--- ticker: NTRS company: NTRS filing_type: 10-K year_current: 2025 year_prior: 2024 risks_added: 0 risks_removed: 1 risks_modified: 14 risks_unchanged: 37 source: SEC EDGAR url: https://riskdiff.com/ntrs/2025-vs-2024/ markdown_url: https://riskdiff.com/ntrs/2025-vs-2024/index.md generated: 2026-06-01 --- # NTRS: 10-K Risk Factor Changes 2025 vs 2024 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 0 | | Risks removed | 1 | | Risks modified | 14 | | Unchanged | 37 | --- ## No Match in Current: Changes in a number of particular market conditions can affect our earnings negatively. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* In past periods, reductions in the volatility of currency-trading markets, the level of cross-border investing activity, and the demand for borrowing securities or willingness to lend such securities have affected our earnings from activities such as foreign exchange trading and securities lending negatively. If these conditions occur in the future, our earnings from these activities may be affected negatively. In certain of our businesses, such as securities lending, our fee is calculated as a percentage of our clients' earnings, such that market and other factors that reduce our clients' earnings from investments or trading activities also reduce our revenues. 18 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 18 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 18 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 18 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION --- ## Modified: Changes in the monetary, trade and other policies of various regulatory authorities, central banks, governments and international agencies may reduce our earnings and affect our growth prospects negatively. **Key changes:** - Reworded sentence: "Further, the Federal Reserve Board's policies can affect our borrowers by increasing interest rates or making sources of funding less available, which may increase the risk that borrowers fail to repay their loans from us." **Prior (2024):** The monetary, trade and other policies of U.S. and international governments, agencies and regulatory bodies have a significant impact on economic conditions and overall financial market performance. For example, the Federal Reserve Board regulates the supply of money and credit in the U.S. through quantitative tightening and/or easing, and its policies determine in large part the level of interest rates and our cost of funds for lending and investing, and play a role in contributing to or moderating levels of inflation, all of which meaningfully impact our earnings. Further, their policies can affect our borrowers by increasing interest rates or making sources of funding less available, which may increase the risk that borrowers fail to repay their loans from us. Changes in monetary, trade and other governmental policies are beyond our 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 17 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 17 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 17 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 17 control and can be difficult to predict, and we cannot determine the ultimate effect that any such changes would have upon our business, financial condition or results of operations. **Current (2025):** The monetary, trade and other policies of U.S. and international governments, agencies and regulatory bodies have a significant impact on economic conditions and overall financial market performance. For example, the Federal Reserve Board regulates the supply of money and credit in the U.S. through quantitative tightening and/or easing, and its policies determine in large part the level of interest rates and our cost of funds for lending and investing, and play a role in contributing to or moderating levels of inflation, all of which meaningfully impact our earnings. Further, the Federal Reserve Board's policies can affect our borrowers by increasing interest rates or making sources of funding less available, which may increase the risk that borrowers fail to repay their loans from us. Changes in monetary, trade and other governmental policies are beyond our control and can be difficult to predict, and we cannot determine the ultimate effect that any such changes would have upon our business, financial condition or results of operations. --- ## Modified: Macroeconomic conditions and uncertainty in the global economy, including the financial stability of various regions or countries across the globe, including the risk of defaults on sovereign debt and related stresses on financial markets, could have a significant adverse effect on our earnings. **Key changes:** - Reworded sentence: "Foreign market volatility and economic disruptions have affected, and may in the future affect, consumer confidence levels and spending, international trade policy, personal bankruptcy rates, levels of incurrence of and default on consumer debt, and home prices." **Prior (2024):** Risks and concerns about the financial stability of various regions or countries across the globe could have a detrimental impact on economic and market conditions in these or other markets across the world. Foreign market and economic disruptions have affected, and may in the future affect, consumer confidence levels and spending, international trade policy, personal bankruptcy rates, levels of incurrence of and default on consumer debt, and home prices. Additionally, financial markets may be adversely affected by the liquidity or capital deficiencies (actual or perceived) of financial institutions and related industry and government actions, current or anticipated impact of military conflict (including the continuing military conflicts involving Ukraine and the Russian Federation and Israel and Hamas and other evolving events in the Middle East), terrorism, political or civil unrest, public health epidemics or pandemics, the exit or potential exit of one or more countries from the EU, sovereign debt downgrades or debt crises, or other geopolitical events. For example, developments related to the U.S. federal debt ceiling, including the possibility of a government shutdown, default by the U.S. government on its debt obligations, or related credit-rating downgrades, could have adverse effects on the broader economy, disrupt access to capital markets, and contribute to, or worsen, an economic recession. The cumulative effect of uncertain business conditions or economic challenges faced in various foreign markets, including fiscal or monetary concerns, economic downturns and the possibility of a recession in some jurisdictions, other economic factors (including changes in foreign currency exchange rates, interest rates and changes to tax laws or the application or enforcement practices of such laws), or volatility or lack of confidence in the financial markets may adversely affect certain portions of our business, financial condition, and results of operations. **Current (2025):** Risks and concerns about the financial stability of various regions or countries across the globe could have a detrimental impact on economic and market conditions in these or other markets across the world. Foreign market volatility and economic disruptions have affected, and may in the future affect, consumer confidence levels and spending, international trade policy, personal bankruptcy rates, levels of incurrence of and default on consumer debt, and home prices. Additionally, financial markets may be adversely affected by the liquidity or capital deficiencies (actual or perceived) of financial institutions and related industry and government actions, the outbreak of hostilities or political and governmental instability (including the