Northern Trust : Q4 Trends Report

Financial Trends

Fourth Quarter 2020

January 21, 2021

Please direct inquiries to:

Mark Bette

Senior Vice President, Director of Investor Relations [phone] or [e-mail]

Kelly Moen Lernihan

Vice President, Investor Relations [phone] or [e-mail]

The historical financial results and trends reflected in this report are not indicative of future financial results and trends for Northern Trust Corporation. This report should be read in conjunction with the Corporation's Fourth Quarter 2020 earnings press release, 2019 Annual Report to Shareholders, and periodic reports to the Securities and Exchange Commission, all of which contain additional information about factors that could affect the Corporation's future financial results and trends. The Corporation assumes no obligation to update this report.

TABLE OF CONTENTS

1	7
Financial Summary	Balance Sheet Mix Trends
2	8
Income Statement	Interest Rate Trends
3	9
Net Income Trends	Asset Quality
4	10
Fee Detail	Trust Assets
5	11
Balance Sheet (EOP)	Reconciliation to FTE
6	12
Balance Sheet Trends	Reconciliation to FTE (Ratios)

Northern Trust Corporation

FINANCIAL SUMMARY

														($ in Millions except per share information)
																			2019										2020
	2016			2017			2018			2019			2020*			1st Qtr		2nd Qtr			3rd Qtr			4th Qtr			1st Qtr		2nd Qtr			3rd Qtr		4th Qtr*
														Profitability:
$	1,032.5	$1,199.0	$	1,556.4	$	1,492.2	$	1,209.3	Net Income	$	347.1	$	389.4	$	384.6	$	371.1	$	360.6	$	313.3	$	294.5	$	240.9
	990.4	1,130.4	1,489.9	1,428.9	1,141.0	Earnings Allocated to Common and Potential		325.5			379.7			362.7			361.0			326.2			305.1			275.0			234.7
														Common Shares
$	4.35	$	4.95	$	6.68	$	6.66	$	5.48	Basic Earnings Per Share	$	1.49	$	1.76	$	1.70	$	1.71	$	1.56	$	1.47	$	1.32	$	1.13
	4.32			4.92			6.64			6.63			5.46	Diluted Earnings Per Share		1.48			1.75			1.69			1.70			1.55			1.46			1.32			1.12
	8%			14%			35%			-%			(18%)	Diluted EPS Growth over Previous Year		(6%)			4%			7%			(5%)			5%			(17%)			(22%)			(34%)
	11.9 %			12.6 %			16.2 %			14.9 %			11.2 %	Return on Average Common Equity		14.0 %			15.9 %			14.9 %			14.8 %			13.4 %			12.2 %			10.5 %			8.8 %
	0.89 %			1.00 %			1.27 %			1.27 %			0.88 %	Return on Average Assets		1.18 %			1.34 %			1.31 %			1.25 %			1.17 %			0.91 %			0.83 %			0.67 %
	30.9 %			31.0 %			33.3 %			32.4 %			27.1 %	Profit Margin (pre-tax) (FTE**)		30.9 %			34.0 %			33.4 %			31.2 %			29.4 %			27.1 %			26.6 %			25.1 %
	20.7 %			22.1 %			25.9 %			24.4 %			19.7 %	Profit Margin (after-tax) (FTE**)		23.3 %			25.7 %			24.9 %			23.8 %			22.6 %			20.7 %			19.7 %			15.7 %
