x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 36-2723087 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
50 South LaSalle Street Chicago, Illinois | 60603 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | x | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page | |
Three Months Ended March 31, | ||||||||||
CONDENSED INCOME STATEMENTS (In Millions) | 2017 | 2016 | % Change (1) | |||||||
Noninterest Income | $ | 930.9 | $ | 882.2 | 6 | % | ||||
Net Interest Income | 353.5 | 307.8 | 15 | |||||||
Provision for Credit Losses | (1.0 | ) | 2.0 | N/M | ||||||
Noninterest Expense | 894.5 | 828.8 | 8 | |||||||
Income before Income Taxes | 390.9 | 359.2 | 9 | |||||||
Provision for Income Taxes | 114.8 | 113.8 | 1 | |||||||
Net Income | $ | 276.1 | $ | 245.4 | 13 | % |
PER COMMON SHARE | ||||||||||
Net Income — Basic | $ | 1.10 | $ | 1.03 | 7 | % | ||||
— Diluted | 1.09 | 1.03 | 6 | |||||||
Cash Dividends Declared Per Common Share | 0.38 | 0.36 | 6 | |||||||
Book Value — End of Period (EOP) | 39.62 | 37.01 | 7 | |||||||
Market Price — EOP | 86.58 | 65.17 | 33 |
SELECTED BALANCE SHEET DATA (In Millions) | ||||||||||
March 31, 2017 | December 31, 2016 | % Change (1) | ||||||||
End of Period: | ||||||||||
Assets | $ | 121,488.7 | $ | 123,926.9 | (2 | )% | ||||
Earning Assets | 112,974.1 | 115,446.4 | (2 | ) | ||||||
Deposits | 100,529.5 | 101,651.7 | (1 | ) | ||||||
Stockholders’ Equity | 9,977.7 | 9,770.4 | 2 |
Three Months Ended March 31, | ||||||||||
2017 | 2016 | % Change (1) | ||||||||
Average Balances: | ||||||||||
Assets | $ | 116,476.4 | $ | 113,417.1 | 3 | % | ||||
Earning Assets | 108,951.8 | 104,617.4 | 4 | |||||||
Deposits | 94,933.6 | 92,476.3 | 3 | |||||||
Stockholders’ Equity | 9,791.4 | 8,691.2 | 13 |
CLIENT ASSETS (In Billions) | March 31, 2017 | December 31, 2016 | % Change (1) | |||||||
Assets Under Custody/Administration (2) | $ | 8,924.7 | $ | 8,541.3 | 4 | % | ||||
Assets Under Custody | 7,107.7 | 6,720.5 | 6 | |||||||
Assets Under Management | 1,001.3 | 942.4 | 6 |
(1) | Percentage calculations are based on actual balances rather than the rounded amounts presented in the Consolidated Financial Highlights. |
(2) | For the purposes of disclosing Assets Under Custody/Administration, to the extent that both custody and administration services are provided, the value of the assets is included only once. |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Financial Ratios: | |||||
Return on Average Common Equity | 11.6 | % | 11.6 | % | |
Return on Average Assets | 0.96 | 0.87 | |||
Dividend Payout Ratio | 34.9 | 35.0 | |||
Net Interest Margin (1) | 1.35 | 1.21 |
March 31, 2017 | December 31, 2016 | ||||||||||
Advanced Approach | Standardized Approach | Advanced Approach | Standardized Approach | ||||||||
Capital Ratios: | |||||||||||
Northern Trust Corporation | |||||||||||
Common Equity Tier 1 | 12.9 | % | 12.2 | % | 12.4 | % | 11.8 | % | |||
Tier 1 | 14.2 | 13.4 | 13.7 | 12.9 | |||||||
Total | 15.6 | 15.0 | 15.1 | 14.5 | |||||||
Tier 1 Leverage | 8.2 | 8.2 | 8.0 | 8.0 | |||||||
Supplementary Leverage (2) | 6.9 | N/A | 6.8 | N/A | |||||||
The Northern Trust Company | |||||||||||
Common Equity Tier 1 | 12.9 | % | 12.0 | % | 12.4 | % | 11.5 | % | |||
Tier 1 | 12.9 | 12.0 | 12.4 | 11.5 | |||||||
Total | 14.6 | 13.8 | 14.0 | 13.3 | |||||||
Tier 1 Leverage | 7.2 | 7.2 | 7.0 | 7.0 | |||||||
Supplementary Leverage (2) | 6.1 | N/A | 6.0 | N/A |
(1) | Net interest margin is presented on a fully taxable equivalent (FTE) basis, a non-generally accepted accounting principle (GAAP) financial measure that facilitates the analysis of asset yields. The net interest margin on a GAAP basis and a reconciliation of net interest income on a GAAP basis to net interest income on an FTE basis are presented on page 20. |
(2) | Effective January 1, 2018, Northern Trust will be subject to a minimum supplementary leverage ratio of 3 percent. |
Noninterest Income | Three Months Ended March 31, | |||||||||||||
($ In Millions) | 2017 | 2016 | Change | |||||||||||
Trust, Investment and Other Servicing Fees | $ | 808.2 | $ | 748.2 | $ | 60.0 | 8 | % | ||||||
Foreign Exchange Trading Income | 48.1 | 60.5 | (12.4 | ) | (21 | ) | ||||||||
Treasury Management Fees | 14.7 | 16.2 | (1.5 | ) | (9 | ) | ||||||||
Security Commissions and Trading Income | 20.5 | 18.9 | 1.6 | 9 | ||||||||||
Other Operating Income | 39.7 | 38.1 | 1.6 | 4 | ||||||||||
Investment Security Gains (Losses), net | (0.3 | ) | 0.3 | (0.6 | ) | N/M | ||||||||
Total Noninterest Income | $ | 930.9 | $ | 882.2 | $ | 48.7 | 6 | % |
Assets Under Custody / Administration | March 31, 2017 | December 31, 2016 | March 31, 2016 | Change Q1-17/Q4-16 | Change Q1-17/Q1-16 | ||||||||||||
($ In Billions) | |||||||||||||||||
Corporate & Institutional | $ | 8,338.2 | $ | 7,987.0 | $ | 7,404.4 | 4 | % | 13 | % | |||||||
Wealth Management | 586.5 | 554.3 | 522.0 | 6 | 12 | ||||||||||||
Total Assets Under Custody / Administration | $ | 8,924.7 | $ | 8,541.3 | $ | 7,926.4 | 4 | % | 13 | % |
Assets Under Custody | March 31, 2017 | December 31, 2016 | March 31, 2016 | Change Q1-17/Q4-16 | Change Q1-17/Q1-16 | ||||||||||||
($ In Billions) | |||||||||||||||||
Corporate & Institutional | $ | 6,533.3 | $ | 6,176.9 | $ | 5,700.3 | 6 | % | 15 | % | |||||||
Wealth Management | 574.4 | 543.6 | 511.1 | 6 | 12 | ||||||||||||
Total Assets Under Custody | $ | 7,107.7 | $ | 6,720.5 | $ | 6,211.4 | 6 | % | 14 | % |
March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||||||||||||
Assets Under Custody | C&IS | WM | Total | C&IS | WM | Total | C&IS | WM | Total | |||||||||||||||||
Equities | 45 | % | 56 | % | 46 | % | 45 | % | 55 | % | 46 | % | 43 | % | 54 | % | 43 | % | ||||||||
Fixed Income | 37 | 21 | 36 | 37 | 22 | 36 | 39 | 23 | 38 | |||||||||||||||||
Cash and Other Assets | 18 | 23 | 18 | 18 | 23 | 18 | 18 | 23 | 19 |
Assets Under Management | March 31, 2017 | December 31, 2016 | March 31, 2016 | Change Q1-17/Q4-16 | Change Q1-17/Q1-16 | ||||||||||||
($ In Billions) | |||||||||||||||||
Corporate & Institutional | $ | 741.1 | $ | 694.0 | $ | 669.9 | 7 | % | 11 | % | |||||||
Wealth Management | 260.2 | 248.4 | 230.1 | 5 | 13 | ||||||||||||
Total Assets Under Management | $ | 1,001.3 | $ | 942.4 | $ | 900.0 | 6 | % | 11 | % |
($ In Billions) | March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||
Equities | $ | 516.8 | $ | 480.6 | $ | 453.5 | |||||
Fixed Income | 165.8 | 160.5 | 148.5 | ||||||||
Cash and Other Assets | 195.1 | 189.3 | 192.0 | ||||||||
Securities Lending Collateral | 123.6 | 112.0 | 106.0 | ||||||||
Total Assets Under Management | $ | 1,001.3 | $ | 942.4 | $ | 900.0 |
March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||||||||||||
Assets Under Management | C&IS | WM | Total | C&IS | WM | Total | C&IS | WM | Total | |||||||||||||||||
Equities | 52 | % | 49 | % | 52 | % | 52 | % | 47 | % | 51 | % | 52 | % | 46 | % | 50 | % | ||||||||
Fixed Income | 13 | 27 | 17 | 13 | 28 | 17 | 12 | 29 | 17 | |||||||||||||||||
Cash and Other Assets | 18 | 24 | 19 | 19 | 25 | 20 | 20 | 25 | 21 | |||||||||||||||||
Securities Lending Collateral | 17 | — | 12 | 16 | — | 12 | 16 | — | 12 |
Three Months Ended | ||||||||||||||||
($ In Billions) | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | |||||||||||
Beginning Balance of AUM | $ | 942.4 | $ | 945.8 | $ | 906.2 | $ | 900.0 | $ | 875.3 | ||||||
Inflows by Investment Type | ||||||||||||||||
Equity | 41.6 | 44.5 | 27.2 | 34.9 | 29.4 | |||||||||||
Fixed Income | 13.7 | 16.2 | 13.1 | 18.6 | 11.4 | |||||||||||
Cash & Other Assets | 91.8 | 95.7 | 109.5 | 83.6 | 94.6 | |||||||||||
Securities Lending Collateral | 29.6 | 24.8 | 27.1 | 21.5 | 20.4 | |||||||||||
Total Inflows | 176.7 | 181.2 | 176.9 | 158.6 | 155.8 | |||||||||||
Outflows by Investment Type | ||||||||||||||||
Equity | (38.4 | ) | (50.0 | ) | (26.6 | ) | (31.4 | ) | (28.1 | ) | ||||||
Fixed Income | (13.0 | ) | (14.1 | ) | (8.8 | ) | (14.9 | ) | (10.2 | ) | ||||||
Cash & Other Assets | (89.7 | ) | (98.4 | ) | (100.2 | ) | (84.7 | ) | (80.3 | ) | ||||||
Securities Lending Collateral | (18.0 | ) | (26.8 | ) | (21.4 | ) | (19.3 | ) | (18.2 | ) | ||||||
Total Outflows | (159.1 | ) | (189.3 | ) | (157.0 | ) | (150.3 | ) | (136.8 | ) | ||||||
Net Inflows / (Outflows) | 17.6 | (8.1 | ) | 19.9 | 8.3 | 19.0 | ||||||||||
Market Performance, Currency & Other | ||||||||||||||||
Market Performance & Other | 38.9 | — | — | — | — | |||||||||||
Currency | 2.4 | — | — | — | — | |||||||||||
Total Market Performance, Currency & Other | 41.3 | 4.7 | 19.7 | (2.1 | ) | 5.7 | ||||||||||
Ending Balance of AUM | $ | 1,001.3 | $ | 942.4 | $ | 945.8 | $ | 906.2 | $ | 900.0 |
Other Operating Income | Three Months Ended March 31, | |||||||||||||
($ In Millions) | 2017 | 2016 | Change | |||||||||||
Loan Service Fees | $ | 12.4 | $ | 13.4 | $ | (1.0 | ) | (7 | )% | |||||
Banking Service Fees | 12.4 | 12.4 | — | — | ||||||||||
Other Income | 14.9 | 12.3 | 2.6 | 21 | ||||||||||
Total Other Operating Income | $ | 39.7 | $ | 38.1 | $ | 1.6 | 4 | % |
NORTHERN TRUST CORPORATION | |||||||||||||||||||||
(Interest and Rate on a Fully Taxable Equivalent Basis) | FIRST QUARTER | ||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||
($ In Millions) | Interest | Average Balance | Rate (6) | Interest | Average Balance | Rate (6) | |||||||||||||||
Average Earning Assets | |||||||||||||||||||||
Federal Reserve and Other Central Bank Deposits (1) | $ | 29.7 | $ | 21,806.9 | 0.55 | % | $ | 26.0 | $ | 21,170.2 | 0.49 | % | |||||||||
Interest-Bearing Due from and Deposits with Banks (1)(2) | 14.9 | 6,684.3 | 0.91 | 17.5 | 9,056.8 | 0.78 | |||||||||||||||
Federal Funds Sold and Securities Purchased under Agreements to Resell | 6.5 | 2,011.7 | 1.32 | 3.2 | 1,593.7 | 0.82 | |||||||||||||||
Securities | |||||||||||||||||||||
U.S. Government | 25.5 | 7,213.8 | 1.44 | 19.3 | 6,500.5 | 1.19 | |||||||||||||||
Obligations of States and Political Subdivisions | 3.6 | 989.7 | 1.47 | 1.8 | 189.1 | 3.77 | |||||||||||||||
Government Sponsored Agency | 68.9 | 17,796.8 | 1.57 | 48.8 | 16,764.2 | 1.17 | |||||||||||||||
Other (3) | 54.6 | 18,777.4 | 1.18 | 38.9 | 15,349.5 | 1.02 | |||||||||||||||
Total Securities | 152.6 | 44,777.7 | 1.38 | 108.8 | 38,803.3 | 1.13 | |||||||||||||||
Loans and Leases (4) | 215.5 | 33,671.2 | 2.59 | 202.7 | 33,993.4 | 2.40 | |||||||||||||||
Total Earning Assets | 419.2 | 108,951.8 | 1.56 | 358.2 | 104,617.4 | 1.38 | |||||||||||||||
Allowance for Credit Losses Assigned to Loans and Leases | — | (160.8 | ) | — | — | (193.5 | ) | — | |||||||||||||
Cash and Due from Banks and Other Central Bank Deposits (5) | — | 2,116.6 | — | — | 2,192.4 | — | |||||||||||||||
Buildings and Equipment | — | 465.9 | — | — | 445.9 | — | |||||||||||||||
Client Security Settlement Receivables | — | 829.6 | — | — | 1,190.5 | — | |||||||||||||||
Goodwill | — | 519.7 | — | — | 523.1 | — | |||||||||||||||
Other Assets | — | 3,753.6 | — | — | 4,641.3 | — | |||||||||||||||
Total Assets | $ | — | $ | 116,476.4 | — | % | $ | — | $ | 113,417.1 | — | % | |||||||||
Average Source of Funds | |||||||||||||||||||||
Deposits | |||||||||||||||||||||
Savings and Money Market | $ | 3.2 | $ | 15,446.7 | 0.09 | % | $ | 2.9 | $ | 15,367.3 | 0.07 | % | |||||||||
Savings Certificates and Other Time | 2.3 | 1,338.5 | 0.70 | 2.0 | 1,459.6 | 0.54 | |||||||||||||||
Non-U.S. Offices — Interest-Bearing | 22.1 | 52,435.9 | 0.17 | 17.3 | 49,434.9 | 0.14 | |||||||||||||||
Total Interest-Bearing Deposits | 27.6 | 69,221.1 | 0.16 | 22.2 | 66,261.8 | 0.13 | |||||||||||||||
Short-Term Borrowings | 9.0 | 5,659.1 | 0.65 | 3.4 | 5,584.1 | 0.25 | |||||||||||||||
Senior Notes | 11.7 | 1,496.7 | 3.17 | 11.7 | 1,497.4 | 3.15 | |||||||||||||||
Long-Term Debt | 7.4 | 1,324.9 | 2.26 | 6.1 | 1,399.3 | 1.75 | |||||||||||||||
Floating Rate Capital Debt | 1.1 | 277.4 | 1.56 | 0.8 | 277.3 | 1.15 | |||||||||||||||
Total Interest-Related Funds | 56.8 | 77,979.2 | 0.30 | 44.2 | 75,019.9 | 0.24 | |||||||||||||||
Interest Rate Spread | — | — | 1.26 | — | — | 1.14 | |||||||||||||||
Demand and Other Noninterest-Bearing Deposits | — | 25,712.5 | — | — | 26,214.5 | — | |||||||||||||||
Other Liabilities | — | 2,993.3 | — | — | 3,491.5 | — | |||||||||||||||
Stockholders’ Equity | — | 9,791.4 | — | — | 8,691.2 | — | |||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | — | $ | 116,476.4 | — | % | $ | — | $ | 113,417.1 | — | % | |||||||||
Net Interest Income/Margin (FTE Adjusted) | $ | 362.4 | $ | — | 1.35 | % | $ | 314.0 | $ | — | 1.21 | % | |||||||||
Net Interest Income/Margin (Unadjusted) | $ | 353.5 | $ | — | 1.32 | % | $ | 307.8 | $ | — | 1.18 | % |
Three Months Ended March 31, 2017/2016 | |||||||||||
Change Due To | |||||||||||
(In Millions) | Average Balance | Rate | Total | ||||||||
Earning Assets (FTE) | $ | 6.6 | $ | 54.4 | $ | 61.0 | |||||
Interest-Related Funds | 2.0 | 10.6 | 12.6 | ||||||||
Net Interest Income (FTE) | $ | 4.6 | $ | 43.8 | $ | 48.4 |
(1) | To be consistent with the change in presentation to the consolidated balance sheets, the First Quarter 2016 presentation above combines non-US central bank deposits, which were previously included in Interest-Bearing Due From and Deposits with Banks, with Federal Reserve deposits. |
(2) | Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheets. |
(3) | Other securities include certain community development investments and Federal Home Loan Bank and Federal Reserve stock, which are classified in other assets in the consolidated balance sheets as of March 31, 2017 and 2016. |
(4) | Average balances include nonaccrual loans. Lease financing receivable balances are reduced by deferred income. |
(5) | Cash and Due from Banks and Other Central Bank Deposits includes the non-interest-bearing component of Federal Reserve and Other Central Bank Deposits as presented on the consolidated balance sheets on page 24. |
(6) | Rate calculations are based on actual balances rather than the rounded amounts presented in the Average Consolidated Balance Sheets with Analysis of Net Interest Income. |
Notes: | Net Interest Income (FTE Adjusted), a non-generally accepted accounting principle (GAAP) financial measure, includes adjustments to a fully taxable equivalent basis for loans and securities. Such adjustments are based on a blended federal and state tax rate of 37.8% and 37.7% for the three months ended March 31, 2017 and 2016, respectively. Total taxable equivalent interest adjustments amounted to $8.9 million and $6.2 million for the three months ended March 31, 2017 and 2016, respectively. A reconciliation of net interest income and net interest margin on a GAAP basis to net interest income and net interest margin on an FTE basis (each of which is a non-GAAP financial measure) is provided on page 20. |
Noninterest Expense | Three Months Ended March 31, | |||||||||||||
($ In Millions) | 2017 | 2016 | Change | |||||||||||
Compensation | $ | 425.8 | $ | 378.8 | $ | 47.0 | 12 | % | ||||||
Employee Benefits | 77.8 | 70.6 | 7.2 | 10 | ||||||||||
Outside Services | 153.1 | 149.9 | 3.2 | 2 | ||||||||||
Equipment and Software | 127.3 | 114.2 | 13.1 | 11 | ||||||||||
Occupancy | 45.4 | 40.9 | 4.5 | 11 | ||||||||||
Other Operating Expense | 65.1 | 74.4 | (9.3 | ) | (13 | ) | ||||||||
Total Noninterest Expense | $ | 894.5 | $ | 828.8 | $ | 65.7 | 8 | % |
Other Operating Expense | Three Months Ended March 31, | |||||||||||||
($ In Millions) | 2017 | 2016 | Change | |||||||||||
Business Promotion | $ | 16.1 | $ | 26.9 | $ | (10.8 | ) | (40 | )% | |||||
Staff Related | 8.7 | 5.9 | 2.8 | 47 | ||||||||||
FDIC Insurance Premiums | 8.4 | 6.3 | 2.1 | 35 | ||||||||||
Other Intangibles Amortization | 2.4 | 2.1 | 0.3 | 13 | ||||||||||
Other Expenses | 29.5 | 33.2 | (3.7 | ) | (11 | ) | ||||||||
Total Other Operating Expense | $ | 65.1 | $ | 74.4 | $ | (9.3 | ) | (13 | )% |
Three Months Ended March 31, | Corporate & Institutional Services | Wealth Management | Treasury and Other | Total Consolidated | |||||||||||||||||||||||||||
($ In Millions) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 ^ | 2017 | 2016 ^ | |||||||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||||||||||
Trust, Investment and Other Servicing Fees | $ | 462.9 | $ | 433.4 | $ | 345.3 | $ | 314.8 | $ | — | $ | — | $ | 808.2 | $ | 748.2 | |||||||||||||||
Foreign Exchange Trading Income | 49.1 | 51.7 | 0.9 | 4.5 | (1.9 | ) | 4.3 | 48.1 | 60.5 | ||||||||||||||||||||||
Other Noninterest Income | 44.2 | 45.6 | 25.5 | 26.8 | 4.9 | 1.1 | 74.6 | 73.5 | |||||||||||||||||||||||
Net Interest Income* | 166.5 | 138.4 | 177.0 | 158.5 | 18.9 | 17.1 | 362.4 | 314.0 | |||||||||||||||||||||||
Revenue* | 722.7 | 669.1 | 548.7 | 504.6 | 21.9 | 22.5 | 1,293.3 | 1,196.2 | |||||||||||||||||||||||
Provision for Credit Losses | 0.3 | (3.2 | ) | (1.3 | ) | 5.2 | — | — | (1.0 | ) | 2.0 | ||||||||||||||||||||
Noninterest Expense | 510.8 | 475.3 | 346.3 | 326.9 | 37.4 | 26.6 | 894.5 | 828.8 | |||||||||||||||||||||||
Income before Income Taxes* | 211.6 | 197.0 | 203.7 | 172.5 | (15.5 | ) | (4.1 | ) | 399.8 | 365.4 | |||||||||||||||||||||
Provision for Income Taxes* | 66.9 | 62.2 | 76.8 | 64.9 | (20.0 | ) | (7.1 | ) | 123.7 | 120.0 | |||||||||||||||||||||
Net Income | $ | 144.7 | $ | 134.8 | $ | 126.9 | $ | 107.6 | $ | 4.5 | $ | 3.0 | $ | 276.1 | $ | 245.4 | |||||||||||||||
Percentage of Consolidated Net Income | 52 | % | 55 | % | 46 | % | 44 | % | 2 | % | 1 | % | 100 | % | 100 | % | |||||||||||||||
Average Assets | $ | 77,803.5 | $ | 75,372.9 | $ | 26,661.8 | $ | 26,237.8 | $ | 12,011.1 | $ | 11,806.4 | $ | 116,476.4 | $ | 113,417.1 |
Three Months Ended March 31, | ||||||||||||||
($ In Millions) | 2017 | 2016 | Change | |||||||||||
Custody and Fund Administration | $ | 307.5 | $ | 286.4 | $ | 21.1 | 7 | % | ||||||
Investment Management | 93.5 | 89.1 | 4.4 | 5 | ||||||||||
Securities Lending | 23.8 | 22.6 | 1.2 | 5 | ||||||||||
Other | 38.1 | 35.3 | 2.8 | 8 | ||||||||||
Total C&IS Trust, Investment and Other Servicing Fees | 462.9 | $ | 433.4 | $ | 29.5 | 7 | % |
Three Months Ended March 31, | ||||||||||||||
($ In Millions) | 2017 | 2016 | Change | |||||||||||
Central | $ | 137.4 | $ | 124.4 | $ | 13.0 | 10 | % | ||||||
East | 85.2 | 81.0 | 4.2 | 5 | ||||||||||
West | 69.6 | 63.9 | 5.7 | 9 | ||||||||||
Global Family Office | 53.1 | 45.5 | 7.6 | 17 | ||||||||||
Total Wealth Management Trust, Investment and Other Servicing Fees | $ | 345.3 | $ | 314.8 | $ | 30.5 | 10 | % |
Capital Ratios — Northern Trust Corporation | March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||
Advanced Approach | Standardized Approach | Advanced Approach | Standardized Approach | Advanced Approach | Standardized Approach | ||||||||||||
Common Equity Tier 1 | 12.9 | % | 12.2 | % | 12.4 | % | 11.8 | % | 11.6 | % | 10.6 | % | |||||
Tier 1 | 14.2 | % | 13.4 | % | 13.7 | % | 12.9 | % | 12.1 | % | 11.1 | % | |||||
Total | 15.6 | % | 15.0 | % | 15.1 | % | 14.5 | % | 13.6 | % | 12.8 | % | |||||
Tier 1 Leverage | 8.2 | % | 8.2 | % | 8.0 | % | 8.0 | % | 7.4 | % | 7.4 | % | |||||
Supplementary Leverage (1) | 6.9 | % | N/A | 6.8 | % | N/A | 6.1 | % | N/A |
Capital Ratios — The Northern Trust Company | March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||
Advanced Approach | Standardized Approach | Advanced Approach | Standardized Approach | Advanced Approach | Standardized Approach | ||||||||||||
Common Equity Tier 1 | 12.9 | % | 12.0 | % | 12.4 | % | 11.5 | % | 11.5 | % | 10.4 | % | |||||
Tier 1 | 12.9 | % | 12.0 | % | 12.4 | % | 11.5 | % | 11.5 | % | 10.4 | % | |||||
Total | 14.6 | % | 13.8 | % | 14.0 | % | 13.3 | % | 13.2 | % | 12.3 | % | |||||
Tier 1 Leverage | 7.2 | % | 7.2 | % | 7.0 | % | 7.0 | % | 6.9 | % | 6.9 | % | |||||
Supplementary Leverage (1) | 6.1 | % | N/A | 6.0 | % | N/A | 5.7 | % | N/A |
($ In Millions) | March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||
Nonperforming Loans and Leases | |||||||||||
Commercial | |||||||||||
Commercial and Institutional | $ | 60.6 | $ | 33.7 | $ | 41.7 | |||||
Commercial Real Estate | 12.1 | 11.6 | 13.5 | ||||||||
Total Commercial | 72.7 | 45.3 | 55.2 | ||||||||
Personal | |||||||||||
Residential Real Estate | 107.0 | 114.6 | 108.5 | ||||||||
Private Client | 0.2 | 0.3 | 0.3 | ||||||||
Total Personal | 107.2 | 114.9 | 108.8 | ||||||||
Total Nonperforming Loans and Leases | 179.9 | 160.2 | 164.0 | ||||||||
Other Real Estate Owned | 6.9 | 5.2 | 10.4 | ||||||||
Total Nonperforming Assets | 186.8 | 165.4 | 174.4 | ||||||||
90 Day Past Due Loans Still Accruing | $ | 9.9 | $ | 31.0 | $ | 10.2 | |||||
Nonperforming Loans and Leases to Total Loans and Leases | 0.54 | % | 0.47 | % | 0.48 | % | |||||
Coverage of Loan and Lease Allowance to Nonperforming Loans and Leases | 0.9 | x | 1.0x | 1.2x |
March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||||||
($ In Millions) | Allowance Amount | Percent of Loans to Total Loans | Allowance Amount | Percent of Loans to Total Loans | Allowance Amount | Percent of Loans to Total Loans | ||||||||||||||
Specific Allowance | $ | 8.7 | — | % | $ | 2.1 | — | % | $ | 1.4 | — | % | ||||||||
Allocated Inherent Allowance | ||||||||||||||||||||
Commercial | ||||||||||||||||||||
Commercial and Institutional | 34.9 | 28 | 34.7 | 28 | 38.6 | 29 | ||||||||||||||
Commercial Real Estate | 68.1 | 12 | 69.2 | 12 | 74.2 | 12 | ||||||||||||||
Lease Financing, net | 0.3 | 1 | 0.4 | 1 | 1.1 | 1 | ||||||||||||||
Non-U.S. | — | 5 | — | 5 | — | 5 | ||||||||||||||
Other | 0.6 | 1 | 0.6 | 1 | — | 1 | ||||||||||||||
Total Commercial | 103.9 | 47 | 104.9 | 47 | 113.9 | 48 | ||||||||||||||
Personal | ||||||||||||||||||||
Residential Real Estate | 65.9 | 22 | 69.0 | 23 | 95.2 | 25 | ||||||||||||||
Private Client | 8.3 | 31 | 13.8 | 30 | 19.5 | 27 | ||||||||||||||
Other | 2.2 | — | 2.2 | — | 2.6 | — | ||||||||||||||
Total Personal | 76.4 | 53 | 85.0 | 53 | 117.3 | 52 | ||||||||||||||
Total Allocated Inherent Allowance | $ | 180.3 | 100 | % | $ | 189.9 | 100 | % | $ | 231.2 | 100 | % | ||||||||
Total Allowance for Credit Losses | $ | 189.0 | $ | 192.0 | $ | 232.6 | ||||||||||||||
Allowance Assigned to | ||||||||||||||||||||
Loans and Leases | $ | 162.0 | $ | 161.0 | $ | 195.6 | ||||||||||||||
Undrawn Commitments and Standby Letters of Credit | 27.0 | 31.0 | 37.0 | |||||||||||||||||
Total Allowance for Credit Losses | $ | 189.0 | $ | 192.0 | $ | 232.6 | ||||||||||||||
Allowance Assigned to Loans and Leases to Total Loans and Leases | 0.48 | % | 0.48 | % | 0.57 | % |
▪ | the balance sheet size and mix generally remains constant over the simulation horizon with maturing assets and liabilities replaced with instruments with similar terms as those that are maturing, with the exception of certain products such as securities (the assumed reinvestment of which is determined by management’s strategies); non-maturity deposits, of which some recent increases are assumed to be temporary in nature; and long-term fixed rate borrowings, which upon maturity are replaced with overnight wholesale instruments; |
▪ | prepayments on mortgage loans and securities collateralized by mortgages are projected under each rate scenario using a third-party mortgage analytics system that incorporates market prepayment assumptions; |
▪ | cash flows for structured securities are estimated using a third-party vendor in conjunction with the prepayments provided by the third-party mortgage analytics vendor; |
▪ | non-maturity deposit pricing and lives are projected based on Northern Trust’s actual historical patterns and management judgment, depending upon the availability of historical data and current pricing strategies/or judgment; and |
▪ | new business rates are based on current spreads to market indices. |
($ In Millions) | Increase/(Decrease) Estimated Impact on Next Twelve Months of Net Interest Income | ||
Increase in Interest Rates Above Market-Implied Forward Rates | |||
100 Basis Points | $ | 25 | |
200 Basis Points | 38 |
▪ | the present value of nonmaturity deposits are estimated using remaining lives, which are based on a combination of Northern Trust’s actual historical runoff patterns and management judgment — some balances are assumed to be core and have long lives while other balances are assumed to be temporary and have comparatively shorter lives; and |
▪ | the present values of most noninterest-related balances (such as receivables, equipment, and payables) are the same as their book values. |
($ In Millions) | Increase/(Decrease) Estimated Impact on Market Value of Equity | ||
Increase in Interest Rates Above Market Implied Forward Rates | |||
100 Basis Points | $ | 320 | |
200 Basis Points | 323 |
Total VaR (Spot and Forward) | Foreign Exchange Spot VaR | Foreign Exchange Forward VaR | |||||||||||||||||||||
($ In Millions) | March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | |||||||||||||||||
High | $ | 1.6 | $ | 1.4 | $ | 1.6 | $ | 1.5 | $ | 1.1 | $ | 0.7 | |||||||||||
Low | 0.2 | 0.1 | — | — | 0.2 | 0.1 | |||||||||||||||||
Average | 0.5 | 0.3 | 0.1 | 0.1 | 0.5 | 0.3 | |||||||||||||||||
Quarter-End | 1.1 | 1.4 | 0.3 | 1.5 | 1.1 | 0.2 |
Three Months Ended | |||||||||||||||||||||||
March 31, 2017 | March 31, 2016 | ||||||||||||||||||||||
($ In Millions) | Reported | FTE Adj. | FTE | Reported | FTE Adj. | FTE | |||||||||||||||||
Interest Income | $ | 410.3 | $ | 8.9 | $ | 419.2 | $ | 352.0 | $ | 6.2 | $ | 358.2 | |||||||||||
Interest Expense | 56.8 | — | 56.8 | 44.2 | — | 44.2 | |||||||||||||||||
Net Interest Income | $ | 353.5 | $ | 8.9 | $ | 362.4 | $ | 307.8 | $ | 6.2 | $ | 314.0 | |||||||||||
Net Interest Margin | 1.32 | % | 1.35 | % | 1.18 | % | 1.21 | % | |||||||||||||||
Revenue | $ | 1,284.4 | $ | 8.9 | $ | 1,293.3 | 1,190.0 | 6.2 | 1,196.2 |
• | financial market disruptions or economic recession, whether in the United States, Europe, the Middle East, Asia or other regions; |
• | volatility or changes in financial markets, including debt and equity markets, that impact the value, liquidity, or credit ratings of financial assets in general, or financial assets held in particular investment funds or client portfolios, including those funds, portfolios, and other financial assets with respect to which Northern Trust has taken, or may in the future take, actions to provide asset value stability or additional liquidity; |
• | the impact of equity markets on fee revenue; |
• | the downgrade of U.S. government-issued and other securities; |
• | changes in foreign exchange trading client volumes and volatility in foreign currency exchange rates, changes in the valuation of the U.S. dollar relative to other currencies in which Northern Trust records revenue or accrues expenses, and Northern Trust’s success in assessing and mitigating the risks arising from all such changes and volatility; |
• | a decline in the value of securities held in Northern Trust’s investment portfolio, particularly asset-backed securities, the liquidity and pricing of which may be negatively impacted by periods of economic turmoil and financial market disruptions; |
• | Northern Trust’s ability to address operating risks, including cyber-security or data security breach risks, human errors or omissions, pricing or valuation of securities, fraud, systems performance or defects, systems interruptions, and breakdowns in processes or internal controls; |
• | Northern Trust’s success in responding to and investing in changes and advancements in technology; |
• | a significant downgrade of any of Northern Trust’s debt ratings; |
• | the health and soundness of the financial institutions and other counterparties with which Northern Trust conducts business; |
• | uncertainties inherent in the complex and subjective judgments required to assess credit risk and establish appropriate allowances therefor; |
• | the pace and extent of continued globalization of investment activity and growth in worldwide financial assets; |
• | changes in interest rates or in the monetary or other policies of various regulatory authorities or central banks; |
• | changes in the legal, regulatory and enforcement framework and oversight applicable to financial institutions, including changes that may affect leverage limits and risk-based capital and liquidity requirements, require financial institutions to pay higher assessments, expose financial institutions to certain liabilities of their subsidiary depository institutions, or restrict or increase the regulation of certain activities carried on by financial institutions, including Northern Trust; |
• | increased costs of compliance and other risks associated with changes in regulation, the current regulatory environment, and areas of increased regulatory emphasis and oversight in the United States and other countries, such as anti-money laundering, anti-bribery, and client privacy; |
• | failure to satisfy regulatory standards or to obtain regulatory approvals when required, including for the use and distribution of capital; |
• | changes in tax laws, accounting requirements or interpretations and other legislation in the United States or other countries that could affect Northern Trust or its clients; |
• | geopolitical risks and the risks of extraordinary events such as natural disasters, terrorist events and war, and the responses of the United States and other countries to those events; |
• | the referendum held in the United Kingdom in which voters approved a departure from the European Union, commonly referred to as “Brexit,” and any effects thereof on global economic conditions, global financial markets, and our business and results of operations; |
• | changes in the nature and activities of Northern Trust’s competition; |
• | Northern Trust’s success in maintaining existing business and continuing to generate new business in existing and targeted markets and its ability to deploy deposits in a profitable manner consistent with its liquidity requirements; |
• | Northern Trust’s ability to address the complex needs of a global client base and manage compliance with legal, tax, regulatory and other requirements; |
• | Northern Trust’s ability to maintain a product mix that achieves acceptable margins; |
• | Northern Trust’s ability to continue to generate investment results that satisfy clients and to develop an array of investment products; |
• | Northern Trust’s success in recruiting and retaining the necessary personnel to support business growth and expansion and maintain sufficient expertise to support increasingly complex products and services; |
• | Northern Trust’s success in controlling expenses and implementing revenue enhancement initiatives; |
• | uncertainties inherent in Northern Trust’s assumptions concerning its pension plan, including discount rates and expected contributions, returns and payouts; |
• | Northern Trust’s success in improving risk management practices and controls and managing risks inherent in its businesses, including credit risk, operational risk, market and liquidity risk, fiduciary risk, compliance risk and strategic risk; |
• | risks and uncertainties inherent in the litigation and regulatory process, including the possibility that losses may be in excess of Northern Trust’s recorded liability and estimated range of possible loss for litigation exposures; |