expansion or escalation of military conflict between Ukraine and the Russian Federation or the conflict in the Middle East, and tensions between the U.S. and China), terrorism, political or civil unrest, public health epidemics or pandemics, sovereign debt downgrades or debt crises, or other geopolitical events. For example, 16 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION developments related to the U.S. federal debt ceiling, including the possibility of a government shutdown, default by the U.S. government on its debt obligations, or related credit-rating downgrades, could have adverse effects on the broader economy, disrupt access to capital markets, and contribute to, or worsen, an economic recession. The cumulative effect of uncertain business conditions or economic challenges faced in various foreign markets, including fiscal or monetary concerns, economic downturns and the possibility of a recession in some jurisdictions, other economic factors (including changes in foreign currency exchange rates, interest rates and changes to tax laws or the application or enforcement practices of such laws), or volatility or lack of confidence in the financial markets may adversely affect certain portions of our business, financial condition, and results of operations. --- ## Modified: Our operations, businesses and clients could be materially adversely affected by the effects of climate change or concerns related thereto. **Key changes:** - Reworded sentence: "Risks related to climate change could impact our business, financial condition, and results of operations adversely." - Reworded sentence: "Climate change could also result in transition risk arising from changes in policy, regulations, technology, business practices or market preferences toward a lower-carbon economy." - Reworded sentence: "Our reputation and business prospects may also be damaged if we do not, or are perceived not to, effectively prepare for the potential business and operational opportunities and risks associated with climate change." **Prior (2024):** Risks related to climate change may impact our business, financial condition, and results of operations adversely. The physical risks of climate change include rising average global temperatures, rising sea levels, and an increase in the frequency and severity of extreme weather events and natural disasters. Such developments could disrupt our operations and resilience capabilities, those of our clients, or third parties on which we rely. Further, the consequences of climate change could negatively impact our clients' ability to pay outstanding loans, reduce the value of collateral, or result in insurance shortfalls. Climate change could also result in transition risk arising from changes in policy, regulations, technology, business practices or market preferences toward a lower-carbon economy which could adversely impact us or our clients. These impacts could result in increased operational or compliance costs, higher energy expenses, additional taxes, and the devaluation of assets. Our reputation and business prospects may also be damaged if we do not, or are perceived not to, effectively prepare for the potential business and operational opportunities and risks associated with climate change, including through the development and marketing of effective and competitive new products and services designed to address our clients' climate risk-related needs. We also face regulatory and liability risk associated with greenwashing claims, a failure to execute on our public climate-related commitments, or by association with individuals, entities, industries or products that may be inconsistent with our stated positions on climate change issues. At the same time, certain financial institutions have also been subject to significant scrutiny by regulatory agencies and government officials and other criticism and negative publicity as a result of their decisions to reduce their involvement in certain industries or projects perceived to be associated with climate change. If we do not identify, quantify, and mitigate such risks successfully, we may experience financial losses, litigation, reputational harm, and losses of investor and stakeholder confidence. Even as regulators begin to mandate additional disclosure of climate-related information by companies across sectors, methodologies and data used to conduct more robust climate-related risk analyses are still in development. Third‑party exposures, emissions, climate-related risks, and other data are limited in availability and variable in quality. Modeling capabilities across the industry to analyze climate-related risks and interconnections are improving but remain imperfect. These legislative and regulatory uncertainties along with inconsistencies and conflicts of policy across jurisdictions, and changes regarding climate-related risk management and disclosures are likely to result in higher regulatory, compliance, credit, reputational and other risks and costs. **Current (2025):** Risks related to climate change could impact our business, financial condition, and results of operations adversely. The physical risks of climate change include harm to people and property arising from acute climate-related events, such as floods, hurricanes, heatwaves, droughts and wildfires, and chronic, longer-term shifts in climate patterns, such as rising average global temperatures, rising sea levels, and an increase in the frequency and severity of extreme weather events and natural disasters. Such developments could disrupt our operations and resilience capabilities, those of our clients, or third parties on which we rely. Further, the consequences of climate change could negatively impact our clients' ability to pay outstanding loans, reduce the value of collateral, or result in insurance shortfalls. Climate change could also result in transition risk arising from changes in policy, regulations, technology, business practices or market preferences toward a lower-carbon economy. While these changes could create opportunities, they could also adversely impact us or our clients. These impacts could result in increased operational or compliance costs, higher energy expenses, additional taxes, and the devaluation of assets. Our reputation and business prospects may also be damaged if we do not, or are perceived not to, effectively prepare for the potential business and operational opportunities and risks associated with climate change. This includes the development and marketing of effective and competitive new products, objectively understanding how climate changes might impact the financial performance of direct and indirect client investments, and other services designed to address our clients' climate related needs. We also face regulatory and liability risk associated with not meeting regulatory expectations on climate risks, greenwashing claims, a failure to execute on our public climate-related commitments, or by association with individuals, entities, industries or products that may be inconsistent with our stated positions on climate change issues. At the same time, certain financial institutions have also been subject to external scrutiny from regulatory agencies, government officials, and others. This can be in relation to a number of climate change areas and can lead to negative publicity and reputational damage. For example, questions on how the impacts of climate change are being reflected in business and investment decisions and the decision to reduce involvement in certain industries or projects associated with climate change. Due to the divergent views of stakeholders, we are at increased risk that any action, or lack thereof, by us concerning our response to climate