10-Q – 2026-07-30 – ntrs-20260630.htm

Clearing and Settlement Organizations . The Bank is a participating member of various cash, securities and foreign exchange clearing and settlement organizations. It participates in these organizations on behalf of its clients and on its own behalf as a result of its own activities. A wide variety of cash and securities transactions are settled through these organizations, including those involving U.S. Treasuries, obligations of states and political subdivisions, asset-backed securities, commercial paper, dollar placements, and securities issued by the Government National Mortgage Association.
Certain of these industry clearing and settlement exchanges require their members to guarantee their obligations and liabilities and/or to provide liquidity support in the event other members do not honor their obligations as stipulated in each clearing organization’s membership agreement. Exposure related to these agreements varies, primarily as a result of fluctuations in the volume of transactions cleared through the organizations. As of June 30, 2026 and December 31, 2025, Northern Trust has not recorded any material liabilities under these arrangements as Northern Trust believes the likelihood that a clearing or settlement exchange (of which Northern Trust is a member) would become insolvent is remote. Controls related to these clearing transactions are closely monitored by management to protect the assets of Northern Trust and its clients.
Legal Proceedings. In the normal course of business, the Corporation and its subsidiaries are routinely defendants in or parties to pending and threatened legal actions, and are subject to regulatory examinations, information-gathering requests, investigations, and proceedings, both formal and informal. In certain legal actions, claims for substantial monetary damages are asserted. In regulatory matters, claims for disgorgement, restitution, penalties and/or other remedial actions or sanctions may be sought.
Based on current knowledge, after consultation with legal counsel and after taking into account current accruals, management does not believe that losses, fines or penalties, if any, arising from pending litigation or threatened legal actions or regulatory matters either individually or in the aggregate, after giving effect to applicable reserves and insurance coverage will have a material adverse effect on the consolidated financial position or liquidity of the Corporation, although such matters could have a material adverse effect on the Corporation’s operating results for a particular period.
Under GAAP, (i) an event is “probable” if the “future event or events are likely to occur”; (ii) an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely”; and (iii) an event is “remote” if “the chance of the future event or events occurring is slight.”
The outcome of litigation and regulatory matters is inherently difficult to predict and/or the range of loss often cannot be reasonably estimated, particularly for matters that (i) will be decided by a jury, (ii) are in early stages, (iii) involve uncertainty as to the likelihood of a class being certified or the ultimate size of the class, (iv) are subject to appeals or motions, (v) involve significant factual issues to be resolved, including with respect to the amount of damages, (vi) do not specify the amount of damages sought or (vii) seek very large damages based on novel and complex damage and liability legal theories. Accordingly, the Corporation cannot reasonably estimate the eventual outcome of these pending matters, the timing of their ultimate resolution or what the eventual loss, fines or penalties, if any, related to each pending matter will be.
In accordance with applicable accounting guidance, the Corporation records accruals for litigation and regulatory matters when those matters present loss contingencies that are both probable and reasonably estimable. When loss contingencies are not both probable and reasonably estimable, the Corporation does not record accruals.  No  material accruals have been recorded for pending litigation or threatened legal actions or regulatory matters.
For a limited number of matters for which a loss is reasonably possible in future periods, whether in excess of an accrued liability or where there is no accrued liability, the Corporation is able to estimate a range of possible loss. As of June 30, 2026, the Corporation has estimated the range of reasonably possible loss for these matters to be from  zero  to approximately $ 10 million in the aggregate. The Corporation’s estimate with respect to the aggregate range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate.
In certain other pending matters, there may be a range of reasonably possible loss (including reasonably possible loss in excess of amounts accrued) that cannot be reasonably estimated for the reasons described above. Such matters are not included in the estimated range of reasonably possible loss discussed above.
75

Notes to Consolidated Financial Statements (unaudited) (continued)