• | risks associated with being a holding company, including Northern Trust’s dependence on dividends from its principal subsidiary; |
• | the risk of damage to Northern Trust’s reputation which may undermine the confidence of clients, counterparties, rating agencies, and stockholders; and |
• | other factors identified elsewhere in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2016, including those factors described in Item 1A, “Risk Factors,” and other filings with the SEC, all of which are available on Northern Trust’s website. |
CONSOLIDATED BALANCE SHEETS | NORTHERN TRUST CORPORATION |
(In Millions Except Share Information) | March 31, 2017 | December 31, 2016 | |||||
(Unaudited) | |||||||
Assets | |||||||
Cash and Due from Banks | $ | 4,649.2 | $ | 5,332.0 | |||
Federal Reserve and Other Central Bank Deposits | 25,959.5 | 26,674.2 | |||||
Interest-Bearing Deposits with Banks | 5,247.8 | 4,800.6 | |||||
Federal Funds Sold and Securities Purchased under Agreements to Resell | 1,933.8 | 1,974.3 | |||||
Securities | |||||||
Available for Sale | 34,997.6 | 35,579.8 | |||||
Held to Maturity (Fair value of $8,933.4 and $8,905.1) | 8,938.4 | 8,921.1 | |||||
Trading Account | 1.4 | 0.3 | |||||
Total Securities | 43,937.4 | 44,501.2 | |||||
Loans and Leases | |||||||
Commercial | 15,527.4 | 15,902.3 | |||||
Personal | 17,944.4 | 17,919.8 | |||||
Total Loans and Leases (Net of unearned income of $39.1 and $41.2) | 33,471.8 | 33,822.1 | |||||
Allowance for Credit Losses Assigned to Loans and Leases | (162.0 | ) | (161.0 | ) | |||
Buildings and Equipment | 459.9 | 466.6 | |||||
Client Security Settlement Receivables | 1,559.9 | 1,043.7 | |||||
Goodwill | 519.3 | 519.4 | |||||
Other Assets | 3,912.1 | 4,953.8 | |||||
Total Assets | $ | 121,488.7 | $ | 123,926.9 | |||
Liabilities | |||||||
Deposits | |||||||
Demand and Other Noninterest-Bearing | $ | 20,698.6 | $ | 22,190.4 | |||
Savings and Money Market | 15,878.8 | 16,509.0 | |||||
Savings Certificates and Other Time | 1,346.8 | 1,331.7 | |||||
Non U.S. Offices — Noninterest-Bearing | 9,848.0 | 7,972.5 | |||||
— Interest-Bearing | 52,757.3 | 53,648.1 | |||||
Total Deposits | 100,529.5 | 101,651.7 | |||||
Federal Funds Purchased | 369.5 | 204.8 | |||||
Securities Sold Under Agreements to Repurchase | 433.2 | 473.7 | |||||
Other Borrowings | 4,077.1 | 5,109.5 | |||||
Senior Notes | 1,496.8 | 1,496.6 | |||||
Long-Term Debt | 1,321.8 | 1,330.9 | |||||
Floating Rate Capital Debt | 277.4 | 277.4 | |||||
Other Liabilities | 3,005.7 | 3,611.9 | |||||
Total Liabilities | 111,511.0 | 114,156.5 | |||||
Stockholders’ Equity | |||||||
Preferred Stock, No Par Value; Authorized 10,000,000 shares: | |||||||
Series C, outstanding shares of 16,000 | 388.5 | 388.5 | |||||
Series D, outstanding shares of 5,000 | 493.5 | 493.5 | |||||
Common Stock, $1.66 2/3 Par Value; Authorized 560,000,000 shares; | |||||||
Outstanding shares of 229,585,949 and 228,605,485 | 408.6 | 408.6 | |||||
Additional Paid-In Capital | 1,010.2 | 1,035.8 | |||||
Retained Earnings | 9,074.4 | 8,908.4 | |||||
Accumulated Other Comprehensive Loss | (352.0 | ) | (370.0 | ) | |||
Treasury Stock (15,585,575 and 16,566,039 shares, at cost) | (1,045.5 | ) | (1,094.4 | ) | |||
Total Stockholders’ Equity | 9,977.7 | 9,770.4 | |||||
Total Liabilities and Stockholders’ Equity | $ | 121,488.7 | $ | 123,926.9 |
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | NORTHERN TRUST CORPORATION |
Three Months Ended March 31, | |||||||
(In Millions Except Share Information) | 2017 | 2016 | |||||
Noninterest Income | |||||||
Trust, Investment and Other Servicing Fees | $ | 808.2 | $ | 748.2 | |||
Foreign Exchange Trading Income | 48.1 | 60.5 | |||||
Treasury Management Fees | 14.7 | 16.2 | |||||
Security Commissions and Trading Income | 20.5 | 18.9 | |||||
Other Operating Income | 39.7 | 38.1 | |||||
Investment Security Gains (Losses), net (Note) | (0.3 | ) | 0.3 | ||||
Total Noninterest Income | 930.9 | 882.2 | |||||
Net Interest Income | |||||||
Interest Income | 410.3 | 352.0 | |||||
Interest Expense | 56.8 | 44.2 | |||||
Net Interest Income | 353.5 | 307.8 | |||||
Provision for Credit Losses | (1.0 | ) | 2.0 | ||||
Net Interest Income after Provision for Credit Losses | 354.5 | 305.8 | |||||
Noninterest Expense | |||||||
Compensation | 425.8 | 378.8 | |||||
Employee Benefits | 77.8 | 70.6 | |||||
Outside Services | 153.1 | 149.9 | |||||
Equipment and Software | 127.3 | 114.2 | |||||
Occupancy | 45.4 | 40.9 | |||||
Other Operating Expense | 65.1 | 74.4 | |||||
Total Noninterest Expense | 894.5 | 828.8 | |||||
Income before Income Taxes | 390.9 | 359.2 | |||||
Provision for Income Taxes | 114.8 | 113.8 | |||||
Net Income | $ | 276.1 | $ | 245.4 | |||
Preferred Stock Dividends | 20.7 | 5.9 | |||||
Net Income Applicable to Common Stock | $ | 255.4 | $ | 239.5 | |||
Per Common Share | |||||||
Net Income — Basic | $ | 1.10 | $ | 1.03 | |||
— Diluted | 1.09 | 1.03 | |||||
Average Number of Common Shares Outstanding — Basic | 229,059,540 | 228,619,089 | |||||
— Diluted | 230,630,876 | 229,797,945 | |||||
Note: Changes in Other-Than-Temporary-Impairment (OTTI) Losses | $ | (0.1 | ) | $ | — | ||
Other Security Gains (Losses), net | (0.2 | ) | 0.3 | ||||
Investment Security Gains (Losses), net | $ | (0.3 | ) | $ | 0.3 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | NORTHERN TRUST CORPORATION | |||||||
Three Months Ended March 31, | ||||||||
(In Millions) | 2017 | 2016 | ||||||
Net Income | $ | 276.1 | $ | 245.4 | ||||
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications) | ||||||||
Net Unrealized Gains on Securities Available for Sale | 19.3 | 74.7 | ||||||
Net Unrealized (Losses) Gains on Cash Flow Hedges | (5.3 | ) | 6.1 | |||||
Foreign Currency Translation Adjustments | 2.0 | 3.9 | ||||||
Pension and Other Postretirement Benefit Adjustments | 2.0 | 4.1 | ||||||
Other Comprehensive Income | 18.0 | 88.8 | ||||||
Comprehensive Income | $ | 294.1 | $ | 334.2 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) | NORTHERN TRUST CORPORATION |
Three Months Ended March 31, | |||||||
(In Millions) | 2017 | 2016 | |||||
Preferred Stock | |||||||
Series D, Balance at January 1 and March 31 | $ | 882.0 | $ | 388.5 | |||
Issuance of Preferred Stock, Series D | — | — | |||||
Balance at March 31 | 882.0 | 388.5 | |||||
Common Stock | |||||||
Balance at January 1 and March 31 | 408.6 | 408.6 | |||||
Additional Paid-in Capital | |||||||
Balance at January 1 | 1,035.8 | 1,072.3 | |||||
Treasury Stock Transactions — Stock Options and Awards | (81.8 | ) | (71.2 | ) | |||
Stock Options and Awards — Amortization | 56.2 | 26.4 | |||||
Stock Options and Awards — Tax Benefit | — | (9.0 | ) | ||||
Balance at March 31 | 1,010.2 | 1,018.5 | |||||
Retained Earnings | |||||||
Balance at January 1 | 8,908.4 | 8,242.8 | |||||
Net Income | 276.1 | 245.4 | |||||
Dividends Declared — Common Stock | (89.4 | ) | (83.9 | ) | |||
Dividends Declared — Preferred Stock | (20.7 | ) | (5.9 | ) | |||
Balance at March 31 | 9,074.4 | 8,398.4 | |||||
Accumulated Other Comprehensive Income (Loss) | |||||||
Balance at January 1 | (370.0 | ) | (372.7 | ) | |||
Net Unrealized Gains on Securities Available for Sale | 19.3 | 74.7 | |||||
Net Unrealized Gains (Losses) on Cash Flow Hedges | (5.3 | ) | 6.1 | ||||
Foreign Currency Translation Adjustments | 2.0 | 3.9 | |||||
Pension and Other Postretirement Benefit Adjustments | 2.0 | 4.1 | |||||
Balance at March 31 | (352.0 | ) | (283.9 | ) | |||
Treasury Stock | |||||||
Balance at January 1 | (1,094.4 | ) | (1,033.6 | ) | |||
Stock Options and Awards | 119.0 | 76.6 | |||||
Stock Purchased | (70.1 | ) | (140.3 | ) | |||
Balance at March 31 | (1,045.5 | ) | (1,097.3 | ) | |||
Total Stockholders’ Equity at March 31 | $ | 9,977.7 | $ | 8,832.8 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | NORTHERN TRUST CORPORATION |
Three Months Ended March 31, | |||||||
(In Millions) | 2017 | 2016 | |||||
Cash Flows from Operating Activities: | |||||||
Net Income | $ | 276.1 | $ | 245.4 | |||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | |||||||
Investment Security Losses (Gains), net | 0.3 | (0.3 | ) | ||||
Amortization and Accretion of Securities and Unearned Income, net | 18.9 | 12.5 | |||||
Provision for Credit Losses | (1.0 | ) | 2.0 | ||||
Depreciation on Buildings and Equipment | 23.3 | 22.4 | |||||
Amortization of Computer Software | 75.6 | 65.8 | |||||
Amortization of Intangibles | 2.4 | 2.1 | |||||
Pension Plan Contributions | (11.5 | ) | (9.1 | ) | |||
Change in Receivables | (5.6 | ) | (95.4 | ) | |||
Change in Interest Payable | 5.9 | 2.3 | |||||
Change in Collateral With Derivative Counterparties, net | 572.5 | (200.1 | ) | ||||
Other Operating Activities, net | (172.2 | ) | (343.1 | ) | |||
Net Cash Provided by (Used in) Operating Activities | 784.7 | (295.5 | ) | ||||
Cash Flows from Investing Activities: | |||||||
Net Change in Federal Funds Sold and Securities Purchased under Agreements to Resell | 52.7 | (143.9 | ) | ||||
Change in Interest-Bearing Deposits with Banks | (327.8 | ) | 721.9 | ||||
Net Change in Federal Reserve and Other Central Bank Deposits | 767.1 | 1,987.3 | |||||
Purchases of Securities — Held to Maturity | (2,284.1 | ) | (1,287.7 | ) | |||
Proceeds from Maturity and Redemption of Securities — Held to Maturity | 2,450.9 | 726.3 | |||||
Purchases of Securities — Available for Sale | (2,633.6 | ) | (3,285.2 | ) | |||
Proceeds from Sale, Maturity and Redemption of Securities — Available for Sale | 3,235.9 | 2,416.6 | |||||
Change in Loans and Leases | 153.0 | (950.6 | ) | ||||
Purchases of Buildings and Equipment | (14.3 | ) | (12.0 | ) | |||
Purchases and Development of Computer Software | (79.9 | ) | (65.0 | ) | |||
Change in Client Security Settlement Receivables | (519.8 | ) | 261.0 | ||||
Other Investing Activities, net | 226.4 | 293.8 | |||||
Net Cash Provided by Investing Activities | 1,026.5 | 662.5 | |||||
Cash Flows from Financing Activities: | |||||||
Change in Deposits | (1,671.8 | ) | 388.6 | ||||
Change in Federal Funds Purchased | 164.7 | (88.2 | ) | ||||
Change in Securities Sold under Agreements to Repurchase | (40.4 | ) | (39.5 | ) | |||
Change in Short-Term Other Borrowings | (1,030.6 | ) | (27.1 | ) | |||
Repayments of Senior Notes and Long-Term Debt | (3.8 | ) | (1.4 | ) | |||
Treasury Stock Purchased | (70.1 | ) | (140.3 | ) | |||
Net Proceeds from Stock Options | 37.2 | 5.3 | |||||
Cash Dividends Paid on Common Stock | (86.9 | ) | (82.8 | ) | |||
Cash Dividends Paid on Preferred Stock | (5.9 | ) | (5.9 | ) | |||
Other Financing Activities, net | — | (8.9 | ) | ||||
Net Cash Used in Financing Activities | (2,707.6 | ) | (0.2 | ) | |||
Effect of Foreign Currency Exchange Rates on Cash | 213.6 | 203.1 | |||||
(Decrease) Increase in Cash and Due from Banks | (682.8 | ) | 569.9 | ||||
Cash and Due from Banks at Beginning of Year | 5,332.0 | 6,418.5 | |||||
Cash and Due from Banks at End of Period | $ | 4,649.2 | $ | 6,988.4 | |||
Supplemental Disclosures of Cash Flow Information: | |||||||
Interest Paid | $ | 50.8 | $ | 41.8 | |||
Income Taxes Paid | 43.5 | 215.0 | |||||
Transfers from Loans to OREO | 2.3 | 4.6 |
Consolidated Statements of Cash Flows | Three Months Ended March 31, 2016 | |||||||||||
(In Millions) | Previously Reported | Adjustment | Revised | |||||||||
Change in Interest-Bearing Deposits with Banks | $ | 716.7 | $ | 5.2 | $ | 721.9 | ||||||
Net Change in Federal Reserve Deposits | 1,983.2 | (1,983.2 | ) | — | ||||||||
Net Change in Federal Reserve and Other Central Bank Deposits | — | 1,987.3 | 1,987.3 | |||||||||
Net Cash Provided by Investing Activities | 653.2 | 9.3 | 662.5 | |||||||||
Effect of Foreign Currency Exchange Rates on Cash | 202.9 | 0.2 | 203.1 | |||||||||
Increase in Cash and Due from Banks | 560.4 | 9.5 | 569.9 | |||||||||
Cash and Due from Banks at Beginning of Year | 6,444.6 | (26.1 | ) | 6,418.5 | ||||||||
Cash and Due from Banks at End of Period | 7,005.0 | (16.6 | ) | 6,988.4 |
Footnote 14 Net Interest Income | Three Months Ended March 31, 2016 | |||||||||||
(In Millions) | Previously Reported | Adjustment | Revised | |||||||||
Interest-Bearing Due from and Deposits with Banks | $ | 23.7 | $ | (6.2 | ) | $ | 17.5 | |||||
Federal Reserve Deposits and Other | 23.0 | (23.0 | ) | — | ||||||||
Federal Reserve and Other Central Bank Deposits | $ | — | $ | 29.2 | $ | 29.2 |
Three Months Ended | ||||||||
March 31, 2016 | ||||||||
($ In Millions except per share data) | As Reported | As Adjusted | ||||||
Provision for Income Taxes | $ | 117.4 | $ | 113.8 | ||||
Net Income | 241.8 | 245.4 | ||||||
Earnings Allocated to Participating Securities | 4.1 | 4.1 | ||||||
Net Income Applicable to Common Stock | 235.9 | 239.5 | ||||||
Effective Tax Rate | 32.7 | % | 31.7 | % | ||||
Basic Earnings per Share | 1.01 | 1.03 | ||||||
Diluted Earnings per Share | 1.01 | 1.03 | ||||||
Diluted Weighted Average Shares Outstanding (000s) | 229,980 | 229,798 | ||||||
Additional Paid-In Capital | 1,022.1 | 1,018.5 | ||||||
Retained Earnings | 8,394.8 | 8,398.4 |
March 31, 2017 | ||||||||||||
Financial Instrument | Fair Value | Valuation Technique | Unobservable Inputs | Range of Inputs | ||||||||
Auction Rate Securities | $ | 4.3 | million | Comparables | Price | $84 | — | 99 | ||||
Swaps Related to Sale of Certain Visa Class B Common Shares | $ | 26.4 | million | Discounted Cash Flow | Visa Class A Appreciation | 7.0 | % | — | 11.0% | |||
Conversion Rate | 1.63x | — | 1.65x | |||||||||
Expected Duration | 1.25 | — | 4.25 years |
December 31, 2016 | ||||||||||||
Financial Instrument | Fair Value | Valuation Technique | Unobservable Inputs | Range of Inputs | ||||||||
Auction Rate Securities | $ | 4.7 | million | Comparables | Price | $84 | — | 99 | ||||
Swap Related to Sale of Certain Visa Class B Common Shares | $ | 25.2 | million | Discounted Cash Flow | Visa Class A Appreciation | 7.0 | % | — | 11.0% | |||
Conversion Rate | 1.63x | — | 1.65x | |||||||||
Expected Duration | 1.50 | — | 4.50 years |
(In Millions) | Level 1 | Level 2 | Level 3 | Netting | Assets/Liabilities at Fair Value | ||||||||||||||
March 31, 2017 | |||||||||||||||||||
Securities | |||||||||||||||||||
Available for Sale | |||||||||||||||||||
U.S. Government | $ | 6,830.2 | $ | — | $ | — | $ | — | $ | 6,830.2 | |||||||||
Obligations of States and Political Subdivisions | — | 951.5 | — | — | 951.5 | ||||||||||||||
Government Sponsored Agency | — | 17,936.4 | — | — | 17,936.4 | ||||||||||||||
Non-U.S. Government | — | 218.1 | — | — | 218.1 | ||||||||||||||
Corporate Debt | — | 3,559.0 | — | — | 3,559.0 | ||||||||||||||
Covered Bonds | — | 884.9 | — | — | 884.9 | ||||||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | — | 1,761.3 | — | — | 1,761.3 | ||||||||||||||
Other Asset-Backed | — | 2,351.9 | — | — | 2,351.9 | ||||||||||||||
Auction Rate | — | — | 4.3 | — | 4.3 | ||||||||||||||
Commercial Mortgage-Backed | — | 456.2 | — | — | 456.2 | ||||||||||||||
Other | — | 43.8 | — | — | 43.8 | ||||||||||||||
Total Available for Sale | 6,830.2 | 28,163.1 | 4.3 | — | 34,997.6 | ||||||||||||||
Trading Account | — | 1.4 | — | — | 1.4 | ||||||||||||||
Total Available for Sale and Trading Securities | 6,830.2 | 28,164.5 | 4.3 | — | 34,999.0 | ||||||||||||||
Other Assets | |||||||||||||||||||
Derivative Assets | |||||||||||||||||||
Foreign Exchange Contracts | — | 1,882.3 | — | — | 1,882.3 | ||||||||||||||
Interest Rate Contracts | — | 116.2 | — | — | 116.2 | ||||||||||||||
Total Derivative Assets | — | 1,998.5 | — | (1,352.5 | ) | 646.0 | |||||||||||||
Other Liabilities | |||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||
Foreign Exchange Contracts | — | 1,874.7 | — | — | 1,874.7 | ||||||||||||||
Interest Rate Contracts | — | 84.8 | — | — | 84.8 | ||||||||||||||
Other Financial Derivatives (1) | — | — | 26.4 | — | 26.4 | ||||||||||||||
Total Derivative Liabilities | $ | — | $ | 1,959.5 | $ | 26.4 | $ | (1,148.7 | ) | $ | 837.2 |
(1) | This line consists of swaps related to the sale of certain Visa Class B common shares. |
(In Millions) | Level 1 | Level 2 | Level 3 | Netting | Assets/Liabilities at Fair Value | ||||||||||||||
December 31, 2016 | |||||||||||||||||||
Securities | |||||||||||||||||||
Available for Sale | |||||||||||||||||||
U.S. Government | $ | 7,522.6 | $ | — | $ | — | $ | — | $ | 7,522.6 | |||||||||
Obligations of States and Political Subdivisions | — | 885.2 | — | — | 885.2 | ||||||||||||||
Government Sponsored Agency | — | 17,892.8 | — | — | 17,892.8 | ||||||||||||||
Non-U.S. Government | — | 417.9 | — | — | 417.9 | ||||||||||||||
Corporate Debt | — | 3,765.2 | — | — | 3,765.2 | ||||||||||||||
Covered Bonds | — | 1,143.9 | — | — | 1,143.9 | ||||||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | — | 1,340.7 | — | — | 1,340.7 | ||||||||||||||
Other Asset-Backed | — | 2,085.1 | — | — | 2,085.1 | ||||||||||||||
Auction Rate | — | — | 4.7 | — | 4.7 | ||||||||||||||
Commercial Mortgage-Backed | — | 471.6 | — | — | 471.6 | ||||||||||||||
Other | — | 50.1 | — | — | 50.1 | ||||||||||||||
Total Available for Sale | 7,522.6 | 28,052.5 | 4.7 | — | 35,579.8 | ||||||||||||||
Trading Account | — | 0.3 | — | — | 0.3 | ||||||||||||||
Total Available for Sale and Trading Securities | 7,522.6 | 28,052.8 | 4.7 | — | 35,580.1 | ||||||||||||||
Other Assets | |||||||||||||||||||
Derivative Assets | |||||||||||||||||||
Foreign Exchange Contracts | — | 3,609.6 | — | — | 3,609.6 | ||||||||||||||
Interest Rate Contracts | — | 247.2 | — | — | 247.2 | ||||||||||||||
Total Derivative Assets | — | 3,856.8 | — | (2,170.4 | ) | 1,686.4 | |||||||||||||
Other Liabilities | |||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||
Foreign Exchange Contracts | — | 3,242.9 | — | — | 3,242.9 | ||||||||||||||
Interest Rate Contracts | — | 108.0 | — | — | 108.0 | ||||||||||||||
Other Financial Derivatives (1) | — | — | 25.2 | — | 25.2 | ||||||||||||||
Total Derivative Liabilities | $ | — | $ | 3,350.9 | $ | 25.2 | $ | (2,431.2 | ) | $ | 944.9 |
(1) | This line consists of swaps related to the sale of certain Visa Class B common shares. |
Level 3 Assets (In Millions) | Auction Rate Securities | ||||||
Three Months Ended March 31, | 2017 | 2016 | |||||
Fair Value at January 1 | $ | 4.7 | $ | 17.1 | |||
Total Gains (Losses): | |||||||
Included in Earnings | — | — | |||||
Included in Other Comprehensive Income (1) | — | (0.4 | ) | ||||
Purchases, Issues, Sales, and Settlements | |||||||
Sales | — | (0.1 | ) | ||||
Settlements | (0.4 | ) | — | ||||
Fair Value at March 31 | $ | 4.3 | $ | 16.6 |
(1) | Unrealized gains (losses) are included in net unrealized gains (losses) on securities available for sale in the consolidated statements of comprehensive income. |
Level 3 Liabilities (In Millions) | Swaps Related to Sale of Certain Visa Class B Common Shares | ||||||
Three Months Ended March 31, | 2017 | 2016 | |||||
Fair Value at January 1 | $ | 25.2 | $ | 10.8 | |||
Total (Gains) Losses: | |||||||
Included in Earnings (1) | 2.9 | (0.3 | ) | ||||
Included in Other Comprehensive Income | — | — | |||||
Purchases, Issues, Sales, and Settlements | |||||||
Purchases | — | — | |||||
Settlements | (1.7 | ) | (0.8 | ) | |||
Fair Value at March 31 | $ | 26.4 | $ | 9.7 |
(1) | (Gains) losses are recorded in other operating income in the consolidated statements of income. |
March 31, 2017 | |||||||||||
Financial Instrument | Fair Value | Valuation Technique | Unobservable Input | Range of Discounts Applied | |||||||
Loans | $28.7 million | Market Approach | Discount to reflect realizable value | 15.0 | % | - | 25.0% | ||||
OREO | $0.6 million | Market Approach | Discount to reflect realizable value | 15.0 | % | - | 20.0% |
December 31, 2016 | |||||||||||
Financial Instrument | Fair Value | Valuation Technique | Unobservable Input | Range of Discounts Applied | |||||||
Loans | $6.7 million | Market Approach | Discount to reflect realizable value | 15.0 | % | - | 25.0% | ||||
OREO | $0.7 million | Market Approach | Discount to reflect realizable value | 15.0 | % | - | 20.0% |
(In Millions) | March 31, 2017 | ||||||||||||||||||
Book Value | Total Fair Value | Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||
Assets | |||||||||||||||||||
Cash and Due from Banks | $ | 4,649.2 | $ | 4,649.2 | $ | 4,649.2 | $ | — | $ | — | |||||||||
Federal Reserve and Other Central Bank Deposits | 25,959.5 | 25,959.5 | — | 25,959.5 | — | ||||||||||||||
Interest-Bearing Deposits with Banks | 5,247.8 | 5,247.8 | — | 5,247.8 | — | ||||||||||||||
Federal Funds Sold and Resell Agreements | 1,933.8 | 1,933.8 | — | 1,933.8 | — | ||||||||||||||
Securities | |||||||||||||||||||
Available for Sale (Note) | 34,997.6 | 34,997.6 | 6,830.2 | 28,163.1 | 4.3 | ||||||||||||||
Held to Maturity | 8,938.4 | 8,933.4 | 6.0 | 8,927.4 | — | ||||||||||||||
Trading Account | 1.4 | 1.4 | — | 1.4 | — | ||||||||||||||
Loans (excluding Leases) | |||||||||||||||||||
Held for Investment | 33,056.5 | 33,151.9 | — | — | 33,151.9 | ||||||||||||||
Held for Sale | — | — | — | — | — | ||||||||||||||
Client Security Settlement Receivables | 1,559.9 | 1,559.9 | — | 1,559.9 | — | ||||||||||||||
Other Assets | |||||||||||||||||||
Federal Reserve and Federal Home Loan Bank Stock | 158.1 | 158.1 | — | 158.1 | — | ||||||||||||||
Community Development Investments | 209.8 | 209.8 | — | 209.8 | — | ||||||||||||||
Employee Benefit and Deferred Compensation | 185.2 | 182.3 | 118.3 | 64.0 | — | ||||||||||||||
Liabilities | |||||||||||||||||||
Deposits | |||||||||||||||||||
Demand, Noninterest-Bearing, Savings and Money Market | $ | 46,425.4 | $ | 46,425.4 | $ | 46,425.4 | $ | — | $ | — | |||||||||
Savings Certificates and Other Time | 1,346.8 | 1,351.4 | — | 1,351.4 | — | ||||||||||||||
Non U.S. Offices Interest-Bearing | 52,757.3 | 52,757.3 | — | 52,757.3 | — | ||||||||||||||
Federal Funds Purchased | 369.5 | 369.5 | — | 369.5 | — | ||||||||||||||
Securities Sold under Agreements to Repurchase | 433.2 | 433.2 | — | 433.2 | — | ||||||||||||||
Other Borrowings | 4,077.1 | 4,079.7 | — | 4,079.7 | — | ||||||||||||||
Senior Notes | 1,496.8 | 1,537.3 | — | 1,537.3 | — | ||||||||||||||
Long Term Debt (excluding Leases) | |||||||||||||||||||
Subordinated Debt | 1,302.5 | 1,315.5 | — | 1,315.5 | — | ||||||||||||||
Floating Rate Capital Debt | 277.4 | 252.6 | — | 252.6 | — | ||||||||||||||
Other Liabilities | |||||||||||||||||||
Standby Letters of Credit | 36.8 | 36.8 | — | — | 36.8 | ||||||||||||||
Loan Commitments | 37.5 | 37.5 | — | — | 37.5 | ||||||||||||||
Derivative Instruments | |||||||||||||||||||
Asset/Liability Management | |||||||||||||||||||
Foreign Exchange Contracts | |||||||||||||||||||
Assets | $ | 30.5 | $ | 30.5 | $ | — | $ | 30.5 | $ | — | |||||||||
Liabilities | 42.1 | 42.1 | — | 42.1 | — | ||||||||||||||
Interest Rate Contracts | |||||||||||||||||||
Assets | 39.4 | 39.4 | — | 39.4 | — | ||||||||||||||
Liabilities | 17.5 | 17.5 | — | 17.5 | — | ||||||||||||||
Other Financial Derivatives | |||||||||||||||||||
Liabilities (1) | 26.4 | 26.4 | — | — | 26.4 | ||||||||||||||
Client-Related and Trading | |||||||||||||||||||
Foreign Exchange Contracts | |||||||||||||||||||
Assets | 1,851.8 | 1,851.8 | — | 1,851.8 | — | ||||||||||||||
Liabilities | 1,832.6 | 1,832.6 | — | 1,832.6 | — | ||||||||||||||
Interest Rate Contracts | |||||||||||||||||||
Assets | 76.8 | 76.8 | — | 76.8 | — | ||||||||||||||
Liabilities | 67.3 | 67.3 | — | 67.3 | — |
(1) | This line consists of swaps related to the sale of certain Visa Class B common shares. |
(In Millions) | December 31, 2016 | ||||||||||||||||||
Book Value | Total Fair Value | Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||
Assets | |||||||||||||||||||
Cash and Due from Banks | $ | 5,332.0 | $ | 5,332.0 | $ | 5,332.0 | $ | — | $ | — | |||||||||
Federal Reserve and Other Central Bank Deposits | 26,674.2 | 26,674.2 | — | 26,674.2 | — | ||||||||||||||
Interest-Bearing Deposits with Banks | 4,800.6 | 4,800.6 | — | 4,800.6 | — | ||||||||||||||
Federal Funds Sold and Resell Agreements | 1,974.3 | 1,974.3 | — | 1,974.3 | — | ||||||||||||||
Securities | |||||||||||||||||||
Available for Sale (Note) | 35,579.8 | 35,579.8 | 7,522.6 | 28,052.5 | 4.7 | ||||||||||||||
Held to Maturity | 8,921.1 | 8,905.1 | 15.0 | 8,890.1 | — | ||||||||||||||
Trading Account | 0.3 | 0.3 | — | 0.3 | — | ||||||||||||||
Loans (excluding Leases) | |||||||||||||||||||
Held for Investment | 33,354.1 | 33,471.3 | — | — | 33,471.3 | ||||||||||||||
Held for Sale | 13.4 | 13.4 | — | — | 13.4 | ||||||||||||||
Client Security Settlement Receivables | 1,043.7 | 1,043.7 | — | 1,043.7 | — | ||||||||||||||
Other Assets | |||||||||||||||||||
Federal Reserve and Federal Home Loan Bank Stock | 203.1 | 203.1 | — | 203.1 | — | ||||||||||||||
Community Development Investments | 218.9 | 215.5 | — | 215.5 | — | ||||||||||||||
Employee Benefit and Deferred Compensation | 166.2 | 162.5 | 107.2 | 55.3 | — | ||||||||||||||
Liabilities | |||||||||||||||||||
Deposits | |||||||||||||||||||
Demand, Noninterest-Bearing, Savings and Money Market | $ | 46,671.9 | $ | 46,671.9 | $ | 46,671.9 | $ | — | $ | — | |||||||||
Savings Certificates and Other Time | 1,331.7 | 1,337.5 | — | 1,337.5 | — | ||||||||||||||
Non U.S. Offices Interest-Bearing | 53,648.1 | 53,648.1 | — | 53,648.1 | — | ||||||||||||||
Federal Funds Purchased | 204.8 | 204.8 | — | 204.8 | — | ||||||||||||||
Securities Sold under Agreements to Repurchase | 473.7 | 473.7 | — | 473.7 | — | ||||||||||||||
Other Borrowings | 5,109.5 | 5,113.4 | — | 5,113.4 | — | ||||||||||||||
Senior Notes | 1,496.6 | 1,535.5 | — | 1,535.5 | — | ||||||||||||||
Long Term Debt (excluding Leases) | |||||||||||||||||||
Subordinated Debt | 1,307.9 | 1,316.0 | — | 1,316.0 | — | ||||||||||||||
Floating Rate Capital Debt | 277.4 | 251.0 | — | 251.0 | — | ||||||||||||||
Other Liabilities | |||||||||||||||||||
Standby Letters of Credit | 37.2 | 37.2 | — | — | 37.2 | ||||||||||||||
Loan Commitments | 41.2 | 41.2 | — | — | 41.2 | ||||||||||||||
Derivative Instruments | |||||||||||||||||||
Asset/Liability Management | |||||||||||||||||||
Foreign Exchange Contracts | |||||||||||||||||||
Assets | $ | 335.4 | $ | 335.4 | $ | — | $ | 335.4 | $ | — | |||||||||
Liabilities | 21.2 | 21.2 | — | 21.2 | — | ||||||||||||||
Interest Rate Contracts | |||||||||||||||||||
Assets | 160.2 | 160.2 | — | 160.2 | — | ||||||||||||||
Liabilities | 22.8 | 22.8 | — | 22.8 | — | ||||||||||||||
Other Financial Derivatives | |||||||||||||||||||
Liabilities (1) | 25.2 | 25.2 | — | — | 25.2 | ||||||||||||||
Client-Related and Trading | |||||||||||||||||||
Foreign Exchange Contracts | |||||||||||||||||||
Assets | 3,274.2 | 3,274.2 | — | 3,274.2 | — | ||||||||||||||
Liabilities | 3,221.7 | 3,221.7 | — | 3,221.7 | — | ||||||||||||||
Interest Rate Contracts | |||||||||||||||||||
Assets | 87.0 | 87.0 | — | 87.0 | — | ||||||||||||||
Liabilities | 85.2 | 85.2 | — | 85.2 | — |
(1) | This line consists of swaps related to the sale of certain Visa Class B common shares. |
Securities Available for Sale | March 31, 2017 | ||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||
(In Millions) | Gains | Losses | |||||||||||||
U.S. Government | $ | 6,815.5 | $ | 27.9 | $ | 13.2 | $ | 6,830.2 | |||||||
Obligations of States and Political Subdivisions | 953.2 | 0.2 | 1.9 | 951.5 | |||||||||||
Government Sponsored Agency | 17,947.4 | 52.6 | 63.6 | 17,936.4 | |||||||||||
Non-U.S. Government | 219.8 | — | 1.7 | 218.1 | |||||||||||
Corporate Debt | 3,578.0 | 3.6 | 22.6 | 3,559.0 | |||||||||||
Covered Bonds | 887.3 | 1.1 | 3.5 | 884.9 | |||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 1,761.0 | 3.1 | 2.8 | 1,761.3 | |||||||||||
Other Asset-Backed | 2,349.0 | 4.4 | 1.5 | 2,351.9 | |||||||||||
Auction Rate | 4.6 | — | 0.3 | 4.3 | |||||||||||
Commercial Mortgage-Backed | 459.1 | — | 2.9 | 456.2 | |||||||||||
Other | 43.8 | — | — | 43.8 | |||||||||||
Total | $ | 35,018.7 | $ | 92.9 | $ | 114.0 | $ | 34,997.6 |
Securities Available for Sale | December 31, 2016 | ||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||
(In Millions) | Gains | Losses | |||||||||||||
U.S. Government | $ | 7,514.5 | $ | 22.4 | $ | 14.3 | $ | 7,522.6 | |||||||
Obligations of States and Political Subdivisions | 890.8 | — | 5.6 | 885.2 | |||||||||||
Government Sponsored Agency | 17,914.1 | 49.3 | 70.6 | 17,892.8 | |||||||||||
Non-U.S. Government | 420.0 | — | 2.1 | 417.9 | |||||||||||
Corporate Debt | 3,787.4 | 2.6 | 24.8 | 3,765.2 | |||||||||||
Covered Bonds | 1,148.6 | 0.8 | 5.5 | 1,143.9 | |||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 1,343.6 | 0.9 | 3.8 | 1,340.7 | |||||||||||
Other Asset-Backed | 2,083.7 | 2.7 | 1.3 | 2,085.1 | |||||||||||
Auction Rate | 5.0 | — | 0.3 | 4.7 | |||||||||||
Commercial Mortgage-Backed | 474.1 | — | 2.5 | 471.6 | |||||||||||
Other | 50.1 | — | — | 50.1 | |||||||||||
Total | $ | 35,631.9 | $ | 78.7 | $ | 130.8 | $ | 35,579.8 |
Securities Held to Maturity | March 31, 2017 | ||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||
(In Millions) | Gains | Losses | |||||||||||||
U.S Government | $ | 6.0 | $ | — | $ | — | $ | 6.0 | |||||||
Obligations of States and Political Subdivisions | 49.0 | 2.6 | — | 51.6 | |||||||||||
Government Sponsored Agency | 6.8 | 0.5 | — | 7.3 | |||||||||||
Corporate Debt | 252.6 | 0.1 | 0.4 | 252.3 | |||||||||||
Covered Bonds | 2,295.6 | 11.6 | 2.7 | 2,304.5 | |||||||||||
Non-U.S. Government | 3,282.6 | 6.6 | 0.4 | 3,288.8 | |||||||||||
Certificates of Deposit | 306.5 | — | — | 306.5 | |||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 2,422.3 | 10.8 | 1.3 | 2,431.8 | |||||||||||
Other Asset-Backed | 186.4 | 1.6 | — | 188.0 | |||||||||||
Other | 130.6 | — | 34.0 | 96.6 | |||||||||||
Total | $ | 8,938.4 | $ | 33.8 | $ | 38.8 | $ | 8,933.4 |
Securities Held to Maturity | December 31, 2016 | ||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||
(In Millions) | Gains | Losses | |||||||||||||
U.S Government | $ | 15.0 | $ | — | $ | — | $ | 15.0 | |||||||
Obligations of States and Political Subdivisions | 63.6 | 2.7 | — | 66.3 | |||||||||||
Government Sponsored Agency | 7.4 | 0.5 | — | 7.9 | |||||||||||
Corporate Debt | 231.2 | 0.2 | 0.4 | 231.0 | |||||||||||
Covered Bonds | 2,051.6 | 10.1 | 3.7 | 2,058.0 | |||||||||||
Non-U.S. Government | 3,517.5 | 4.9 | 2.3 | 3,520.1 | |||||||||||
Certificates of Deposit | 606.0 | 0.2 | 0.1 | 606.1 | |||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 2,154.7 | 10.5 | 2.8 | 2,162.4 | |||||||||||
Other Asset-Backed | 143.4 | 0.1 | — | 143.5 | |||||||||||
Other | 130.7 | — | 35.9 | 94.8 | |||||||||||
Total | $ | 8,921.1 | $ | 29.2 | $ | 45.2 | $ | 8,905.1 |
March 31, 2017 | |||||||
(In Millions) | Amortized Cost | Fair Value | |||||
Available for Sale | |||||||
Due in One Year or Less | $ | 6,665.1 | $ | 6,660.1 | |||
Due After One Year Through Five Years | 21,136.2 | 21,124.3 | |||||
Due After Five Years Through Ten Years | 6,015.5 | 6,017.7 | |||||
Due After Ten Years | 1,201.9 | 1,195.5 | |||||
Total | 35,018.7 | 34,997.6 | |||||