change will be perceived negatively by some stakeholders, which could adversely impact our reputation and business. If we do not identify, quantify, and mitigate such risks successfully, we may experience financial losses, litigation, reputational harm, and losses of investor and stakeholder confidence. Even as regulators begin to mandate additional disclosure of climate-related information by companies across sectors, methodologies and data used to conduct more robust climate-related risk analyses are still in development. Third‑party exposures, emissions, climate-related risks, and other data are limited in availability and variable in quality. Modeling capabilities across the industry to analyze climate-related risks and interconnections are improving but remain imperfect. These legislative and regulatory uncertainties along with inconsistencies and conflicts of policy across jurisdictions, and changes regarding climate-related risk management and disclosures are likely to result in higher regulatory, compliance, credit, reputational and other risks and costs. --- ## Modified: Failure of any of our third-party vendors (or their vendors) to perform can result in losses. **Key changes:** - Added sentence: "20 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 20 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 20 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 20 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION" **Prior (2024):** Third-party vendors provide key components of our business operations such as data processing, recording and monitoring transactions, online banking interfaces and services, and network access. Our use of third-party vendors exposes us to the risk that such vendors (or their vendors) may not comply with their servicing and other contractual obligations, including with respect to indemnification and information security, and to the risk that we may not satisfy applicable regulatory responsibilities regarding the management and oversight of third parties and outsourcing providers. While we have established risk management processes and continuity plans, any disruptions in service from a key vendor for any reason or poor performance of services have in the past and could in the future have a negative effect on our ability to deliver products and services to our clients and conduct our business. Replacing these third-party vendors or performing the tasks they perform for ourselves has in the past and could in the future create significant delay and expense. **Current (2025):** Third-party vendors provide key components of our business operations such as data processing, recording and monitoring transactions, online banking interfaces and services, and network access. Our use of third-party vendors exposes us to the risk that such vendors (or their vendors) may not comply with their servicing and other contractual obligations, including with respect to indemnification and information security, and to the risk that we may not satisfy applicable regulatory responsibilities regarding the management and oversight of third parties and outsourcing providers. While we have established risk management processes and continuity plans, any disruptions in service from a key vendor for any reason or poor performance of services have in the past and could in the future have a negative effect on our ability to deliver products and services to our clients and conduct our business. Replacing these third-party vendors or performing the tasks they perform for ourselves has in the past and could in the future create significant delay and expense. 20 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 20 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 20 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 20 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION --- ## Modified: Market Risks **Key changes:** - Reworded sentence: "•Changes in a number of particular market conditions, including in foreign currency rates, cross-border investing activity and the demand for borrowing or lending securities, could affect our earnings negatively." **Prior (2024):** •We are dependent on fee-based business for a majority of our revenues, which may be affected adversely by market volatility, a downturn in economic conditions, underperformance and/or negative trends in investment preferences. •Changes in interest rates can affect our earnings negatively. •Changes in the monetary, trade and other policies of various regulatory authorities, central banks, governments and international agencies may reduce our earnings and affect our growth prospects negatively. •Macroeconomic conditions and uncertainty in the global economy, including the financial stability of various regions or countries across the globe, including the risk of defaults on sovereign debt and related stresses on financial markets, could have a significant adverse effect on our earnings. •Declines in the value of securities held in our investment portfolio can affect us negatively. •Volatility levels and fluctuations in foreign currency exchange rates may affect our earnings. •Changes in a number of particular market conditions can affect our earnings negatively. **Current (2025):** •We are dependent on fee-based business for a majority of our revenues, which may be affected adversely by market volatility, a downturn in economic conditions, underperformance and/or negative trends in investment preferences. •Changes in interest rates can affect our earnings negatively. •Changes in the monetary, trade and other policies of various regulatory authorities, central banks, governments and international agencies may reduce our earnings and affect our growth prospects negatively. •Macroeconomic conditions and uncertainty in the global economy, including the financial stability of various regions or countries across the globe, including the risk of defaults on sovereign debt and related stresses on financial markets, could have a significant adverse effect on our earnings. •Declines in the value of securities held in our investment portfolio can affect us negatively. •Changes in a number of particular market conditions, including in foreign currency rates, cross-border investing activity and the demand for borrowing or lending securities, could affect our earnings negatively. --- ## Modified: We are subject to extensive and evolving government regulation and supervision that impacts our operations. Changes by the U.S. and other governments to laws, regulations and policies applicable to the financial services industry could heighten the challenges we face and make regulatory compliance more difficult and costly. **Key changes:** - Reworded sentence: "We operate in a highly regulated environment, and are subject to a comprehensive statutory and regulatory regime affecting all aspects of our business and operations, including oversight by governmental agencies both inside and outside the United States." - Reworded sentence: "These initiatives have increased compliance costs and regulatory risks and may lead to financial and reputational damage in the event of a compliance violation, even if the failure to comply was inadvertent or reflected a difference in interpretation." - Reworded sentence: "In addition, changes to statutes, regulations or regulatory and supervisory policies or their interpretation or implementation and the continued heightening of regulatory and supervisory requirements could affect us in substantial and unpredictable ways." - Reworded sentence: "For example, given the current rapid pace of change, we are unable to predict what, if any, changes to the laws and regulations applicable to the financial services industry may be enacted by the new