In 2015, Northern Trust Fiduciary Services (Guernsey) Limited (NTFS), an indirect subsidiary of the Corporation, was charged by a French investigating magistrate judge with complicity in estate tax fraud in connection with the administration of two trusts for which it serves as trustee. Charges also were brought against a number of other persons and entities related to this matter. NTFS provided no tax advice and was not involved in the preparation or filing of the challenged estate tax filings in this case. In 2017, a French court found no estate tax fraud had occurred and NTFS and all other persons and entities charged were acquitted. The Public Prosecutor’s Office of France appealed the court decision and in June 2018 a French appellate court issued its opinion on the matter, acquitting all persons and entities charged, including NTFS. In January 2021, the Cour de Cassation, the highest court in France, reversed the June 2018 appellate court ruling, requiring a re-trial at the appellate court level. This re-trial concluded in October 2023. On March 5, 2024 the appellate court rendered a judgment against all defendants, including NTFS. NTFS was ordered to pay a fine of € 187,500 in conjunction with the judgment. In addition, the court ordered that certain of those convicted in relation to tax fraud or aiding and abetting tax fraud, including NTFS, are jointly and severally liable for any allegedly unpaid estate taxes owing, plus penalties and interest. NTFS filed an appeal of the judgment on March 5, 2024. On February 4, 2026, the Cour de Cassation affirmed the appellate court’s judgment against all of the defendants, including NTFS. The determination of the parties’ joint and several liability for the unpaid estate taxes owing, plus penalties and interest, is dependent on a final decision in a separate proceeding still pending before the tax courts.
Visa Class B Common Shares and Makewhole Agreement. Northern Trust, as a member of Visa U.S.A. Inc. (Visa U.S.A.) and in connection with the 2007 restructuring of Visa U.S.A. and its affiliates and the 2008 initial public offering of Visa Inc. (Visa), received certain Visa Class B common shares. The Visa Class B common shares are subject to certain transfer restrictions until the final resolution of certain litigation related to interchange fees involving Visa (the covered litigation), at which time the shares are convertible into Visa Class A common shares based on a conversion rate dependent upon the ultimate cost of resolving the covered litigation. Since 2018, Visa has deposited an additional $ 6.0  billion into an escrow account previously established with respect to the covered litigation. As a result of the additional contributions to the escrow account, the rate at which Visa Class B-3 common shares will convert into Visa Class A common shares was reduced to 1.4953 as of June 30, 2026.
In September 2018, Visa reached a proposed class settlement agreement covering damage claims but not injunctive relief claims regarding the covered litigation. In December 2019, the district court granted final approval for the proposed class settlement agreement. In March 2023, the Second Circuit Court of Appeals affirmed the district court’s approval of the class settlement agreement. Certain merchants have opted out of the class settlement and are pursuing claims separately. The ultimate resolution of the covered litigation, the timing for removal of the selling restrictions on the Visa Class B common shares and the rate at which such shares will ultimately convert into Visa Class A common shares are uncertain.
In May 2024, Northern Trust participated in an offer to exchange outstanding shares of Visa’s Class B common stock for a newly issued series of Visa Class B-2 common shares and Visa Class C common shares (Exchange Offer).
In May 2026, Northern Trust participated in a second Exchange Offer and tendered all of its Visa Class B-2 common shares in exchange for 50 % in the form of a newly issued series of Visa Class B-3 common shares and 50 % in the form of Visa Class C common shares.
All outstanding Visa Class B common share series have the same transfer and convertibility restrictions as those Visa Class B common shares outstanding prior to the Exchange Offers.
Participation in the Exchange Offers required Northern Trust to enter into Makewhole Agreements whereby Northern Trust is subject to the same Visa indemnity obligations as prior to its participation in the Exchange Offers. At June 30, 2026, Northern Trust has not recorded a liability under these agreements as Northern Trust believes the likelihood that a payment under the Makewhole Agreements will have to be made is remote.
Northern Trust holds the Visa Class B-3 common shares received in the second Exchange Offer at their carryover basis of zero as of June 30, 2026. Based upon the June 30, 2026 closing price of $ 343.09 for a Visa Class A common share, the estimated value of Northern Trust’s Visa Class B-3 common shares was approximately $ 529.7  million at the current conversion rate of Visa Class B-3 to Visa Class A common shares. The estimated value does not represent fair value given the shares’ limited transferability.
Northern Trust sold 129.7  thousand Visa Class C shares in the three months ended June 30, 2026, and recorded a realized gain of $ 169.3  million on the sales through Other Operating Income. As of June 30, 2026, Northern Trust continues to hold 270.1  thousand Visa Class C common shares which are recorded at their fair value of $ 370.7  million in Other Assets on the consolidated balance sheets with changes in fair value recorded in Other Operating Income on the consolidated statement of income.
76

Notes to Consolidated Financial Statements (unaudited) (continued)

