1)

(1) Changes not due solely to average balance changes or rate changes are allocated proportionately to average balance and rate based on their relative absolute magnitudes.

(2) Changes due to average balance and average rate include the impact of balance sheet netting as noted in Table 21: Average Consolidated Balance Sheets with Analysis of Net Interest Income. Excluding the impact of netting, the 2025 vs. 2024 change in Federal Funds Sold and Securities Purchased under Agreements to Resell attributed to the average balance and the average rate would be $111.3 million and $(622.3) million respectively. The 2024 vs. 2023 change attributed to the average balance and the average rate would be $1.8 billion and $4.1 million respectively. Excluding the impact of netting, the 2025 vs. 2024 change in Securities Sold under Agreements to Repurchase attributed to the average balance and the average rate would be $95.4 million and $(612.6) million respectively. The 2024 vs. 2023 change attributed to the average balance and the average rate would be $1.7 billion and $(3.7) million respectively.

Notes:    Net Interest Income (FTE), a non-GAAP financial measure, includes adjustments to a fully taxable equivalent basis for Loans, Securities and Other Interest-Earning Assets. The adjustments are based on a federal income tax rate of 21.0%, where the rate is adjusted for applicable state income taxes, net of related federal tax benefit. Total taxable equivalent interest adjustments amounted to $28.5 million in 2025, $31.8 million in 2024 and $57.5 million in 2023. A reconciliation of Net Interest Income and net interest margin on a GAAP basis to Net Interest Income and net interest margin on an FTE basis (each of which is a non-GAAP financial measure) is provided in “Supplemental Information—Reconciliation to Fully Taxable Equivalent” within this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section. Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets.

Interest revenue on cash collateral positions is reported above within Interest-Bearing Due from and Deposits with Banks, within Loans, and within Other Interest-Earning Assets. Interest expense on cash collateral positions is reported above within Savings, Money Market and Other and in Non-U.S. Offices Interest-Bearing Deposits. Related cash collateral received from and deposited with derivative counterparties is recorded net of the associated derivative contract in Other Assets and Other Liabilities, respectively.

Stockholders’ Equity

During the year ended December 31, 2025, the Corporation increased its quarterly common stock dividend to $0.80 per share from the previous $0.75 per share. The Corporation declared cash dividends totaling $600.5 million to common stockholders and repurchased 11,005,509 shares of common stock, including 450,486 shares withheld to satisfy tax withholding obligations related to share-based compensation, at a total cost of $1.3 billion ($115.72 average price per share). Through the common stock dividends and repurchases, the Corporation returned $1.9 billion in capital to common stockholders in 2025. During the year ended December 31, 2025, the Corporation declared cash dividends totaling $41.8 million to preferred stockholders.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

During the year ended December 31, 2024, the Corporation declared cash dividends totaling $608.4 million to common stockholders and repurchased 10,489,770 shares of common stock, including 424,806 shares withheld to satisfy tax withholding obligations related to share-based compensation, at a total cost of $937.8 million ($89.41 average price per share). Through the common stock dividends and repurchases, the Corporation returned $1.5 billion in capital to common stockholders in 2024. During the year ended December 31, 2024, the Corporation declared cash dividends totaling $41.8 million to preferred stockholders.

On July 22, 2025, the stock repurchase program was terminated and replaced with a new program, under which the Board of Directors authorized the Corporation to repurchase up to $2.5 billion of the Corporation’s common stock. Repurchases prior to July 22, 2025 were made pursuant to the stock repurchase authorization approved by the Board of Directors in October 2021. Shares are repurchased by the Corporation to, among other things, manage the Corporation’s capital levels. Repurchased shares are used for general purposes, including the issuance of shares under stock option and other equity incentive plans. The repurchase authorization approved by the Board of Directors has no expiration date, thus the Corporation retains the ability to repurchase when circumstances warrant and applicable regulations permit. Please refer to Note 13, “Stockholders’ Equity,” provided in Item 8, “Financial Statements and Supplementary Data.”

Provision for Credit Losses

There was a negative Provision for Credit Losses of $7.5 million in 2025, as compared to a negative Provision for Credit Losses of $3.0 million in 2024. The negative provision during 2025 resulted primarily from a decrease in collective reserves for the Commercial Real Estate (CRE) portfolio driven by an improved industry outlook, partially offset by an increase in specific reserves related to a small number of non-performing loans. The prior-year negative provision primarily reflected a decrease in collective reserves driven by methodology changes and improvements in the held to maturity securities portfolio quality; partially offset by an increase in the CRE portfolio, driven by deterioration in portfolio quality.

Net charge-offs in 2025 totaled $0.3 million resulting from $3.9 million of charge-offs and $3.6 million of recoveries, compared to net charge-offs of $11.3 million in 2024 resulting from $15.5 million of charge-offs and $4.2 million of recoveries. For additional discussion of the Allowance for Credit Losses, refer to the “Asset Quality” section.