Held to Maturity | |||||||
Due in One Year or Less | 2,914.6 | 2,916.9 | |||||
Due After One Year Through Five Years | 5,764.1 | 5,783.4 | |||||
Due After Five Years Through Ten Years | 201.2 | 200.2 | |||||
Due After Ten Years | 58.5 | 32.9 | |||||
Total | $ | 8,938.4 | $ | 8,933.4 |
Securities with Unrealized Losses as of March 31, 2017 | Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||
(In Millions) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
U.S. Government | $ | 1,701.3 | $ | 13.2 | $ | — | $ | — | $ | 1,701.3 | $ | 13.2 | ||||||||||||
Obligations of States and Political Subdivisions | 750.1 | 1.9 | — | — | 750.1 | 1.9 | ||||||||||||||||||
Government Sponsored Agency | 7,455.5 | 51.5 | 2,433.8 | 12.1 | 9,889.3 | 63.6 | ||||||||||||||||||
Non-U.S. Government | 1,729.3 | 2.1 | — | — | 1,729.3 | 2.1 | ||||||||||||||||||
Corporate Debt | 1,555.2 | 9.6 | 807.3 | 13.4 | 2,362.5 | 23.0 | ||||||||||||||||||
Covered Bonds | 829.3 | 6.0 | 139.2 | 0.2 | 968.5 | 6.2 | ||||||||||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 1,089.2 | 3.4 | 249.3 | 0.7 | 1,338.5 | 4.1 | ||||||||||||||||||
Other Asset-Backed | 714.5 | 1.5 | — | — | 714.5 | 1.5 | ||||||||||||||||||
Auction Rate | 0.4 | 0.1 | 3.8 | 0.2 | 4.2 | 0.3 | ||||||||||||||||||
Commercial Mortgage-Backed | 439.3 | 2.9 | — | — | 439.3 | 2.9 | ||||||||||||||||||
Other | 48.4 | 14.1 | 51.6 | 19.9 | 100.0 | 34.0 | ||||||||||||||||||
Total | $ | 16,312.5 | $ | 106.3 | $ | 3,685.0 | $ | 46.5 | $ | 19,997.5 | $ | 152.8 |
Securities with Unrealized Losses as of December 31, 2016 | Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||
(In Millions) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
U.S. Government | $ | 1,603.0 | $ | 14.3 | $ | — | $ | — | $ | 1,603.0 | $ | 14.3 | ||||||||||||
Obligations of States and Political Subdivisions | 865.3 | 5.6 | — | — | 865.3 | 5.6 | ||||||||||||||||||
Government Sponsored Agency | 8,252.5 | 58.5 | 2,121.0 | 12.1 | 10,373.5 | 70.6 | ||||||||||||||||||
Non-U.S. Government | 2,957.1 | 4.4 | — | — | 2,957.1 | 4.4 | ||||||||||||||||||
Corporate Debt | 1,601.7 | 11.2 | 1,054.4 | 14.0 | 2,656.1 | 25.2 | ||||||||||||||||||
Covered Bonds | 809.0 | 8.6 | 138.9 | 0.6 | 947.9 | 9.2 | ||||||||||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 1,136.1 | 5.7 | 249.1 | 0.9 | 1,385.2 | 6.6 | ||||||||||||||||||
Other Asset-Backed | 584.3 | 1.3 | — | — | 584.3 | 1.3 | ||||||||||||||||||
Certificates of Deposit | 81.4 | 0.1 | — | — | 81.4 | 0.1 | ||||||||||||||||||
Auction Rate | 0.4 | 0.1 | 4.3 | 0.2 | 4.7 | 0.3 | ||||||||||||||||||
Commercial Mortgage-Backed | 471.5 | 2.5 | — | — | 471.5 | 2.5 | ||||||||||||||||||
Other | 50.5 | 17.9 | 59.7 | 18.0 | 110.2 | 35.9 | ||||||||||||||||||
Total | $ | 18,412.8 | $ | 130.2 | $ | 3,627.4 | $ | 45.8 | $ | 22,040.2 | $ | 176.0 |
Three Months Ended March 31, | |||||||
(In Millions) | 2017 | 2016 | |||||
Cumulative Credit-Related Losses on Securities Held — Beginning of Period | $ | 3.4 | $ | 5.2 | |||
Plus: Losses on Newly Identified Impairments | — | — | |||||
Additional Losses on Previously Identified Impairments | 0.1 | — | |||||
Less: Current and Prior Period Losses on Securities Sold During the Period | — | — | |||||
Cumulative Credit-Related Losses on Securities Held — End of Period | $ | 3.5 | $ | 5.2 |
March 31, 2017 | |||
(In Millions) | Remaining Contractual Maturity of the Agreements | ||
Repurchase Agreements | Overnight and Continuous | ||
U.S. Treasury and Agency Securities | $ | 433.2 | |
Total Borrowings | $ | 433.2 | |
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 21 | $ | 433.2 | |
Amounts related to agreements not included in Note 21 | $ | — |
(In Millions) | March 31, 2017 | December 31, 2016 | |||||
Commercial | |||||||
Commercial and Institutional | $ | 9,487.3 | $ | 9,523.0 | |||
Commercial Real Estate | 3,922.8 | 4,002.5 | |||||
Non-U.S. | 1,654.0 | 1,877.8 | |||||
Lease Financing, net | 253.6 | 293.9 | |||||
Other | 209.7 | 205.1 | |||||
Total Commercial | 15,527.4 | 15,902.3 | |||||
Personal | |||||||
Private Client | 10,375.8 | 10,052.0 | |||||
Residential Real Estate | 7,542.1 | 7,841.9 | |||||
Other | 26.5 | 25.9 | |||||
Total Personal | 17,944.4 | 17,919.8 | |||||
Total Loans and Leases | 33,471.8 | 33,822.1 | |||||
Allowance for Credit Losses Assigned to Loans and Leases | (162.0 | ) | (161.0 | ) | |||
Net Loans and Leases | $ | 33,309.8 | $ | 33,661.1 |
• | Commercial and Institutional: leverage, profit margin, liquidity, asset size and capital levels; |
• | Commercial Real Estate: debt service coverage, loan-to-value ratio, leasing status and guarantor support; |
• | Lease Financing and Commercial-Other: leverage, profit margin, liquidity, asset size and capital levels; |
• | Non-U.S.: leverage, profit margin, liquidity, return on assets and capital levels; |
• | Residential Real Estate: payment history, credit bureau scores and loan-to-value ratio; |
• | Private Client: cash-flow-to-debt and net worth ratios, leverage and liquidity; and |
• | Personal-Other: cash-flow-to-debt and net worth ratios. |
March 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
(In Millions) | 1 to 3 Category | 4 to 5 Category | 6 to 9 Category (Watch List) | Total | 1 to 3 Category | 4 to 5 Category | 6 to 9 Category (Watch List) | Total | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||||
Commercial and Institutional | $ | 6,278.1 | $ | 3,080.6 | $ | 128.6 | $ | 9,487.3 | $ | 6,293.2 | $ | 3,108.5 | $ | 121.3 | $ | 9,523.0 | |||||||||||||||
Commercial Real Estate | 1,742.3 | 2,157.6 | 22.9 | 3,922.8 | 1,825.7 | 2,134.8 | 42.0 | 4,002.5 | |||||||||||||||||||||||
Non-U.S. | 379.9 | 1,272.8 | 1.3 | 1,654.0 | 602.8 | 1,273.5 | 1.5 | 1,877.8 | |||||||||||||||||||||||
Lease Financing, net | 200.8 | 52.8 | — | 253.6 | 214.3 | 79.6 | — | 293.9 | |||||||||||||||||||||||
Other | 113.4 | 95.5 | 0.8 | 209.7 | 135.5 | 67.9 | 1.7 | 205.1 | |||||||||||||||||||||||
Total Commercial | 8,714.5 | 6,659.3 | 153.6 | 15,527.4 | 9,071.5 | 6,664.3 | 166.5 | 15,902.3 | |||||||||||||||||||||||
Personal | |||||||||||||||||||||||||||||||
Private Client | 6,526.9 | 3,839.4 | 9.5 | 10,375.8 | 6,373.2 | 3,668.4 | 10.4 | 10,052.0 | |||||||||||||||||||||||
Residential Real Estate | 2,564.4 | 4,664.3 | 313.4 | 7,542.1 | 2,617.8 | 4,913.9 | 310.2 | 7,841.9 | |||||||||||||||||||||||
Other | 14.4 | 12.0 | 0.1 | 26.5 | 17.1 | 8.5 | 0.3 | 25.9 | |||||||||||||||||||||||
Total Personal | 9,105.7 | 8,515.7 | 323.0 | 17,944.4 | 9,008.1 | 8,590.8 | 320.9 | 17,919.8 | |||||||||||||||||||||||
Total Loans and Leases | $ | 17,820.2 | $ | 15,175.0 | $ | 476.6 | $ | 33,471.8 | $ | 18,079.6 | $ | 15,255.1 | $ | 487.4 | $ | 33,822.1 |
March 31, 2017 | |||||||||||||||||||||||||||
(In Millions) | Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Performing | Nonperforming | Total Loans and Leases | ||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||
Commercial and Institutional | $ | 9,398.5 | $ | 21.8 | $ | 2.4 | $ | 4.0 | $ | 9,426.7 | $ | 60.6 | $ | 9,487.3 | |||||||||||||
Commercial Real Estate | 3,887.8 | 15.8 | 3.0 | 4.1 | 3,910.7 | 12.1 | 3,922.8 | ||||||||||||||||||||
Non-U.S. | 1,654.0 | — | — | — | 1,654.0 | — | 1,654.0 | ||||||||||||||||||||
Lease Financing, net | 253.6 | — | — | — | 253.6 | — | 253.6 | ||||||||||||||||||||
Other | 209.7 | — | — | — | 209.7 | — | 209.7 | ||||||||||||||||||||
Total Commercial | 15,403.6 | 37.6 | 5.4 | 8.1 | 15,454.7 | 72.7 | 15,527.4 | ||||||||||||||||||||
Personal | |||||||||||||||||||||||||||
Residential Real Estate | 7,389.4 | 40.0 | 5.6 | 0.1 | 7,435.1 | 107.0 | 7,542.1 | ||||||||||||||||||||
Private Client | 10,216.4 | 155.0 | 2.5 | 1.7 | 10,375.6 | 0.2 | 10,375.8 | ||||||||||||||||||||
Other | 26.5 | — | — | — | 26.5 | — | 26.5 | ||||||||||||||||||||
Total Personal | 17,632.3 | 195.0 | 8.1 | 1.8 | 17,837.2 | 107.2 | 17,944.4 | ||||||||||||||||||||
Total Loans and Leases | $ | 33,035.9 | $ | 232.6 | $ | 13.5 | $ | 9.9 | $ | 33,291.9 | $ | 179.9 | $ | 33,471.8 | |||||||||||||
Other Real Estate Owned | $ | 6.9 | |||||||||||||||||||||||||
Total Nonperforming Assets | $ | 186.8 |
December 31, 2016 | |||||||||||||||||||||||||||
(In Millions) | Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Performing | Nonperforming | Total Loans and Leases | ||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||
Commercial and Institutional | $ | 9,470.0 | $ | 5.3 | $ | 2.3 | $ | 11.7 | $ | 9,489.3 | $ | 33.7 | $ | 9,523.0 | |||||||||||||
Commercial Real Estate | 3,974.4 | 10.9 | 1.0 | 4.6 | 3,990.9 | 11.6 | 4,002.5 | ||||||||||||||||||||
Non-U.S. | 1,877.7 | 0.1 | — | — | 1,877.8 | — | 1,877.8 | ||||||||||||||||||||
Lease Financing, net | 293.9 | — | — | — | 293.9 | — | 293.9 | ||||||||||||||||||||
Other | 205.1 | — | — | — | 205.1 | — | 205.1 | ||||||||||||||||||||
Total Commercial | 15,821.1 | 16.3 | 3.3 | 16.3 | 15,857.0 | 45.3 | 15,902.3 | ||||||||||||||||||||
Personal | |||||||||||||||||||||||||||
Private Client | 9,988.7 | 40.8 | 8.5 | 13.7 | 10,051.7 | 0.3 | 10,052.0 | ||||||||||||||||||||
Residential Real Estate | 7,675.7 | 44.5 | 6.1 | 1.0 | 7,727.3 | 114.6 | 7,841.9 | ||||||||||||||||||||
Other | 25.9 | — | — | — | 25.9 | — | 25.9 | ||||||||||||||||||||
Total Personal | 17,690.3 | 85.3 | 14.6 | 14.7 | 17,804.9 | 114.9 | 17,919.8 | ||||||||||||||||||||
Total Loans and Leases | $ | 33,511.4 | $ | 101.6 | $ | 17.9 | $ | 31.0 | $ | 33,661.9 | $ | 160.2 | $ | 33,822.1 | |||||||||||||
Other Real Estate Owned | $ | 5.2 | |||||||||||||||||||||||||
Total Nonperforming Assets | $ | 165.4 |
As of March 31, 2017 | As of December 31, 2016 | ||||||||||||||||||||||
(In Millions) | Recorded Investment | Unpaid Principal Balance | Specific Allowance | Recorded Investment | Unpaid Principal Balance | Specific Allowance | |||||||||||||||||
With No Related Specific Allowance | |||||||||||||||||||||||
Commercial and Institutional | $ | 31.9 | $ | 34.5 | $ | — | $ | 32.2 | $ | 34.6 | $ | — | |||||||||||
Commercial Real Estate | 11.6 | 14.1 | — | 14.7 | 18.6 | — | |||||||||||||||||
Lease Financing, net | — | — | — | — | — | — | |||||||||||||||||
Private Client | 0.1 | 0.1 | — | 0.3 | 0.3 | — | |||||||||||||||||
Residential Real Estate | 91.8 | 127.5 | — | 101.2 | 138.4 | — | |||||||||||||||||
With a Related Specific Allowance | |||||||||||||||||||||||
Commercial and Institutional | 27.3 | 27.6 | 7.2 | — | — | — | |||||||||||||||||
Commercial Real Estate | 2.8 | 2.8 | 0.7 | — | — | — | |||||||||||||||||
Lease Financing, net | — | — | — | — | — | — | |||||||||||||||||
Private Client | — | — | — | — | — | — | |||||||||||||||||
Residential Real Estate | 7.3 | 7.4 | 0.8 | 7.7 | 7.9 | 2.1 | |||||||||||||||||
Total | |||||||||||||||||||||||
Commercial | 73.6 | 79.0 | 7.9 | 46.9 | 53.2 | — | |||||||||||||||||
Personal | 99.2 | 135.0 | 0.8 | 109.2 | 146.6 | 2.1 | |||||||||||||||||
Total | $ | 172.8 | $ | 214.0 | $ | 8.7 | $ | 156.1 | $ | 199.8 | $ | 2.1 |
Three Months Ended March 31, | |||||||||||||||
2017 | 2016 | ||||||||||||||
(In Millions) | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||
With No Related Specific Allowance | |||||||||||||||
Commercial and Institutional | $ | 39.0 | $ | — | $ | 28.3 | $ | — | |||||||
Commercial Real Estate | 14.9 | 0.1 | 17.7 | 0.1 | |||||||||||
Lease Financing, net | — | — | 0.4 | 0.1 | |||||||||||
Private Client | 0.2 | — | 0.3 | — | |||||||||||
Residential Real Estate | 101.7 | 0.5 | 99.6 | 0.4 | |||||||||||
With a Related Specific Allowance | |||||||||||||||
Commercial and Institutional | 9.1 | — | 8.4 | — | |||||||||||
Commercial Real Estate | 0.9 | — | — | — | |||||||||||
Lease Financing, net | — | — | 2.1 | — | |||||||||||
Private Client | — | — | — | — | |||||||||||
Residential Real Estate | 2.4 | — | 1.5 | — | |||||||||||
Total | |||||||||||||||
Commercial | 63.9 | 0.1 | 56.9 | 0.2 | |||||||||||
Personal | 104.3 | 0.5 | 101.4 | 0.4 | |||||||||||
Total | $ | 168.2 | $ | 0.6 | $ | 158.3 | $ | 0.6 |
($ In Millions) | Three Months Ended March 31, 2017 | |||||||||
Number of Loans and Leases | Recorded Investment | Unpaid Principal Balance | ||||||||
Commercial | ||||||||||
Commercial and Institutional | — | $ | — | $ | — | |||||
Commercial Real Estate | 1 | 1.4 | 1.4 | |||||||
Total Commercial | 1 | 1.4 | 1.4 | |||||||
Personal | ||||||||||
Private Client | 1 | — | 0.1 | |||||||
Residential Real Estate | 19 | 3.9 | 3.9 | |||||||
Total Personal | 20 | 3.9 | 4.0 | |||||||
Total Loans and Leases | 21 | $ | 5.3 | $ | 5.4 |
($ In Millions) | Three Months Ended March 31, 2016 | |||||||||
Number of Loans and Leases | Recorded Investment | Unpaid Principal Balance | ||||||||
Commercial | ||||||||||
Commercial and Institutional | 2 | $ | 4.0 | $ | 6.0 | |||||
Commercial Real Estate | 5 | 5.4 | 7.7 | |||||||
Total Commercial | 7 | 9.4 | 13.7 | |||||||
Personal | ||||||||||
Private Client | — | — | — | |||||||
Residential Real Estate | 24 | 5.5 | 6.2 | |||||||
Total Personal | 24 | 5.5 | 6.2 | |||||||
Total Loans and Leases | 31 | $ | 14.9 | $ | 19.9 |
Three Months Ended March 31, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
(In Millions) | Commercial | Personal | Total | Commercial | Personal | Total | |||||||||||||||||
Balance at Beginning of Period | $ | 104.9 | $ | 87.1 | $ | 192.0 | $ | 114.8 | $ | 118.5 | $ | 233.3 | |||||||||||
Charge-Offs | (1.1 | ) | (3.6 | ) | (4.7 | ) | (3.5 | ) | (1.8 | ) | (5.3 | ) | |||||||||||
Recoveries | 1.6 | 1.1 | 2.7 | 1.2 | 1.4 | 2.6 | |||||||||||||||||
Net (Charge-Offs) Recoveries | 0.5 | (2.5 | ) | (2.0 | ) | (2.3 | ) | (0.4 | ) | (2.7 | ) | ||||||||||||
Provision for Credit Losses | 6.4 | (7.4 | ) | (1.0 | ) | 2.7 | (0.7 | ) | 2.0 | ||||||||||||||
Balance at End of Period | $ | 111.8 | $ | 77.2 | $ | 189.0 | $ | 115.2 | $ | 117.4 | $ | 232.6 |
March 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
(In Millions) | Commercial | Personal | Total | Commercial | Personal | Total | |||||||||||||||||
Loans and Leases | |||||||||||||||||||||||
Specifically Evaluated for Impairment | $ | 73.6 | $ | 99.2 | $ | 172.8 | $ | 46.9 | $ | 109.2 | $ | 156.1 | |||||||||||
Evaluated for Inherent Impairment | 15,453.8 | 17,845.2 | 33,299.0 | 15,855.4 | 17,810.6 | 33,666.0 | |||||||||||||||||
Total Loans and Leases | 15,527.4 | 17,944.4 | 33,471.8 | 15,902.3 | 17,919.8 | 33,822.1 | |||||||||||||||||
Allowance for Credit Losses on Credit Exposures | |||||||||||||||||||||||
Specifically Evaluated for Impairment | 7.9 | 0.8 | 8.7 | — | 2.1 | 2.1 | |||||||||||||||||
Evaluated for Inherent Impairment | 83.6 | 69.7 | 153.3 | 83.7 | 75.2 | 158.9 | |||||||||||||||||
Allowance Assigned to Loans and Leases | 91.5 | 70.5 | 162.0 | 83.7 | 77.3 | 161.0 | |||||||||||||||||
Allowance for Undrawn Exposures | |||||||||||||||||||||||
Commitments and Standby Letters of Credit | 20.3 | 6.7 | 27.0 | 21.2 | 9.8 | 31.0 | |||||||||||||||||
Total Allowance for Credit Losses | $ | 111.8 | $ | 77.2 | $ | 189.0 | $ | 104.9 | $ | 87.1 | $ | 192.0 |
(In Millions) | March 31, 2017 | December 31, 2016 | |||||
Corporate & Institutional Services | $ | 448.3 | $ | 448.4 | |||
Wealth Management | 71.0 | 71.0 | |||||
Total Goodwill | $ | 519.3 | $ | 519.4 |
(In Millions) | March 31, 2017 | December 31, 2016 | |||||
Gross Carrying Amount | $ | 90.9 | $ | 89.0 | |||
Less: Accumulated Amortization | 49.8 | 47.2 | |||||
Net Book Value | $ | 41.1 | $ | 41.8 |
Three Months Ended March 31, | Corporate & Institutional Services | Wealth Management | Treasury and Other | Total Consolidated | |||||||||||||||||||||||||||
($ In Millions) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||||||||||
Trust, Investment and Other Servicing Fees | $ | 462.9 | $ | 433.4 | $ | 345.3 | $ | 314.8 | $ | — | $ | — | $ | 808.2 | $ | 748.2 | |||||||||||||||
Foreign Exchange Trading Income | 49.1 | 51.7 | 0.9 | 4.5 | (1.9 | ) | 4.3 | 48.1 | 60.5 | ||||||||||||||||||||||
Other Noninterest Income | 44.2 | 45.6 | 25.5 | 26.8 | 4.9 | 1.1 | 74.6 | 73.5 | |||||||||||||||||||||||
Net Interest Income* | 166.5 | 138.4 | 177.0 | 158.5 | 18.9 | 17.1 | 362.4 | 314.0 | |||||||||||||||||||||||
Revenue* | 722.7 | 669.1 | 548.7 | 504.6 | 21.9 | 22.5 | 1,293.3 | 1,196.2 | |||||||||||||||||||||||
Provision for Credit Losses | 0.3 | (3.2 | ) | (1.3 | ) | 5.2 | — | — | (1.0 | ) | 2.0 | ||||||||||||||||||||
Noninterest Expense | 510.8 | 475.3 | 346.3 | 326.9 | 37.4 | 26.6 | 894.5 | 828.8 | |||||||||||||||||||||||
Income before Income Taxes* | 211.6 | 197.0 | 203.7 | 172.5 | (15.5 | ) | (4.1 | ) | 399.8 | 365.4 | |||||||||||||||||||||
Provision for Income Taxes* | 66.9 | 62.2 | 76.8 | 64.9 | (20.0 | ) | (7.1 | ) | 123.7 | 120.0 | |||||||||||||||||||||
Net Income | $ | 144.7 | $ | 134.8 | $ | 126.9 | $ | 107.6 | $ | 4.5 | $ | 3.0 | $ | 276.1 | $ | 245.4 | |||||||||||||||
Percentage of Consolidated Net Income | 52 | % | 55 | % | 46 | % | 44 | % | 2 | % | 1 | % | 100 | % | 100 | % | |||||||||||||||
Average Assets | $ | 77,803.5 | $ | 75,372.9 | $ | 26,661.8 | $ | 26,237.8 | $ | 12,011.1 | $ | 11,806.4 | $ | 116,476.4 | $ | 113,417.1 |
(In Millions) | Balance at March 31, 2017 | Net Change | Balance at December 31, 2016 | ||||||||
Net Unrealized Gains (Losses) on Securities Available for Sale | $ | (13.1 | ) | $ | 19.3 | $ | (32.4 | ) | |||
Net Unrealized Gains (Losses) on Cash Flow Hedges | 0.8 | (5.3 | ) | 6.1 | |||||||
Net Foreign Currency Adjustments | (16.5 | ) | 2.0 | (18.5 | ) | ||||||
Net Pension and Other Postretirement Benefit Adjustments | (323.2 | ) | 2.0 | (325.2 | ) | ||||||
Total | $ | (352.0 | ) | $ | 18.0 | $ | (370.0 | ) |
(In Millions) | Balance at March 31, 2016 | Net Change | Balance at December 31, 2015 | ||||||||
Net Unrealized Gains (Losses) on Securities Available for Sale | $ | 43.7 | $ | 74.7 | $ | (31.0 | ) | ||||
Net Unrealized Gains (Losses) on Cash Flow Hedges | 3.1 | 6.1 | (3.0 | ) | |||||||
Net Foreign Currency Adjustments | (13.7 | ) | 3.9 | (17.6 | ) | ||||||
Net Pension and Other Postretirement Benefit Adjustments | (317.0 | ) | 4.1 | (321.1 | ) | ||||||
Total | $ | (283.9 | ) | $ | 88.8 | $ | (372.7 | ) |
Three Months Ended March 31, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
(In Millions) | Before Tax | Tax Effect | After Tax | Before Tax | Tax Effect | After Tax | |||||||||||||||||
Unrealized Gains (Losses) on Securities Available for Sale | |||||||||||||||||||||||
Other Unrealized Gains (Losses) on Securities Available for Sale | 30.9 | (11.7 | ) | 19.2 | 120.5 | (45.6 | ) | 74.9 | |||||||||||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income | 0.2 | (0.1 | ) | 0.1 | (0.3 | ) | 0.1 | (0.2 | ) | ||||||||||||||
Net Change | 31.1 | (11.8 | ) | 19.3 | 120.2 | (45.5 | ) | 74.7 | |||||||||||||||
Unrealized Gains (Losses) on Cash Flow Hedges | |||||||||||||||||||||||
Unrealized Gains (Losses) on Cash Flow Hedges | 8.7 | (10.8 | ) | (2.1 | ) | 9.4 | (3.7 | ) | 5.7 | ||||||||||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income | (5.1 | ) | 1.9 | (3.2 | ) | 0.6 | (0.2 | ) | 0.4 | ||||||||||||||
Net Change | 3.6 | (8.9 | ) | (5.3 | ) | 10.0 | (3.9 | ) | 6.1 | ||||||||||||||
Foreign Currency Adjustments | |||||||||||||||||||||||
Foreign Currency Translation Adjustments | 22.4 | (1.5 | ) | 20.9 | 17.3 | (0.3 | ) | 17.0 | |||||||||||||||
Long-Term Intra-Entity Foreign Currency Transaction Gains (Losses) | — | — | — | 4.2 | (1.0 | ) | 3.2 | ||||||||||||||||
Net Investment Hedge Gains (Losses) | (30.5 | ) | 11.6 | (18.9 | ) | (26.5 | ) | 10.2 | (16.3 | ) | |||||||||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income | — | — | — | — | — | — | |||||||||||||||||
Net Change | (8.1 | ) | 10.1 | 2.0 | (5.0 | ) | 8.9 | 3.9 | |||||||||||||||
Pension and Other Postretirement Benefit Adjustments | |||||||||||||||||||||||
Net Actuarial Gain (Loss) | (2.3 | ) | — | (2.3 | ) | — | — | — | |||||||||||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income | 6.4 | (2.1 | ) | 4.3 | 6.4 | (2.3 | ) | 4.1 | |||||||||||||||
Net Change | $ | 4.1 | $ | (2.1 | ) | $ | 2.0 | $ | 6.4 | $ | (2.3 | ) | $ | 4.1 |
(In Millions) | Location of Reclassification Adjustments Recognized in Income | Amount of Reclassification Adjustments Recognized in Income | ||
Three Months Ended | ||||
March 31, 2017 | ||||
Securities Available for Sale | ||||
Realized (Gains) Losses on Securities Available for Sale | Investment Security Gains (Losses), net | $ | 0.2 | |
Realized Gains on Cash Flow Hedges | ||||
Foreign Exchange Contracts | Other Operating Income/Expense | (5.1 | ) | |
Pension and Other Postretirement Benefit Adjustments | ||||
Amortization of Net Actuarial Loss | Employee Benefits | 6.5 | ||
Amortization of Prior Service Cost | Employee Benefits | (0.1 | ) | |
Gross Reclassification Adjustment | $ | 6.4 |
Three Months Ended March 31, | |||||||
($ In Millions Except Per Common Share Information) | 2017 | 2016 | |||||
Basic Net Income Per Common Share | |||||||
Average Number of Common Shares Outstanding | 229,059,540 | 228,619,089 | |||||
Net Income | $ | 276.1 | $ | 245.4 | |||
Less: Dividends on Preferred Stock | 20.7 | 5.9 | |||||
Net Income Applicable to Common Stock | 255.4 | 239.5 | |||||
Less: Earnings Allocated to Participating Securities | 4.5 | 4.1 | |||||
Earnings Allocated to Common Shares Outstanding | 250.9 | 235.4 | |||||
Basic Net Income Per Common Share | $ | 1.10 | $ | 1.03 | |||
Diluted Net Income Per Common Share | |||||||
Average Number of Common Shares Outstanding | 229,059,540 | 228,619,089 | |||||
Plus: Dilutive Effect of Share-based Compensation | 1,571,336 | 1,178,856 | |||||
Average Common and Potential Common Shares | 230,630,876 | 229,797,945 | |||||
Earnings Allocated to Common and Potential Common Shares | $ | 250.9 | $ | 235.5 | |||
Diluted Net Income Per Common Share | 1.09 | 1.03 |
Three Months Ended March 31, | |||||||
(In Millions) | 2017 | 2016 | |||||
Interest Income | |||||||
Loans and Leases | $ | 213.4 | $ | 200.9 | |||
Securities — Taxable | 143.2 | 103.3 | |||||
— Non-Taxable | 2.6 | 1.1 | |||||
Interest-Bearing Due from and Deposits with Banks (1) | 14.9 | 17.5 | |||||
Federal Reserve and Other Central Bank Deposits | 36.2 | 29.2 | |||||
Total Interest Income | 410.3 | 352.0 | |||||
Interest Expense | |||||||
Deposits | 27.6 | 22.2 | |||||
Federal Funds Purchased | 0.5 | 0.3 | |||||
Securities Sold Under Agreements to Repurchase | 0.9 | 0.4 | |||||
Other Borrowings | 7.6 | 2.7 | |||||
Senior Notes | 11.7 | 11.7 | |||||
Long-Term Debt | 7.4 | 6.1 | |||||
Floating Rate Capital Debt | 1.1 | 0.8 | |||||
Total Interest Expense | 56.8 | 44.2 | |||||
Net Interest Income | $ | 353.5 | $ | 307.8 |
(1) | Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheets. |
Net Periodic Pension Expense U.S. Plan | Three Months Ended March 31, | ||||||
(In Millions) | 2017 | 2016 | |||||
Service Cost | $ | 9.6 | $ | 9.3 | |||
Interest Cost | 11.5 | 11.5 | |||||
Expected Return on Plan Assets | (23.5 | ) | (23.6 | ) | |||
Amortization | |||||||
Net Actuarial Loss | 4.8 | 4.7 | |||||
Prior Service Cost | (0.1 | ) | (0.1 | ) | |||
Net Periodic Pension Expense | $ | 2.3 | $ | 1.8 |
Net Periodic Pension Expense Non-U.S. Plans | Three Months Ended March 31, | ||||||
(In Millions) | 2017 | 2016 | |||||
Interest Cost | $ | 0.9 | $ | 1.3 | |||
Expected Return on Plan Assets | (1.1 | ) | (1.3 | ) | |||
Net Actuarial Loss Amortization | 0.3 | 0.3 | |||||
Net Periodic Pension Expense | $ | 0.1 | $ | 0.3 |
Net Periodic Pension Expense Supplemental Plan | Three Months Ended March 31, | ||||||
(In Millions) | 2017 | 2016 | |||||
Service Cost | $ | 0.9 | $ | 0.9 | |||
Interest Cost | 1.3 | 1.3 | |||||
Amortization | |||||||
Net Actuarial Loss | 1.4 | 1.5 | |||||
Prior Service Cost | — | — | |||||
Net Periodic Pension Expense | $ | 3.6 | $ | 3.7 |
Net Periodic Postretirement Expense Postretirement Health Care Plan | Three Months Ended March 31, | ||||||
(In Millions) | 2017 | 2016 | |||||
Service Cost | $ | — | $ | — | |||
Interest Cost | 0.4 | 0.4 | |||||
Amortization | |||||||
Net Actuarial (Gain) | — | — | |||||
Net Periodic Postretirement Expense | $ | 0.4 | $ | 0.4 |
Three Months Ended March 31, | |||||||
(In Millions) | 2017 | 2016 | |||||
Restricted Stock Unit Awards | $ | 41.2 | $ | 15.3 | |||
Stock Options | 6.3 | 6.4 | |||||
Performance Stock Units | 8.5 | 4.1 | |||||
Total Share-Based Compensation Expense | 56.0 | 25.8 | |||||
Tax Benefits Recognized | $ | 21.2 | $ | 9.7 |
March 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Notional Value | Fair Value | Notional Value | Fair Value | ||||||||||||||||||||
(In Millions) | Asset | Liability | Asset | Liability | |||||||||||||||||||
Foreign Exchange Contracts | $ | 286,237.9 | $ | 1,851.8 | $ | 1,832.6 | $ | 273,213.1 | $ | 3,274.2 | $ | 3,221.7 | |||||||||||
Interest Rate Contracts | 6,838.1 | 76.8 | 67.3 | 6,968.3 | 87.0 | 85.2 | |||||||||||||||||
Total | $ | 293,076.0 | $ | 1,928.6 | $ | 1,899.9 | $ | 280,181.4 | $ | 3,361.2 | $ | 3,306.9 |
Amount of Derivative Gain Recognized in Income | ||||||||
Location of Derivative Gain Recognized in Income | Three Months Ended March 31, | |||||||
(In Millions) | 2017 | 2016 | ||||||
Foreign Exchange Contracts | Foreign Exchange Trading Income | $ | 48.1 | $ | 60.5 | |||
Interest Rate Contracts | Security Commissions and Trading Income | 1.2 | 4.1 | |||||
Total | $ | 49.3 | $ | 64.6 |
March 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||
Derivative Instrument | Risk Classification | Notional Value | Fair Value | Notional Value | Fair Value | ||||||||||||||||||||||
(In Millions) | Asset | Liability | Asset | Liability | |||||||||||||||||||||||
Fair Value Hedges | |||||||||||||||||||||||||||
Available for Sale Investment Securities | Interest Rate Swap Contracts | Interest Rate | $ | 3,670.3 | $ | 9.6 | $ | 11.0 | $ | 3,873.4 | $ | 88.3 | $ | 16.8 | |||||||||||||
Senior Notes and Long-Term Subordinated Debt | Interest Rate Swap Contracts | Interest Rate | 1,250.0 | 29.7 | 3.5 | 1,250.0 | 71.8 | 3.3 | |||||||||||||||||||
Cash Flow Hedges | |||||||||||||||||||||||||||
Forecasted Foreign Currency Denominated Transactions | Foreign Exchange Contracts | Foreign Currency | 351.5 | 10.2 | 6.2 | 329.3 | 8.5 | 7.8 | |||||||||||||||||||
Foreign Currency Denominated Investment Securities | Foreign Exchange Contracts | Foreign Currency | 1,193.9 | — | 27.7 | 1,431.6 | 151.5 | 0.8 | |||||||||||||||||||
Available for Sale Investment Securities | Interest Rate Contracts | Interest Rate | 1,025.0 | 0.2 | 3.0 | 975.0 | 0.1 | 2.7 | |||||||||||||||||||
Net Investment Hedges | |||||||||||||||||||||||||||
Net Investments in Non-U.S. Affiliates | Foreign Exchange Contracts | Foreign Currency | 2,190.0 | 18.1 | 7.5 | 2,083.6 | 174.6 | 10.8 | |||||||||||||||||||
Total | $ | 9,680.7 | $ | 67.8 | $ | 58.9 | $ | 9,942.9 | $ | 494.8 | $ | 42.2 |
Location of Derivative Gain/(Loss) Recognized in Income | Amount of Derivative Gain/(Loss) Recognized in Income | ||||||||||
Derivative Instrument | Three Months Ended March 31, | ||||||||||
(In Millions) | 2017 | 2016 | |||||||||
Available for Sale Investment Securities | Interest Rate Swap Contracts | Interest Income | $ | (2.4 | ) | $ | (34.7 | ) | |||
Senior Notes and Long-Term Subordinated Debt | Interest Rate Swap Contracts | Interest Expense | 3.1 | 47.4 | |||||||
Total | $ | 0.7 | $ | 12.7 |
(In Millions) | Foreign Exchange Contracts (Before Tax) | Interest Rate Contracts (Before Tax) | |||||||||||||
Three Months Ended March 31, | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net Gain/(Loss) Recognized in AOCI | $ | 8.9 | $ | 4.2 | $ | (0.2 | ) | $ | 5.2 | ||||||
Net Gain/(Loss) Reclassified from AOCI to Net Income | |||||||||||||||
Other Operating Income | 0.7 | (1.1 | ) | — | — | ||||||||||
Interest Income | 4.4 | — | 0.1 | 0.9 | |||||||||||
Other Operating Expense | (0.1 | ) | (0.4 | ) | — | — | |||||||||
Total | $ | 5.0 | $ | (1.5 | ) | $ | 0.1 | $ | 0.9 |
Hedging Gain / (Loss) Recognized in OCI (Before Tax) | |||||||
Three Months Ended March 31, | |||||||
(In Millions) | 2017 | 2016 | |||||
Foreign Exchange Contracts | $ | (30.5 | ) | $ | (26.5 | ) | |
Total | $ | (30.5 | ) | $ | (26.5 | ) |
March 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
(In Millions) | Notional Value | Fair Value | Notional Value | Fair Value | |||||||||||||||||||
Asset | Liability | Asset | Liability | ||||||||||||||||||||
Foreign Exchange Contracts | $ | 441.6 | $ | 2.1 | $ | 0.6 | $ | 289.6 | $ | 0.8 | $ | 1.8 | |||||||||||
Other Financial Derivatives (1) | 307.6 | — | 26.4 | 270.0 | — | 25.2 | |||||||||||||||||
Total | $ | 749.2 | $ | 2.1 | $ | 27.0 | $ | 559.6 | $ | 0.8 | $ | 27.0 |
(1) | This line includes swaps related to sales of certain Visa Class B common shares. |
(In Millions) | Location of Derivative Gain / (Loss) Recognized in Income | Amount of Derivative Gain / (Loss) Recognized in Income | ||||||
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Foreign Exchange Contracts | Other Operating Income | $ | 1.7 | $ | 2.7 | |||
Other Financial Derivatives (1) | Other Operating Income | (2.9 | ) | (0.8 | ) | |||
Total | $ | (1.2 | ) | $ | 1.9 |
(1) | This line includes swaps related to sales of certain Visa Class B common shares, total return swap contracts, and credit default swap contracts. |
March 31, 2017 | |||||||||||||||||||
(In Millions) | Gross Recognized Assets | Gross Amounts Offset | Net Amounts Presented | Gross Amounts Not Offset | Net Amount (3) | ||||||||||||||
Derivative Assets (1) | |||||||||||||||||||
Foreign Exchange Contracts Over the Counter (OTC) | $ | 1,414.1 | $ | 884.0 | $ | 530.1 | $ | — | $ | 530.1 | |||||||||
Interest Rate Swaps OTC | (10.3 | ) | 17.8 | (28.1 | ) | — | (28.1 | ) | |||||||||||
Interest Rate Swaps Exchange Cleared | 126.5 | 20.5 | 106.0 | — | 106.0 | ||||||||||||||
Cross Product Netting Adjustment | — | 19.2 | — | — | — | ||||||||||||||
Cross Product Collateral Adjustment | — | 411.0 | — | — | — | ||||||||||||||
Total Derivatives Subject to a Master Netting Arrangement | 1,530.3 | 1,352.5 | 177.8 | — | 177.8 | ||||||||||||||
Total Derivatives Not Subject to a Master Netting Arrangement | 468.2 | — | 468.2 | — | 468.2 | ||||||||||||||
Total Derivatives | $ | 1,998.5 | $ | 1,352.5 | $ | 646.0 | $ | — | $ | 646.0 | |||||||||
Securities Purchased under Agreements to Resell (2) | $ | 1,933.8 | $ | — | $ | 1,933.8 | $ | 1,933.8 | $ | — |
December 31, 2016 | |||||||||||||||||||
(In Millions) | Gross Recognized Assets | Gross Amounts Offset | Net Amounts Presented | Gross Amounts Not Offset | Net Amount (3) | ||||||||||||||
Derivative Assets (1) | |||||||||||||||||||
Foreign Exchange Contracts OTC | $ | 2,800.4 | $ | 1,651.9 | $ | 1,148.5 | $ | — | $ | 1,148.5 | |||||||||
Interest Rate Swaps OTC | 129.8 | 18.2 | 111.6 | — | 111.6 | ||||||||||||||
Interest Rate Swaps Exchange Cleared | 117.4 | 21.8 | 95.6 | — | 95.6 | ||||||||||||||
Cross Product Netting Adjustment | — | 17.2 | — | — | — | ||||||||||||||
Cross Product Collateral Adjustment | — | 461.3 | — | — | — | ||||||||||||||
Total Derivatives Subject to a Master Netting Arrangement | 3,047.6 | 2,170.4 | 877.2 | — | 877.2 | ||||||||||||||
Total Derivatives Not Subject to a Master Netting Arrangement | 809.2 | — | 809.2 | — | 809.2 | ||||||||||||||
