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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Assets and Liabilities Measured at Fair Value on Recurring Basis Segregated by Fair Value Hierarchy Level
The following presents assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016, segregated by fair value hierarchy level.

TABLE 47: RECURRING BASIS HIERARCHY LEVELING
 
DECEMBER 31, 2017
(In Millions)
LEVEL 1
 
LEVEL 2

LEVEL 3

NETTING

ASSETS/
LIABILITIES
AT FAIR
VALUE

Securities
 
 
 
 
 
Available for Sale
 
 
 
 
 
U.S. Government
$
5,700.3
 
$
—

$
—

$
—

$
5,700.3

Obligations of States and Political Subdivisions
—
 
746.4

—

—

746.4

Government Sponsored Agency
—
 
18,676.6

—

—

18,676.6

Non-U.S. Government
—
 
177.2

—

—

177.2

Corporate Debt
—
 
2,993.0

—

—

2,993.0

Covered Bonds
—
 
875.6

—

—

875.6

Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
—
 
1,820.0

—

—

1,820.0

Other Asset-Backed
—
 
2,291.3

—

—

2,291.3

Auction Rate
—
 
—

4.3

—

4.3

Commercial Mortgage-Backed
—
 
435.1

—

—

435.1

Other
—
 
22.3

—

—

22.3

 
 
 
 
 
 
Total Available for Sale
5,700.3
 
28,037.5

4.3

—

33,742.1

 
 
 
 
 
 
Trading Account
—
 
0.5

—

—

0.5

 
 
 
 
 
 
Total Available for Sale and Trading Securities
5,700.3
 
28,038.0

4.3

—

33,742.6

 
 
 
 
 
 
Other Assets
 
 
 
 
 
Derivative Assets
 
 
 
 
 
Foreign Exchange Contracts
—
 
2,557.1

—

—

2,557.1

Interest Rate Contracts
—
 
97.0

—

—

97.0

 
 
 
 
 
 
Total Derivative Assets
—
 
2,654.1

—

(1,860.0
)
794.1

 
 
 
 
 
 
Other Liabilities
 
 
 
 
 
Derivative Liabilities
 
 
 
 
 
Foreign Exchange Contracts
—
 
2,715.1

—

—

2,715.1

Interest Rate Contracts
—
 
83.5

—

—

83.5

Other Financial Derivatives (1)
—
 
0.7

29.7

—

30.4

 
 
 
 
 
 
Total Derivative Liabilities
$
—
 
$
2,799.3

$
29.7

$
(1,621.4
)
$
1,207.6


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, 2017, derivative assets and liabilities shown above also include reductions of $427.6 million and $189.0 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 and total return swaps.

 
DECEMBER 31, 2016
(In Millions)
LEVEL 1
 
LEVEL 2

LEVEL 3

NETTING

ASSETS/
LIABILITIES
AT FAIR
VALUE

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

Residential Mortgage-Backed
—
 
—

—

—

—

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

Other Financial Derivative
—
 
—

—

—

—

Total Derivatives 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 Derivative (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 a swap 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 years ended December 31, 2017 and 2016.

TABLE 48: CHANGES IN LEVEL 3 ASSETS AND LIABILITIES
LEVEL 3 ASSETS
AUCTION RATE SECURITIES
 
(In Millions)
2017

2016

Fair Value at January 1
$
4.7

$
17.1

Total Gains (Losses):
 
 
Included in Other Comprehensive Income (1)
0.2

(0.7
)
Purchases, Issues, Sales, and Settlements
 
 
Sales
—

(10.1
)
Settlements
(0.6
)
(1.6
)
 
 
 
Fair Value at December 31
$
4.3

$
4.7


(1) Unrealized gains (losses) are included in net unrealized gains (losses) on securities available for sale, within the consolidated statements of comprehensive income.
Changes in Level 3 Liabilities
LEVEL 3 LIABILITIES
SWAPS RELATED TO SALE OF CERTAIN VISA CLASS B
COMMON SHARES
 
(In Millions)
2017

2016

Fair Value at January 1
$
25.2

$
10.8

Total (Gains) Losses:
 
 
Included in Earnings (1)
12.7

4.4

Purchases, Issues, Sales, and Settlements
 
 
Issuance
—

14.9

Settlements
(8.2
)
(4.9
)
Fair Value at December 31
$
29.7

$
25.2

Unrealized (Gains) Losses Included in Earnings Related to Financial Instruments Held at December 31 (1)
$
11.4

$
4.4


(1) Gains (losses) are recorded in other operating income (expense) within the consolidated statements of income.
Book and Fair Values of All Financial Instruments
The following tables summarize the fair values of all financial instruments.