U.S." - Reworded sentence: "For more information concerning our legal and regulatory obligations with respect to Basel III and long-term debt requirements, see "Supervision and Regulation" in Item 1, "Business." In addition, regulatory responses in connection with severe market downturns or unforeseen stress events could alter or disrupt our planned future strategies and actions." **Prior (2024):** We operate in a highly regulated environment, and are subject to a comprehensive statutory and regulatory regime affecting all aspects of our business and operations, including oversight by governmental agencies both inside and outside the U.S. Various regulatory bodies have demonstrated heightened scrutiny of financial institutions through many regulatory initiatives. These initiatives have increased compliance costs and regulatory risks and may lead to financial and reputational damage in the event of a compliance violation, even if the failure to comply was inadvertent or reflects a difference in interpretation. We have programs in place, including policies, training and various forms of monitoring, designed to ensure compliance with legislative and regulatory requirements. We cannot provide assurance that these programs and policies are or will be adequate to identify and manage internal and external compliance risks. For example, our business may be adversely impacted by actual or alleged misconduct by an employee or other negative outcomes caused by human error. Changes to statutes, regulations or regulatory and supervisory policies or their interpretation or implementation and the continued heightening of regulatory and supervisory requirements could affect us in substantial and unpredictable ways. 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 25 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 25 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 25 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 25 Additionally, governments and regulators may take actions that increase intervention in the normal operation of our businesses and the businesses of our competitors in the financial services industry, and these likely would involve additional legislative and regulatory requirements imposed on banks and other financial services companies. Any such actions could increase compliance costs and regulatory risks, lead to financial and reputational damage in the event of a violation, affect our ability to compete successfully, and also may impact the nature and level of competition in the industry in unpredictable ways. The full scope and impact of possible legislative or regulatory changes and the extent of regulatory activity is uncertain and difficult to predict. For example, we are unable to predict what, if any, changes to financial services laws and regulations applicable to the financial services industry may be enacted by the U.S. Congress and what the impact of any such changes will be upon our business, financial condition, and results of operations. The evolving regulatory and supervisory environment and uncertainty about the timing and scope of future laws, regulations and policies may contribute to decisions we may make to suspend, reduce or withdraw from existing businesses, activities or initiatives, which may result in potential lost revenue or significant restructuring or related costs or exposures. We also face the risk of becoming subject to new or more stringent requirements in connection with the introduction of new regulations or modification of existing regulations, which could require us to hold more capital or liquidity or have other adverse effects on our businesses or profitability. For example, proposed changes to applicable capital and liquidity requirements, such as the Basel III Endgame Proposal and the long-term debt proposal, could result in increased expenses or cost of funding, which could negatively affect our financial results or our ability to pay dividends and engage in share repurchases. For more information concerning our legal and regulatory obligations with respect to Basel III and long-term debt requirements, see "Supervision and Regulation" in Item 1, "Business." In addition, regulatory responses in connection with severe market downturns or unforeseen stress events may alter or disrupt our planned future strategies and actions. Adverse developments affecting the overall strength and soundness of other financial institutions, the financial services industry as a whole and the general economic climate and the U.S. Treasury market could have a negative impact on perceptions about the strength and soundness of our business even if we are not subject to the same adverse developments. For example, during 2023, the FDIC took control and was appointed receiver of Silicon Valley Bank, Signature Bank, and First Republic Bank. The failure of other banks and financial institutions and the measures taken by governments and regulators in response to these events could adversely impact our business, financial condition and results of operations. **Current (2025):** We operate in a highly regulated environment, and are subject to a comprehensive statutory and regulatory regime affecting all aspects of our business and operations, including oversight by governmental agencies both inside and outside the United States. Various regulatory bodies have demonstrated heightened scrutiny of financial institutions through many regulatory initiatives. These initiatives have increased compliance costs and regulatory risks and may lead to financial and reputational damage in the event of a compliance violation, even if the failure to comply was inadvertent or reflected a difference in interpretation. Although we have programs in place, including policies, training and various forms of monitoring, designed to ensure compliance with legislative and regulatory requirements, we cannot provide assurance that these programs and policies are or will be adequate to identify and manage internal and external compliance risks. For example, our business may be adversely impacted by actual or alleged misconduct by an employee or other negative outcomes caused by human error. In addition, changes to statutes, regulations or regulatory and supervisory policies or their interpretation or implementation and the continued heightening of regulatory and supervisory requirements could affect us in substantial and unpredictable ways. For example, governments and regulators could take actions that increase intervention in the normal operation of our businesses and the businesses of our competitors in the financial services industry, and these likely would involve additional legislative and regulatory requirements imposed on banks and other financial services companies. Any such actions could increase compliance costs and regulatory risks, lead to financial and reputational damage in the event of a violation, affect our ability to compete successfully or limit how we conduct our business, and also could impact the nature and level of competition in the industry in unpredictable ways. The full scope and impact of possible legislative or regulatory changes and the extent of regulatory activity is uncertain and difficult to predict. For example, given the current rapid pace of change, we are unable to predict what, if any, changes to the laws and regulations applicable to the financial services industry may be enacted by the new U.S. Congress in conjunction with the new U.S. presidential administration under unified party control, and what the impact of any such changes will be upon our business, financial condition, and results of operations. We expect the current U.S. presidential administration will seek to implement a regulatory reform