	74.7 %			72.8 %			72.3 %			72.0 %			75.9 %	Noninterest Income to Total Revenue (FTE**)		71.1 %			71.9 %			72.5 %			72.4 %			73.9 %			74.9 %			77.5 %			77.5 %
	62.3 %			63.4 %			62.5 %			63.1 %			65.1 %	Trust Fees to Total Revenue (FTE**)		62.4 %			63.1 %			63.1 %			63.7 %			62.9 %			63.5 %			67.2 %			67.0 %
	31.9 %			26.6 %			20.5 %			23.2 %			25.7 %	Effective Tax Rate (US GAAP)		23.2 %			23.2 %			24.4 %			22.1 %			21.8 %			22.3 %			24.5 %			35.5 %
	33.1 %			28.6 %			22.1 %			24.5 %			27.2 %	Effective Tax Rate (FTE**)		24.5 %			24.3 %			25.5 %			23.7 %			23.1 %			23.8 %			26.0 %			37.3 %
														Capital Ratios:
														Standardized Approach
	11.8 %			12.6 %			12.9 %			12.7 %			12.8 %	Common Equity Tier 1 Capital		13.0 %			13.2 %			12.9 %			12.7 %			11.7 %			13.4 %			13.4 %			12.8 %
	12.9 %			13.8 %			14.1 %			14.5 %			13.9 %	Tier 1 Capital		14.3 %			14.5 %			14.1 %			14.5 %			12.8 %			14.6 %			14.5 %			13.9 %
	14.5 %			15.8 %			16.1 %			16.3 %			15.6 %	Total Capital		16.3 %			16.4 %			16.0 %			16.3 %			14.5 %			16.5 %			16.5 %			15.6 %
	8.0 %			7.8 %			8.0 %			8.7 %			7.6 %	Tier 1 Leverage		8.2 %			8.6 %			8.6 %			8.7 %			8.1 %			7.6 %			7.7 %			7.6 %
														Advanced Approach
	12.4 %			13.5 %			13.7 %			13.2 %			13.4 %	Common Equity Tier 1 Capital		13.4 %			13.5 %			13.6 %			13.2 %			12.9 %			13.9 %			13.9 %			13.4 %
	13.7 %			14.8 %			15.0 %			15.0 %			14.5 %	Tier 1 Capital		14.7 %			14.8 %			14.9 %			15.0 %			14.1 %			15.2 %			15.1 %			14.5 %
	15.1 %			16.7 %			16.9 %			16.8 %			15.9 %	Total Capital		16.5 %			16.5 %			16.6 %			16.8 %			15.7 %			16.8 %			16.7 %			15.9 %
	8.0 %			7.8 %			8.0 %			8.7 %			7.6 %	Tier 1 Leverage		8.2 %			8.6 %			8.6 %			8.7 %			8.1 %			7.6 %			7.7 %			7.6 %
	6.8 %			6.8 %			7.0 %			7.6 %			8.6 %	Supplementary Leverage (a) (b)		7.2 %			7.6 %			7.6 %			7.6 %			7.2 %			9.0 %			8.8 %			8.6 %
														Per Share Information / Ratios:
$	1.48	$	1.60	$	1.94	$	2.60	$	2.80	Cash Dividends Declared Per Common Share	$	0.60	$	0.60	$	0.70	$	0.70	$	0.70	$	0.70	$	0.70	$	0.70
	34 %			33 %			29 %			39 %			51 %	Dividend Payout Ratio		41 %			34 %			41 %			41 %			45 %			48 %			53 %			63 %
$	89.05	$ 99.89	$	83.59	$	106.24	$	93.14	Market Value Per Share (End of Period)	$	90.41	$	90.00	$	93.32	$	106.24	$	75.46	$	79.34	$	77.97	$	93.14
	20.6			20.3			12.6			16.0			17.1	Stock Price Multiple of Earnings		13.8			13.6			13.9			16.0			11.3			12.4			12.9			17.1
														(based on trailing 4 quarters of diluted EPS)
$	38.88	$ 41.28	$	43.95	$	46.82	$	51.87	Book Value Per Common Share (End of Period)	$	44.72	$	46.18	$	46.86	$	46.82	$	48.04	$	50.45	$	51.38	$	51.87