TABLE 50: FAIR VALUE OF FINANCIAL INSTRUMENTS
 
DECEMBER 31, 2017
 
 
 
FAIR VALUE
(In Millions)
BOOK VALUE

TOTAL
FAIR VALUE

LEVEL 1

LEVEL 2

LEVEL 3

ASSETS
 
 
 
 
 
Cash and Due from Banks
$
4,518.1

$
4,518.1

$
4,518.1

$
—

$
—

Federal Reserve and Other Central Bank Deposits
40,479.1

40,479.1

—

40,479.1

—

Interest-Bearing Deposits with Banks
5,611.9

5,611.9

—

5,611.9

—

Federal Funds Sold and Resell Agreements
1,324.3

1,324.3

—

1,324.3

—

Securities
 
 
 
 
 
Available for Sale (Note)
33,742.1

33,742.1

5,700.3

28,037.5

4.3

Held to Maturity
13,049.0

13,010.9

35.0

12,975.9

—

Trading Account
0.5

0.5

—

0.5

—

Loans (excluding Leases)
 
 
 
 
 
Held for Investment
32,211.1

32,375.8

—

—

32,375.8

Held for Sale
20.9

20.9

—

—

20.9

Client Security Settlement Receivables
1,647.0

1,647.0

—

1,647.0

—

Other Assets
 
 
 
 
 
Federal Reserve and Federal Home Loan Bank Stock
223.1

223.1

—

223.1

—

Community Development Investments
415.3

415.3

—

415.3

—

Employee Benefit and Deferred Compensation
183.4

181.5

115.5

66.0

—

LIABILITIES
 
 
 
 
 
Deposits
 
 
 
 
 
Demand, Noninterest-Bearing, Savings and Money Market
$
45,566.3

$
45,566.3

$
45,566.3

$
—

$
—

Savings Certificates and Other Time
1,152.3

1,153.6

—

1,153.6

—

Non U.S. Offices Interest-Bearing
65,672.2

65,672.2

—

65,672.2

—

Federal Funds Purchased
2,286.1

2,286.1

—

2,286.1

—

Securities Sold under Agreements to Repurchase
834.0

834.0

—

834.0

—

Other Borrowings
6,051.1

6,052.9

—

6,052.9

—

Senior Notes
1,497.3

1,528.4

—

1,528.4

—

Long Term Debt (excluding Leases)
 
 
 
 
 
Subordinated Debt
1,435.1

1,449.8

—

1,449.8

—

Federal Home Loan Bank Borrowings
—

—

—

—

—

Floating Rate Capital Debt
227.5

260.0

—

260.0

—

Other Liabilities
 
 
 
 
 
Standby Letters of Credit
30.3

30.3

—

—

30.3

Loan Commitments
33.1

33.1

—

—

33.1

DERIVATIVE INSTRUMENTS
 
 
 
 
 
Asset/Liability Management
 
 
 
 
 
Foreign Exchange Contracts
 
 
 
 
 
Assets
$
30.1

$
30.1

$
—

$
30.1

$
—

Liabilities
192.6

192.6

—

192.6

—

Interest Rate Contracts
 
 
 
 
 
Assets
31.9

31.9

—

31.9

—

Liabilities
19.4

19.4

—

19.4

—

Other Financial Derivatives
 
 
 
 
 
Assets
—

—

—

—

—

Liabilities (1)
30.4

30.4

—

0.7

29.7

Client-Related and Trading
 
 
 
 
 
Foreign Exchange Contracts
 
 
 
 
 
Assets
2,527.0

2,527.0

—

2,527.0

—

Liabilities
2,522.5

2,522.5

—

2,522.5

—

Interest Rate Contracts
 
 
 
 
 
Assets
65.1

65.1

—

65.1

—

Liabilities
64.1

64.1

—

64.1

—


Note: Refer to the table located on page 102 for the disaggregation of available for sale securities.
(1) This line consists of a swap related to the sale of certain Visa Class B common shares and total return swaps.

 
DECEMBER 31, 2016

 
 
FAIR VALUE
(In Millions)
BOOK VALUE

TOTAL
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

—

LIABILITES
 
 
 
 
 
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
 
 
 
 
 
Assets
—

—

—

—

—

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 103 for the disaggregation of available for sale securities.
(1) This line consists of a swap 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]  
Valuation Techniques, Significant Unobservable Inputs, and Quantitative Information
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 December 31, 2017 and 2016.

TABLE 46: LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS
 
DECEMBER 31, 2017
FINANCIAL INSTRUMENT
FAIR VALUE

VALUATION TECHNIQUE
UNOBSERVABLE INPUT
RANGE OF INPUTS
Auction Rate Securities
$
4.3
 million
Comparables
Price
$92
–
$100
Swaps Related to Sale of Certain
Visa Class B Common Shares
$
29.7
 million
Discounted Cash Flow
Visa Class A Appreciation
7.0
%
–
11.0%
 
 
 
Conversion Rate
1.63
x
–
1.65x
 
 
 
Expected Duration
1.5

–
4.0 years

 
DECEMBER 31, 2016
FINANCIAL INSTRUMENT
FAIR VALUE

VALUATION TECHNIQUE
UNOBSERVABLE INPUT
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
1.63
x
–
1.65x
 
 
 
Expected Duration
1.5

–
4.5 years
Fair Value, Measurements, Nonrecurring  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Valuation Techniques, Significant Unobservable Inputs, and Quantitative Information
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 December 31, 2017.

TABLE 49: LEVEL 3 NONRECURRING BASIS SIGNIFICANT UNOBSERVABLE INPUTS
FINANCIAL INSTRUMENT
FAIR VALUE
VALUATION TECHNIQUE
UNOBSERVABLE INPUT
RANGE OF DISCOUNTS APPLIED
Loans
$12.2 million
Market Approach
Discount to reflect realizable value
15.0%
–
25.0%
OREO
$0.3 million
Market Approach
Discount to reflect realizable value
15.0%
–
20.0%