agenda that is significantly different than that of the prior administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies. Moreover, the turnover of the U.S. presidential administration is expected to result in certain changes in the leadership and senior staffs of the federal banking agencies which are likely to impact the rulemaking, supervision, examination and enforcement priorities and policies of such agencies, the potential impacts of which, if any, we cannot predict at this time. 24 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 24 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 24 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 24 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION Further, the regulatory framework for AI and similar technologies, and automated decision making, is changing rapidly. It is possible that new laws and regulations will be adopted in the U.S. and in non-U.S. jurisdictions, or that existing laws and regulations may be interpreted, in ways that would affect the operation of our products and services and the way in which we use AI and similar technologies. For more information on regulations regarding AI, see "Supervision and Regulation" in Item 1, "Business." The evolving regulatory and supervisory environment and uncertainty about the timing and scope of future laws, regulations and policies may contribute to decisions we may make to suspend, reduce or withdraw from existing businesses, activities or initiatives, which may result in potential lost revenue or significant restructuring or related costs or exposures. We also face the risk of becoming subject to new or more stringent requirements in connection with the introduction of new regulations or modification of existing regulations, which could require us to hold more capital or liquidity or have other adverse effects on our businesses or profitability. For example, proposed changes to applicable capital and liquidity requirements, such as the Basel III Endgame Proposal and the long-term debt proposal, could result in increased expenses or cost of funding, which could negatively affect our financial results or our ability to pay dividends and engage in share repurchases. For more information concerning our legal and regulatory obligations with respect to Basel III and long-term debt requirements, see "Supervision and Regulation" in Item 1, "Business." In addition, regulatory responses in connection with severe market downturns or unforeseen stress events could alter or disrupt our planned future strategies and actions. Adverse developments affecting the overall strength and soundness of other financial institutions, the financial services industry as a whole and the general economic climate and the U.S. Treasury market could have a negative impact on perceptions about the strength and soundness of our business even if we are not subject to the same adverse developments. For example, during 2023, the FDIC took control and was appointed receiver of Silicon Valley Bank, Signature Bank, and First Republic Bank. The failure of other banks and financial institutions and the measures taken by governments and regulators in response to these events could adversely impact our business, financial condition and results of operations. --- ## Modified: We may be impacted adversely by supervisory and/or regulatory enforcement matters. **Key changes:** - Reworded sentence: "The Corporation and other financial institutions have become subject to increased scrutiny, more intense supervision and regulation, and a higher risk of enforcement action, which we expect to continue." **Prior (2024):** In the ordinary course of our business, we are subject to various governmental enforcement inquiries, supervisory examinations, investigations and subpoenas. These may be directed generally to participants in the businesses in which we are involved or may be directed specifically at us. In conjunction with both supervisory and enforcement matters, we may face limits on our ability to conduct or expand our business, be required to implement corrective actions that increase the costs of conducting business, or become subject to civil or criminal penalties or other remedial sanctions, any of which could result in reputational damage or otherwise have an adverse impact on us. The complexity of the federal and state regulatory, supervisory and enforcement regimes in the U.S., coupled with the global scope of our operations and the increased aggressiveness of the tax and regulatory environment worldwide, also means that a single event may give risk to a large number of overlapping investigations and regulatory proceedings, either by multiple agencies in the U.S. or by multiple regulators and other governmental entities or tax authorities in different jurisdictions. Responding to inquiries, investigations, and proceedings, regardless of the outcome of the matter, is time consuming and expensive and can divert the attention of our senior management from our business. The outcome of such proceedings may be difficult to predict or estimate until late in the proceedings, which may last a number of years. The number of regulatory and governmental investigations and proceedings, as well as the amount of penalties and fines sought, has remained elevated for many firms in the financial services industry. The Corporation and other financial 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 27 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 27 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 27 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 27 institutions have become subject to increased scrutiny, more intense supervision and regulation, and a higher risk of enforcement action, which we expect to continue. Any such heightened enforcement activity or new regulations could have a material adverse effect on our business, financial condition and results of operations. **Current (2025):** In the ordinary course of our business, we are subject to various governmental enforcement inquiries, supervisory examinations, investigations and subpoenas. These may be directed generally to participants in the businesses in which we are involved or may be directed specifically at us. In conjunction with both supervisory and enforcement matters, we may face limits on our ability to conduct or expand our business, be required to implement corrective actions that increase the costs of conducting business, or become subject to civil or criminal penalties or other remedial sanctions, any of which could result in reputational damage or otherwise have an adverse impact on us. The complexity of the federal and state regulatory, supervisory and enforcement regimes in the U.S., coupled with the global scope of our operations and the increased aggressiveness of the tax and regulatory environment worldwide, also means that a single event may give risk to a large number of overlapping investigations and regulatory proceedings, either by multiple agencies in the U.S. or by multiple regulators and other governmental entities or tax authorities in different jurisdictions. Responding to inquiries, investigations, and proceedings, regardless of the outcome of the matter, is time consuming and expensive and can divert the attention of our senior management from our business. The outcome of such proceedings may be difficult to predict or estimate until late in the proceedings, which may last a number of years. The number of regulatory and governmental investigations and proceedings, as well as the amount of penalties and fines sought, has remained elevated for many firms in the financial services industry. The Corporation and other financial institutions have become subject to