* Capital ratios for the current quarter are considered preliminary until the Form 10-K is filed with the Securities and Exchange Commission.

• Fully taxable equivalent (FTE). Presentation on an FTE basis is a non-generally accepted accounting principle financial measure. Please refer to the Reconciliation to Fully Taxable Equivalent - Ratios on page 12 for further detail.

1. Effective January 1, 2018, the Corporation and Bank are subject to a minimum supplementary leverage ratio of 3 percent.
2. Total supplementary leverage exposure reflects the exclusion of cash on deposit with central banks and U.S. treasury balances as prescribed by the custodial bank rule and the temporary Supplementary Leverage Ratio ("SLR") relief rule. For further discussion of

the changes in regulation impacting the SLR, please see the Northern Trust Corporation Pillar 3 disclosures as of March 31, 2020 and June 30, 2020.	1

Northern Trust Corporation

INCOME STATEMENT

($ in Millions except per share information)

	TWELVE MONTHS			CHANGE				FOURTH QUARTER			CHANGE
	2020			2019			$			%			2020			2019			$			%
$	2,321.6	$	2,211.5	$	110.1			5 %	C&IS Trust, Investment and Other Servicing Fees	$	596.1	$	567.0	$	29.1			5 %
	1,673.4			1,640.6			32.8			2 %	WM Trust, Investment and Other Servicing Fees		430.0			425.2			4.8			1 %
	3,995.0			3,852.1			142.9			4 %	Total Fees		1,026.1			992.2			33.9			3 %
	290.4			250.9			39.5			16 %	Foreign Exchange Trading Income		68.6			64.5			4.1			6 %
	45.4			44.5			0.9			2 %	Treasury Management Fees		11.4			10.4			1.0			10 %
	133.2			103.6			29.6			29 %	Security Commissions and Trading Income		32.3			27.8			4.5			16 %
	194.0			145.5			48.5			33 %	Other Operating Income		49.6			32.5			17.1			52 %
	(0.4)			(1.4)			1.0			(70)	Investment Security Gains (Losses), net		(0.5)			(0.5)			-	19
	4,657.6			4,395.2			262.4			6 %	Total Noninterest Income		1,187.5			1,126.9			60.6			5 %
	1,677.9			2,532.7			(854.8)			(34)%	Interest Income (FTE*)		363.3			585.8			(222.5)			(38)%
	200.3			822.0			(621.7)			(76)%	Interest Expense		18.2			155.3			(137.1)			(88)%
	1,477.6			1,710.7			(233.1)			(14)%	Net Interest Income (FTE*)		345.1			430.5			(85.4)			(20)%
	6,135.2			6,105.9			29.3			- %	Total Revenue (FTE*)		1,532.6			1,557.4			(24.8)			(2)%
	125.0			(14.5)			139.5			N/M	Provision for Credit Losses		(2.5)			(1.0)			(1.5)			N/M
	1,947.1			1,859.0			88.1			5 %	Compensation		525.3			463.5			61.8			13 %
	387.7			355.2			32.5			9 %	Employee Benefits		101.9			92.6			9.3			10 %
	763.1			774.5			(11.4)			(1)%	Outside Services		208.1			205.7			2.4			1 %
	673.5			612.1			61.4			10 %	Equipment and Software		176.4			164.9			11.5			7 %
	230.1			212.9			17.2			8 %	Occupancy		67.2			57.4			9.8			17 %
	346.7			329.8			16.9			5 %	Other Operating Expense		72.1			88.2			(16.1)			(18)%
	4,348.2			4,143.5			204.7			5 %	Total Noninterest Expense		1,151.0			1,072.3			78.7			7 %
	1,662.0			1,976.9			(314.9)			(16)%	Income before Income Taxes (FTE*)		384.1			486.1			(102.0)			(21)%
	418.3			451.9			(33.6)			(7)%	Provision for Income Taxes		132.5			105.3			27.2			26 %
	34.4			32.8			1.6			5 %	Taxable Equivalent Adjustment		10.7			9.7			1.0			10 %
	452.7			484.7			(32.0)			(7)%	Total Taxes (FTE*)		143.2			115.0			28.2			25 %
$	1,209.3		$	1,492.2		$	(282.9)			(19)%	Net Income	$	240.9		$	371.1		$	(130.2)			(35)%
$	56.2	$	46.4	$	9.8			21 %	Dividends on Preferred Stock**	$	4.7	$	5.8	$	(1.1)			(20)%
	12.1			16.9			(4.8)			(29)%	Earnings Allocated to Participating Securities		1.5			4.3			(2.8)			(65)%
	1,141.0			1,428.9			(287.9)			(20)%	Earnings Allocated to Common and Potential Common Shares		234.7			361.0			(126.3)			(35)%
$	5.48	$	6.66	$	(1.18)			(18)%	Earnings Per Share - Basic	$	1.13	$	1.71	$	(0.58)			(34)%
$	5.46	$	6.63	$	(1.17)			(18)%	Earnings Per Share - Diluted	$	1.12	$	1.70	$	(0.58)			(34)%
	208,319			214,526							Average Basic Shares (000s)		208,225			210,648
	209,008			215,603							Average Diluted Shares (000s)		208,962			211,855
	208,289			209,709							End of Period Shares Outstanding (000s)		208,289			209,709

N/M - Not meaningful

* Fully taxable equivalent (FTE). Presentation on an FTE basis is a non-generally accepted accounting principle financial measure. Please refer to the Reconciliation to Fully Taxable Equivalent on page 11 for further detail.

• Dividends on Preferred Stock in the first quarter of 2020 includes $11.5 million related to the difference between the redemption amount of the Corporation's Series C Non-Cumulative Perpetual Preferred Stock, which was redeemed in the first quarter of 2020, and its carrying value.

2