Total Derivatives | 3,856.8 | 2,170.4 | 1,686.4 | — | 1,686.4 | ||||||||||||||
Securities Purchased under Agreements to Resell (2) | $ | 1,967.5 | $ | — | $ | 1,967.5 | $ | 1,967.5 | $ | — |
(1) | Derivative assets are reported in other assets in the consolidated balance sheets. Other assets (excluding derivative assets) totaled $3.3 billion as of March 31, 2017 and December 31, 2016, respectively. |
(2) | Securities purchased under agreements to resell are reported in federal funds sold and securities purchased under agreements to resell in the consolidated balance sheets. There were no Federal funds sold and $6.8 million Federal funds sold as of March 31, 2017 and December 31, 2016, respectively. |
(3) | 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 March 31, 2017 and December 31, 2016. |
March 31, 2017 | |||||||||||||||||||
(In Millions) | Gross Recognized Liabilities | Gross Amounts Offset | Net Amounts Presented | Gross Amounts Not Offset | Net Amount (2) | ||||||||||||||
Derivative Liabilities (1) | |||||||||||||||||||
Foreign Exchange Contracts OTC | $ | 1,275.1 | $ | 884.0 | $ | 391.1 | $ | — | $ | 391.1 | |||||||||
Interest Rate Swaps OTC | 64.3 | 17.8 | 46.5 | — | 46.5 | ||||||||||||||
Interest Rate Swaps Exchange Cleared | 20.5 | 20.5 | — | — | — | ||||||||||||||
Other Financial Derivatives | 26.4 | — | 26.4 | — | 26.4 | ||||||||||||||
Cross Product Netting Adjustment | — | 19.2 | — | — | — | ||||||||||||||
Cross Product Collateral Adjustment | — | 207.2 | — | — | — | ||||||||||||||
Total Derivatives Subject to a Master Netting Arrangement | 1,386.3 | 1,148.7 | 237.6 | — | 237.6 | ||||||||||||||
Total Derivatives Not Subject to a Master Netting Arrangement | 599.6 | — | 599.6 | — | 599.6 | ||||||||||||||
Total Derivatives | 1,985.9 | 1,148.7 | 837.2 | — | 837.2 | ||||||||||||||
Securities Sold under Agreements to Repurchase | $ | 433.2 | $ | — | $ | 433.2 | $ | 433.2 | $ | — |
December 31, 2016 | |||||||||||||||||||
(In Millions) | Gross Recognized Liabilities | Gross Amounts Offset | Net Amounts Presented | Gross Amounts Not Offset | Net Amount (2) | ||||||||||||||
Derivative Liabilities (1) | |||||||||||||||||||
Foreign Exchange Contracts OTC | $ | 2,634.4 | $ | 1,651.9 | $ | 982.5 | $ | — | $ | 982.5 | |||||||||
Interest Rate Swaps OTC | 86.2 | 18.2 | 68.0 | — | 68.0 | ||||||||||||||
Interest Rate Swaps Exchange Cleared | 21.8 | 21.8 | — | — | — | ||||||||||||||
Other Financial Derivatives | 25.2 | — | 25.2 | 25.2 | |||||||||||||||
Cross Product Netting Adjustment | — | 17.2 | — | — | — | ||||||||||||||
Cross Product Collateral Adjustment | — | 722.1 | — | — | — | ||||||||||||||
Total Derivatives Subject to a Master Netting Arrangement | 2,767.6 | 2,431.2 | 336.4 | — | 336.4 | ||||||||||||||
Total Derivatives Not Subject to a Master Netting Arrangement | 608.5 | — | 608.5 | — | 608.5 | ||||||||||||||
Total Derivatives | 3,376.1 | 2,431.2 | 944.9 | — | 944.9 | ||||||||||||||
Securities Sold under Agreements to Repurchase | $ | 473.7 | $ | — | $ | 473.7 | $ | 473.7 | $ | — |
(1) | Derivative liabilities are reported in other liabilities in the consolidated balance sheets. Other liabilities (excluding derivative liabilities) totaled $2.2 billion and $2.7 billion as of March 31, 2017 and December 31, 2016, respectively. |
(2) | 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 March 31, 2017 and December 31, 2016. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of a Publicly Announced Plan (1) | Maximum Number of Shares that May Yet Be Purchased Under the Plan | ||||||||
January 1-31, 2017 | 60,762 | $ | 83.52 | 60,762 | 4,025,632 | |||||||
February 1-28, 2017 | 191,132 | 84.96 | 191,132 | 3,834,500 | ||||||||
March 1-31, 2017 | 148,967 | 88.57 | 148,967 | 3,685,533 | ||||||||
Total (First Quarter) | 400,861 | $ | 86.09 | 400,861 | 3,685,533 |
(1) | Repurchases were made pursuant to the repurchase program announced by the Corporation on April 22, 2015, under which the Corporation’s board of directors authorized the Corporation to repurchase up to 15.0 million shares of the Corporation’s common stock. The repurchase program has no expiration date. |
NORTHERN TRUST CORPORATION | |||
(Registrant) | |||
Date: | May 2, 2017 | By: | /s/ S. Biff Bowman |
S. Biff Bowman Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||
Date: | May 2, 2017 | By: | /s/ Jane Karpinski |
Jane Karpinski Executive Vice President and Controller (Principal Accounting Officer) |
Exhibit Number | Description |
3.1 | By-laws of Northern Trust Corporation, as amended through April 25, 2017 (incorporated by reference to Exhibit 3.1 to the Corporation's Current Report on Form 8-K filed April 26, 2017) |
10.1 | Northern Trust Corporation Executive Change in Control Severance Plan (incorporated by reference to Exhibit 10.1 to the Corporation's Current Report on Form 8-K filed April 28, 2017) |
10.2 | Northern Trust Corporation Key Officer Change in Control Severance Plan (incorporated by reference to Exhibit 10.2 to the Corporation's Current Report on Form 8-K filed April 28, 2017) |
10.3 | Northern Trust Corporation 2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Corporation’s Current Report on Form 8-K filed April 26, 2017) |
10.4 | Form of 2017 Stock Option Award Terms and Conditions |
10.5 | Form of 2017 Stock Unit Award Terms and Conditions |
10.6 | Form of 2017 Performance Stock Unit Award Terms and Conditions |
10.7 | Northern Trust Corporation 2017 Long Term Cash Incentive Plan |
10.8 | Form of Cash Incentive Award Terms and Conditions |
10.9 | Northern Partners Incentive Plan – EMEA Plan |
10.10 | Form of Director Stock Unit Agreement |
10.11 | Form of Director Stock Unit Agreement (prorated) |
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 March 31, 2017, formatted in Extensible Business Reporting Language (XBRL): (1) the Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016, (2) the Consolidated Statements of Income for the three months ended March 31, 2017 and 2016, (3) the Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016, (4) the Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2017 and 2016, (5) the Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016, and (6) Notes to Consolidated Financial Statements |
Vesting Date | Percentage of Stock Options Vesting |
First Anniversary of Grant Date | 25% |
Second Anniversary of Grant Date | 25% |
Third Anniversary of Grant Date | 25% |
Fourth Anniversary of Grant Date | 25% |
Vesting Date | Percentage of Stock Options Vesting |
Vesting Date | Percentage of Stock Units Vesting |
First Anniversary of Grant Date | 0% |
Second Anniversary of Grant Date | 0% |
Third Anniversary of Grant Date | 50% |
Fourth Anniversary of Grant Date | 50% |
Vesting Date | Percentage of Stock Units Vesting |
Average Annual Rate of Return on Equity | Less than 7.5% | 7.5% | 9.0% | 12.0% | ≥ 15% |
PSU Multiplier | 0% | 25% | 50% | 100% | 150% |
(i) | The average annual rate of return on equity for the Performance Period attained by the Corporation is the return on average common equity, based on the Corporation’s net income, and shall be determined by the Committee in its sole and absolute discretion in accordance with generally accepted accounting principles (subject to the adjustments set forth below). For purposes of the foregoing, the average annual rate of return on equity shall be calculated as the simple average annual rate of return on equity for the three-year Performance Period measured across the Corporation as a whole. |
(ii) | Notwithstanding anything herein to the contrary, for purposes of determining the average annual rate of return on equity for any individual fiscal year of the Corporation within the Performance Period, if any of the following items, individually or aggregated with other items as reflected herein, would produce a change to net income in excess of $100 million, net income shall be determined for such fiscal year by excluding such item(s) as aggregated: |
(A) | the gains or losses resulting from, and the expenses incurred in connection with, the acquisition or disposition of a business, a merger, or a similar transaction, and integration in connection therewith; |
(B) | the impact of securities issuances in connection with events described in item (A), above, and expenses incurred in connection therewith; |
(C) | any gain, loss, income or expense resulting from changes in accounting principles, tax laws, or other laws or provisions affecting reported results, that become effective during the Performance Period; |
(D) | any gain or loss resulting from, and expenses incurred in connection with, any litigation or regulatory investigations; |
(E) | any charges and expenses incurred in connection with restructuring activity, including but not limited to, reductions in force; |
(F) | the impact of discontinued operations; |
(G) | asset write-downs; |
(H) | the impact on goodwill impairment; or |
(I) | any other gain, loss, income or expense with respect to the Performance Period that is extraordinary, unusual and/or infrequent. |
1. | Purpose. The purpose of the Plan is to promote the growth and profitability of the Corporation and its Subsidiaries by encouraging outstanding individuals to accept or continue employment with the Corporation and its Subsidiaries through the provision of incentive compensation opportunities in the form of Long Term Cash Incentive Awards (“Awards”). |
2. | Administration. |
3. | Participants. |
4. | Long Term Cash Incentive Awards. The Committee may in its discretion award Long Term Cash Incentive Awards under the Plan to Participants hereunder. Each Award shall be subject to such terms and conditions as the Committee may determine at the time of grant, the general provisions of the Plan, the terms and conditions of the applicable Long Term Cash Incentive Award Agreement and the following specific rules: |
5. | Nontransferability. Except as provided below, each Award granted under the Plan to a Participant shall not be transferable by the Participant other than by will or the laws of descent and distribution. In the event of the death of a Participant during employment or prior to the termination, cancellation or forfeiture of any Award held by the Participant hereunder, each vested Award theretofore granted to the Participant shall be payable to the extent and to such persons as provided in, and in accordance with the terms of, the applicable Award Agreement. |
6. | Change in Control. |
(b) | A “Change in Control” shall be deemed to have occurred if: |
(i) | any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities beneficially owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 30% or more of the combined voting power of the Corporation's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (iii) below; |
(ii) | the election to the Board, without the recommendation or approval of two-thirds of the incumbent Board, of directors constituting a majority of the number of directors of the Corporation then in office, provided, however, that directors whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Corporation will not be considered as incumbent members of the Board for purposes of this section; |
(iii) | there is consummated a merger or consolidation of the Corporation or any direct or indirect Subsidiary of the Corporation with any other company, other than (A) a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), at least 60% of the combined voting power of the securities of the Corporation or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities; or |
(iv) | there is consummated the sale or disposition by the Corporation of all or substantially all of the Corporation's assets, other than a sale or disposition by the Corporation of all or substantially all of the Corporation's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale or the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation; |
7. | Other Provisions. |
8. | Taxes. The Corporation shall have the right to deduct from any payment to be made under the Plan the amount of any taxes required by law to be withheld from such payment, or to require a Participant to pay to the Corporation such amount required to be withheld prior to the payment of any Award under the Plan. |
9. | Amendment, Suspension or Termination of Plan. The Board may at any time amend, suspend or terminate the Plan as it deems advisable and in the best interests of the Corporation; provided, that no amendment, suspension or termination shall adversely affect the right of any Participant under any outstanding Award in any material way without the written consent of the Participant, unless such amendment, suspension or termination is required by applicable law. Anything in this Section 9 or elsewhere in the Plan to the contrary notwithstanding: |
10. | No Contract of Employment. Neither the adoption of the Plan nor the grant of any Award under the Plan shall be deemed to obligate the Corporation or any Subsidiary to continue the employment of any Participant for any particular period, nor shall the granting of an Award constitute a request or consent to postpone the retirement date of any Participant. |
11. | Applicable Law. All questions pertaining to the validity, construction and administration of the Plan and any Award Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or any Award granted under the Plan shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state. |
12. | Definitions. As used in the Plan, the following terms shall have the meanings set forth below: |
15. | The Long Term Cash Incentive Awards granted under the Plan are intended to be exempt from, or to comply in all applicable respects with, the requirements of Code Section 409A, and the Plan shall be construed and administered so as to cause such Awards to be exempt from or comply with that Code section, respectively, as applicable. |
Vesting Date | Percentage of Cash Award Vesting |
First Anniversary of Grant Date | 0% |
Second Anniversary of Grant Date | 0% |
Third Anniversary of Grant Date | 50% |
Fourth Anniversary of Grant Date | 50% |
Vesting Date | Percentage of Cash Award Vesting |
1. | Purpose of Plan |
• | The purpose of the Northern Partners Incentive Plan (the “Plan”) is to promote the achievement of superior financial and operating performance of Northern Trust Corporation and its subsidiaries (hereinafter referred to as “Northern Trust”), and further the objective of delivering unrivaled service to its clients and partners through the awarding of incentive payments to selected employees. |
• | The Plan supersedes all incentive plans previously established or maintained by Northern Trust providing for any form of incentive, bonus or commission compensation.1 |
2. | Plan Year / Effective Date / Termination |
• | The Plan Year is the calendar year from January 1 to December 31. |
• | The Plan was adopted by the Board of Directors of Northern Trust Corporation on July 19, 2004. |
• | The Plan shall remain in effect until terminated by the Board of Directors of Northern Trust Corporation. |
3. | Plan Performance Periods |
• | Under the Plan, incentives may be determined and paid on a quarterly, semi-annual, or an annual basis, depending upon the incentive category to which a participant is assigned and the structure of the potential award determined for the participant. The applicable performance periods and frequency of award payments are determined by Business Unit Management. |
• | The performance periods for the Plan Year for incentives with quarterly payments are as follows: |
◦ | January 1 to March 31; |
◦ | April 1 to June 30; |
◦ | July 1 to September 30; and |
◦ | October 1 to December 31. |
• | The performance periods for the Plan Year incentives with semi-annual payments are as follows: |
◦ | January 1 to June 30; and |
◦ | July 1 to December 31. |
• | The performance period for all other awards under the Plan is the Plan Year, unless otherwise approved by the Chief Human Resources Officer or his/her designee. |
4. | Eligibility / Participation |
• | Participants in the Plan for the Plan Year are those employees designated by their respective Business Units as eligible to participate in the Plan. Participants are generally designated at the beginning of the Plan Year. In addition, those employees who have a change in job duties, are promoted, or who are hired during the performance period may be considered for inclusion and designated by their respective Business Units for partial Plan Year participation. |
• | Designation for participation in this Plan for one Plan Year or a portion thereof does not establish eligibility for participation in any subsequent Plan Year or for any form of incentive, bonus or commission compensation with respect to any subsequent period. |
• | Participants are assigned for the Plan Year to one of the following incentive categories within the Plan as their primary eligibility for their current role. However, participants may receive payments under multiple incentive categories within a Plan Year: |
◦ | Northern Performance Incentives |
◦ | Northern Sales Incentives |
◦ | Northern Technical Incentives |
5. | Award Targets |
• | An award target, generally expressed as a percent of a participant’s base salary at the beginning of the Plan Year, will be communicated to each participant annually as a potential award goal provided that the applicable Corporate and Business Unit goals and individual performance expectations are achieved. |
• | The payment of any incentive amount is at the absolute discretion of Northern Trust. Management has the discretion not to award participants an incentive payout or to reduce the amount of the incentive payout if either Corporate, Business Unit or individual performances are not in line with expectations or due to any other reason Management deems fit in its sole discretion. This may mean that, regardless of individual performance, where Corporate or Business Unit performance is not in line |
6. | Individual Performance Measures |
• | Each participant will receive performance expectations, including risk management expectations, for the Plan Year that will consist of both objective goals and subjective performance assessments. |
• | Each participant’s manager will establish the participant’s performance expectations as early in the Plan Year as practicable. |
7. | Plan Funding |
• | At the beginning of each Plan Year, the Compensation and Benefits Committee of the Board of Directors of Northern Trust Corporation (the “Committee”) will determine a Corporate Earnings Target and projected funding for awards under the Plan. Management reserves the right to either increase or decrease the original projected funding amount for the Corporate level; provided, however, that the funding amount may not exceed the funding level established by the Committee without prior approval. Management has full discretion to allocate funding to the Business Unit level depending upon actual results and each Business Unit’s relative contribution to actual results, effective risk management, or for any other reason as Management deems fit in its sole discretion. Where funding is reduced in respect of Corporate or Business Unit amounts, this may result in no incentive payout, regardless of individual performance or any other factors. In addition, the funding amount is subject to final approval by, and may be further reduced by, the Committee after the end of the performance period, as described at Section 10, below. |
8. | Individual Award Determination |
• | All awards (if any) are impacted by available Plan funding, as determined and adjusted by Corporate and Business Unit Management in its discretion. |
• | Awards (if any) are determined by Business Unit Management after the end of the applicable performance period, based upon an assessment of individual performance during the applicable performance period, taking into consideration: |
◦ | Individual performance expectations, including the risk management expectation; |
◦ | Overall contribution to Corporate and Business Unit earnings, relative to peers; |
◦ | Competitiveness of a participant’s total compensation; and |
◦ | Notification by the participant or by Northern Trust of a notice to terminate the participant’s employment prior to the first day in February after the close of the plan year. |
• | Formula-driven performance measures are one of several factors for determination of award amounts. Both quantitative and qualitative performance criteria will be used to evaluate performance. Thus, Management has the full discretion both during and after the performance period, up to the actual settlement of the award, as described in Paragraph 10, not to make an award or to adjust all awards up or down based on a subjective performance evaluation, funding considerations, and any other factors which Management, in its absolute discretion, determines appropriate. |
• | In addition to the foregoing, all awards must also comply with applicable regulatory requirements and may be risk-adjusted within Management's discretion for all individual employees or groups of employees who, individually or collectively, may expose Northern Trust to more substantial amounts of risk. |
9. | Conditions on Eligibility for Payment of Awards. |
• | In order for a participant to be eligible for payment of an award, except as specifically set forth herein, the participant must continue in employment with Northern Trust and the Business Unit that designated him or her as a participant, and contribute toward the achievement of Corporate and Business Unit goals, throughout the applicable performance period, and not be under notice of termination (whether given by him or Northern Trust). |
• | A participant who was designated by a Business Unit and transfers to another Business Unit during the applicable performance period may, as determined by Management of the transferring Business Unit in its sole discretion, be determined eligible for a pro-rata payment of an award for work performed during the performance period for the transferring Business Unit, provided that Corporate and Business Unit goals and individual performance expectations, and any other factors which Management may determine applicable, are achieved. Payment of such pro-rata awards will be made at the same time all other awards are paid for such performance period. |
• | In order for a participant to be eligible for consideration for an award, the participant must continue employment with Northern Trust in good standing during the entire performance period established for the award. Good standing means: |
◦ | The participant has satisfactorily met all performance expectations, including risk management performance expectations, as determined by the participant's manager; |
◦ | The participant has complied with all Northern Trust policies and standards of conduct; |
◦ | The participant has not engaged in any activity competitive with Northern Trust’s business or otherwise detrimental to Northern Trust’s business; and |
◦ | The participant has not served or been served with notice to terminate the participant’s employment. |
• | Notwithstanding the foregoing, Management may, in its absolute discretion, determine that a pro-rata award will be paid in the event of termination of employment with Northern Trust by a participant on account of death, disability (as defined below), retirement (as defined below), or involuntary termination by Northern Trust without cause (as defined below), such as job elimination or redundancy, taking into consideration the portion of the performance period worked by the participant, the individual performance of the participant during such portion of the performance period worked, and the availability of Corporate, Business Unit and individual performance measurements as of the date of termination and any other factors as Northern Trust Management may from time to time take into account. |
◦ | For this purpose, “cause” means the participant’s conviction or no contest pleading, or the country specific equivalent, with respect to a criminal offence (other than a minor road traffic offence); the employee being prevented by regulatory requirements from carrying out his duties; or a determination by Management that the participant has failed to meet performance expectations to the extent that termination, whether with or without notice is warranted; the participant has violated Northern Trust policies or standards of conduct to the extent that termination with or without notice is warranted; the participant has been negligent to a material extent with respect to his or her responsibilities; the participant has been engaged in fraud upon Northern Trust, or has disclosed Northern Trust confidential or proprietary information to an unauthorized person, or his or her actions amount to misconduct under common law. |
◦ | For this purpose, termination on account of “retirement” means termination of the participant’s employment by reason of the participant having qualified for Normal or Early Retirement Pension benefits under any of Northern Trust’s Europe pension plans. |
◦ | For this purpose, termination on account of “disability” means the participant's employment is terminated pursuant to Northern Trust's Long Term Ill Health Procedure as amended from time to time. |
• | Subject to the final bullet point in this Paragraph 9, in no circumstances will a pro-rata award or any unpaid award referable to a previous Plan Year be paid to a participant who terminates employment by resigning (other than due to retirement, as defined above) before the end of the applicable performance period or whose employment is terminated by Northern Trust for cause (as defined above). |
• | A participant who is terminated for cause (as defined above) after the end of the Plan Year but before the date of payment will forfeit entitlement to any unpaid award (and termination includes having received notice of termination). |
• | A participant who resigns (other than due to retirement, as defined above) after the end of the Plan Year but prior to the first day in February after the close of the plan year will forfeit entitlement to any unpaid award (and resignation includes having given notice of resignation). |
• | In respect only of those participants who have been designated as Senior Managers for the purposes of the UK Financial Conduct Authority’s and Prudential Regulation Authority’s Senior and Certified Persons Regime, in addition to those discretions reserved by Northern Trust above, and notwithstanding any rules of the Plan to the contrary, in the event that a participant’s employment terminates by reason of resignation, Management may at its absolute discretion, elect to pay a pro-rata award in respect of the Plan Year in which employment terminates, and/or to pay any unpaid award referable to a previous Plan Year. |
10. | Payment of Awards |
• | After the end of the performance period, Northern Trust Management shall make recommendations with respect to the final funding amount for the performance period, and whether each participant’s award shall be settled in cash, a grant of equity-based compensation (e.g., restricted stock units or options) under the equity plan of Northern Trust Corporation then in effect, or a combination thereof. Such recommendations (including the terms and conditions of each equity grant, which may include, but are not limited to, a deferred vesting schedule and possible forfeiture upon the occurrence of specified events (such as termination of employment, regulatory events, risk based events or behaviors, or changes in business conditions)), are subject to the review and approval of the Committee, and no grant of any equity award shall occur until the date of Committee action. |
• | Notwithstanding anything herein to the contrary, until the date of settlement of the award (whether by actual payment in cash and/or the grant by the Committee of equity-based compensation in accordance with the preceding paragraph), Northern Trust may in its absolute discretion reduce or eliminate any award. |
• | It is intended that all cash-settled awards made under the Plan shall constitute short-term deferrals for purposes of the regulations issued under Section 409A of the U.S. Internal Revenue Code (the “Code”), and shall be paid within the deadline for short term deferrals, that all other awards hereunder shall constitute short-term deferrals for purposes of the regulations under Code Section 409A or comply with that Code Section and the regulations thereunder, and all provisions of this Plan shall be interpreted in all events in a manner consistent with such intent, to the extent 409A could apply. |
11. | Administration |
• | The Plan shall be administered by the Chief Human Resources Officer and the Compensation Division of the Human Resources Department. Subject to the provisions of the Plan, the Chief Human Resources Officer shall be authorized to interpret the Plan, to establish, amend, and rescind rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The determination of the Chief Human Resources Officer in the administration of the Plan, as described herein, shall, upon consultation with members of the Management Group, be final and conclusive. The Chief Human Resources Officer shall be responsible for final approval of all awards to be paid under the Plan, subject to any |
• | Responsibilities of the Compensation Division of the Human Resources Department: |
◦ | Guide incentive award calculations and determinations; |
◦ | Review and monitor financial accruals in conjunction with the Controller’s Department; |
◦ | Prepare communications to Plan participants; |
◦ | Participate in a yearly review of all compensation plans to evaluate whether the designs encourage imprudent risk taking; |
◦ | Participate in a yearly assessment of the full range of inherent risks in order to identify those partners whose responsibilities might lead to imprudent risk-taking; and |
◦ | Direct processing of incentive awards. |
• | Business Unit Responsibilities: |
◦ | Identify Plan participants; |
◦ | Prepare and communicate individual performance expectations; |
◦ | Determine and recommend awards for approval by the Business Unit Head; and |
◦ | Communicate award decisions to participants. |
• | Risk Management Responsibilities |
◦ | Participate in a yearly review of all compensation plans to evaluate whether the designs encourage imprudent risk taking; |
◦ | Undertake a yearly assessment of the full range of inherent risks in order to identify those partners whose responsibilities might lead to imprudent risk-taking; and |
◦ | Participate in the design of any Northern Partners Incentive Plan Addendum and any other new or revised incentive plan to assess plans’ effectiveness in balancing imprudent risk taking. |
12. | Contractual Rights |
• | Neither the Plan, nor any action taken thereunder, shall be construed as creating a contract or any contractually enforceable rights to any employee, retiree, terminated |