Noninterest Expense

Noninterest Expense for 2025 increased from 2024, primarily reflecting higher Compensation, Employee Benefits and Equipment and Software expense, partially offset by lower Other Operating Expense.

The components of Noninterest Expense and a discussion of significant changes during 2025 are provided below.

TABLE 23: NONINTEREST EXPENSE

Compensation

Compensation expense, the largest component of Noninterest Expense, increased in 2025 from 2024, primarily driven by increased headcount and higher annual base pay adjustments. Full-time equivalent employees totaled approximately 23,800 at December 31, 2025, up 2% from approximately 23,300 at December 31, 2024.

Employee Benefits

Employee Benefits expense in 2025 increased from 2024, primarily driven by higher medical costs and higher payroll taxes.

Equipment and Software

Equipment and Software expense in 2025 increased from 2024, primarily due to higher software amortization and higher software support expense, partially offset by $16.4 million of software acceleration and disposition charges recorded in the prior year.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Other Operating Expense

Other Operating Expense in 2025 decreased from 2024 primarily due to a $70.0 million charitable contribution, a $10.6 million legal settlement, $14.7 million of additional expense related to the FDIC special assessment, all recorded in the prior year, and a $15.9 million release of the FDIC special assessment reserve recorded in the current year.

Please refer to Note 19, “Other Operating Expense” included under Item 8, “Financial Statements and Supplementary Data,” for additional details related to other operating expenses.

Provision for Income Taxes

The 2025 Provision for Income Taxes was $602.6 million, representing an effective rate of 25.8%. This compares with a Provision for Income Taxes of $628.4 million and an effective rate of 23.6% in 2024. For the year ended December 31, 2025, the increase in the effective tax rate was primarily driven by a higher net tax impact from international operations.

See Note 20, “Income Taxes,” provided in Item 8, “Financial Statements and Supplementary Data,” for more information on income taxes.

REPORTING SEGMENTS AND RELATED INFORMATION

The following information summarizes our consolidated results of operations by reporting segment for 2025 compared to 2024. For a discussion related to the consolidated results of operations by reporting segment for 2024 compared to 2023, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2024 Form 10-K, which was filed with the SEC on February 24, 2025.

Northern Trust is organized around its two client-focused reporting segments: Asset Servicing and Wealth Management. Asset management and related services are provided to Asset Servicing and Wealth Management clients primarily by the Asset Management business. The revenue and expenses of Asset Management and certain other support functions are allocated fully to Asset Servicing and Wealth Management.

Reporting segment financial information, presented on an internal management-reporting basis, is determined by accounting systems used to allocate revenue and expense to each segment, and incorporates processes for allocating assets, liabilities, equity and the applicable interest income and expense utilizing a funds transfer pricing (FTP) methodology. Under the methodology, assets and liabilities receive a funding charge or credit that considers interest rate risk, liquidity risk, and other product characteristics on an instrument level. Additionally, segment information is presented on an FTE basis as management believes an FTE presentation provides a clearer indication of net interest income. Income before Income Taxes on an FTE basis is the measure of segment profit or loss reviewed by the Chief Operating Decision Maker for purposes of assessing performance and allocating resources. The adjustment to an FTE basis has no impact on Net Income.

Equity is allocated to the reporting segments based on a variety of factors including, but not limited to, risk, regulatory considerations, and internal metrics. Allocations of equity and certain corporate expense may not be representative of levels that would be required if the segments were independent entities. The accounting policies used for management reporting are consistent with those described in Note 1, “Summary of Significant Accounting Policies,” provided in Item 8, “Financial Statements and Supplementary Data.” Transfers of income and expense items are recorded at cost; there is no consolidated profit or loss on sales or transfers between reporting segments. Northern Trust’s presentations are not necessarily consistent with similar information for other financial institutions.

Revenues, expenses and average assets are allocated to Asset Servicing and Wealth Management, with the exception of non-recurring activities such as certain corporate transactions and costs incurred associated with acquisitions, divestitures, litigation, restructuring, and tax adjustments not directly attributable to a specific reporting segment, which are reported within Other.

In addition to income and expenses associated with non-recurring activities, Other includes expenses for Asset Management, corporate and other support functions not directly incurred by, but ultimately allocated back to Asset Servicing and Wealth Management. Other also includes the FTE adjustments of $28.5 million, $31.8 million, and $57.5 million for 2025, 2024, and 2023, respectively, in order to reconcile the segment results that are reported on an internal management-reporting basis into consolidated results.

Reporting segment results are subject to reclassification when organizational changes are made. The results are also subject to refinements in revenue and expense allocation methodologies, which are typically reflected on a retrospective basis unless it is impractical to do so.