Note 21 – Derivative Financial Instruments
Northern Trust is a party to various derivative financial instruments that are used in the normal course of business to meet the needs of its clients, as part of its trading activity for its own account and as part of its risk management activities. These instruments may include foreign exchange contracts, interest rate contracts, total return swap contracts, and swaps related to the sales of certain Visa Class B common shares.
Foreign exchange contracts are agreements to exchange specific amounts of currencies at a future date, at a specified rate of exchange. Foreign exchange contracts are entered into primarily to meet the foreign exchange needs of clients. Foreign exchange contracts are also used for trading and risk management purposes. For risk management purposes, Northern Trust uses foreign exchange contracts to reduce its exposure to changes in foreign exchange rates relating to certain forecasted non-functional-currency-denominated revenue and expenditure transactions and foreign-currency-denominated assets and liabilities, including debt securities and net investments in non-U.S. affiliates.
Interest rate contracts include swap and option contracts. Interest rate swap contracts involve the exchange of fixed and floating rate interest payment obligations without the exchange of the underlying principal amounts. Northern Trust enters into interest rate swap contracts with its clients and also may utilize such contracts to reduce or eliminate the exposure to changes in the cash flows or fair value of hedged assets or liabilities due to changes in interest rates. Interest rate option contracts may include caps, floors, collars and swaptions, and provide for the transfer or reduction of interest rate risk, typically in exchange for a fee. Northern Trust enters into option contracts primarily as a seller of interest rate protection to clients. Northern Trust receives a fee at the outset of the agreement for the assumption of the risk of an unfavorable change in interest rates. This assumed interest rate risk is then mitigated by entering into an offsetting position with an outside counterparty. Northern Trust may also purchase or enter into option contracts for risk management purposes including to reduce the exposure to changes in the cash flows of hedged assets due to changes in interest rates.
77

Notes to Consolidated Financial Statements (unaudited) (continued)

The following table shows the notional and fair values of all derivative financial instruments as of June 30, 2026 and December 31, 2025.
TABLE 69: NOTIONAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS

JUNE 30, 2026 DECEMBER 31, 2025
NOTIONAL VALUE FAIR VALUE NOTIONAL VALUE FAIR VALUE
(In Millions) ASSET (1)
LIABILITY (2)
ASSET (1)
LIABILITY (2)

Derivatives Designated as Hedging under GAAP
Interest Rate Contracts
Fair Value Hedges $ 10,316.6   $ —   $ —   $ 10,897.4   $ 16.5   $ —  
Cash Flow Hedges 20,000.0   1.6   0.1   —   —   —  
Foreign Exchange Contracts
Cash Flow Hedges 399.9   16.8   —   1,312.0   29.6   —  
Net Investment Hedges 5,038.8   109.8   11.3   4,734.5   8.7   351.8  
Total Derivatives Designated as Hedging under GAAP $ 35,755.3   $ 128.2   $ 11.4   $ 16,943.9   $ 54.8   $ 351.8  
Derivatives Not Designated as Hedging under GAAP
Non-Designated Risk Management Derivatives
Foreign Exchange Contracts
$ 1.5   $ —   $ —   $ 1.6   $ —   $ —  
Other Financial Derivatives (3)
366.7   0.3   23.1   606.6   0.7   31.3  
Total Non-Designated Risk Management Derivatives $ 368.2   $ 0.3   $ 23.1   $ 608.2   $ 0.7   $ 31.3  
Client-Related and Trading Derivatives
Foreign Exchange Contracts
$ 489,167.1   $ 3,168.0   $ 3,148.1   $ 392,874.0   $ 1,950.5   $ 1,896.1  
Interest Rate Contracts
9,253.1   78.6   138.7   11,132.1   88.3   130.4  
Total Client-Related and Trading Derivatives $ 498,420.2   $ 3,246.6   $ 3,286.8   $ 404,006.1   $ 2,038.8   $ 2,026.5  
Total Derivatives Not Designated as Hedging under GAAP $ 498,788.4   $ 3,246.9   $ 3,309.9   $ 404,614.3   $ 2,039.5   $ 2,057.8  
Total Gross Derivatives $ 534,543.7   $ 3,375.1   $ 3,321.3   $ 421,558.2   $ 2,094.3   $ 2,409.6  
Less: Netting (4)
1,830.4   2,752.4   1,779.2   1,175.7  
Total Derivative Financial Instruments $ 1,544.7   $ 568.9   $ 315.1   $ 1,233.9  

(1)      Derivative assets are reported in Other Assets on the consolidated balance sheets.
(2)      Derivative liabilities are reported in Other Liabilities on the consolidated balance sheets.
(3)     Includes swaps related to sales of certain Visa Class B common shares and total return swap contracts.
(4)     See further detail in Note 23—Offsetting of Assets and Liabilities.
Notional amounts of derivative financial instruments do not represent credit risk and are not recorded in the consolidated balance sheets. They are used merely to express the volume of this activity. Northern Trust’s credit-related risk of loss is limited to the positive fair value of the derivative instrument, net of any collateral received, which is significantly less than the notional amount.
All derivative financial instruments, whether designated as hedges or not, are recorded on the consolidated balance sheets at fair value within Other Assets or Other Liabilities. Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting arrangements or similar agreements exist between Northern Trust and the counterparty.
Hedging Derivative Instruments Designated under GAAP. Northern Trust uses derivative instruments to hedge its exposure to foreign currency and interest rate risk. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP as fair value, cash flow or net investment hedges.
In order to qualify for hedge accounting, a formal assessment is performed on a calendar-quarter basis to verify that derivatives used in designated hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. If a derivative ceases to be highly effective, matures, is sold or is terminated, or if a hedged forecasted transaction is no longer probable of occurring, hedge accounting is terminated and the derivative is treated as a trading instrument.
Fair Value Hedges. Derivatives are designated as fair value hedges to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. Northern Trust may enter into interest rate swaps to hedge changes in fair value of AFS debt securities and long-term subordinated debt and senior notes. Northern Trust applied the “shortcut” method of accounting, available under GAAP, which assumes there is perfect effectiveness in a hedge, for all of its fair value hedges during the three- and six- month periods ended June 30, 2026 and 2025. Changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability attributable to the hedged risk are recognized currently in earnings within the same income statement line item.
78