increased scrutiny, more intense supervision and regulation, and a higher risk of enforcement action, which we expect to continue. For example, the failures in 2023 of Silicon Valley Bank, Signature Bank, and First Republic Bank and the regulatory investigations into these failures resulted in increased regulatory scrutiny 26 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 26 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 26 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 26 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION and heightened supervisory expectations of these banks, which could require us to expend significant time and effort to implement enhanced compliance procedures or to incur other expenses. Any such heightened enforcement activity or new regulations could have a material adverse effect on our business, financial condition and results of operations. --- ## Modified: Market volatility and/or weak economic conditions can result in losses or the need for additional provisions for credit losses, both of which reduce our earnings. **Key changes:** - Removed sentence: "2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 23 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 23 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 23 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 23" **Prior (2024):** Credit risk levels and our earnings can be affected by market volatility and/or weakness in the economy in general and in the particular locales in which we extend credit, a deterioration in credit quality, or a reduced demand for credit. Adverse changes in the financial performance or condition of our borrowers resulting from market volatility, elevated interest rates, and/or weakened economic conditions could impact the borrowers' abilities to repay outstanding loans, which could in turn impact our financial condition and results of operations negatively. 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 23 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 23 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 23 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 23 **Current (2025):** Credit risk levels and our earnings can be affected by market volatility and/or weakness in the economy in general and in the particular locales in which we extend credit, a deterioration in credit quality, or a reduced demand for credit. Adverse changes in the financial performance or condition of our borrowers resulting from market volatility, elevated interest rates, and/or weakened economic conditions could impact the borrowers' abilities to repay outstanding loans, which could in turn impact our financial condition and results of operations negatively. --- ## Modified: Regulatory and Legal Risks **Key changes:** - Reworded sentence: "14 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 14 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 14 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 14 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION •We may be impacted adversely by claims or litigation, including claims or litigation relating to our fiduciary responsibilities." **Prior (2024):** •Failure to comply with regulations and/or supervisory expectations can result in penalties and regulatory constraints that restrict our ability to grow or even conduct our business, or that reduce earnings. •We are subject to extensive and evolving government regulation and supervision that impacts our operations. Changes by the U.S. and other governments to laws, regulations and policies applicable to the financial services industry may heighten the challenges we face and make regulatory compliance more difficult and costly. •We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding data privacy and security, which could increase the cost of doing business, compliance risks and potential liability. •We may be impacted adversely by claims or litigation, including claims or litigation relating to our fiduciary responsibilities. •We may be impacted adversely by supervisory and/or regulatory enforcement matters. •We may fail to set aside adequate reserves for, or otherwise underestimate our liability relating to, pending and threatened claims, with a negative effect on our earnings. •The ultimate impact on us of regulatory divergence between the United Kingdom and the European Union remains uncertain. •If we fail to comply with legal standards, we could incur liability to our clients or lose clients, which could affect our earnings negatively. **Current (2025):** •Failure to comply with regulations and/or supervisory expectations can result in penalties and regulatory constraints that restrict our ability to grow or even conduct our business, or that reduce earnings. •We are subject to extensive and evolving government regulation and supervision that impacts our operations. Changes by the U.S. and other governments to laws, regulations and policies applicable to the financial services industry may heighten the challenges we face and make regulatory compliance more difficult and costly. •We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding data privacy and security, which could increase the cost of doing business, compliance risks and potential liability. 14 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 14 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 14 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 14 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION •We may be impacted adversely by claims or litigation, including claims or litigation relating to our fiduciary responsibilities. •We may be impacted adversely by supervisory and/or regulatory enforcement matters. •We may fail to set aside adequate reserves for, or otherwise underestimate our liability relating to, pending and threatened claims, with a negative effect on our earnings. •The ultimate impact on us of regulatory divergence between the United Kingdom and the European Union remains uncertain. •If we fail to comply with legal standards, we could incur liability to our clients or lose clients, which could affect our earnings negatively. --- ## Modified: We may take actions to maintain client satisfaction that could result in losses or reduced earnings. **Key changes:** - Reworded sentence: "2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 29 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 29 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 29 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 29" **Prior (2024):** We may take action or incur expenses in order to maintain client satisfaction or preserve the usefulness of investments or investment vehicles we manage in light of changes in security ratings, liquidity or valuation issues or other developments, even though we are not required to do so by law or the terms of governing instruments. The risk that we will decide to take actions to maintain client satisfaction that result in losses or reduced earnings is greater in periods when credit or equity markets are deteriorating in value or are particularly volatile and liquidity in markets is disrupted. 30 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 30 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 30 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 30 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION **Current (2025):** We may take action or incur expenses in order to maintain client satisfaction or preserve the usefulness of investments or investment vehicles we manage in light of changes in security ratings, liquidity or valuation issues or other developments, even though we are not required to do so by law or the terms of governing instruments. The risk that we will decide to take actions to maintain client satisfaction that result in losses or reduced earnings is greater in periods when credit or equity markets are deteriorating in value or are particularly volatile and liquidity in markets is disrupted. 