As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the custody bank industry, including Federated Hermes (NYSE: FHI) and its peers.
Custody banks safeguard financial assets and provide services like settlement, accounting, and regulatory compliance for institutional investors. Growth opportunities stem from increasing global assets under custody, demand for data analytics, and blockchain technology adoption for settlement efficiency. Challenges include fee pressure from large clients, substantial technology investment requirements, and competition from both traditional players and fintech firms entering the space.
The 14 custody bank stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.9%.
In light of this news, share prices of the companies have held steady as they are up 4.3% on average since the latest earnings results.
Federated Hermes (NYSE: FHI)
With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE: FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.
Federated Hermes reported revenues of $479 million, up 13.1% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS and revenue estimates.
"In the first quarter, we saw record gross sales and positive net flows in our equity offerings as we continued momentum from the previous year, with investor interest in a range of our offering types," said J. Christopher Donahue, president and chief executive officer.
The stock is down 4.4% since reporting and currently trades at $55.56.
Best Q1: Franklin Resources (NYSE: BEN)
Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.
Franklin Resources reported revenues of $2.29 billion, up 8.7% year on year, outperforming analysts’ expectations by 11.8%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
The market seems happy with the results as the stock is up 11.8% since reporting. It currently trades at $30.82.
Is now the time to buy Franklin Resources? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Ridgepost Capital (NYSE: RPC)
Operating as a bridge between institutional investors and hard-to-access private market opportunities, Ridgepost Capital (NYSE: RPC) is an alternative asset management firm that provides access to private equity, venture capital, impact investing, and private credit opportunities in the middle and lower middle markets.
Ridgepost Capital reported revenues of $75.35 million, up 11.2% year on year, falling short of analysts’ expectations by 3.8%. It was a slower quarter as it posted a significant miss of analysts’ EBITDA and revenue estimates.
Ridgepost Capital delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $8.43.
Read our full analysis of Ridgepost Capital’s results here.
BNY (NYSE: BK)
Tracing its roots back to 1784 when it was founded by Alexander Hamilton, BNY (NYSE: BK) is a global financial institution that provides asset servicing, wealth management, and investment services to institutions, corporations, and high-net-worth individuals.
BNY reported revenues of $5.41 billion, up 13.8% year on year. This result topped analysts’ expectations by 4.3%. It was an exceptional quarter as it also recorded a beat of analysts’ EPS and revenue estimates.
The stock is flat since reporting and currently trades at $132.80.
Read our full, actionable report on BNY here, it’s free.
Northern Trust (NASDAQ: NTRS)
Founded in 1889 during Chicago's post-Great Fire rebuilding boom, Northern Trust (NASDAQ: NTRS) provides wealth management, asset servicing, and banking solutions to corporations, institutions, families, and high-net-worth individuals globally.
Northern Trust reported revenues of $2.21 billion, up 13.8% year on year. This number surpassed analysts’ expectations by 4%. Overall, it was an exceptional quarter as it also put up an impressive beat of analysts’ EBITDA and EPS estimates.
The stock is flat since reporting and currently trades at $159.20.
Read our full, actionable report on Northern Trust here, it’s free.
Market Update
Late in 2025 into early 2026, there was hand wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?
These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.
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