Notes to Consolidated Financial Statements (unaudited) (continued)

Cash Flow Hedges. Derivatives are also d esignated as cash flow hedges in order to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. Northern Trust may enter into foreign exchange contracts to hedge changes in cash flows due to movements in foreign exchange rates of forecasted foreign-currency-denominated transactions and foreign-currency-denominated debt securities. Northern Trust may also enter into interest rate contracts to hedge changes in cash flows due to movements in interest rates of AFS debt securities or loans. The change in fair value of cash flow hedging derivative instruments are recorded in AOCI and reclassified to earnings when the hedged forecasted transaction impacts earnings within the same income statement line item. For certain cash flow hedging strategies, amounts excluded from the assessment of hedge effectiveness are recorded in AOCI and amortized to earnings over the life of the derivative.
There were no material gains or losses reclassified into earnings during the three- and six- month periods ended June 30, 2026 and 2025, as a result of the discontinuance of forecasted transactions that were no longer probable of occurring. It is estimated that net losses of $ 3.1  million will be reclassified into Net Income within the next twelve months relating to cash flow hedges. As of June 30, 2026, 7 months was the maximum length of time over which the exposure to variability in future cash flows of forecasted foreign-currency-denominated debt securities was being hedged.
The following tables provide fair value and cash flow hedge derivative gains and losses recognized in income during the three- and six- month periods ended June 30, 2026 and 2025.
TABLE 70: LOCATION AND AMOUNT OF FAIR VALUE AND CASH FLOW HEDGE DERIVATIVE GAINS AND LOSSES RECORDED IN INCOME

(In Millions) INTEREST INCOME INTEREST EXPENSE
THREE MONTHS ENDED JUNE 30, 2026 2025 2026 2025
Total amounts on the consolidated statements of income $ 2,189.3   $ 2,212.8   $ 1,513.8   $ 1,602.3  
Gains (Losses) on fair value hedges recognized on
Interest Rate Contracts
Recognized on derivatives 46.9   ( 48.0 ) ( 23.3 ) 25.5  
Recognized on hedged items ( 46.9 ) 48.0   23.3   ( 25.5 )
Amounts related to interest settlements on derivatives ( 4.4 ) 9.2   ( 11.8 ) ( 14.8 )
Total gains (losses) recognized on fair value hedges $ ( 4.4 ) $ 9.2   $ ( 11.8 ) $ ( 14.8 )
Gains (Losses) on cash flow hedges reclassified from AOCI to net income
Interest Rate Contracts (1)
( 2.0 ) —   —   —  
Foreign Exchange Contracts $ 10.5   $ 3.4   $ —   $ —  
Total gains (losses) reclassified from AOCI to net income on cash flow hedges $ 8.5   $ 3.4   $ —   $ —  

(1)     Amounts relate to the amortization of excluded components.

(In Millions) INTEREST INCOME INTEREST EXPENSE
SIX MONTHS ENDED JUNE 30, 2026 2025 2026 2025
Total amounts on the consolidated statements of income $ 4,423.4   $ 4,353.7   $ 3,093.9   $ 3,175.1  
Gains (Losses) on fair value hedges recognized on
Interest Rate Contracts
Recognized on derivatives 99.7   ( 147.6 ) ( 32.9 ) 64.7  
Recognized on hedged items ( 99.7 ) 147.6   32.9   ( 64.7 )
Amounts related to interest settlements on derivatives ( 8.1 ) 18.2   ( 23.4 ) ( 29.4 )
Total gains (losses) recognized on fair value hedges $ ( 8.1 ) $ 18.2   $ ( 23.4 ) $ ( 29.4 )
Gains (Losses) on cash flow hedges reclassified from AOCI to net income
Interest Rate Contracts (1)
( 2.4 ) —   —   —  
Foreign Exchange Contracts $ 24.3   $ 13.9   $ —   $ —  
Total gains (losses) reclassified from AOCI to net income on cash flow hedges $ 21.9   $ 13.9   $ —   $ —  

(1)     Amounts relate to the amortization of excluded components.
79

Notes to Consolidated Financial Statements (unaudited) (continued)