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 29 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 29 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 29 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 29 --- ## Modified: The systems and models we employ to analyze, monitor and mitigate risks, as well as for other business purposes, are inherently limited, may not be effective in all cases and, in any case, cannot eliminate all risks that we face. **Key changes:** - Reworded sentence: "We use various systems and models, including AI-powered solutions, in analyzing and monitoring several risk categories, as well as for other business purposes." - Reworded sentence: "Models based on historical data sets might not be accurate predicators of future outcomes and their ability to appropriately predict future outcomes may degrade over time due to limited historical patterns, extreme or unanticipated market movements or customer behavior and liquidity, especially during severe market downturns or stress events (e.g., geopolitical events or pandemics)." - Reworded sentence: "In addition, the use of generative AI, a relatively new and emerging technology in the early stages of commercial use, exposes us to additional risks, such as damage to our reputation, competitive position, and business, legal and regulatory risks and additional costs." **Prior (2024):** We use various systems and models in analyzing and monitoring several risk categories, as well as for other business purposes. While we assess and improve these systems and models on an ongoing basis, there can be no assurance that they, along with other related controls, will effectively mitigate risk under all circumstances, or that they will adequately mitigate any risk or loss to us. As with any systems and models, there are inherent limitations because they involve techniques and judgments that cannot anticipate every economic and financial outcome in the markets in which we operate, nor can they anticipate the specifics and timing of such outcomes. Further, these systems and models may fail to quantify accurately the magnitude of the risks we face or they may not be effective against all types of risk, including risks that are unidentified or unanticipated. Our measurement methodologies rely on many assumptions and historical analyses and correlations. These assumptions may be incorrect, and the historical correlations on which we rely may not continue to be relevant. Models based on historical data sets might not be accurate predicators of future outcomes and their ability to appropriately predict future outcomes may degrade over time due to limited historical patterns, extreme or unanticipated market movements or customer behavior and liquidity, especially during severe market downturns or stress events (e.g., geopolitical or pandemic events). Consequently, the measurements that we make may not adequately capture or express the true risk profiles of our businesses or provide accurate data for other business purposes, each of which ultimately could have a negative impact on our business, financial condition and results of operations. Errors in the underlying model or model assumptions, or inadequate model assumptions, could result in unanticipated and adverse consequences, including material loss or noncompliance with regulatory requirements or expectations. 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 31 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 31 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 31 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 31 **Current (2025):** We use various systems and models, including AI-powered solutions, in analyzing and monitoring several risk categories, as well as for other business purposes. While we assess and improve these systems and models on an ongoing basis, there can be no assurance that they, along with other related controls, will effectively mitigate risk under all circumstances, or that they will adequately mitigate any risk or loss to us. As with any systems and models, there are inherent limitations because they involve techniques and judgments that cannot anticipate every economic and financial outcome in the markets in which we operate, nor can they anticipate the specifics and timing of such outcomes. Further, these systems and models may fail to quantify accurately the magnitude of the risks we face or they may not be effective against all types of risk, including risks that are unidentified or unanticipated. Our measurement methodologies rely on many assumptions and historical analyses and correlations. These assumptions may be incorrect, and the historical correlations on which we rely may not continue to be relevant. Models based on historical data sets might not be accurate predicators of future outcomes and their ability to appropriately predict future outcomes may degrade over time due to limited historical patterns, extreme or unanticipated market movements or customer behavior and liquidity, especially during severe market downturns or stress events (e.g., geopolitical events or pandemics). Consequently, the measurements that we make may not adequately capture or express the true risk profiles of our businesses or provide accurate data for other business purposes, each of which ultimately could have a negative impact on our business, financial condition and results of operations. Errors in the underlying model or model assumptions, or inadequate model assumptions, could result in unanticipated and adverse consequences, including material loss or noncompliance with regulatory requirements or expectations. In addition, the use of generative AI, a relatively new and emerging technology in the early stages of commercial use, exposes us to additional risks, such as damage to our reputation, competitive position, and business, legal and regulatory risks and additional costs. 30 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 30 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 30 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION 30 2024 ANNUAL REPORT | NORTHERN TRUST CORPORATION For example, generative AI has been known to produce false or "hallucinatory" inferences or output, and certain generative AI uses machine learning and predictive analytics, which can create inaccurate, incomplete, or misleading content, unintended biases, and other discriminatory or unexpected results, errors or inadequacies, any of which may not be easily detectable. Additionally, to the extent that we do not have sufficient rights to use the data or other material or content used in or produced by the AI tools used in our business, or if we experience cybersecurity incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, data protection and cybersecurity, publicity, contractual or other rights. Further, our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively. As the utilization of AI becomes more prevalent, we anticipate that it will continue to present new or unanticipated ethical, reputational, technical, operational, legal, competitive, and regulatory issues, among others. As a result, the challenges presented with our use of AI could adversely affect our business, financial condition, and results of operations. --- ## Modified: Other Risks **Key changes:** - Removed sentence: "16 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION" **Prior (2024):** •The systems and models we employ to analyze, monitor and mitigate