13. | Other Provisions |
• | Except in the event of death of a participant, the rights and interests of the participant under the Plan shall not be assigned, encumbered, or transferred. In the event of the death of a participant, the Plan will be administered in accordance with applicable local rules. |
• | All awards are subject to legally required withholdings and deductions. |
• | All questions pertaining to the validity, construction, interpretation and administration of the Plan and any award hereunder shall be determined in conformity with the applicable local laws of the jurisdiction in which the employee primarily provides services. |
• | It is intended that no awards payable under the Plan will reward or incent prohibited proprietary trading. |
14. | Internal Audit |
• | All awards may be subject to review and approval by the Auditing Department and final review and approval by the Chief Human Resources Officer, prior to any award distribution. |
15. | Plan Amendment and Termination |
• | Northern Trust reserves the right to suspend or terminate the Plan, or to amend any or all of the provisions of the Plan, at any time, including during a performance period and without prior notice to participants. The Committee of Northern Trust Corporation shall approve any material amendments to the Plan. The Chief Human Resources Officer shall have the authority to make any non-material amendments to the Plan or amendments deemed required, authorized or desirable under applicable statutes, regulations or rulings without the approval of the Committee. In the event of termination of the Plan, only awards determined for completed performance periods and which are approved by the Chief Human Resources Officer shall be payable. |
1. | Grant. Northern hereby grants to the Participant an award of Stock Units equal in value to $[_____], as determined by the closing sale price of Northern’s Common Stock (as defined below) on the date of the 20[__] Annual Meeting of Stockholders, subject to the terms and conditions of the Plan and this Agreement. A Stock Unit is the right, subject to the terms and conditions of the Plan and this Agreement, to receive a distribution of a share of common stock (“Common Stock”), pursuant to Paragraph 6 of this Agreement. |
2. | Stock Unit Account. Northern shall maintain an account (“Stock Unit Account”) on its books in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant that the Participant is eligible to receive in distribution pursuant to Paragraph 6 of this Agreement. |
3. | Dividend Equivalents. Except as provided below in Paragraph 7 of this Agreement, upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s Stock Unit award pursuant to Paragraph 6 of this Agreement, Northern shall credit to a cash account maintained by Northern on its books in the name of the Participant with respect to the Stock Units (“Dividend Equivalent Account”) an amount equal in value to the dividends that the Participant would have received had the Participant been the actual owner on the record date of the number of shares of Common Stock represented by the Stock Units in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”). No interest or earnings shall be credited to the Dividend Equivalent Account. Such Dividend Equivalents shall be subject to the same forfeiture, vesting, and distribution provisions of this Agreement applicable to the Stock Units to which such Dividend Equivalents relate. |
4. | Forfeiture. If the Participant incurs a Separation from Service, as defined in Paragraph 7(c) below, prior to the vesting date set forth in Paragraph 5 of this Agreement, the Participant’s Stock Units shall be forfeited and revert to Northern, and Northern shall have no obligation after such date to pay Dividend Equivalents pursuant to Paragraph 3 of this Agreement or any other obligation to the Participant under this Agreement with respect to such Stock Units. |
5. | Vesting. The Participant shall become 100% vested in the Stock Units granted hereunder upon the date (the “vesting date”) that is the earliest to occur of (a) the date of Northern’s 20[__] Annual Meeting of Stockholders (the “regular vesting date”), (b) the date of the Participant’s death, or (c) the date of a Change in Control, provided that the Participant has not incurred a Separation from Service, as defined in Paragraph 7(c) below, prior to the earliest of the foregoing three events. |
6. | Distribution. Except as provided below in Paragraph 7 of this Agreement, |
(a) | Subject to Paragraph 6(b), if the Participant has become 100% vested in the Stock Units granted hereunder upon the regular vesting date, the Stock Units shall be distributed upon such regular vesting date, provided that the distribution shall be treated as made on such date if made within the period described in Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the Participant shall in no event have the right directly or indirectly to designate the taxable year of payment. Stock Units shall be distributed only in shares of Common Stock so that, pursuant to Paragraph 1 of this Agreement and this Paragraph 6, a Participant shall be entitled to receive one share of Common Stock for each Stock Unit in the Participant’s Stock Unit Account. |
(b) | If a Participant’s service on the Board of Directors of Northern shall terminate by reason of death prior to the regular vesting date, all cash (as provided in Paragraph 7) or Common Stock then distributable hereunder with respect to the Participant shall be distributed to such individual, trustee, trust or other entity (“Beneficiary”) as the Participant shall have designated by an instrument in writing last filed with, and in a form and manner acceptable to, Northern prior to death, or in the absence of a designation, according to the applicable laws of descent. Except as otherwise provided in Paragraph 7(c), such distribution shall be made on the date of death, provided that the distribution shall be treated as made on such date if made within the period described in Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that neither the Participant (nor the Beneficiary) shall have the right directly or indirectly to designate the taxable year of payment. |
(c) | If the Participant dies on or after the regular vesting date, but prior to the distribution of all amounts to which the Participant is entitled hereunder, all cash or Common Stock then distributable hereunder with respect to the Participant shall be distributed to the Beneficiary designated by the Participant, or, if none, |
(d) | In the case of Stock Units that become vested as a result of a Change in Control, the Participant shall not be entitled to a distribution of such Stock Units upon such Change in Control. Instead, any Stock Units that become vested as a result of a Change in Control shall be distributed only upon the date, or the occurrence of the event upon which, distribution would have been made in the absence of such Change in Control. For purposes of this Paragraph 6(d) the Annual Meeting of Stockholders in 20[__] shall be deemed to occur upon the third Tuesday in April in that year. |
7. | Voluntary Deferral. |
(a) | Subject to applicable law, receipt of the payment of all or any portion of the Stock Units shall be deferred until the date on which the Participant incurs a Separation from Service, as defined in clause (c) below, if the Participant has filed a deferral election, subject to and in accordance with the provisions of Paragraph 7(b), no later than the deadline described in Paragraph 7(b). Any such election shall likewise apply to the Dividend Equivalents payable with respect to such deferred Stock Units. Deferred Dividend Equivalents shall be credited to a cash account with respect to the Stock Units (“Cash Account”) maintained by Northern on its books in the name of the Participant. Until the entire balance of a Cash Account has been paid to the Participant or to the Participant’s Beneficiaries (as defined in Paragraph 6), such balance shall be adjusted on the last day of each calendar quarter to reflect accrued interest on such balance based on the rate of interest determined from time to time by the Committee. |
(b) | A Participant’s election to defer receipt of the payment of all or any portion of the Stock Units granted hereunder and related Dividend Equivalents to the date of his or her Separation from Service, as defined in clause (c) below, shall be effective if it was made on a deferral election form provided by the Committee and completed and delivered to the Committee no later than the last day of the calendar year preceding the calendar year in which the grant hereunder is made. Such election, if made, became irrevocable upon December 31 of the calendar year completed and delivered to the Committee. Such election shall remain in effect for grants of Stock Units in subsequent calendar years and becomes irrevocable as of each December 31 with respect to Stock Units granted for services performed in the immediately following calendar year, until modified or revoked by the Participant by the completion and delivery to the Committee of a form provided by the Committee for such purpose, setting out such modification or revocation; any such modification or revocation shall be effective only for Stock Units granted to the Participant for services performed in calendar years beginning after the calendar year in which such modification or revocation is |
(c) | The entire balance of deferred Stock Units in the Stock Unit Account and deferred Dividend Equivalents in the Cash Account shall be paid to the Participant or to the Beneficiaries of the Participant (i) in a single lump sum on the 10th business day following the date the Participant incurs a Separation from Service, as defined below, or (ii) in up to 10 annual installments beginning on the 10th business day following the date the Participant incurs a Separation from Service, as defined below, as irrevocably designated by the Participant in the applicable form described in clause (b) above. In the absence of a designation, the entire balance of deferred Stock Units in the Stock Unit Account and deferred Dividend Equivalents in the Cash Account shall be paid in a single lump sum on the 10th business day following the date the Participant incurs a Separation from Service, as defined below. For purposes of this Agreement, the term “Separation from Service” shall mean the date on which the Participant dies or otherwise terminates his or her membership on the Board of Directors of Northern. |
(d) | Deferred Stock Units in the Stock Unit Account shall be distributed only in shares of Common Stock. In the event of a single lump sum distribution in Common Stock, a certificate (or a non-certificated book entry) representing the number of full shares of Common Stock equal to the number of such Stock Units in the Stock Unit Account, registered in the name of the Participant or the Beneficiaries of the Participant, shall be distributed to the Participant or the Beneficiaries of the Participant, on the distribution date described in Paragraph 7(c) above. In the event of a distribution in Common Stock in up to 10 annual installments, a certificate (or a non-certificated book entry) representing the number of full shares of Common Stock equal to a fraction (the numerator of which shall be the number of Stock Units in the Stock Unit Account, and the denominator of which shall be the number of annual installments designated by the Participant), registered in the name of the Participant or the Beneficiaries of the Participant, shall be distributed to the Participant or the Beneficiaries of the Participant, on the distribution date described in Paragraph 7(c) above in each year of the installment period, provided that the number of shares in each of the installments shall be rounded to the nearest whole number of shares. |
(e) | Deferred Dividend Equivalents in the Participant’s Cash Account shall be distributed in cash. In the event of a single lump sum distribution in cash, the entire balance of the Participant’s Cash Account shall be distributed to the Participant or the Beneficiaries of the Participant on the distribution date described in Paragraph 7(c) above. In the event of a distribution in cash in up to 10 annual installments, the balance of the Cash Account shall continue to accrue interest and shall be distributed to the Participant or the Beneficiaries of the Participant on the distribution date described in Paragraph 7(c) above in each year of the installment period in an amount equal to the then current balance in the |
8. | Delivery of Shares. Northern may delay the issuance or delivery of shares of Common Stock if Northern reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which Northern reasonably anticipates that such issuance or delivery will not cause such violation. |
9. | Adjustment. The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 5.7 of the Plan. |
10. | No Obligation to Reelect. Nothing in the Plan or this Agreement shall be deemed to create an obligation on the part of the Board of Directors to nominate the Participant for reelection by Northern’s stockholders or to fill any vacancy upon action of the Board of Directors. |
11. | Nontransferability. No interest hereunder of the Participant or any Beneficiary shall be assignable or transferable by voluntary or involuntary act or by operation of law other than by testamentary bequest or devise or the laws of descent or distribution, all rights hereunder shall be wholly unalienable and beyond the power of any person to anticipate or in any way create a lien or encumbrance thereon; and distribution shall be made only to (i) the Participant, (ii) the Participant’s personal representative in the event of the Participant’s adjudicated disability, or (iii) the Participant’s Beneficiaries in the event of the Participant’s death, upon his, her or their own personal receipts or endorsements. Any effort to exercise the powers herein denied shall be wholly ineffective and shall be grounds for termination by the Committee of all rights hereunder. |
12. | Withholding. In the event that federal, state or local taxes must be withheld from any distribution hereunder, (a) Northern shall deduct from any such distribution in cash the amount of such required withholding and, (b) with respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, withholding obligations, if any, shall be satisfied from one of the following elected by the Participant: (i) by cash payment by the Participant; (ii) through the surrender of shares of Common Stock already owned by the Participant that are acceptable to the Committee; or (iii) through the surrender of shares of Common Stock to which the Participant is otherwise entitled under the Plan, provided, however, that such shares under this clause (iii) may be used to satisfy not more than Northern’s minimum statutory withholding obligation, if any (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income). |
13. | Administration. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as |
14. | No Rights as Shareholder. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Stock Units. |
15. | Interpretation. Any interpretation by the Committee of the terms and conditions of the Plan, this Agreement or any guidelines shall be final. This Agreement shall be construed under the laws of the State of Delaware without regard to the conflict of law provisions of any state. Capitalized terms not defined in this Agreement shall have the meanings assigned to them in the Plan. |
16. | Sole Agreement. This Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of this Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors. |
1. | Grant. Northern hereby grants to the Participant an award of Stock Units equal in value to $[________], as determined by the closing sale price of Northern’s common stock (“Common Stock”) on [_________], 20[_], (which represents a prorated award based on the Participant’s service on the Board from the effective date of election on [__________], 20[_] to the regular vesting date set forth in Paragraph 5 below), subject to the terms and conditions of the Plan and this Agreement. A Stock Unit is the right, subject to the terms and conditions of the Plan and this Agreement, to receive a distribution of a share of Common Stock, pursuant to Paragraph 6 of this Agreement. |
2. | Stock Unit Account. Northern shall maintain an account (“Stock Unit Account”) on its books in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant that the Participant is eligible to receive in distribution pursuant to Paragraph 6 of this Agreement. |
3. | Dividend Equivalents. Except as provided below in Paragraph 7 of this Agreement, upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s Stock Unit award pursuant to Paragraph 6 of this Agreement, Northern shall credit to a cash account maintained by Northern on its books in the name of the Participant with respect to the Stock Units (“Dividend Equivalent Account”) an amount equal in value to the dividends that the Participant would have received had the Participant been the actual owner on the record date of the number of shares of Common Stock represented by the Stock Units in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”). No interest or earnings shall be credited to the Dividend Equivalent Account. Such Dividend Equivalents shall be subject to the same forfeiture, vesting, and distribution provisions of this Agreement applicable to the Stock Units to which such Dividend Equivalents relate. |
4. | Forfeiture. If the Participant incurs a Separation from Service, as defined in Paragraph 7(c) below, prior to the vesting date set forth in Paragraph 5 of this Agreement, the Participant’s Stock Units shall be forfeited and revert to Northern, and Northern shall have no obligation after such date to pay Dividend Equivalents pursuant to Paragraph 3 of this Agreement or any other further obligation to the Participant under this Agreement with respect to such Stock Units. |
5. | Vesting. The Participant shall become 100% vested in the Stock Units granted hereunder upon the date (the “vesting date”) that is the earliest to occur of (a) the date of Northern’s 2018 Annual Meeting of Stockholders (the “regular vesting date”), (b) the date of the Participant’s death, or (c) the date of a Change in Control, provided that the Participant has not incurred a Separation from Service, as defined in Paragraph 7(c) below, prior to the earliest of the foregoing three events. |
6. | Distribution. Except as provided below in Paragraph 7 of this Agreement, |
(a) | Subject to Paragraph 6(b), if the Participant has become 100% vested in the Stock Units granted hereunder upon the regular vesting date, the Stock Units shall be distributed upon such regular vesting date, provided that the distribution shall be treated as made on such date if made within the period described in Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the Participant shall in no event have the right directly or indirectly to designate the taxable year of payment. Stock Units shall be distributed only in shares of Common Stock so that, pursuant to Paragraph 1 of this Agreement and this Paragraph 6, a Participant shall be entitled to receive one share of Common Stock for each Stock Unit in the Participant’s Stock Unit Account. |
(b) | If a Participant’s service on the Board of Directors of Northern shall terminate by reason of death prior to the regular vesting date, all cash (as provided in Paragraph 7) or Common Stock then distributable hereunder with respect to the Participant shall be distributed to such individual, trustee, trust or other entity (“Beneficiary”) as the Participant shall have designated by an instrument in writing last filed with, and in a form and manner acceptable to, Northern prior to death, or in the absence of a designation, according to the applicable laws of descent. Except as otherwise provided in Paragraph 7(c), such distribution shall be made on the date of death, provided that the distribution shall be treated as made on such date if made within the period described in Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that neither the Participant (nor the Beneficiary) shall have the right directly or indirectly to designate the taxable year of payment. |
(c) | If the Participant dies on or after the regular vesting date, but prior to the distribution of all amounts to which the Participant is entitled hereunder, all cash or Common Stock then distributable hereunder with respect to the Participant shall be distributed to the Beneficiary designated by the Participant, or, if none, |
(d) | In the case of Stock Units that become vested as a result of a Change in Control, the Participant shall not be entitled to a distribution of such Stock Units upon such Change in Control. Instead, any Stock Units that become vested as a result of a Change in Control shall be distributed only upon the date, or the occurrence of the event upon which, distribution would have been made in the absence of such Change in Control. For purposes of this Paragraph 6(d) the Annual Meeting of Stockholders in 20[__] shall be deemed to occur upon the third Tuesday in April in that year. |
7. | Voluntary Deferral. |
(a) | Subject to applicable law, receipt of the payment of all or any portion of the Stock Units shall be deferred until the date on which the Participant incurs a Separation from Service, as defined in clause (c) below, if the Participant has filed a deferral election, subject to and in accordance with the provisions of Paragraph 7(b), no later than the deadline described in Paragraph 7(b). Any such election shall likewise apply to the Dividend Equivalents payable with respect to such deferred Stock Units. Deferred Dividend Equivalents shall be credited to a cash account with respect to the Stock Units (“Cash Account”) maintained by Northern on its books in the name of the Participant. Until the entire balance of a Cash Account has been paid to the Participant or to the Participant’s Beneficiaries (as defined in Paragraph 6), such balance shall be adjusted on the last day of each calendar quarter to reflect accrued interest on such balance based on the rate of interest determined from time to time by the Committee. |
(b) | A Participant may elect to defer receipt of the payment of all or any portion of the Stock Units granted hereunder and related Dividend Equivalents to the date of his or her Separation from Service, as defined in clause (c) below only if the grant hereunder is made in the calendar year in which the Participant initially becomes eligible to participate in the Plan, and the election is made on a deferral election form provided by the Committee and completed and delivered to the Committee within 30 days after the date on which the Participant initially becomes eligible to participate in the Plan. Such election shall be effective with respect to Stock Units described in Paragraph 1 that are paid for services to be performed by the Participant after the date such deferral election form is completed and delivered to the Committee and becomes irrevocable with respect to such Stock Units and their related Dividend Equivalents upon completion and delivery of such deferral election form to the Committee. For purposes of applying the foregoing provisions of this clause (b), the plan aggregation rules of Treasury Regulation Section 1.409A-1(c) shall apply. A Participant’s election hereunder shall remain in effect for grants of Stock Units in subsequent calendar years and becomes irrevocable as of each December 31 with respect to Stock Units granted for services performed in the immediately following |
(c) | The entire balance of deferred Stock Units in the Stock Unit Account and deferred Dividend Equivalents in the Cash Account shall be paid to the Participant or to the Beneficiaries of the Participant (i) in a single lump sum on the 10th business day following the date the Participant incurs a Separation from Service, as defined below, or (ii) in up to 10 annual installments beginning on the 10th business day following the date the Participant incurs a Separation from Service, as defined below, as irrevocably designated by the Participant in the applicable form described in clause (b) above. In the absence of a designation, the entire balance of deferred Stock Units in the Stock Unit Account and deferred Dividend Equivalents in the Cash Account shall be paid in a single lump sum on the 10th business day following the date the Participant incurs a Separation from Service, as defined below. For purposes of this Agreement, the term “Separation from Service” shall mean the date on which the Participant dies or otherwise terminates his or her membership on the Board of Directors of Northern. |
(d) | Deferred Stock Units in the Stock Unit Account shall be distributed only in shares of Common Stock. In the event of a single lump sum distribution in Common Stock, a certificate (or a non-certificated book entry) representing the number of full shares of Common Stock equal to the number of such Stock Units in the Stock Unit Account, registered in the name of the Participant or the Beneficiaries of the Participant, shall be distributed to the Participant or the Beneficiaries of the Participant, on the distribution date described in Paragraph 7(c) above. In the event of a distribution in Common Stock in up to 10 annual installments, a certificate (or a non-certificated book entry) representing the number of full shares of Common Stock equal to a fraction (the numerator of which shall be the number of Stock Units in the Stock Unit Account, and the denominator of which shall be the number of annual installments designated by the Participant), registered in the name of the Participant or the Beneficiaries of the Participant, shall be distributed to the Participant or the Beneficiaries of the Participant, on the distribution date described in Paragraph 7(c) above in each year of the installment period, provided that the number of shares in each of the installments shall be rounded to the nearest whole number of shares. |
(e) | Deferred Dividend Equivalents in the Participant’s Cash Account shall be distributed in cash. In the event of a single lump sum distribution in cash, the entire balance of the Participant’s Cash Account shall be distributed to the Participant or the Beneficiaries of the Participant on the distribution date |
8. | Delivery of Shares. Northern may delay the issuance or delivery of shares of Common Stock if Northern reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which Northern reasonably anticipates that such issuance or delivery will not cause such violation. |
9. | Adjustment. The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 5.7 of the Plan. |
10. | No Obligation to Reelect. Nothing in the Plan or this Agreement shall be deemed to create an obligation on the part of the Board of Directors to nominate the Participant for reelection by Northern’s stockholders or to fill any vacancy upon action of the Board of Directors. |
11. | Nontransferability. No interest hereunder of the Participant or any Beneficiary shall be assignable or transferable by voluntary or involuntary act or by operation of law other than by testamentary bequest or devise or the laws of descent or distribution, all rights hereunder shall be wholly unalienable and beyond the power of any person to anticipate or in any way create a lien or encumbrance thereon; and distribution shall be made only to (i) the Participant, (ii) the Participant’s personal representative in the event of the Participant’s adjudicated disability, or (iii) the Participant’s Beneficiaries in the event of the Participant’s death, upon his, her or their own personal receipts or endorsements. Any effort to exercise the powers herein denied shall be wholly ineffective and shall be grounds for termination by the Committee of all rights hereunder. |
12. | Withholding. In the event that federal, state or local taxes must be withheld from any distribution hereunder, (a) Northern shall deduct from any such distribution in cash the amount of such required withholding and, (b) with respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, withholding obligations, if any, shall be satisfied from one of the following elected by the Participant: (i) by cash payment by the Participant; (ii) through the surrender of shares of Common Stock already owned by the Participant that are acceptable to the Committee; or (iii) through the surrender of shares of Common Stock to which the Participant is otherwise entitled under the Plan, provided, however, that such shares under this clause (iii) may be used to satisfy not more than Northern’s minimum statutory withholding obligation, if any (based on minimum statutory |
13. | Administration. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as have been or may be adopted from time to time by the Committee. The Participant hereby acknowledges receipt of a copy of the Plan. |
14. | No Rights as Shareholder. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Stock Units. |
15. | Interpretation. Any interpretation by the Committee of the terms and conditions of the Plan, this Agreement or any guidelines shall be final. This Agreement shall be construed under the laws of the State of Delaware without regard to the conflict of law provisions of any state. Capitalized terms not defined in this Agreement shall have the meanings assigned to them in the Plan. |
16. | Sole Agreement. This Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of this Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors. |
1. | I have reviewed this report on Form 10-Q for the quarterly period ended March 31, 2017, of Northern Trust Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Frederick H. Waddell | ||
Date: | May 2, 2017 | Frederick H. Waddell |
Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this report on Form 10-Q for the quarterly period ended March 31, 2017, of Northern Trust Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ S. Biff Bowman | ||
Date: | May 2, 2017 | S. Biff Bowman |
Chief Financial Officer | ||
(Principal Financial Officer) |
/s/ Frederick H. Waddell |
Frederick H. Waddell |
Chief Executive Officer |
(Principal Executive Officer) |
/s/ S. Biff Bowman |
S. Biff Bowman |
Chief Financial Officer |
(Principal Financial Officer) |
Document and Entity Information |
3 Months Ended |
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Mar. 31, 2017
shares
| |
Document And Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2017 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q1 |
Trading Symbol | NTRS |
Entity Registrant Name | NORTHERN TRUST CORP |
Entity Central Index Key | 0000073124 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 229,585,949 |