The following table provides the impact of fair value hedge accounting on the carrying value of the designated hedged items as of June 30, 2026 and December 31, 2025.
TABLE 71: HEDGED ITEMS IN FAIR VALUE HEDGES

JUNE 30, 2026 DECEMBER 31, 2025
(In Millions) CARRYING VALUE OF THE HEDGED ITEMS CUMULATIVE HEDGE ACCOUNTING BASIS ADJUSTMENT (1)(3)
CARRYING VALUE OF THE HEDGED ITEMS CUMULATIVE HEDGE ACCOUNTING BASIS ADJUSTMENT (2)(3)

Available for Sale Debt Securities (4)
$ 7,006.8   $ ( 6.9 ) $ 7,674.8   $ 94.1  
Senior Notes and Long-Term Subordinated Debt 3,058.9   ( 184.3 ) 3,091.1   ( 151.4 )

(1)     The cumulative hedge accounting basis adjustment includes no amounts related to discontinued hedging relationships of Available for Sale Debt Securities or Senior Notes and Long-Term Subordinated Debt as of June 30, 2026.
(2)     The cumulative hedge accounting basis adjustment includes $ 1.3 million related to discontinued hedging relationships of Available for Sale Debt Securities and no amounts related to discontinued hedging relationships in the cumulative hedge accounting basis adjustment of Senior Notes and Long-Term Subordinated Debt as of December 31, 2025.
(3) Positive (negative) amounts related to Available for Sale Debt Securities represent cumulative fair value hedge basis adjustments that will reduce (increase) net interest income in future periods. Positive (negative) amounts related to Senior Notes and Long-Term Subordinated Debt represent cumulative fair value hedge basis adjustments that will increase (reduce) net interest income in future periods.
(4)     Carrying value represents amortized cost.
Net Investment Hedges. Certain foreign exchange contracts are designated as net investment hedges to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. Net investment hedge gains of $ 30.7 million and losses of $ 278.1 million were recognized in AOCI related to foreign exchange contracts for the three months ended June 30, 2026 and 2025, respectively. Net investment hedge gains of $ 115.3 million and losses of $ 392.4 million were recognized in AOCI related to foreign exchange contracts for the six months ended June 30, 2026 and 2025, respectively.
Derivative Instruments Not Designated as Hedging under GAAP. Northern Trust’s derivative instruments that are not designated as hedging under GAAP include derivatives for purposes of client-related and trading activities, as well as other risk management purposes. These activities consist principally of providing foreign exchange services to clients in connection with Northern Trust’s global custody business. However, in the normal course of business, Northern Trust also engages in trading of currencies for its own account.
Non-designated risk management derivatives may include foreign exchange contracts entered into to manage the foreign currency risk of non-U.S.-dollar-denominated assets and liabilities, the net investment in certain non-U.S. affiliates, commercial loans and forecasted foreign-currency-denominated transactions. Swaps related to sales of certain Visa Class B common shares were entered into pursuant to which Northern Trust retains the risks associated with the ultimate conversion of the Visa Class B common shares into Visa Class A common shares. Total return swaps are entered into to manage the equity price risk associated with certain investments.
Changes in the fair value of derivative instruments not designated as hedges under GAAP are recognized currently in income. The following table provides the location and amount of gains and losses recorded in the consolidated statements of income for the six months ended June 30, 2026 and 2025, respectively, for derivative instruments not designated as hedges under GAAP.
TABLE 72: LOCATION AND AMOUNT OF GAINS AND LOSSES RECORDED IN INCOME FOR DERIVATIVES NOT DESIGNATED AS HEDGING UNDER GAAP

(In Millions) DERIVATIVE GAINS (LOSSES) LOCATION RECOGNIZED IN INCOME AMOUNT OF DERIVATIVE GAINS (LOSSES) RECOGNIZED IN INCOME
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
2026 2025 2026 2025
Non-designated risk management derivatives

Other Financial Derivatives (1)
Other Operating Income ( 7.0 ) 0.2   ( 4.2 ) ( 5.4 )
Gains (Losses) from non-designated risk management derivatives $ ( 7.0 ) $ 0.2   $ ( 4.2 ) $ ( 5.4 )
Client-related and trading derivatives
Foreign Exchange Contracts Foreign Exchange Trading Income $ 97.1   $ 50.6   $ 184.8   $ 109.3  
Interest Rate Contracts Security Commissions and Trading Income 0.7   1.2   1.0   1.7  
Gains from client-related and trading derivatives $ 97.8   $ 51.8   $ 185.8   $ 111.0  
Total gains from derivatives not designated as hedging under GAAP $ 90.8   $ 52.0   $ 181.6   $ 105.6  

(1)     Includes swaps related to the sale of certain Visa Class B common shares and total return swap contracts.
80

Notes to Consolidated Financial Statements (unaudited) (continued)

