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Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2017
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
(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

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.
(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

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.
(1)
This line consists of swaps related to the sale of certain Visa Class B common shares.
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
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.
Changes in Level 3 Liabilities
Table 34: Changes in Level 3 Liabilities
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.
Fair Value of Financial Instruments
The following tables summarize the fair values of all financial instruments.
Table 36: Fair Value of Financial Instruments
(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

 
—

Note: Refer to the table located on page 32 for the disaggregation of available for sale securities.
(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

 
—

Note: Refer to the table located on page 33 for the disaggregation of available for sale securities.
(1)
This line consists of swaps related to the sale of certain Visa Class B common shares.
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
 
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
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
 
 
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%