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Held to maturity, fair value | $ 8,933.4 | $ 8,905.1 |
Total loans and leases, unearned income | $ 39.1 | $ 41.2 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 1.6667 | $ 1.6667 |
Common stock, authorized (in shares) | 560,000,000 | 560,000,000 |
Common stock, outstanding (in shares) | 229,585,949 | 228,605,485 |
Treasury stock, (in shares) | 15,585,575 | 16,566,039 |
Series C Preferred Stock | ||
Preferred stock, outstanding (in shares) | 16,000 | 16,000 |
Series D Preferred Stock | ||
Preferred stock, outstanding (in shares) | 5,000 | 5,000 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 276.1 | $ 245.4 |
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications) | ||
Net Unrealized Gains on Securities Available for Sale | 19.3 | 74.7 |
Net Unrealized Gains (Losses) on Cash Flow Hedges | (5.3) | 6.1 |
Foreign Currency Translation Adjustments | 2.0 | 3.9 |
Pension and Other Postretirement Benefit Adjustments | 2.0 | 4.1 |
Other Comprehensive Income (Loss) | 18.0 | 88.8 |
Comprehensive Income | $ 294.1 | $ 334.2 |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Northern Trust Corporation (the Corporation) and its wholly-owned subsidiary, The Northern Trust Company (the Bank), and various other wholly-owned subsidiaries of the Corporation and the Bank. Throughout the notes, the term “Northern Trust” refers to the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements, as of and for the periods ended March 31, 2017 and 2016, have not been audited by the Corporation’s independent registered public accounting firm. In the opinion of management, all accounting entries and adjustments, including normal recurring accruals, necessary for a fair presentation of the financial position and the results of operations for the interim periods have been made. The accounting and financial reporting policies of Northern Trust conform to U.S. generally accepted accounting principles (GAAP) and reporting practices prescribed by the banking industry. The consolidated statements of income include results of acquired subsidiaries from the dates of acquisition. Certain amounts in prior periods have been reclassified to conform with the current year’s presentation. For a description of Northern Trust’s significant accounting policies, refer to Note 1 of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2016. Change in Presentation. Based on the increase in trade clearing activity taking place outside of the United States, during the year ended December 31, 2016, Northern Trust became a participant in the Clearing House Automated Payment System (CHAPS) in the United Kingdom. In addition, Northern Trust anticipates becoming a participant in the European solution for securities settlements, the Target 2 Securities (T2S) platform, in 2017. As a part of the implementation of these programs, management assessed the nature of Northern Trust’s deposits with non-U.S. central banks and determined that they were similar to the deposits Northern Trust has with the U.S. Federal Reserve System (Federal Reserve). As such, during the year ended December 31, 2016, the presentation of non-U.S. central bank deposits was combined with the presentation of Federal Reserve deposits on a single financial statement line, Federal Reserve and Other Central Bank Deposits, on the face of the consolidated balance sheets. Northern Trust determined that this change in presentation was material to the financial statements and has revised the prior-period presentation of the consolidated balance sheets, statements of cash flows and applicable notes to the financial statements. This change in presentation has no impact on the consolidated statements of income, comprehensive income or changes in stockholders’ equity. The table below shows the effect of the change in presentation on the Corporation’s consolidated statements of cash flows and related footnotes for the three months ended March 31, 2016. Table 30: Change in Presentation
Adoption of ASU No. 2016-09. The Corporation adopted ASU No. 2016-09 on July 1, 2016 with an effective date of January 1, 2016, which resulted in a reclassification $3.6 million from additional paid-in capital to provision for income taxes, representing excess tax benefits previously recognized in additional paid-in-capital during the three months ended March 31, 2016. Adoption of the standard impacted the Corporation’s previously reported quarterly results as follows:
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Recent Accounting Pronouncements |
3 Months Ended |
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Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On January 1, 2017, the Corporation adopted ASU 2016-05, “Derivatives and Hedging (Topics 815): Effects of Derivative Contract Novations on Existing Hedge Accounting Relationships (a consensus of the Emerging Issues Task Force)” (ASU 2016-05). ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815, does not, in and of itself, require dedesignation of that hedging relationship provided all other hedge accounting criteria continue to be met. Upon adoption of ASU 2016-05, the Corporation did not dedesignate any hedging relationships due to change in counterparty and therefore there was no impact to its consolidated financial condition or results of operations. On January 1, 2017, the Corporation adopted ASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the Emerging Issues Task Force)” (ASU 2016-06). The amendments in ASU 2016-06 clarify what steps are required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. The Corporation currently applies the approach for analyzing potential embedded derivative instruments in debt instruments detailed in ASU 2016-06 and therefore upon adoption there was no impact to its consolidated financial condition or results of operations. On January 1, 2017, the Corporation adopted ASU 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting” (ASU 2016-07), which requires that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Upon adoption of ASU 2016-07, the Corporation did not hold an interest in an investee that subsequently qualified for the use of the equity method and therefore there was no impact to the Corporation’s consolidated financial condition or results of operations. On January 1, 2017, the Corporation adopted ASU 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control” (ASU 2016-17). Under ASU 2016-17, a single decision maker evaluating whether it is the primary beneficiary of a variable interest entity will consider its indirect interests held by related parties that are under common control on a proportionate basis. Upon adoption of ASU 2016-17, there was no impact to the Corporation’s consolidated financial condition or results of operations. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair Value Hierarchy. The following describes the hierarchy of valuation inputs (Levels 1, 2, and 3) used to measure fair value and the primary valuation methodologies used by Northern Trust for financial instruments measured at fair value on a recurring basis. Observable inputs reflect market data obtained from sources independent of the reporting entity; unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. GAAP requires an entity measuring fair value to maximize the use of observable inputs and minimize the use of unobservable inputs and establishes a fair value hierarchy of inputs. Financial instruments are categorized within the hierarchy based on the lowest level input that is significant to their valuation. Northern Trust’s policy is to recognize transfers into and transfers out of fair value levels as of the end of the reporting period in which the transfer occurred. No transfers between fair value levels occurred during the three months ended March 31, 2017 or the year ended December 31, 2016. Level 1 — Quoted, active market prices for identical assets or liabilities. Northern Trust’s Level 1 assets are comprised of available for sale investments in U.S. treasury securities. Level 2 — Observable inputs other than Level 1 prices, such as quoted active market prices for similar assets or liabilities, quoted prices for identical or similar assets in inactive markets, and model-derived valuations in which all significant inputs are observable in active markets. Northern Trust’s Level 2 assets include available for sale and trading account securities, the fair values of which are determined predominantly by external pricing vendors. Prices received from vendors are compared to other vendor and third-party prices. If a security price obtained from a pricing vendor is determined to exceed pre-determined tolerance levels that are assigned based on an asset type’s characteristics, the exception is researched and, if the price is not able to be validated, an alternate pricing vendor is utilized, consistent with Northern Trust’s pricing source hierarchy. As of March 31, 2017, Northern Trust’s available for sale securities portfolio included 1,434 Level 2 securities with an aggregate market value of $28.2 billion. All 1,434 securities were valued by external pricing vendors. As of December 31, 2016, Northern Trust’s available for sale securities portfolio included 1,409 Level 2 securities with an aggregate market value of $28.1 billion. All 1,409 securities were valued by external pricing vendors. Trading account securities, which totaled $1.4 million and $0.3 million as of March 31, 2017 and December 31, 2016, respectively, were all valued using external pricing vendors. Level 2 assets and liabilities also include derivative contracts which are valued internally using widely accepted income-based models that incorporate inputs readily observable in actively quoted markets and reflect the contractual terms of the contracts. Observable inputs include foreign exchange rates and interest rates for foreign exchange contracts; interest rates for interest rate swap contracts and forward contracts; and interest rates and volatility inputs for interest rate option contracts. Northern Trust evaluates the impact of counterparty credit risk and its own credit risk on the valuation of its derivative instruments. Factors considered include the likelihood of default by Northern Trust and its counterparties, the remaining maturities of the instruments, net exposures after giving effect to master netting arrangements or similar agreements, available collateral, and other credit enhancements in determining the appropriate fair value of derivative instruments. The resulting valuation adjustments have not been considered material. Level 3 — Valuation techniques in which one or more significant inputs are unobservable in the marketplace. Northern Trust’s Level 3 assets consist of auction rate securities purchased in 2008 from Northern Trust clients. To estimate the fair value of auction rate securities, Northern Trust uses external pricing vendors that incorporate transaction details and market based inputs such as past auction results, trades and bids. The significant unobservable inputs used in the fair value measurement are the prices of the securities supported by little market activity and for which trading is limited. Northern Trust’s Level 3 liabilities consist of swaps that Northern Trust entered into with the purchaser of 1.1 million and 1.0 million shares of Visa Inc. Class B common stock (Visa Class B common shares) previously held by Northern Trust and sold in June 2016 and 2015, respectively. Pursuant to the swaps, Northern Trust retains the risks associated with the ultimate conversion of the Visa Class B common shares into shares of Visa Inc. Class A common stock (Visa Class A common shares), such that the counterparty will be compensated for any dilutive adjustments to the conversion ratio and Northern Trust will be compensated for any anti-dilutive adjustments to the ratio. The swaps also require periodic payments from Northern Trust to the counterparty calculated by reference to the market price of Visa Class A common shares and a fixed rate of interest. The fair value of the swaps is determined using a discounted cash flow methodology. The significant unobservable inputs used in the fair value measurement are Northern Trust’s own assumptions about estimated changes in the conversion rate of the Visa Class B common shares into Visa Class A common shares, the date on which such conversion is expected to occur and the estimated growth rate of the Visa Class A common share price. See “Visa Class B Common Shares” under Note 19 — “Contingent Liabilities” for further information. Northern Trust believes its valuation methods for its assets and liabilities carried at fair value are appropriate; however, the use of different methodologies or assumptions, particularly as applied to Level 3 assets and liabilities, could have a material effect on the computation of their estimated fair values. The following presents the fair values of, and the valuation techniques, significant unobservable inputs, and quantitative information used to develop significant unobservable inputs for, Northern Trust’s Level 3 assets and liabilities as of March 31, 2017 and December 31, 2016. Table 31: Level 3 Significant Unobservable Inputs
The following tables present assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016, segregated by fair value hierarchy level. Table 32: Recurring Basis Hierarchy Leveling
Note: 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. As of March 31, 2017, derivative assets and liabilities shown above also include reductions of $411.0 million and $207.2 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.
Note: 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. As of December 31, 2016, derivative assets and liabilities shown above also include reductions of $461.3 million and $722.1 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.
The following tables present the changes in Level 3 assets and liabilities for the three months ended March 31, 2017 and 2016. Table 33: Changes in Level 3 Assets
Table 34: Changes in Level 3 Liabilities
During the three months ended March 31, 2017 and 2016, there were no transfers into or out of Level 3 assets or liabilities. Carrying values of assets and liabilities that are not measured at fair value on a recurring basis may be adjusted to fair value in periods subsequent to their initial recognition, for example, to record an impairment of an asset. GAAP requires entities to disclose separately these subsequent fair value measurements and to classify them under the fair value hierarchy. Assets measured at fair value on a nonrecurring basis at March 31, 2017 and 2016, all of which were categorized as Level 3 under the fair value hierarchy, were comprised of impaired loans whose values were based on real estate and other available collateral, and of other real estate owned (OREO) properties. Fair values of real-estate loan collateral were estimated using a market approach typically supported by third-party valuations and property-specific fees and taxes, and were subject to adjustments to reflect management’s judgment as to realizable value. Other loan collateral, which typically consists of accounts receivable, inventory and equipment, is valued using a market approach adjusted for asset-specific characteristics and in limited instances third-party valuations are used. OREO assets are carried at the lower of cost or fair value less estimated costs to sell, with fair value typically based on third-party appraisals. Collateral-based impaired loans and OREO assets that have been adjusted to fair value totaled $28.7 million and $0.6 million, respectively, at March 31, 2017, and $10.1 million and $2.5 million, respectively, at March 31, 2016. Assets measured at fair value on a nonrecurring basis reflect management’s judgment as to realizable value. The following table provides the fair value of, and the valuation technique, significant unobservable inputs and quantitative information used to develop the significant unobservable inputs for, Northern Trust’s Level 3 assets that were measured at fair value on a nonrecurring basis as of March 31, 2017 and December 31, 2016. Table 35: Level 3 Nonrecurring Basis Significant Unobservable Inputs
Fair Value of Financial Instruments. GAAP requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate fair value. It excludes from this requirement nonfinancial assets and liabilities, as well as a wide range of franchise, relationship and intangible values that add value to Northern Trust. Accordingly, the required fair value disclosures provide only a partial estimate of the fair value of Northern Trust. Financial instruments recorded at fair value in Northern Trust’s consolidated balance sheets are discussed above. The following methods and assumptions were used in estimating the fair values of financial instruments that are not carried at fair value. Held to Maturity Securities. The fair values of held to maturity securities, excluding U.S. treasury securities, were obtained from external pricing vendors, or in limited cases internally, using widely accepted models which are based on an income approach (discounted cash flow) that incorporates current market yield curves. The fair values of U.S. treasury securities were determined using quoted, active market prices for identical securities. Loans (excluding lease receivables). The fair value of the loan portfolio was estimated using an income approach (discounted cash flow) that incorporates current market rates offered by Northern Trust as of the date of the consolidated financial statements. The fair values of all loans were adjusted to reflect current assessments of loan collectability. Loans held for sale are recorded at the lower of cost or fair value. Federal Reserve and Federal Home Loan Bank Stock. The fair values of Federal Reserve and Federal Home Loan Bank stock are equal to their carrying values which represent redemption value. Community Development Investments. The fair values of these instruments were estimated using an income approach (discounted cash flow) that incorporates current market rates. Employee Benefit and Deferred Compensation. These assets include U.S. Treasury securities and investments in mutual and collective trust funds held to fund certain supplemental employee benefit obligations and deferred compensation plans. Fair values of U.S. Treasury securities were determined using quoted, active market prices for identical securities. The fair values of investments in mutual and collective trust funds were valued at the funds’ net asset values based on a market approach. Savings Certificates and Other Time Deposits. The fair values of these instruments were estimated using an income approach (discounted cash flow) that incorporates market interest rates currently offered by Northern Trust for deposits with similar maturities. Senior Notes, Subordinated Debt, and Floating Rate Capital Debt. Fair values were determined using a market approach based on quoted market prices, when available. If quoted market prices were not available, fair values were based on quoted market prices for comparable instruments. Federal Home Loan Bank Borrowings. The fair values of these instruments were estimated using an income approach (discounted cash flow) that incorporates market interest rates available to Northern Trust. Loan Commitments. The fair values of loan commitments represent the estimated costs to terminate or otherwise settle the obligations with a third party adjusted for any related allowance for credit losses. Standby Letters of Credit. The fair values of standby letters of credit are measured as the amount of unamortized fees on these instruments, inclusive of the related allowance for credit losses. Fees are determined by applying basis points to the principal amounts of the letters of credit. Financial Instruments Valued at Carrying Value. Due to their short maturity, the carrying values of certain financial instruments approximated their fair values. These financial instruments include: cash and due from banks; federal funds sold and securities purchased under agreements to resell; interest-bearing deposits with banks; Federal Reserve and other central bank deposits; client security settlement receivables; non-U.S. offices interest-bearing deposits; federal funds purchased; securities sold under agreements to repurchase; and other borrowings (includes term federal funds purchased and other short-term borrowings). The fair values of demand, noninterest-bearing, savings, and money market deposits represent the amounts payable on demand as of the reporting date, although such deposits are typically priced at a premium in banking industry consolidations. The following tables summarize the fair values of all financial instruments. Table 36: Fair Value of Financial Instruments
Note: Refer to the table located on page 32 for the disaggregation of available for sale securities.
Note: Refer to the table located on page 33 for the disaggregation of available for sale securities.
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The following tables provide the amortized cost and fair values of securities at March 31, 2017 and December 31, 2016. Table 37: Reconciliation of Amortized Cost to Fair Value of Securities Available for Sale
Table 38: Reconciliation of Amortized Cost to Fair Value of Securities Held to Maturity
Securities held to maturity consist of debt securities that management intends to, and Northern Trust has the ability to, hold until maturity. The following table provides the remaining maturity of securities as of March 31, 2017. Table 39: Remaining Maturity of Securities Available for Sale and Held to Maturity
Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments. Investment Security Gains / Losses. Net investment security losses of $0.3 million were recognized in the three months ended March 31, 2017, which include $0.1 million of charges related to the other-than-temporary impairment (OTTI) of certain Community Reinvestment ACT (CRA) eligible held to maturity securities. Net investment security gains of $0.3 million were recognized in the three months ended March 31, 2016. For three months ended March 31, 2017, proceeds of $541.3 million were received from the sale of securities resulting in gross realized losses of $0.2 million. For the three months ended March 31, 2016, proceeds of $513.6 million were received from the sale of securities, resulting in realized gross gains of $0.3 million. Securities with Unrealized Losses. The following tables provide information regarding securities that had been in a continuous unrealized loss position for less than twelve months and for twelve months or longer as of March 31, 2017 and December 31, 2016. Table 40: Securities with Unrealized Losses
As of March 31, 2017, 1,074 securities with a combined fair value of $20.0 billion were in an unrealized loss position, with their unrealized losses totaling $152.8 million. Unrealized losses of $63.6 million related to government sponsored agency securities are primarily attributable to changes in market interest rates since their purchase. Unrealized losses of $23.0 million within corporate debt securities primarily reflect widened credit spreads and higher market rates since purchase; 35% of the corporate debt portfolio is backed by guarantees provided by U.S. and non-U.S. governmental entities. The majority of the $34.0 million of unrealized losses in securities classified as “other” at March 31, 2017, related to securities primarily purchased at a premium or par by Northern Trust for compliance with the CRA. Unrealized losses on these CRA-related securities were attributable to yields that were below market rates for the purpose of supporting institutions and programs that benefit low- to moderate- income communities within Northern Trust’s market area. Unrealized losses of $0.3 million related to auction rate securities primarily reflected reduced market liquidity as a majority of auctions continued to fail, preventing holders from liquidating their investments at par. The remaining unrealized losses on Northern Trust’s securities portfolio as of March 31, 2017, were attributable to changes in overall market interest rates, increased credit spreads or reduced market liquidity. As of March 31, 2017, Northern Trust did not intend to sell any investment in an unrealized loss position and it was more likely than not that Northern Trust would not be required to sell any such investment before the recovery of its amortized cost basis, which may be maturity. Security impairment reviews are conducted quarterly to identify and evaluate securities that have indications of possible OTTI. A determination as to whether a security’s decline in market value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Factors Northern Trust considers in determining whether impairment is other-than-temporary include, but are not limited to: the length of time the security has been impaired; the severity of the impairment; the cause of the impairment and the financial condition and near-term prospects of the issuer; activity in the market of the issuer, which may indicate adverse credit conditions; Northern Trust’s intent regarding the sale of the security as of the balance sheet date; and the likelihood that it will not be required to sell the security for a period of time sufficient to allow for the recovery of the security’s amortized cost basis. For each security meeting the requirements of Northern Trust’s internal screening process, an extensive review is conducted to determine if OTTI has occurred. While all securities are considered, the process for identifying credit impairment within CRA-eligible mortgage-backed securities incorporates an expected loss approach using discounted cash flows on the underlying collateral pools. To evaluate whether an unrealized loss on CRA-eligible mortgage-backed securities is other-than-temporary, a calculation of the security’s present value is made using current pool data, the current delinquency pipeline, default rates and loan loss severities based on the historical performance of the mortgage pools, and Northern Trust’s outlook for the housing market and the overall economy. If the present value of the collateral pools was found to be less than the current amortized cost of the security, a credit-related OTTI loss would be recorded in earnings equal to the difference between the two amounts. Impairments of CRA-eligible mortgage-backed securities are influenced by a number of factors, including but not limited to, U.S. economic and housing market performance, pool credit enhancement level, year of origination and estimated credit quality of the collateral. The factors used in estimating losses related to CRA-eligible mortgage-backed securities vary by vintage of loan origination and collateral quality. There were $0.1 million of OTTI losses recognized in the three months ended March 31, 2017 related to CRA-eligible mortgage-backed securities. There were no OTTI losses recognized during the three months ended March 31, 2016. Credit Losses on Debt Securities. The table below provides the cumulative credit-related losses recognized in earnings on debt securities other-than-temporarily impaired. Table 41: Cumulative Credit-Related Losses on Securities
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Securities Sold Under Agreements to Repurchase |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||
Securities Sold Under Agreements to Repurchase | 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 held by the counterparty until the repurchase. The following table provides information regarding repurchase agreements that are accounted for as secured borrowings as of March 31, 2017. Table 42: Repurchase Agreements Accounted for as Secured Borrowings
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Loans and Leases |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases | Loans and Leases Amounts outstanding for loans and leases, by segment and class, are shown below. Table 43: Loans and Leases
Residential real estate loans consist of traditional first lien mortgages and equity credit lines that generally require a loan-to-collateral value of no more than 65% to 80% at inception. Northern Trust’s equity credit line products generally have draw periods of up to 10 years and a balloon payment of any outstanding balance is due at maturity. Payments are interest only with variable interest rates. Northern Trust does not offer equity credit lines that include an option to convert the outstanding balance to an amortizing payment loan. As of March 31, 2017 and December 31, 2016, equity credit lines totaled $1.1 billion and $1.2 billion, respectively, and equity credit lines for which first liens were held by Northern Trust represented 92% and 91% of the total equity credit lines as of March 31, 2017 and December 31, 2016, respectively. Included within the non-U.S., commercial-other and personal-other classes are short-duration advances primarily related to the processing of custodied client investments that totaled $920.1 million at March 31, 2017, and $1.4 billion at December 31, 2016. Demand deposits reclassified as loan balances totaled $74.8 million and $88.1 million at March 31, 2017 and December 31, 2016, respectively. There were no loans classified as held for sale as of March 31, 2017. Loans classified as held for sale totaled $13.4 million as of December 31, 2016. Leases classified as held for sale totaled $32.3 million as of March 31, 2017 and $43.0 million as of December 31, 2016, respectively, related to the decision to exit a non-strategic loan and lease portfolio. Credit Quality Indicators. Credit quality indicators are statistics, measurements or other metrics that provide information regarding the relative credit risk of loans and leases. Northern Trust utilizes a variety of credit quality indicators to assess the credit risk of loans and leases at the segment, class and individual credit exposure levels. As part of its credit process, Northern Trust utilizes an internal borrower risk rating system to support identification, approval and monitoring of credit risk. Borrower risk ratings are used in credit underwriting, management reporting and the calculation of credit loss allowances and economic capital. Risk ratings are used for ranking the credit risk of borrowers and the probability of their default. Each borrower is rated using one of a number of ratings models or other subjective assessment methodologies, which consider both quantitative and qualitative factors. The ratings models vary among classes of loans and leases in order to capture the unique risk characteristics inherent within each particular type of credit exposure. Provided below are the more significant performance indicator attributes considered within Northern Trust’s borrower rating models, by loan and lease class.