Effective January 2025, certain operations support activities were moved out of Asset Servicing and Wealth Management in connection with the formation of the Enterprise Chief Operating Office. The Enterprise Chief Operating Office provides operational support to Asset Servicing and Wealth Management. Its expenses are included within Other and are fully allocated to Asset Servicing and Wealth Management. Prior-year segment results have been recast, where practical, to reflect the organizational changes.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Effective January 2024, Northern Trust implemented certain enhancements to its FTP methodology, impacting the allocation of Net Interest Income to the Asset Servicing and Wealth Management segments. As a result, the approximate impact on the Asset Servicing and Wealth Management segments was a $132.0 million decrease and a $132.0 million increase in Net Interest Income, respectively, for the year ended December 31, 2024. Prior-year segment results have not been revised to reflect this methodology change.

The following tables reflect the earnings contribution and certain average balances of Northern Trust’s reporting segments for the years ended December 31, 2025, 2024, and 2023.

TABLE 24: RESULTS OF REPORTING SEGMENTS

(1) Financial measures stated on an FTE basis.

(2) Other Segment Items include Occupancy, Equipment & Software and Other Operating Expense.

(3) The current $58.8 million and prior-year $85.2 million severance-related charges, as well as, the prior-year $16.4 million software amortization acceleration and dispositions, and $6.5 million loss on securities repositioning related to the supplemental pension plan, are allocated to the Reporting Segments based on the nature of the item.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(1) Financial measures stated on an FTE basis. The FTE adjustment was $28.5 million, $31.8 million, and $57.5 million for 2025, 2024, and 2023, respectively, and is eliminated within “Other” in order for “Total Consolidated” to reconcile with the Consolidated Statement of Income.

(2) Other Segment Items include Occupancy, Equipment & Software and Other Operating Expense.

(3) Current year includes the $19.2 million expense related to mark-to-market activity associated with existing Visa Class B swap agreements and the $15.9 million release of a Federal Deposit Insurance Corporation (FDIC) special assessment reserve. Prior-year includes the $878.4 million net gain related to Northern Trust’s participation in a Visa Exchange Offer, a $68.1 million gain related to the sale of an equity investment, partially offset by a $189.3 million loss on available for sale debt securities sold in conjunction with a repositioning of the portfolio.

Asset Servicing

Asset Servicing is a leading global provider of asset servicing and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds, and other institutional investors around the globe. Asset servicing and related services encompass a full range of capabilities including but not limited to: custody; fund administration; investment operations outsourcing; investment management; investment risk and analytical services; employee benefit services; securities lending; foreign exchange; treasury management; brokerage services; transition management services; banking; and cash management. Client relationships are managed through the Bank and the Bank’s and the Corporation’s other subsidiaries, including support from locations in North America, Europe, the Middle East, and the Asia-Pacific region.

Asset Servicing Trust, Investment and Other Servicing Fees

For an explanation of Asset Servicing Trust, Investment, and Other Servicing Fees, please see the “Trust, Investment, and Other Servicing Fees” section within the Consolidated Results of Operations section.

Asset Servicing Foreign Exchange Trading Income

Foreign Exchange Trading Income for 2025 increased from 2024, primarily driven by higher trading volumes from growth in outsourced client activity, partially offset by an unfavorable impact from higher foreign exchange swap activity executed by our Treasury department that is allocated to Asset Servicing.

Asset Servicing Other Noninterest Income

Other Noninterest Income for 2025 increased from 2024, primarily due to Security Commissions and Trading Income due to growth in outsourced trading activity.

Asset Servicing Net Interest Income

Net Interest Income on an FTE basis for 2025 increased from 2024, primarily due to the favorable impact of higher deposits and lower funding costs. Net interest margin on an FTE basis increased to 1.37% for 2025 from 1.26% in 2024.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Asset Servicing Provision for Credit Losses

There was a negative Provision for Credit Losses of $3.2 million for 2025 compared to a negative Provision for Credit Losses of $4.6 million for 2024. The 2025 negative Provision for Credit Losses was primarily driven by refinements to factors used to estimate losses for the C&I portfolio. The negative Provision for Credit Losses during 2024 was primarily in the C&I portfolio, driven by an improvement in credit quality.

Wealth Management

Wealth Management focuses on high-net-worth individuals and families, business owners, executives, professionals, retirees, and established privately-held businesses in its target markets. In supporting these targeted segments, Wealth Management provides trust, investment management, custody, and philanthropic services; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services; and private and business banking. Wealth Management also includes Global Family Office, which provides customized services, including but not limited to: investment management; global custody; fiduciary; and private banking; family office consulting, and technology solutions, to meet the complex financial and reporting needs of family offices across the globe. Wealth Management is one of the largest providers of advisory services in the United States with AUC/A, assets under custody, and AUM of $1.3 trillion, $1.3 trillion, and $507.2 billion, respectively, at December 31, 2025. Wealth Management services are delivered by multidisciplinary teams through a network of offices in 19 U.S. states and Washington, D.C., as well as offices in London, Guernsey, Singapore and Abu Dhabi.