Note 22 – Securities Sold Under Agreements to Repurchase
Securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. Securities sold under agreements to repurchase are either directly held by, or pledged to the counterparty until the repurchase. Northern Trust nets securities sold under repurchase agreements against those purchased under resale agreements when there is a legally enforceable master netting arrangement and the other conditions to net are met.
The following table provides information regarding repurchase agreements that are accounted for as secured borrowings as of June 30, 2026 and December 31, 2025.
TABLE 73: REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS

REMAINING CONTRACTUAL MATURITY OF THE AGREEMENTS
JUNE 30, 2026 DECEMBER 31, 2025
(In Millions) OVERNIGHT AND CONTINUOUS
U.S. Treasury and Agency Securities $ 92,684.6   $ 90,307.8  
Total Borrowings 92,684.6   90,307.8  

Note 23 – Offsetting of Assets and Liabilities
The following table provides information regarding the offsetting of derivative assets and securities purchased under agreements to resell within the consolidated balance sheets as of June 30, 2026 and December 31, 2025.
TABLE 74: OFFSETTING OF DERIVATIVE ASSETS AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL

JUNE 30, 2026
(In Millions) GROSS RECOGNIZED ASSETS GROSS AMOUNTS OFFSET IN THE BALANCE SHEET (3)
NET AMOUNTS PRESENTED IN THE BALANCE SHEET GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET (4)
NET AMOUNT (5)

Derivative Assets (1)

Foreign Exchange Contracts Over the Counter (OTC) $ 2,402.2   $ 1,768.9   $ 633.3   $ 89.7   $ 543.6  
Interest Rate Swaps OTC 74.2   61.2   13.0   —   13.0  
Other Financial Derivatives 0.3   0.3   —   —   —  

Total Derivatives Subject to a Master Netting Arrangement 2,476.7   1,830.4   646.3   89.7   556.6  
Total Derivatives Not Subject to a Master Netting Arrangement 898.4   —   898.4   —   898.4  
Total Derivatives 3,375.1   1,830.4   1,544.7   89.7   1,455.0  
Securities Purchased under Agreements to Resell (2)
$ 92,935.5   $ 92,509.0   $ 426.5   $ 426.5   $ —  

DECEMBER 31, 2025
(In Millions) GROSS RECOGNIZED ASSETS GROSS AMOUNTS OFFSET IN THE BALANCE SHEET (3)
NET AMOUNTS PRESENTED IN THE BALANCE SHEET GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET (4)
NET AMOUNT (5)

Derivative Assets (1)

Foreign Exchange Contracts OTC $ 1,707.2   $ 1,696.1   $ 11.1   $ 2.7   $ 8.4  
Interest Rate Swaps OTC 83.4   82.4   1.0   —   1.0  

Other Financial Derivative 0.7   0.7   —   —   —  
Total Derivatives Subject to a Master Netting Arrangement 1,791.3   1,779.2   12.1   2.7   9.4  
Total Derivatives Not Subject to a Master Netting Arrangement 303.0   —  303.0   —  303.0  
Total Derivatives 2,094.3   1,779.2   315.1   2.7   312.4  
Securities Purchased under Agreements to Resell (2)
$ 92,669.7   $ 90,015.6   $ 2,654.1   $ 2,654.1   $ —  

(1) Derivative assets are reported in Other Assets on the consolidated balance sheets.
(2) Offsetting of Securities Purchased under Agreements to Resell primarily relates to our involvement in the FICC.
(3) Including cash collateral received from counterparties.
(4) Including financial assets accepted as collateral which are received from counterparties.
(5) Northern Trust did not possess any cash collateral that was not offset in the consolidated balance sheets that could have been used to offset the net amounts presented in the consolidated balance sheets as of June 30, 2026 and December 31, 2025.

81

Notes to Consolidated Financial Statements (unaudited) (continued)

The following table provides information regarding the offsetting of derivative liabilities and securities sold under agreements to repurchase within the consolidated balance sheets as of June 30, 2026 and December 31, 2025.
TABLE 75: OFFSETTING OF DERIVATIVE LIABILITIES AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

JUNE 30, 2026
(In Millions) GROSS RECOGNIZED LIABILITIES GROSS AMOUNTS OFFSET IN THE BALANCE SHEET (3)
NET AMOUNTS PRESENTED IN THE BALANCE SHEET GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET (4)
NET AMOUNT (5)

Derivative Liabilities (1)

Foreign Exchange Contracts OTC $ 2,859.2   $ 2,729.3   $ 129.9   $ —   $ 129.9  
Interest Rate Swaps OTC 2.0   —   2.0   —   2.0  