While the criteria vary by model, the objective is for the borrower ratings to be consistent in both the measurement and ranking of risk. Each model is calibrated to a master rating scale to support this consistency. Ratings for borrowers not in default range from “1” for the strongest credits to “7” for the weakest non-defaulted credits. Ratings of “8” or “9” are used for defaulted borrowers. Borrower risk ratings are monitored and are revised when events or circumstances indicate a change is required. Risk ratings are validated at least annually. Loan and lease segment and class balances as of March 31, 2017 and December 31, 2016 are provided below, segregated by borrower ratings into “1 to 3,” “4 to 5” and “6 to 9” (watch list), categories. Table 44: Borrower Ratings
Loans and leases in the “1 to 3” category are expected to exhibit minimal to modest probabilities of default and are characterized by borrowers having the strongest financial qualities, including above average financial flexibility, cash flows and capital levels. Borrowers assigned these ratings are anticipated to experience very little to moderate financial pressure in adverse down cycle scenarios. As a result of these characteristics, borrowers within this category exhibit a minimal to modest likelihood of loss. Loans and leases in the “4 to 5” category are expected to exhibit moderate to acceptable probabilities of default and are characterized by borrowers with less financial flexibility than those in the “1 to 3” category. Cash flows and capital levels are generally sufficient to allow for borrowers to meet current requirements, but have reduced cushion in adverse down cycle scenarios. As a result of these characteristics, borrowers within this category exhibit a moderate likelihood of loss. Loans and leases in the watch list category have elevated credit risk profiles that are monitored through internal watch lists, and consist of credits with borrower ratings of “6 to 9.” These credits, which include all nonperforming credits, are expected to exhibit minimally acceptable probabilities of default, elevated risk of default, or are currently in default. Borrowers associated with these risk profiles that are not currently in default have limited financial flexibility. Cash flows and capital levels range from acceptable to potentially insufficient to meet current requirements, particularly in adverse down cycle scenarios. As a result of these characteristics, borrowers in this category exhibit an elevated likelihood of loss. Recognition of Income. Interest income on loans is recorded on an accrual basis unless, in the opinion of management, there is a question as to the ability of the debtor to meet the terms of the loan agreement, or interest or principal is more than 90 days contractually past due and the loan is not well-secured and in the process of collection. Loans meeting such criteria are classified as nonperforming and interest income is recorded on a cash basis. At the time a loan is determined to be nonperforming, interest accrued but not collected is reversed against interest income in the current period. Interest collected on nonperforming loans is applied to principal unless, in the opinion of management, collectability of principal is not in doubt. Management’s assessment of the indicators of loan and lease collectability, and its policies relative to the recognition of interest income, including the suspension and subsequent resumption of income recognition, do not meaningfully vary between loan and lease classes. Nonperforming loans are returned to performing status when factors indicating doubtful collectability no longer exist. Factors considered in returning a loan to performing status are consistent across all classes of loans and leases and, in accordance with regulatory guidance, relate primarily to expected payment performance. Loans are eligible to be returned to performing status when: (i) no principal or interest that is due is unpaid and repayment of the remaining contractual principal and interest is expected or (ii) the loan has otherwise become well-secured (possessing realizable value sufficient to discharge the debt, including accrued interest, in full) and is in the process of collection (through action reasonably expected to result in debt repayment or restoration to a current status in the near future). A loan that has not been brought fully current may be restored to performing status provided there has been a sustained period of repayment performance (generally a minimum of six months) by the borrower in accordance with the contractual terms, and Northern Trust is reasonably assured of repayment within a reasonable period of time. Additionally, a loan that has been formally restructured so as to be reasonably assured of repayment and performance according to its modified terms may be returned to accrual status, provided there was a well-documented credit evaluation of the borrower’s financial condition and prospects of repayment under the revised terms and there has been a sustained period of repayment performance (generally a minimum of six months) under the revised terms. Past due status is based on how long since the contractual due date a principal or interest payment has been past due. For disclosure purposes, loans that are 29 days past due or less are reported as current. The following tables provide balances and delinquency status of performing and nonperforming loans and leases by segment and class, as well as the total OREO and nonperforming asset balances, as of March 31, 2017 and December 31, 2016. Table 45: Delinquency Status
Impaired Loans. A loan is considered to be impaired when, based on current information and events, management determines that it is probable that Northern Trust will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are identified through ongoing credit management and risk rating processes, including the formal review of past due and watch list credits. Payment performance and delinquency status are critical factors in identifying impairment for all loans and leases, particularly those within the residential real estate, private client and personal-other classes. Other key factors considered in identifying impairment of loans and leases within the commercial and institutional, non-U.S., lease financing, and commercial-other classes relate to the borrower’s ability to perform under the terms of the obligation as measured through the assessment of future cash flows, including consideration of collateral value, market value, and other factors. A loan is also considered to be impaired if its terms have been modified as a concession by Northern Trust or a bankruptcy court resulting from the debtor’s financial difficulties, referred to as a troubled debt restructuring (TDR). All TDRs are reported as impaired loans in the calendar year of their restructuring. In subsequent years, a TDR may cease being reported as impaired if the loan was modified at a market rate and has performed according to the modified terms for at least six payment periods. A loan that has been modified at a below market rate will return to performing status if it satisfies the six payment periods performance requirement; however, it will remain reported as impaired. Impairment is measured based upon the present value of expected future cash flows, discounted at the loan's original effective interest rate, the fair value of the collateral if the loan is collateral dependent, or the loan's observable market value. If the loan valuation is less than the recorded value of the loan, based on the certainty of loss, either a specific allowance is established, or a charge-off is recorded, for the difference. Smaller balance (individually less than $1 million) homogeneous loans are collectively evaluated for impairment and excluded from impaired loan disclosures as allowed under applicable accounting standards. Northern Trust’s accounting policies for material impaired loans is consistent across all classes of loans and leases. The following tables provide information related to impaired loans by segment and class. Table 46: Information about Impaired Loans as of the Period End
Note: Average recorded investment in impaired loans is calculated as the average of the month-end impaired loan balances for the period. Interest income that would have been recorded for nonperforming loans in accordance with their original terms was $2.3 million and $2.1 million, respectively, for the three months ended March 31, 2017 and 2016. There were $5.0 million and $2.3 million of aggregate undrawn loan commitments and standby letters of credit at March 31, 2017 and December 31, 2016, respectively, issued to borrowers whose loans were classified as nonperforming or impaired. Troubled Debt Restructurings (TDRs). Included within impaired loans were $79.9 million and $85.2 million of nonperforming TDRs, and $37.9 million and $42.4 million of performing TDRs as of March 31, 2017 and December 31, 2016, respectively. All TDRs are reported as impaired loans in the calendar year of their restructuring. In subsequent years, a TDR may cease being reported as impaired if the loan was modified at a market rate and has performed according to the modified terms for at least six months. A loan that has been modified at a below market rate will return to performing status if it satisfies the six-month performance requirement; however, it will remain reported as impaired. The following tables provide, by segment and class, the number of loans and leases modified in TDRs during the three-month periods ended March 31, 2017 and 2016, and the recorded investments and unpaid principal balances as of March 31, 2017 and 2016. Table 47: Modified Troubled Debt Restructurings
Note: Period end balances reflect all paydowns and charge-offs during the period.
Note: Period end balances reflect all paydowns and charge-offs during the period. TDR modifications involve interest rate concessions, extensions of term, deferrals of principal and other modifications. Other modifications typically reflect other nonstandard terms which Northern Trust would not offer in non-troubled situations. During the three months ended March 31, 2017, the majority of TDR modifications of loans within residential real estate were extension of term, other modifications, interest rate concessions and deferred principal. During the three months ended March 31, 2017, the majority of TDR modifications within commercial real estate were extension of term, and other modifications. During the three months ended March 31, 2016, the majority of TDR modifications of loans within residential real estate were deferred principal, extension of term, interest rate concessions, and other modifications. During the three months ended March 31, 2016, the majority of TDR modifications within commercial and institutional, and commercial real estate classes were extension of term and other modifications. There were no loans modified in a TDR during the twelve months ended December 31, 2016, which subsequently became nonperforming during the three months ended March 31, 2017. There was one loan modified in a TDR during the twelve months ended December 31, 2015, which subsequently became nonperforming during the three months ended March 31, 2016. The total recorded investment and unpaid principal balance for these loans was approximately $0.1 million. All loans and leases modified in TDRs are evaluated for impairment. The nature and extent of impairment of TDRs, including those that have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for credit losses. Northern Trust may obtain physical possession of residential real estate collateralizing a consumer mortgage loan via foreclosure on an in-substance repossession. As of March 31, 2017, Northern Trust held foreclosed residential real estate properties with a carrying value of $5.9 million as a result of obtaining physical possession. In addition, as of March 31, 2017, Northern Trust had consumer loans with a carrying value of $26.1 million collateralized by residential real estate property for which formal foreclosure proceedings were in process. |
Allowance for Credit Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses, which represents management’s estimate of probable losses related to specific borrower relationships and inherent in the various loan and lease portfolios, undrawn commitments, and standby letters of credit, is determined by management through a disciplined credit review process. Northern Trust’s accounting policies related to the estimation of the allowance for credit losses and the charging off of loans, leases and other extensions of credit deemed uncollectible are consistent across both loan and lease segments. Loans, leases and other extensions of credit deemed uncollectible are charged to the allowance for credit losses. Subsequent recoveries, if any, are credited to the allowance. Determinations as to whether an uncollectible loan is charged-off or a specific allowance is established are based on management’s assessment as to the level of certainty regarding the amount of loss. The following table provides information regarding changes in the total allowance for credit losses by segment during the three months ended March 31, 2017 and 2016. Table 48: Changes in the Allowance for Credit Losses
The following table provides information regarding the recorded investments in loans and leases and the allowance for credit losses by segment as of March 31, 2017 and December 31, 2016. Table 49: Recorded Investments in Loans and Leases
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Pledged Assets |
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Mar. 31, 2017 | |
Transfers and Servicing [Abstract] | |
Pledged Assets | Pledged Assets Certain of Northern Trust’s subsidiaries, as required or permitted by law, pledge assets to secure public and trust deposits, repurchase agreements and Federal Home Loan Bank borrowings, as well as for other purposes, including support for securities settlement, primarily related to client activities, and for potential Federal Reserve Bank discount window borrowings. As of March 31, 2017, securities and loans totaling $42.6 billion ($31.5 billion of government-sponsored agency and other securities, $990.4 million of obligations of states and political subdivisions and $10.1 billion of loans) were pledged. This compares to $40.3 billion ($29.7 billion of government-sponsored agency and other securities, $939.8 million of obligations of states and political subdivisions and $9.6 billion of loans) at December 31, 2016. Collateral required for these purposes totaled $7.1 billion and $9.7 billion at March 31, 2017 and December 31, 2016, respectively. Available for sale securities with a total fair value of $1.3 billion and $1.4 billion at March 31, 2017 and December 31, 2016 were included in the total pledged assets, which were pledged as collateral for agreements to repurchase securities sold transactions. The secured parties to these transactions have the right to repledge or sell these securities. Northern Trust is not permitted, by contract or custom, to repledge or sell collateral from agreements to resell securities purchased transactions. The total fair value of accepted collateral was $1.6 billion as of March 31, 2017 and $1.8 billion as of December 31, 2016. There was no repledged or sold collateral at March 31, 2017 or December 31, 2016. Deposits maintained to meet Federal Reserve Bank reserve requirements averaged $2.0 billion and $1.8 billion for the three months ended March 31, 2017 and 2016. |
Goodwill and Other Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangibles | Goodwill and Other Intangibles The carrying amounts of goodwill and other intangibles assets, reflecting the effect of foreign exchange rates on non-U.S.-dollar-denominated balances, by reporting segment at March 31, 2017, and December 31, 2016, were as follows: Table 50: Goodwill by Reporting Segment
The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of March 31, 2017 and December 31, 2016, were as follows: Table 51: Other Intangible Assets
Other intangible assets consist primarily of the value of acquired client relationships and are included within other assets in the consolidated balance sheets. Amortization expense related to other intangible assets totaled $2.4 million and $2.1 million for the three months ended March 31, 2017 and 2016, respectively. Amortization for the remainder of 2017 and for the years 2018, 2019, 2020, and 2021 is estimated to be $6.7 million, $8.3 million, $8.2 million, $8.2 million and $5.9 million, respectively. On February 19, 2017, the Corporation entered into a definitive agreement with UBS AG to acquire UBS Asset Management’s fund administration servicing businesses in Luxembourg and Switzerland, for an initial purchase price of approximately $175 million in cash, subject to adjustment. The transaction is expected to close in the second half of 2017, subject to applicable regulatory and fund board approvals and other customary closing conditions. |
Reporting Segments |
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Reporting Segments | Reporting Segments The following table shows the earnings contributions of Northern Trust’s reporting segments for the three-month periods ended March 31, 2017 and 2016. Table 52: Results of Reporting Segments
* Non-GAAP financial measures stated on a fully taxable equivalent basis (FTE). Total consolidated includes FTE adjustments of $8.9 million for 2017 and $6.2 million for 2016. Further discussion of reporting segment results is provided within the “Reporting Segments” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Stockholders' Equity |
3 Months Ended |
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Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock. The Corporation is authorized to issue 10 million shares of preferred stock without par value. The Board of Directors is authorized to fix the particular designations, preferences and relative, participating, optional and other special rights and qualifications, limitations or restrictions for each series of preferred stock issued. On August 8, 2016, the Corporation issued and sold 500,000 depositary shares (the “Depositary Shares”), each representing a 1/100th ownership interest in a share of Series D Non-Cumulative Perpetual Preferred Stock (the “Series D Preferred Stock”). Shares of the Series D Preferred Stock have no par value and a liquidation preference of $100,000 (equivalent to $1,000 per depositary share). The aggregate proceeds from the public offering of the depositary shares, net of underwriting discounts, commissions and offering expenses, were $493.5 million. Dividends on the Series D Preferred Stock, which are not mandatory, will accrue and be payable on the liquidation preference amount, on a non-cumulative basis, at a rate per annum equal to (i) 4.60% from the original issue date of the Series D Preferred Stock to but excluding October 1, 2026; and (ii) a floating rate equal to Three-Month LIBOR plus 3.202% from and including October 1, 2026. Fixed rate dividends will be payable in arrears on the 1st day of April and October of each year, commencing on April 1, 2017, to and including October 1, 2026, and floating rate dividends will be payable in arrears on the 1st day of January, April, July and October of each year, commencing on January 1, 2027. The Series D Preferred Stock has no maturity date and is redeemable at the Corporation’s option, in whole or in part, on any dividend payment date on or after October 1, 2026. The Series D Preferred Stock is redeemable at the Corporation’s option in whole, but not in part, including prior to October 1, 2026, within 90 days of a regulatory capital treatment event, as described in the Series D Preferred Stock Certificate of Designation. On January 17, 2017, the Corporation declared a cash dividend of $2,977.222222 per share of Series D Preferred Stock payable on April 1, 2017, to stockholders of record as of March 15, 2017. This initial dividend payment on the Series D preferred stock covers the period from the date of issuance of such stock through March 31, 2017. As of March 31, 2017, the Corporation also had issued and outstanding 16 million depositary shares, each representing 1/1000th ownership interest in a share of Series C Non-Cumulative Perpetual Preferred Stock (“Series C Preferred Stock”), issued in August 2014. Equity related to Series C Preferred Stock as of March 31, 2017 and December 31, 2016 totaled $388.5 million. Series C Preferred Stock has no par value and has a liquidation preference of $25,000 ($25 per depositary share). Dividends on the Series C Preferred Stock, which are not mandatory, accrue and are payable on the liquidation preference amount, on a non-cumulative basis, quarterly in arrears on the first day of January, April, July and October of each year, at a rate per annum equal to 5.85%. On January 17, 2017, the Corporation declared a cash dividend of $365.625 per share of Series C Preferred Stock payable on April 1, 2017, to stockholders of record as of March 15, 2017. The Series C Preferred Stock has no maturity date and is redeemable at the Corporation’s option, in whole or in part, on any dividend payment date on or after October 1, 2019. The Series C Preferred stock is redeemable at the Corporation’s option, in whole, but not in part, including prior to October 1, 2019, within 90 days of a regulatory capital treatment event, as described in the Series C Preferred Stock Certificate of Designation. Shares of the Series C Preferred Stock and Series D Preferred Stock rank senior to the Corporation’s common stock, and will rank at least equally with any other series of preferred stock it may issue (except for any senior series that may be issued with the requisite consent of the holders of the Series C Preferred Stock and Series D Preferred Stock, respectively) and all other parity stock, with respect to the payment of dividends and distributions upon liquidation, dissolution or winding up. Common Stock. During the three months ended March 31, 2017, the Corporation repurchased 811,730 shares of common stock, including 410,869 shares withheld related to share-based compensation, at a total cost of $70.1 million ($86.39 average price per share). The Corporation’s current common stock repurchase authorization was approved by the Board of Directors in April 2015. The repurchased shares are used for general purposes by the Corporation, including management of the Corporation’s capital level and the issuance of shares under stock option and other incentive plans of the Corporation. The repurchase authorization approved by the Board of Directors has no expiration date. Under the Corporation’s 2016 Capital Plan, which was reviewed without objection by the Federal Reserve, the Corporation may repurchase up to $74.8 million of common stock after March 31, 2017 through June 2017. |
Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following tables summarize the components of accumulated other comprehensive income (loss) (AOCI) at March 31, 2017 and 2016, and changes during the three-month periods then ended. Table 53: Summary of Changes in Accumulated Other Comprehensive Income (Loss)
Table 54: Details of Changes in Accumulated Other Comprehensive Income (Loss)
The following table provides the location and before-tax amounts of reclassifications out of AOCI during the three months ended March 31, 2017. Table 55: Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
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Net Income Per Common Share Computations |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Common Share Computations | Net Income Per Common Share Computations The computations of net income per common share are presented in the following table. Table 56: Net Income per Common Share
Note: Common stock equivalents of 468,381 and 1,796,320 for the three months ended March 31, 2017 and 2016, respectively, were not included in the computation of diluted net income per common share because their inclusion would have been antidilutive. |
Net Interest Income |
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Banking and Thrift, Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Interest Income | Net Interest Income The components of net interest income were as follows: Table 57: Net Interest Income
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Income Taxes |
3 Months Ended |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the three months ended March 31, 2017 was $114.8 million, representing an effective tax rate of 29.4%. The prior-year three-month provision for income taxes was $113.8 million, representing an effective tax rate of 31.7%. |
Pension and Postretirement Health Care |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Postretirement Health Care | Pension and Postretirement Health Care The following tables set forth the net periodic pension and postretirement benefit expense for Northern Trust’s U.S. and non-U.S. pension plans, supplemental pension plan, and postretirement health care plan for the three months ended March 31, 2017 and 2016. Table 58: Net Periodic Pension Expense (Benefit)
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Share-Based Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Plans | Share-Based Compensation Plans The Northern Trust Corporation 2012 Stock Plan provides for the grant of nonqualified stock options, incentive stock options, stock appreciation rights, stock awards, restricted stock units and performance stock units. Beginning with grants made on or after February 21, 2017, restricted stock unit and performance stock unit grants continue to vest in accordance with the original terms of the award if the applicable employee retires, after satisfying applicable age and service requirements. For all applicable periods, stock option grants continue to vest in accordance with the original terms of the award if the applicable employee retires, after satisfying applicable age and service requirements. In the first quarter of 2017, the Corporation granted 468,381 non-qualified stock options with a total grant-date fair value of $9.0 million, 839,354 stock unit awards with a total grant-date value of $73.9 million, and 206,091 performance stock units with a total grant-date fair value of $18.1 million. Compensation expense for the three months ended March 31, 2017 of $21.6 million and $5.5 million was attributable to restricted stock units and stock options, respectively, granted to retirement-eligible employees that were expensed in their entirety on the date of grant. Compensation expense for the three months ended March 31, 2016 of $5.5 million was attributable to stock options granted to retirement-eligible employees that were expensed in their entirety on the date of grant. Compensation expense for the three months ended March 31, 2017 of $3.3 million was attributable to performance stock units granted to retirement-eligible employees that are expensed from the date of grant through the requisite service period which ends on June 30, 2017. Restricted stock unit award compensation expense for the three months ended March 31, 2017 and 2016 includes $2.5 million and $2.0 million, respectively, attributable to restricted stock units vested in full and were expensed in the entirety upon their date of grant. Total compensation expense for share-based payment arrangements and the associated tax impacts were as follows for the three months ended March 31, 2017 and 2016. Table 59: Total Compensation Expense for Share-Based Payment Arrangements
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Variable Interest Entities |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Variable Interest Entities (VIEs) are defined within GAAP as entities that either have a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Investors that finance a VIE through debt or equity interests, or other counterparties that provide other forms of support, such as guarantees, subordinated fee arrangements, or certain types of derivative contracts, are variable interest holders in the entity. The variable interest holder, if any, that has both the power to direct the activities that most significantly impact the entity and a variable interest that could potentially be significant to the entity is deemed to be the VIE’s primary beneficiary and is required to consolidate the VIE. Leveraged Leases. In leveraged leasing transactions, Northern Trust acts as lessor of the underlying asset subject to the lease and typically funds 20 - 30% of the asset’s cost via an equity ownership in a trust with the remaining 70 - 80% provided by third-party non-recourse debt holders. In such transactions, the trusts, which are VIEs, are created to provide the lessee use of the property with substantially all of the rights and obligations of ownership. The lessee’s maintenance and operation of the leased property has a direct effect on the fair value of the underlying property, and the lessee also has the ability to increase the benefits it can receive and limit the losses it can suffer by the manner in which it uses the property. As a result, Northern Trust has determined that it is not the primary beneficiary of these VIEs given it lacks the power to direct the activities that most significantly impact the economic performance of the VIEs. Northern Trust’s maximum exposure to loss as a result of its involvement with the leveraged lease trust VIEs is limited to the carrying amounts of its leveraged lease investments. As of March 31, 2017 and December 31, 2016, the carrying amounts of these investments, which are included in loans and leases in the consolidated balance sheets, were $145.9 million and $183.5 million, respectively. Northern Trust’s funding requirements relative to the VIEs are limited to its invested capital. Northern Trust has no other liquidity arrangements or obligations to purchase assets of the VIEs that would expose Northern Trust to a loss. Tax Credit Structures. Northern Trust invests in qualified affordable housing projects and community development entities (collectively, community development projects) that are designed to generate a return primarily through the realization of tax credits. The community development projects are formed as limited partnerships and limited liability companies (LLCs) in which Northern Trust invests as a limited partner/investor member through equity contributions. The economic performance of the community development projects, which are VIEs, is subject to the performance of their underlying investment and their ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. Northern Trust has determined that it is not the primary beneficiary of any community development projects as it lacks the power to direct the activities that most significantly impact the economic performance of the underlying investments or to affect their ability to operate in compliance with the rules and regulations necessary for the qualification of tax credits generated by equity investments. This power is held by the general partners and managing members who exercise full and exclusive control of the operations of the VIEs. Northern Trust’s maximum exposure to loss as a result of its involvement with community development projects is limited to the carrying amount of its investments, including any undrawn commitments. As of March 31, 2017 and December 31, 2016, the carrying amount of investments in community development projects that generate tax credits, included in other assets in the consolidated balance sheets, totaled $178.1 million and $186.5 million, respectively. As of March 31, 2017 and December 31, 2016, liabilities related to undrawn commitments on investments in tax credit community development projects, included in other liabilities in the consolidated balance sheets, totaled $54.6 million and $56.7 million, respectively. Northern Trust’s funding requirements are limited to its invested capital and undrawn commitments for future equity contributions. Northern Trust has no exposure to loss from liquidity arrangements and no obligation to purchase assets of the community development projects. Affordable housing tax credits and other tax benefits attributable to community development projects totaled $12.1 million and $12.0 million for the three months ended March 31, 2017 and 2016, respectively. Investment Funds. Northern Trust acts as asset manager for various funds in which clients of Northern Trust are investors. As an asset manager of funds, Northern Trust earns a competitively priced fee that is based on assets managed and varies with each fund’s investment objective. Based on its analysis, Northern Trust has determined that it is not the primary beneficiary of these VIEs under GAAP. Some of the funds for which Northern Trust acts as asset manager comply or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds and therefore the funds are exempt from the consolidation requirements in Accounting Standards Codification 810-10. Northern Trust voluntarily waived $0.2 million and $7.7 million of money market mutual fund fees for the three months ended March 31, 2017 and 2016, respectively. Northern Trust does not have any explicit arrangements to provide financial support to the funds. Any potential future support of the funds will be at the discretion of Northern Trust after an evaluation of the specific facts and circumstances. |
Contingent Liabilities |
3 Months Ended |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities Commitments, Letters of Credit and Indemnifications. Northern Trust, in the normal course of business, enters into various types of commitments and issues letters of credit to meet the liquidity and credit enhancement needs of its clients. Legally binding commitments to extend credit generally have fixed expiration dates or other termination clauses. Since a significant portion of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future loans or liquidity requirements. Legally binding commitments to extend credit totaled $30.7 billion and $32.8 billion as of March 31, 2017 and December 31, 2016, respectively. Standby letters of credit obligate Northern Trust to meet certain financial obligations of its clients, if, under the contractual terms of the agreement, the clients are unable to do so. These instruments are primarily issued to support public and private financial commitments, including commercial paper, bond financing, initial margin requirements on futures exchanges and similar transactions. Northern Trust is obligated to meet the entire financial obligation of these agreements and in certain cases is able to recover the amounts paid through recourse against collateral received or other participants. Standby letters of credit outstanding were $3.5 billion and $3.8 billion as of March 31, 2017 and December 31, 2016, respectively. As part of its securities custody activities and at the direction of its clients, Northern Trust lends securities owned by clients to borrowers who are reviewed and approved by the Northern Trust Counterparty Risk Management Committee. In connection with these activities, Northern Trust has issued indemnifications to certain clients against certain losses that are a direct result of a borrower’s failure to return securities when due, should the value of such securities exceed the value of the collateral required to be posted. Borrowers are required to collateralize fully securities received with cash or marketable securities. As securities are loaned, collateral is maintained at a minimum of 100% of the fair value of the securities plus accrued interest. The collateral is revalued on a daily basis. The amount of securities loaned as of March 31, 2017 and December 31, 2016 subject to indemnification was $112.6 billion and $102.3 billion, respectively. Because of the credit quality of the borrowers and the requirement to collateralize fully securities borrowed, management believes that the exposure to credit loss from this activity is not significant and no liability was recorded as of March 31, 2017 or December 31, 2016, related to these indemnifications. Legal Proceedings. In the normal course of business, the Corporation and its subsidiaries are routinely defendants in or parties to a number of pending and threatened legal actions, including, but not limited to, actions brought on behalf of various claimants or classes of claimants, regulatory matters, employment matters and challenges from tax authorities regarding the amount of taxes due. In certain of these actions and proceedings, claims for substantial monetary damages or adjustments to recorded tax liabilities are asserted. Based on current knowledge, after consultation with legal counsel and after taking into account current accruals, management does not believe that losses, if any, arising from pending litigation or threatened legal actions or regulatory matters 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.” For the reasons set out in this paragraph, the outcome of some matters is inherently difficult to predict and/or the range of loss cannot be reasonably estimated. This may be the case in 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 March 31, 2017, the Corporation has estimated the range of reasonably possible loss for these matters to be from zero to approximately $35 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 estimate of reasonably possible loss discussed above. In January 2015, the Public Prosecutor’s Office of France recommended that certain charges be brought against Northern Trust Fiduciary Services (Guernsey) Limited (NTFS), an indirect subsidiary of the Corporation, relating to the administration of two trusts for which NTFS serves as trustee. In April 2015, a French investigating magistrate judge charged NTFS with complicity in estate tax fraud. Charges also were brought against a number of other persons and entities related to this matter. The trial related to this matter concluded in October 2016. In January 2017, the 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 has appealed the court decision. The proceedings in the appellate court have not yet been scheduled. As trustee, NTFS provided no tax advice and had no involvement in the preparation or filing of the challenged estate tax filings. Visa Class B Common Shares. 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 selling restrictions until the final resolution of the covered litigation noted below, 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. Certain members of Visa U.S.A. are obligated to indemnify Visa for losses resulting from certain litigation relating to interchange fees (the covered litigation). On October 19, 2012, Visa signed a settlement agreement with plaintiff representatives for binding settlement of the covered litigation. On January 14, 2014, the United States District Court for the Eastern District of New York entered a final judgment order approving the settlement with the class plaintiffs. A number of objectors appealed from that order and more than 30 opt-out cases have been filed by merchants in various federal district courts. On June 30, 2016, the United States Court of Appeals for the Second Circuit reversed the District Court's approval of the settlement and remanded the case to the District Court for further proceedings. In November 2016, a subset of plaintiffs filed a certiorari petition with the Supreme Court of the United States. In March 2017, the Supreme Court denied that petition. The ultimate resolution of the covered litigation and the timing for removal of the selling restrictions on the Visa Class B common shares are uncertain. In June 2016 and 2015, Northern Trust recorded a $123.1 million and $99.9 million net gain on the sale of 1.1 million and 1.0 million of its Visa Class B common shares, respectively. These sales do not affect Northern Trust’s risk related to the impact of the covered litigation on the rate at which such shares will ultimately convert into Visa Class A common shares. Northern Trust continued to hold approximately 4.1 million and 5.2 million Visa Class B common shares, which are recorded at their original cost basis of zero as of March 31, 2017 and 2016, respectively. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | 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 include foreign exchange contracts, interest rate contracts, total return swap contracts, credit default swap contracts, and swaps related to the sale of certain Visa Class B common shares. Northern Trust’s primary risks associated with these instruments are the possibility that interest rates, foreign exchange rates, equity prices, or credit spreads could change in an unanticipated manner, resulting in higher costs or a loss in the underlying value of the instrument. These risks are mitigated by establishing limits, monitoring the level of actual positions taken against such established limits and monitoring the level of any interest rate sensitivity gaps created by such positions. When establishing position limits, market liquidity and volatility, as well as experience in each market, are taken into account. 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 cash 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, equity prices or other underlying exposures 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. All derivative financial instruments, whether designated as hedges or not, are recorded in the consolidated balance sheets at fair value within other assets or other liabilities. As noted in the discussions below, the manner in which changes in the fair value of a derivative is accounted for in the consolidated statements of income depends on whether the contract has been designated as a hedge and qualifies for hedge accounting under GAAP. 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. Derivative assets and liabilities recorded in the consolidated balance sheets were each reduced by $941.5 million and $1.7 billion as of March 31, 2017 and December 31, 2016, respectively, as a result of master netting arrangements and similar agreements in place. Derivative assets and liabilities recorded at March 31, 2017, also reflect reductions of $411.1 million and $207.2 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties, respectively. This compares with reductions of derivative assets and liabilities of $461.3 million and $722.1 million, respectively, at December 31, 2016. Additional cash collateral received from and deposited with derivative counterparties totaling $127.2 million and $126.2 million, respectively, as of March 31, 2017, and $70.8 million and $324.5 million, respectively, as of December 31, 2016, was not offset against derivative assets and liabilities in the consolidated balance sheets as the amounts exceeded the net derivative positions with those counterparties. Northern Trust centrally clears eligible interest rate derivative instruments as required under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Securities posted as collateral for these transactions totaled $52.2 million and $70.7 million at March 31, 2017 and December 31, 2016, respectively, are not offset against derivative assets and liabilities in the consolidated balance sheets, and the counterparty receiving the securities as collateral does not have the right to repledge or sell the securities. 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 $271.2 million and $358.2 million at March 31, 2017 and December 31, 2016, respectively. Cash collateral amounts deposited with derivative counterparties on those dates included $159.8 million and $317.5 million, respectively, posted against these liabilities, resulting in a net maximum amount of termination payments that could have been required at March 31, 2017 and December 31, 2016, of $111.4 million and $40.7 million, respectively. Accelerated settlement of these liabilities would not have a material effect on the consolidated financial position or liquidity of Northern Trust. 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 purposes and risk management. 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, foreign-currency-denominated assets and liabilities, including investment 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. Client-Related and Trading Derivative Instruments. Approximately 96% of Northern Trust’s derivatives outstanding at March 31, 2017 and December 31, 2016, measured on a notional value basis, relate to client-related and trading activities. 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. The following table shows the notional and fair values of client-related and trading derivative financial instruments. 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, which is significantly less than the notional amount. Table 60: Notional and Fair Values of Client-Related and Trading Derivative Financial Instruments