Wealth Management Trust, Investment and Other Servicing Fees

For an explanation of Wealth Management Trust, Investment, and Other Servicing Fees, please see the “Trust, Investment, and Other Servicing Fees” section within the Consolidated Results of Operations section.

Wealth Management Foreign Exchange Trading Income (Loss)

Foreign Exchange Trading Income for 2025 decreased from 2024, primarily driven by an unfavorable impact from higher foreign exchange swap activity executed by our Treasury department that is allocated to Wealth Management.

Wealth Management Net Interest Income

Net Interest Income on an FTE basis for 2025 increased from 2024, primarily due to lower funding costs, partially offset by a decline in loan yields. Net interest margin on an FTE basis increased to 2.71% for 2025 from 2.63% in 2024.

Wealth Management Provision for Credit Losses

There was a negative Provision for Credit Losses of $7.5 million for 2025 compared to a Provision for Credit Losses of $8.8 million in 2024. The negative Provision for Credit Losses during 2025 was primarily due to a decrease in collective reserves for the CRE portfolio driven by an improved industry outlook; partially offset by an increase in individual reserves related to a small number of non-performing loans. The Provision for Credit Losses during 2024 reflected an increase in the collective reserve, primarily in the C&I portfolio, driven by a small number of downgrades and increased duration, and the CRE portfolio, driven by higher exposure and portfolio quality.

Wealth Management Noninterest Expense

Wealth Management Noninterest Expense, which includes the direct expense of the reporting segment, indirect expense allocations for product and operating support, and indirect expense allocations for certain corporate support services, increased in 2025 from 2024. The increase primarily reflects higher indirect expense allocations for certain corporate support services and Outside Services expense due to higher third party outsourcing expense.

Other

Other includes expenses for the Enterprise Chief Operating Office, Asset Management, corporate and support functions not directly incurred by, but ultimately allocated back to, our two client-focused reporting segments. Income and expenses associated with non-recurring activities such as certain costs associated with acquisitions, divestitures, litigation, restructuring, and tax adjustments are retained within Other. Other also includes the FTE adjustments of $28.5 million, $31.8 million, and $57.5 million for 2025, 2024, and 2023, respectively, in order to reconcile the segment results that are reported on an internal management-reporting basis into consolidated results.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Other—Noninterest Income (Loss)

Noninterest Income (Loss) in 2025 primarily reflects expenses for swap agreements related to Visa Inc. Class B common shares. The prior year primarily reflected the gain related to the net impact from the Visa-related transactions and the gain related to the sale of an equity investment, partially offset by the loss on sale of available for sale debt securities arising from a repositioning of the portfolio in the first quarter of 2024.

Other—Noninterest Expense

Noninterest Expense in 2025 primarily reflects non-allocated occupancy expense due to early lease exits on vacant space partially offset by the release of a portion of the FDIC special assessment. The prior year primarily reflected a $70.0 million charitable contribution to the Northern Trust Foundation, a $14.7 million expense related to the FDIC special assessment, a $10.6 million legal settlement, and non-allocated occupancy expense primarily arising from early lease exits.

CONSOLIDATED BALANCE SHEET REVIEW

The following tables summarize selected consolidated balance sheet information.

TABLE 25: SELECT CONSOLIDATED BALANCE SHEET INFORMATION

(1)    Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheets.

(2)    Other Interest-Earning Assets includes certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank and Federal Reserve stock, and money market investments which are classified in Other Assets on the consolidated balance sheets.

(3) Other Borrowings primarily includes advances from the Federal Home Loan Bank of Chicago.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Asset Quality

Securities Portfolio

The following table presents the remaining maturity and average yield of Northern Trust's available for sale (AFS) debt securities and held to maturity (HTM) debt securities by security type as of December 31, 2025. Book value is fair value for AFS debt securities and amortized cost for HTM debt securities. Depending on market conditions, Northern Trust continuously seeks to optimize its securities portfolio, including through purchases and sales of AFS debt securities from time to time.

TABLE 26: REMAINING MATURITY AND AVERAGE YIELD OF HELD TO MATURITY AND AVAILABLE FOR SALE DEBT SECURITIES

Note: Yield is calculated on amortized cost and presented on a taxable equivalent basis giving effect to the applicable federal and state tax rates.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Northern Trust maintains a high quality debt securities portfolio. The following tables provide the book value of debt securities by credit rating using ratings from Moody’s, S&P Global or Fitch Ratings. Debt securities not explicitly rated were grouped where possible under the credit rating of the issuer of the security.

TABLE 27: BOOK VALUE OF DEBT SECURITIES BY CREDIT RATING

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS