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



	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

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



	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