Other Financial Derivatives 23.1   23.1   —   —   —  
Total Derivatives Subject to a Master Netting Arrangement 2,884.3   2,752.4   131.9   —   131.9  
Total Derivatives Not Subject to a Master Netting Arrangement 437.0   —   437.0   —   437.0  
Total Derivatives 3,321.3   2,752.4   568.9   —   568.9  
Securities Sold under Agreements to Repurchase (2)
$ 92,684.6   $ 92,509.0   $ 175.6   $ 175.6   $ —  

DECEMBER 31, 2025
(In Millions) GROSS RECOGNIZED LIABILITIES GROSS AMOUNTS OFFSET IN THE BALANCE SHEET (3)
NET AMOUNTS PRESENTED IN THE BALANCE SHEET GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET (4)
NET AMOUNT (5)

Derivative Liabilities (1)

Foreign Exchange Contracts OTC $ 1,334.8   $ 1,139.4   $ 195.4   $ —   $ 195.4  
Interest Rate Swaps OTC 5.0   5.0   —   —   —  

Other Financial Derivatives 31.3   31.3   —   —   —  
Total Derivatives Subject to a Master Netting Arrangement 1,371.1   1,175.7   195.4   —   195.4  
Total Derivatives Not Subject to a Master Netting Arrangement 1,038.5   —  1,038.5   —  1,038.5  
Total Derivatives 2,409.6   1,175.7   1,233.9   —   1,233.9  
Securities Sold under Agreements to Repurchase (2)
$ 90,307.8   $ 90,015.6   $ 292.2   $ 292.2   $ —  

(1) Derivative liabilities are reported in Other Liabilities on the consolidated balance sheets.
(2) Offsetting of Securities Sold under Agreements to Repurchase primarily relates to our involvement in the FICC.
(3) Including cash collateral deposited with counterparties.
(4) Including financial assets accepted as collateral which are deposited with counterparties.
(5) Northern Trust did not place any cash collateral with counterparties that was not offset in the consolidated balance sheets that could have been used to offset the net amounts presented in the consolidated balance sheets as of June 30, 2026 and December 31, 2025.
All of Northern Trust’s securities sold under agreements to repurchase (repurchase agreements) and securities purchased under agreements to resell (reverse repurchase agreements) involve the transfer of financial assets in exchange for cash subject to a right and obligation to repurchase those assets for an agreed upon amount. In the event of a repurchase failure, the cash or financial assets are available for offset. Certain repurchase agreements and reverse repurchase agreements are subject to a master netting arrangement, which sets forth the rights and obligations for repurchase and offset. Under the master netting arrangement, Northern Trust is entitled to offset receivables from and collateral placed with a single counterparty against obligations owed to that counterparty. In addition, collateral held by Northern Trust can be offset against receivables from that counterparty. Northern Trust has elected to net securities sold under repurchase agreements against those purchased under resale agreements when the GAAP requirements to net are met.
Derivative asset and liability positions with a single counterparty can be offset against each other in cases where legally enforceable master netting arrangements or similar agreements exist. Derivative assets and liabilities can be further offset by cash collateral received from, and deposited with, the transacting counterparty. The basis for this view is that, upon termination of transactions subject to a master netting arrangement or similar agreement, the individual derivative receivables do not represent resources to which general creditors have rights and individual derivative payables do not represent claims that are equivalent to the claims of general creditors. Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting arrangements or similar agreements exist between Northern Trust and the counterparty.
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Notes to Consolidated Financial Statements (unaudited) (continued)

Credit risk associated with derivative instruments relates to the failure of the counterparty and the failure of Northern Trust to pay based on the contractual terms of the agreement, and is generally limited to the unrealized fair value gains and losses on these instruments, net of any collateral received or deposited. The amount of credit risk will increase or decrease during the lives of the instruments as interest rates, foreign exchange rates, or equity prices fluctuate. Northern Trust’s risk is controlled by limiting such activity to an approved list of counterparties and by subjecting such activity to the same credit and quality controls as are followed in lending and investment activities. Credit support annexes and other similar agreements are currently in place with a number of Northern Trust’s counterparties which mitigate the aforementioned credit risk associated with derivative activity conducted with those counterparties by requiring that significant net unrealized fair value gains be supported by collateral placed with Northern Trust.
Additional cash collateral received from and deposited with derivative counterparties totaling $ 73.3 million and $ 423.9 million, respectively, as of June 30, 2026, and $ 420.8 million and $ 144.1 million, respectively, as of December 31, 2025, was not offset against derivative assets and liabilities in the consolidated balance sheets as the amounts exceeded the net derivative positions with those counterparties.
Certain master netting arrangements Northern Trust enters into with derivative counterparties contain credit-risk-related contingent features in which the counterparty has the option to declare Northern Trust in default and accelerate cash settlement of net derivative liabilities with the counterparty in the event Northern Trust’s credit rating falls below specified levels. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position was $ 248.8 million and $ 306.7 million at June 30, 2026 and December 31, 2025. Cash collateral amounts deposited with derivative counterparties on those dates included $ 246.6 million and $ 299.1 million, respectively, posted against these liabilities, resulting in a net maximum amount of termination payments that could have been required at June 30, 2026 and December 31, 2025, of $ 2.2 million and $ 7.6 million, respectively. Accelerated settlement of these liabilities would not have a material effect on the consolidated financial position or liquidity of Northern Trust.