Changes in the fair value of client-related and trading derivative instruments are recognized currently in income. The following table shows the location and amount of gains and losses recorded in the consolidated statements of income for the three months ended March 31, 2017 and 2016. Table 61: Location and Amount of Client-Related and Trading Derivative Gains and Losses Recorded in Income
Risk Management Instruments. Northern Trust uses derivative instruments to hedge its exposure to foreign currency, interest rate, equity price, and credit risk. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP as fair value, cash flow or net investment hedges. Other derivatives that are entered into for risk management purposes as economic hedges are not formally designated as hedges and changes in fair value are recognized currently in other operating income. 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 if it were a trading instrument. The following table identifies the types and classifications of derivative instruments formally designated as hedges under GAAP and used by Northern Trust to manage risk, their notional and fair values, and the respective risks addressed. Table 62: Notional and Fair Value of Designated Risk Management Derivative Financial Instruments
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. For a fair value hedge, 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 recorded currently in income. The following table shows the location and amount of derivative gains and losses recognized in the consolidated statements of income related to fair value hedges for the three months ended March 31, 2017 and 2016. Table 63: Location and Amount of Fair Value Hedge Derivative Gains and Losses Recorded in Income
Northern Trust applies the “shortcut” method of accounting, available under GAAP, to substantially all of its fair value hedges, which assumes there is no ineffectiveness in a hedge. For fair value hedges that do not qualify for the “shortcut” method of accounting, Northern Trust utilizes regression analysis, the “long-haul” method of accounting, in assessing whether the hedging relationships are highly effective at inception and quarterly thereafter. There was no ineffectiveness or changes in the fair value of hedged items recognized in income for fair value hedges accounted for under the “long-haul” method of accounting during the three month periods ended March 31, 2017 and 2016. Derivatives are also designated 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. There was no ineffectiveness recognized in income for cash flow hedges during the three months ended March 31, 2017 and 2016. As of March 31, 2017, 23 months was the maximum length of time over which the exposure to variability in future cash flows of forecasted foreign-currency-denominated transactions was being hedged. The following table provides cash flow hedge derivative gains and losses recognized in AOCI and the amounts reclassified to income during the three months ended March 31, 2017 and 2016. Table 64: Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and Reclassified to Income
There were no gains or losses reclassified into earnings during the three months ended March 31, 2017 and 2016, as a result of the discontinuance of forecasted transactions that were no longer probable of occurring. It is estimated that a net gain of $2.9 million and a net loss of $0.4 million will be reclassified into net income within the next twelve months relating to cash flow hedges of foreign currency denominated transactions and cash flow hedges of foreign currency denominated investment securities, respectively. It is estimated that a net gain of $0.2 million will be reclassified into net income upon the receipt of interest payments on earning assets within the next twelve months relating to cash flow hedges of available for sale investment securities. Certain foreign exchange contracts and qualifying nonderivative instruments 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. There was no ineffectiveness recorded during the three months ended March 31, 2017 and 2016. Amounts recorded in AOCI are reclassified to net income only upon the sale or liquidation of an investment in a non-U.S. branch or subsidiary. The following table provides net investment hedge gains and losses recognized in AOCI during the three months ended March 31, 2017 and 2016. Table 65: Net Investment Hedge Gains and Losses Recognized in AOCI
Derivatives that are not formally designated as a hedge under GAAP are entered into for risk management purposes. Foreign exchange contracts are 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 which retains the risks associated with the ultimate conversion of the Visa Class B common shares into Visa Class A common shares. Credit default swaps were entered into to manage credit risk associated with certain loans and loan commitments. Total return swaps are entered into to manage the equity price risk associated with certain investments. The following table identifies the types of risk management derivative instruments not formally designated as hedges and their notional amounts and fair values. Table 66: Notional and Fair Values of Non-Designated Risk Management Derivative Instruments
Changes in the fair value of derivative instruments not formally designated as hedges 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 three months ended March 31, 2017 and 2016. Table 67: Location and Amount of Gains and Losses Recorded in Income for Non-Designated Risk Management Derivative Instruments
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting of Assets and Liabilities | Offsetting of Assets and Liabilities The following tables provide information regarding the offsetting of derivative assets and securities purchased under agreements to resell within the consolidated balance sheets as of March 31, 2017 and December 31, 2016. Table 68: Offsetting of Derivative Assets and Securities Purchased Under Agreements to Resell
The following tables provide information regarding the offsetting of derivative liabilities and securities sold under agreements to repurchase within the consolidated balance sheets as of March 31, 2017 and December 31, 2016. Table 69: Offsetting of Derivative Liabilities and Securities Sold Under Agreements to Repurchase
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. All of Northern Trust’s 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 set off 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. 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 centrally clears those interest rate derivative instruments addressed under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. These transactions are subject to an agreement similar to a master netting arrangement which has the same rights of offset as described above. |
Recent Accounting Pronouncements (Policies) |
3 Months Ended |
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Mar. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On January 1, 2017, the Corporation adopted ASU 2016-05, “Derivatives and Hedging (Topics 815): Effects of Derivative Contract Novations on Existing Hedge Accounting Relationships (a consensus of the Emerging Issues Task Force)” (ASU 2016-05). ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815, does not, in and of itself, require dedesignation of that hedging relationship provided all other hedge accounting criteria continue to be met. Upon adoption of ASU 2016-05, the Corporation did not dedesignate any hedging relationships due to change in counterparty and therefore there was no impact to its consolidated financial condition or results of operations. On January 1, 2017, the Corporation adopted ASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the Emerging Issues Task Force)” (ASU 2016-06). The amendments in ASU 2016-06 clarify what steps are required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. The Corporation currently applies the approach for analyzing potential embedded derivative instruments in debt instruments detailed in ASU 2016-06 and therefore upon adoption there was no impact to its consolidated financial condition or results of operations. On January 1, 2017, the Corporation adopted ASU 2016-07, “Investments - Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting” (ASU 2016-07), which requires that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Upon adoption of ASU 2016-07, the Corporation did not hold an interest in an investee that subsequently qualified for the use of the equity method and therefore there was no impact to the Corporation’s consolidated financial condition or results of operations. On January 1, 2017, the Corporation adopted ASU 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control” (ASU 2016-17). Under ASU 2016-17, a single decision maker evaluating whether it is the primary beneficiary of a variable interest entity will consider its indirect interests held by related parties that are under common control on a proportionate basis. Upon adoption of ASU 2016-17, there was no impact to the Corporation’s consolidated financial condition or results of operations. |
Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of effects of the change in presentation | The table below shows the effect of the change in presentation on the Corporation’s consolidated statements of cash flows and related footnotes for the three months ended March 31, 2016. Table 30: Change in Presentation
Adoption of ASU No. 2016-09. The Corporation adopted ASU No. 2016-09 on July 1, 2016 with an effective date of January 1, 2016, which resulted in a reclassification $3.6 million from additional paid-in capital to provision for income taxes, representing excess tax benefits previously recognized in additional paid-in-capital during the three months ended March 31, 2016. Adoption of the standard impacted the Corporation’s previously reported quarterly results as follows:
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Fair Value Measurements (Tables) |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recurring Basis Hierarchy Leveling | The following tables present assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016, segregated by fair value hierarchy level. Table 32: Recurring Basis Hierarchy Leveling
Note: 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. As of March 31, 2017, derivative assets and liabilities shown above also include reductions of $411.0 million and $207.2 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.
Note: 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. As of December 31, 2016, derivative assets and liabilities shown above also include reductions of $461.3 million and $722.1 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.
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Changes in Level 3 Assets | The following tables present the changes in Level 3 assets and liabilities for the three months ended March 31, 2017 and 2016. Table 33: Changes in Level 3 Assets
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Changes in Level 3 Liabilities | Table 34: Changes in Level 3 Liabilities
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Fair Value of Financial Instruments | The following tables summarize the fair values of all financial instruments. Table 36: Fair Value of Financial Instruments
Note: Refer to the table located on page 32 for the disaggregation of available for sale securities.
Note: Refer to the table located on page 33 for the disaggregation of available for sale securities.
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Fair Value, Measurements, Recurring | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Level 3 Nonrecurring Basis Significant Unobservable Inputs | The following presents the fair values of, and the valuation techniques, significant unobservable inputs, and quantitative information used to develop significant unobservable inputs for, Northern Trust’s Level 3 assets and liabilities as of March 31, 2017 and December 31, 2016. Table 31: Level 3 Significant Unobservable Inputs
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Fair Value, Measurements, Nonrecurring | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Level 3 Nonrecurring Basis Significant Unobservable Inputs | The following table provides the fair value of, and the valuation technique, significant unobservable inputs and quantitative information used to develop the significant unobservable inputs for, Northern Trust’s Level 3 assets that were measured at fair value on a nonrecurring basis as of March 31, 2017 and December 31, 2016. Table 35: Level 3 Nonrecurring Basis Significant Unobservable Inputs
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Securities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Amortized Cost to Fair Value of Securities Available for Sale | The following tables provide the amortized cost and fair values of securities at March 31, 2017 and December 31, 2016. Table 37: Reconciliation of Amortized Cost to Fair Value of Securities Available for Sale
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Reconciliation of Amortized Cost to Fair Values of Securities Held to Maturity | Table 38: Reconciliation of Amortized Cost to Fair Value of Securities Held to Maturity
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Securities Continuous Unrealized Loss Position | The following tables provide information regarding securities that had been in a continuous unrealized loss position for less than twelve months and for twelve months or longer as of March 31, 2017 and December 31, 2016. Table 40: Securities with Unrealized Losses
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Credit Related Impairment Losses Recognized in Earnings on Other Than Temporarily Impaired Securities | The table below provides the cumulative credit-related losses recognized in earnings on debt securities other-than-temporarily impaired. Table 41: Cumulative Credit-Related Losses on Securities
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Available for Sale Investment Securities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining Maturity of Securities | The following table provides the remaining maturity of securities as of March 31, 2017. Table 39: Remaining Maturity of Securities Available for Sale and Held to Maturity
Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments. |
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Held-to-maturity Securities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining Maturity of Securities | The following table provides the remaining maturity of securities as of March 31, 2017. Table 39: Remaining Maturity of Securities Available for Sale and Held to Maturity
Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments. |
Securities Sold Under Agreements to Repurchase (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||
Repurchase Agreements Accounted for as Secured Borrowings | The following table provides information regarding repurchase agreements that are accounted for as secured borrowings as of March 31, 2017. Table 42: Repurchase Agreements Accounted for as Secured Borrowings
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Loans and Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts Outstanding for Loans and Leases by Segment and Class | Amounts outstanding for loans and leases, by segment and class, are shown below. Table 43: Loans and Leases
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Loan and Lease Segment and Class Balances Segregated by Borrower Ratings into "1 to 3", "4 to 5" and "6 to 9" (Watch List) Categories | Loan and lease segment and class balances as of March 31, 2017 and December 31, 2016 are provided below, segregated by borrower ratings into “1 to 3,” “4 to 5” and “6 to 9” (watch list), categories. Table 44: Borrower Ratings
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Balances and Delinquency Status of Performing and Nonperforming Loans and Leases by Segment and Class as well as Total OREO and Nonperforming Asset Balances | The following tables provide balances and delinquency status of performing and nonperforming loans and leases by segment and class, as well as the total OREO and nonperforming asset balances, as of March 31, 2017 and December 31, 2016. Table 45: Delinquency Status
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Impaired Loans By Segment and Class | The following tables provide information related to impaired loans by segment and class. Table 46: Information about Impaired Loans as of the Period End
Note: Average recorded investment in impaired loans is calculated as the average of the month-end impaired loan balances for the period. |
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Number of Loans and Leases Modified in TDRs and Total Recorded Investments and Unpaid Principal Balances | The following tables provide, by segment and class, the number of loans and leases modified in TDRs during the three-month periods ended March 31, 2017 and 2016, and the recorded investments and unpaid principal balances as of March 31, 2017 and 2016. Table 47: Modified Troubled Debt Restructurings
Note: Period end balances reflect all paydowns and charge-offs during the period.
Note: Period end balances reflect all paydowns and charge-offs during the period. |
Allowance for Credit Losses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Allowance for Credit Losses by Segment | The following table provides information regarding changes in the total allowance for credit losses by segment during the three months ended March 31, 2017 and 2016. Table 48: Changes in the Allowance for Credit Losses
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Allowances for Credit Losses and Recorded Investments in Loans and Leases by Segment | The following table provides information regarding the recorded investments in loans and leases and the allowance for credit losses by segment as of March 31, 2017 and December 31, 2016. Table 49: Recorded Investments in Loans and Leases
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Goodwill and Other Intangibles (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Changes by Reporting Segment in Carrying Amounts of Goodwill, including Effect of Foreign Exchange Rates on Non-U.S.-Dollar-Denominated Balances | The carrying amounts of goodwill and other intangibles assets, reflecting the effect of foreign exchange rates on non-U.S.-dollar-denominated balances, by reporting segment at March 31, 2017, and December 31, 2016, were as follows: Table 50: Goodwill by Reporting Segment
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Other Intangible Assets Subject to Amortization | The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of March 31, 2017 and December 31, 2016, were as follows: Table 51: Other Intangible Assets
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Reporting Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Contribution of Northern Trust's Reporting Segments | The following table shows the earnings contributions of Northern Trust’s reporting segments for the three-month periods ended March 31, 2017 and 2016. Table 52: Results of Reporting Segments
* Non-GAAP financial measures stated on a fully taxable equivalent basis (FTE). Total consolidated includes FTE adjustments of $8.9 million for 2017 and $6.2 million for 2016. |
Accumulated Other Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Income (Loss) (AOCI) | The following tables summarize the components of accumulated other comprehensive income (loss) (AOCI) at March 31, 2017 and 2016, and changes during the three-month periods then ended. Table 53: Summary of Changes in Accumulated Other Comprehensive Income (Loss)
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Components of Changes in Accumulated Other Comprehensive Income (Loss) | Table 54: Details of Changes in Accumulated Other Comprehensive Income (Loss)
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Reclassification Out of Accumulated Other Comprehensive Income (Loss) | The following table provides the location and before-tax amounts of reclassifications out of AOCI during the three months ended March 31, 2017. Table 55: Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
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Net Income Per Common Share Computations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computations of Net Income per Common Share | The computations of net income per common share are presented in the following table. Table 56: Net Income per Common Share
Note: Common stock equivalents of 468,381 and 1,796,320 for the three months ended March 31, 2017 and 2016, respectively, were not included in the computation of diluted net income per common share because their inclusion would have been antidilutive. |
Net Interest Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift, Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Interest Income | The components of net interest income were as follows: Table 57: Net Interest Income
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Pension and Postretirement Health Care (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Company's Net Periodic Benefit Cost | The following tables set forth the net periodic pension and postretirement benefit expense for Northern Trust’s U.S. and non-U.S. pension plans, supplemental pension plan, and postretirement health care plan for the three months ended March 31, 2017 and 2016. Table 58: Net Periodic Pension Expense (Benefit)
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Share-Based Compensation Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Expense for Share-Based Payment Arrangements and Associated Tax Impacts | Total compensation expense for share-based payment arrangements and the associated tax impacts were as follows for the three months ended March 31, 2017 and 2016. Table 59: Total Compensation Expense for Share-Based Payment Arrangements
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Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notional and Fair Value Amounts of Client-related and Trading Derivative Financial Instruments | The following table shows the notional and fair values of client-related and trading derivative financial instruments. 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, which is significantly less than the notional amount. Table 60: Notional and Fair Values of Client-Related and Trading Derivative Financial Instruments
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Location and Amount of Gains and Losses Recorded in Consolidated Statements of Income | The following table shows the location and amount of gains and losses recorded in the consolidated statements of income for the three months ended March 31, 2017 and 2016. Table 61: Location and Amount of Client-Related and Trading Derivative Gains and Losses Recorded in Income
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Types and Classifications of Derivative Instruments | The following table identifies the types and classifications of derivative instruments formally designated as hedges under GAAP and used by Northern Trust to manage risk, their notional and fair values, and the respective risks addressed. Table 62: Notional and Fair Value of Designated Risk Management Derivative Financial Instruments
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Gains/Losses of Derivative Financial Instruments | The following table shows the location and amount of derivative gains and losses recognized in the consolidated statements of income related to fair value hedges for the three months ended March 31, 2017 and 2016. Table 63: Location and Amount of Fair Value Hedge Derivative Gains and Losses Recorded in Income
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Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and the Amounts Reclassified to Earnings | The following table provides cash flow hedge derivative gains and losses recognized in AOCI and the amounts reclassified to income during the three months ended March 31, 2017 and 2016. Table 64: Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and Reclassified to Income
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Net Investment Hedge Gains and Losses Recognized in AOCI | The following table provides net investment hedge gains and losses recognized in AOCI during the three months ended March 31, 2017 and 2016. Table 65: Net Investment Hedge Gains and Losses Recognized in AOCI
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Types of Risk Management Derivative Instruments Not Formally Designated as Hedges, Including Notional Amounts and Fair Values | The following table identifies the types of risk management derivative instruments not formally designated as hedges and their notional amounts and fair values. Table 66: Notional and Fair Values of Non-Designated Risk Management Derivative Instruments
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Gains/Losses of Derivative Financial Instruments | The following table provides the location and amount of gains and losses recorded in the consolidated statements of income for the three months ended March 31, 2017 and 2016. Table 67: Location and Amount of Gains and Losses Recorded in Income for Non-Designated Risk Management Derivative Instruments
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Offsetting of Assets and Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of offsetting derivative assets and securities purchased under agreements to resell | The following tables provide information regarding the offsetting of derivative assets and securities purchased under agreements to resell within the consolidated balance sheets as of March 31, 2017 and December 31, 2016. Table 68: Offsetting of Derivative Assets and Securities Purchased Under Agreements to Resell
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Schedule of offsetting derivative liabilities and securities sold under agreements to repurchase | The following tables provide information regarding the offsetting of derivative liabilities and securities sold under agreements to repurchase within the consolidated balance sheets as of March 31, 2017 and December 31, 2016. Table 69: Offsetting of Derivative Liabilities and Securities Sold Under Agreements to Repurchase
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Fair Value Measurements (Changes in Level 3 Assets) (Details) - Auction Rate - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value assets beginning balance | $ 4.7 | $ 17.1 |
Total Gains (Losses): | ||
Included in Earnings | 0.0 | 0.0 |
Included in Other Comprehensive Income (1) | 0.0 | (0.4) |
Purchases, Issues, Sales, and Settlements | ||
Sales | 0.0 | (0.1) |
Settlements | (0.4) | 0.0 |
Fair value assets ending balance | $ 4.3 | $ 16.6 |
Fair Value Measurements (Changes in Level 3 Liabilities) (Details) - Swaps Related to Sale of Certain Visa Class B Common Shares - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value liabilities beginning balance | $ 25.2 | $ 10.8 |
Total (Gains) Losses: | ||
Included in Earnings (1) | 2.9 | (0.3) |
Included in Other Comprehensive Income | 0.0 | 0.0 |
Purchases, Issues, Sales, and Settlements | ||
Purchases | 0.0 | 0.0 |
Settlements | (1.7) | (0.8) |
Fair value liabilities ending balance | $ 26.4 | $ 9.7 |
Securities (Remaining Maturity of Securities Available for Sale and Held to Maturity) (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Available for Sale - Cost | ||
Due in One Year or Less | $ 6,665.1 | |
Due After One Year Through Five Years | 21,136.2 | |
Due After Five Years Through Ten Years | 6,015.5 | |
Due After Ten Years | 1,201.9 | |
Total | 35,018.7 | |
Held to Maturity - Amortized Cost | ||
Due in One Year or Less | 2,914.6 | |
Due After One Year Through Five Years | 5,764.1 | |
Due After Five Years Through Ten Years | 201.2 | |
Due After Ten Years | 58.5 | |
Total | 8,938.4 | $ 8,921.1 |
Available for Sale - Value | ||
Due in One Year or Less | 6,660.1 | |
Due After One Year Through Five Years | 21,124.3 | |
Due After Five Years Through Ten Years | 6,017.7 | |
Due After Ten Years | 1,195.5 | |
Total | 34,997.6 | |
Held to Maturity - Fair Value | ||
Due in One Year or Less | 2,916.9 | |
Due After One Year Through Five Years | 5,783.4 | |
Due After Five Years Through Ten Years | 200.2 | |
Due After Ten Years | 32.9 | |
Total | $ 8,933.4 | $ 8,905.1 |
Securities (Cumulative Credit-Related Losses on Securities) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
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Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||
Cumulative Credit-Related Losses on Securities Held — Beginning of Period | $ 3.4 | $ 5.2 |
Plus: Losses on Newly Identified Impairments | 0.0 | 0.0 |
Additional Losses on Previously Identified Impairments | 0.1 | 0.0 |
Less: Current and Prior Period Losses on Securities Sold During the Period | 0.0 | 0.0 |
Cumulative Credit-Related Losses on Securities Held — End of Period | $ 3.5 | $ 5.2 |
Securities Sold Under Agreements to Repurchase (Repurchase Agreements Accounted for as Secured Borrowings) (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 21 | $ 237.6 | $ 336.4 |
Overnight and Continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Borrowings | 433.2 | |
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 21 | 433.2 | |
Amounts related to agreements not included in Note 21 | 0.0 | |
Overnight and Continuous | U.S. Treasury and Agency Securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Borrowings | $ 433.2 |
Allowance for Credit Losses (Changes in Allowance for Credit Losses) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance at beginning of period | $ 192.0 | $ 233.3 |
Charge-Offs | (4.7) | (5.3) |
Recoveries | 2.7 | 2.6 |
Net (Charge-Offs) Recoveries | (2.0) | (2.7) |
Provision for Credit Losses | (1.0) | 2.0 |
Balance at end of period | 189.0 | 232.6 |
Commercial | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance at beginning of period | 104.9 | 114.8 |
Charge-Offs | (1.1) | (3.5) |
Recoveries | 1.6 | 1.2 |
Net (Charge-Offs) Recoveries | 0.5 | (2.3) |
Provision for Credit Losses | 6.4 | 2.7 |
Balance at end of period | 111.8 | 115.2 |
Personal | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Balance at beginning of period | 87.1 | 118.5 |
Charge-Offs | (3.6) | (1.8) |
Recoveries | 1.1 | 1.4 |
Net (Charge-Offs) Recoveries | (2.5) | (0.4) |
Provision for Credit Losses | (7.4) | (0.7) |
Balance at end of period | $ 77.2 | $ 117.4 |
Goodwill and Other Intangibles (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Feb. 19, 2017 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
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Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Net Book Value | $ 41.1 | $ 41.8 | ||
Other Intangible Assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense related to other intangible assets | 2.4 | $ 2.1 | ||
Estimated future amortization expense for 2017 | 6.7 | |||
Estimated future amortization expense for 2018 | 8.3 | |||
Estimated future amortization expense for 2019 | 8.2 | |||
Estimated future amortization expense for 2020 | 8.2 | |||
Estimated future amortization expense for 2021 | $ 5.9 | |||
UBS Asset Management Fund Administration Servicing Business | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cash paid | $ 175.0 |
Goodwill and Other Intangibles (Goodwill by Reporting Segment) (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 519.3 | $ 519.4 |
Corporate & Institutional Services | ||
Goodwill [Line Items] | ||
Goodwill | 448.3 | 448.4 |
Wealth Management | ||
Goodwill [Line Items] | ||
Goodwill | $ 71.0 | $ 71.0 |
Goodwill and Other Intangibles (Other Intangible Assets) (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross Carrying Amount | $ 90.9 | $ 89.0 |
Less: Accumulated Amortization | 49.8 | 47.2 |
Net Book Value | $ 41.1 | $ 41.8 |
Net Interest Income (Net Interest Income) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Interest Income | ||
Loans and Leases | $ 213.4 | $ 200.9 |
Securities — Taxable | 143.2 | 103.3 |
Securities - Non-Taxable | 2.6 | 1.1 |
Interest-Bearing Due from and Deposits with Banks | 14.9 | 17.5 |
Federal Reserve and Other Central Bank Deposits | 36.2 | 29.2 |
Total Interest Income | 410.3 | 352.0 |
Interest Expense | ||
Deposits | 27.6 | 22.2 |
Federal Funds Purchased | 0.5 | 0.3 |
Securities Sold Under Agreements to Repurchase | 0.9 | 0.4 |
Other Borrowings | 7.6 | 2.7 |
Senior Notes | 11.7 | 11.7 |
Long-Term Debt | 7.4 | 6.1 |
Floating Rate Capital Debt | 1.1 | 0.8 |
Total Interest Expense | 56.8 | 44.2 |
Net Interest Income | $ 353.5 | $ 307.8 |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Provision for Income Taxes | $ 114.8 | $ 113.8 |
Effective Tax Rate | 29.40% | 31.70% |
Share-Based Compensation Plans (Compensation Expense for Share-Based Arrangements and Tax Impacts) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 56.0 | $ 25.8 |
Tax Benefits Recognized | 21.2 | 9.7 |
Restricted Stock Unit Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 41.2 | 15.3 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 6.3 | 6.4 |
Performance Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 8.5 | $ 4.1 |
Derivative Financial Instruments (Notional and Fair Values of Client-Related and Trading Derivative Financial Instruments) (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivative [Line Items] | ||
Fair value asset | $ 1,530.3 | $ 3,047.6 |
Fair value liability | 1,386.3 | 2,767.6 |
Client Related and Trading | ||
Derivative [Line Items] | ||
Notional Value | 293,076.0 | 280,181.4 |
Fair value asset | 1,928.6 | 3,361.2 |
Fair value liability | 1,899.9 | 3,306.9 |
Client Related and Trading | Foreign Exchange Contracts | ||
Derivative [Line Items] | ||
Notional Value | 286,237.9 | 273,213.1 |
Fair value asset | 1,851.8 | 3,274.2 |
Fair value liability | 1,832.6 | 3,221.7 |
Client Related and Trading | Interest Rate Contracts | ||
Derivative [Line Items] | ||
Notional Value | 6,838.1 | 6,968.3 |
Fair value asset | 76.8 | 87.0 |
Fair value liability | $ 67.3 | $ 85.2 |
Derivative Financial Instruments (Location and Amount of Gains and Losses Recorded in Income) (Details) - Client Related and Trading - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | $ 49.3 | $ 64.6 |
Foreign Exchange Contracts | Foreign Exchange Trading Income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | 48.1 | 60.5 |
Interest Rate Contracts | Security Commissions and Trading Income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | $ 1.2 | $ 4.1 |
Derivative Financial Instruments (Location and Amount of Derivative Gains and Losses Recorded in Income) (Details) - Asset And Liability Management - Fair Value Hedges - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | $ 0.7 | $ 12.7 |
Available for Sale Investment Securities | Interest Rate Swap Contracts | Interest Income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | (2.4) | (34.7) |
Senior Notes and Long-Term Subordinated Debt | Interest Rate Swap Contracts | Interest Expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | $ 3.1 | $ 47.4 |
Derivative Financial Instruments (Net Investment Hedge Gains and Losses Recognized in AOCI) (Details) - Net Investment Hedges - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Derivative [Line Items] | ||
Hedging Gain / (Loss) Recognized in OCI (Before Tax) | $ (30.5) | $ (26.5) |
Foreign Exchange Contracts | ||
Derivative [Line Items] | ||
Hedging Gain / (Loss) Recognized in OCI (Before Tax) | $ (30.5) | $ (26.5) |
Derivative Financial Instruments (Notional and Fair Values of Non-Designated Risk Management Derivative Instruments) (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Derivative [Line Items] | ||
Fair value asset | $ 1,530.3 | $ 3,047.6 |
Fair value liability | 1,386.3 | 2,767.6 |
Nondesignated | ||
Derivative [Line Items] | ||
Notional Value | 749.2 | 559.6 |
Fair value asset | 2.1 | 0.8 |
Fair value liability | 27.0 | 27.0 |
Nondesignated | Foreign Exchange Contracts | ||
Derivative [Line Items] | ||
Notional Value | 441.6 | 289.6 |
Fair value asset | 2.1 | 0.8 |
Fair value liability | 0.6 | 1.8 |
Nondesignated | Other Financial Derivatives | ||
Derivative [Line Items] | ||
Notional Value | 307.6 | 270.0 |
Fair value asset | 0.0 | 0.0 |
Fair value liability | $ 26.4 | $ 25.2 |
Derivative Financial Instruments (Location and Amount of Gains and Losses Recorded in Income for Non-Designated Risk Management Derivative Instruments) (Details) - Nondesignated - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | $ (1.2) | $ 1.9 |
Foreign Exchange Contracts | Others Operating Income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | 1.7 | 2.7 |
Other Financial Derivatives | Others Operating Income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Derivative Gain Recognized in Income | $ (2.9) | $ (0.8) |
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