risks, as well as for other business purposes, are inherently limited, may not be effective in all cases and, in any case, cannot eliminate all risks that we face. •Changes in tax laws and interpretations and challenges to our tax positions may affect our earnings negatively. •Changes in accounting standards may be difficult to predict and could have a material impact on our consolidated financial statements. •Our ability to return capital to stockholders is subject to the discretion of our Board of Directors and may be limited by U.S. banking laws and regulations, applicable provisions of Delaware law, or our failure to pay full and timely dividends on our preferred stock and the terms of our outstanding debt. 16 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 16 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION **Current (2025):** •The systems and models we employ to analyze, monitor and mitigate risks, as well as for other business purposes, are inherently limited, may not be effective in all cases and, in any case, cannot eliminate all risks that we face. •Changes in tax laws and interpretations and challenges to our tax positions may affect our earnings negatively. •Changes in accounting standards may be difficult to predict and could have a material impact on our consolidated financial statements. •Our ability to return capital to stockholders is subject to the discretion of our Board of Directors and may be limited by U.S. banking laws and regulations, applicable provisions of Delaware law, or our failure to pay full and timely dividends on our preferred stock and the terms of our outstanding debt. --- ## Modified: Liquidity Risks **Key changes:** - Removed sentence: "2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 15 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 15 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 15 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 15" **Prior (2024):** •If we do not manage our liquidity effectively, our business could suffer. •If the Bank is unable to supply the Corporation with funds over time, the Corporation could be unable to meet its various obligations. •We may need to raise additional capital in the future, which may not be available to us or may only be available on unfavorable terms. •Any downgrades in our credit ratings, or an actual or perceived reduction in our financial strength, could affect our borrowing costs, capital costs and liquidity adversely. 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 15 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 15 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 15 2023 ANNUAL REPORT | NORTHERN TRUST CORPORATION 15 **Current (2025):** •If we do not manage our liquidity effectively, our business could suffer. •If the Bank is unable to supply the Corporation with funds over time, the Corporation could be unable to meet its various obligations. •We may need to raise additional capital in the future, which may not be available to us or may only be available on unfavorable terms. •Any downgrades in our credit ratings, or an actual or perceived reduction in our financial strength, could affect our borrowing costs, capital costs and liquidity adversely. --- ## Modified: Changes in a number of particular market conditions, including in foreign currency exchange rates, cross-border investing activity and the demand for borrowing or lending securities, could affect our earnings negatively. **Key changes:** - Reworded sentence: "We provide foreign exchange services to our clients, primarily in connection with our custody business." - Reworded sentence: "Fluctuations in exchange rates could raise the potential for losses resulting from foreign currency trading positions where aggregate obligations to purchase and sell a currency other than the U.S." - Reworded sentence: "Any failure or circumvention of our procedures to mitigate risk could impact earnings negatively." - Added sentence: "In addition, in past periods, reductions in the volatility of currency-trading markets, the level of cross-border investing activity, and the demand for borrowing securities or willingness to lend such securities have affected our earnings from activities such as foreign exchange trading and securities lending negatively." - Added sentence: "If these conditions occur again in the future, our earnings from these activities could be affected negatively." **Prior (2024):** We provide foreign exchange services to our clients, primarily in connection with our global custody business. Foreign currency volatility influences our foreign exchange trading income as does the level of client activity. Foreign currency volatility and changes in client activity may result in reduced foreign exchange trading income. Fluctuations in exchange rates may raise the potential for losses resulting from foreign currency trading positions where aggregate obligations to purchase and sell a currency other than the U.S. dollar do not offset each other or offset each other in different time periods. We also are exposed to non-trading foreign currency risk as a result of our holdings of non-U.S. dollar denominated assets and liabilities, investments in non-U.S. subsidiaries, and future non-U.S. dollar denominated revenue and expense. We have policies and procedures in place to assess and mitigate potential impacts of foreign exchange risks, including hedging-related strategies. Any failure or circumvention of our procedures to mitigate risk may impact earnings negatively. Please see "Market Risk" in the "Risk Management" section included in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," for a more detailed discussion of market risks we face. **Current (2025):** We provide foreign exchange services to our clients, primarily in connection with our custody business. Foreign currency volatility influences our foreign exchange trading income as does the level of client activity. Foreign currency volatility and changes in client activity may result in reduced foreign exchange trading income. Fluctuations in exchange rates could raise the potential for losses resulting from foreign currency trading positions where aggregate obligations to purchase and sell a currency other than the U.S. dollar do not offset each other or offset each other in different time periods. We also are exposed to non-trading foreign currency risk as a result of our holdings of non-U.S. dollar denominated assets and liabilities, investments in non-U.S. subsidiaries, and future non-U.S. dollar denominated revenue and expense. We have policies and procedures in place to assess and mitigate potential impacts of foreign exchange risks, including hedging-related strategies. Any failure or circumvention of our procedures to mitigate risk could impact earnings negatively. Please see "Market Risk" in the "Risk Management" section included in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," for a more detailed discussion of market risks we face. In addition, in past periods, reductions in the volatility of currency-trading markets, the level of cross-border investing activity, and the demand for borrowing securities or willingness to lend such securities have affected our earnings from activities such as foreign exchange trading and securities lending negatively. If these conditions occur again in the future, our earnings from these activities could be affected negatively. In certain of our businesses, such as securities lending, our fee is calculated as a percentage of our clients' earnings, such that market and other factors that reduce our clients' earnings from investments or trading activities also reduce our revenues. --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*