Item 4. Controls and Procedures
As of June 30, 2026, the Corporation’s management, with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Corporation’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), that are designed to ensure that information required to be disclosed by the Corporation in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Based on such evaluation, such officers have concluded that, as of June 30, 2026, the Corporation’s disclosure controls and procedures are effective.
There have been no changes in the Corporation’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act during the last fiscal quarter that have materially affected, or that are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
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PART II — OTHER INFORMATION

Item 1. Legal Proceedings
The information presented under the caption “Legal Proceedings” in Note 20—Commitments and Contingent Liabilities included under Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

Item 1A. Risk Factors
Refer to “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of risks identified as being most significant to Northern Trust.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) The following table shows certain information relating to the Corporation’s purchases of common stock for the three months ended June 30, 2026.
TABLE 76: REPURCHASES OF COMMON STOCK

(Dollars in millions except per share amounts; shares in thousands) TOTAL NUMBER OF SHARES PURCHASED AVERAGE PRICE PAID PER SHARE TOTAL NUMBER OF SHARES PURCHASED AS PART OF A PUBLICLY ANNOUNCED PLAN MAXIMUM APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PUBLICLY ANNOUNCED PLAN
PERIOD:
April 1 - 30, 2026 481  $ 158.48  481  $ 1,560 
May 1 - 31, 2026 1,036  164.37  1,036  1,389 
June 1 - 30, 2026 607  169.97  607  1,286 
Total (Second Quarter) 2,124  $ 164.64  2,124  $ 1,286 

On July 22, 2025 the Corporation’s Board of Directors approved a new common stock repurchase authorization (the “New Stock Repurchase Authorization”) authorizing, but not obligating, the repurchase of up to $2.5 billion (the “Maximum Program Amount”) of the Corporation’s outstanding shares of common stock from time to time. The New Stock Repurchase Authorization replaces the previously announced authorization approved on October 19, 2021. All funds expected in connection with repurchases after the New Stock Repurchase Authorization shall count against the Maximum Program Amount. The New Stock Repurchase Authorization has no expiration date. Thus the Corporation retains the ability to repurchase when circumstances warrant and applicable regulation permits.
The Corporation expects to acquire shares of common stock under the New Stock Repurchase Authorization through open market transactions, block trades, privately negotiated transactions, and/or pursuant to any trading plan that may be adopted by the Corporation’s management in accordance with federal securities laws from time to time, including pursuant to Rule 10b5-1 of the Exchange Act. The timing and actual number of shares of common stock repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The New Stock Repurchase Authorization does not obligate the Corporation to acquire a specific dollar amount or number of shares and may be modified, suspended or discontinued at any time. Please refer to Note 10—Stockholders’ Equity to the consolidated financial statements provided in Part I - Item 1. Consolidated Financial Statements (unaudited).

Item 3. Defaults Upon Senior Securities
None.

Item 4. Mine Safety Disclosures
Not applicable.

Item 5. Other Information
During the three months ended June 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended) adopted , terminated or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
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Item 6. Exhibits

Exhibit
Number Description

4.1 Certain instruments defining the rights of the holders of long-term debt of the Corporation and certain of its subsidiaries, none of which authorize a total amount of indebtedness in excess of 10% of the total assets of the Corporation and its subsidiaries on a consolidated basis, have not been filed as exhibits. The Corporation hereby agrees to furnish a copy of any of these agreements to the SEC upon request.

10.1
Form of June 2026 Stock Unit Award Terms and Conditions

31.1
Rule 13a-14(a)/15d-14(a) Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2
Rule 13a-14(a)/15d-14(a) Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32
Certifications of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101 Includes the following financial and related information from Northern Trust’s Quarterly Report on Form 10-Q as of and for the quarter ended June 30, 2026, formatted in Inline Extensible Business Reporting Language (iXBRL): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Income, (3) the Consolidated Statements of Comprehensive Income, (4) the Consolidated Statements of Changes in Stockholders’ Equity, (5) the Consolidated Statements of Cash Flows, and (6) Notes to Consolidated Financial Statements.

104 The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NORTHERN TRUST CORPORATION
(Registrant)

Date:  July 30, 2026 By: /s/ David W. Fox, Jr.
David W. Fox, Jr.
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)

Date: July 30, 2026 By: /s/ John P. Landers
John P. Landers
Executive Vice President and Controller
(Principal Accounting Officer)

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